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Encyclopedia Editor: Cary L. Cooper
Advisory Editors: Chris Argyris and William H. Starbuck
Volume I: Accounting
Edited by Colin Clubb (and A. Rashad Abdel Khalik)
Volume II: Business Ethics
Edited by Patricia H. Werhane and R. Edward Freeman
Volume III: Entrepreneurship
Edited by Michael A. Hitt and R. Duane Ireland
Volume IV: Finance
Edited by Ian Garrett (and Dean Paxson and Douglas Wood)
Volume V: Human Resource Management
Edited by Susan Cartwright (and Lawrence H. Peters, Charles R. Greer, and Stuart A.
Volume VI: International Management
Edited by Jeanne McNett, Henry W. Lane, Martha L. Maznevski, Mark E. Mendenhall,
and John O’Connell
Volume VII: Management Information Systems
Edited by Gordon B. Davis
Volume VIII: Managerial Economics
Edited by Robert E. McAuliffe
Volume IX: Marketing
Edited by Dale Littler
Volume X: Operations Management
Edited by Nigel Slack and Michael Lewis
Volume XI: Organizational Behavior
Edited by Nigel Nicholson, Pino G. Audia, and Madan M. Pillutla
Volume XII: Strategic Management
Edited by John McGee (and Derek F. Channon)


Edited by
Dale Littler
Manchester Business School,
University of Manchester

# 1997, 1999, 2005 by Blackwell Publishing Ltd
except for editorial material and organization # 1997, 1999, 2005 by Dale Littler
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First published 1997 by Blackwell Publishers Ltd
Published in paperback in 1999 by Blackwell Publishers Ltd
Second edition published 2005 by Blackwell Publishing Ltd
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The Blackwell encyclopedia of management. Marketing / edited by
Dale Littler.
p. cm. (The Blackwell encyclopedia of management ; v. 9)
Rev. ed. of: The Blackwell encyclopedic dictionary of marketing /
edited by Barbara R. Lewis and Dale Littler. 1997.
Includes bibliographical references and index.
ISBN 1-4051-0254-3 (hardcover : alk. paper)
1. Marketing Dictionaries. I. Littler, Dale. II. Blackwell Publishing Ltd.
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About the Editors




Dictionary Entries A–Z


The contribution of marketing to economic welfare has been clearly identified in many studies on,
inter alia, the development and adoption of innovations. Yet marketing continues to be viewed
ambiguously: its status, both by practitioners and more especially by non marketing academics, is
not unreservedly acknowledged. It is often seen as lacking a clear paradigmatic framework and robust
research methodological tradition, although this perception applies also to business and management
studies in general. Even if true, this may not necessarily be an unhealthy state regarding serious
treatment: knowledge diversity promotes discussion, dissension, even conflict, all of which can
promote further exploration, thought, and analysis.
Nevertheless, marketing as a core body of knowledge has a generally accepted defined structure: it
remains, as it should be, informed by practice; but it also draws on an eclectic mix of knowledge from
other disciplines and is unconfined within an epistemological straightjacket. Differing philosophical
perspectives can of course enrich our understanding. Marketing has in recent years broadened its
scope, and its accommodation of different traditions and its acknowledgment of ethical and other
concerns are reflections of its increasing confidence.
The second edition has embraced some recent developments – the importance of cross cultural
research, the developments in information and communications technology, the increasing sophisti
cation of qualitative research. New entries and the updating of entries where appropriate have taken
account of one or more of these areas.
As with the first edition, there was a large number of possible entries, and arbitrary decisions had
to be taken on where to draw the boundaries of what constitutes an acceptable range of entries that
will somehow provide information and insights on key areas of marketing. In some cases the encyclo
pedia is the beginning of further explorations, in others the end point, and in yet others a means of
I am extremely grateful to all the contributors, all of whom are valued colleagues. They are, in
alphabetical order: Dr Emma Banister, Dr Liz Barnes, Professor Margaret Bruce, Dr Charles C. Cui,
Professor Gary Davies, Dr Jim Freeman, Mr Michael Greatorex, Dr Steve Greenland, Professor Phil
Harris, Mr Mark P. Healey, Professor Margaret K. Hogg, Professor Nigel Holden, Dr Gillian
C. Hopkinson, Dr Kalipso Karantinou, Professor Philip J. Kitchen, Dr Fiona Leverick, Professor
Barbara R. Lewis, Dr Andrew Lindridge, Dr David Marsden, Professor Vincent Wayne Mitchell,
Dr Andrew Newman, Dr Rudolf Sinkovics, Professor Trevor Watkins, Professor Dominic Wilson,
Dr Steve Worrall, Dr Mohammed Yamin, Mr David Yorke, Dr Judy Zolkiewski. I am especially
indebted to Mark Healey, who reviewed the first edition, and to Miss Deborah A. Lee of Manchester
Business School, University of Manchester, who provided invaluable, and very patient, assistance
throughout the long and arduous process of bringing all the disparate parts into some form of
Dale Littler

About the Editors
Editor in Chief
Cary Cooper is based at Lancaster University as Professor of Organizational Psychology. He is the
author of over 80 books, past editor of the Journal of Organizational Behavior, and Founding President
of the British Academy of Management.
Advisory Editors
Chris Argyris is James Bryant Conant Professor of Education and Organizational Behavior at
Harvard Business School.
William Haynes Starbuck is Professor of Management and Organizational Behavior at the Stern
School of Business, New York University.
Volume Editor
Professor Dale Littler of Manchester Business School, University of Manchester, has held a
number of senior positions at the Manchester School of Management, including Head of the
Manchester School of Management and Dean of Management. He established the Customer Research
Academy and the Center for Applied Management Research.
Dale Littler has been a visiting professor at major European business and management schools
and departments. He has had several grants from the ESRC and was a principal investigator for
around eight years on the ESRC funded Programme of Information and Communication Technolo
gies. He has also had research grants from the European Commission, the Chartered Institute of
Management Accountants, the Department of Trade and Industry, the Council for Scientific Policy,
the Teaching Company Secretariat, and from the private sector. He is on the editorial board of many
marketing and technology management journals and has undertaken consultancies with a wide range of
He has been a member of the Research Grants Board of the ESRC and is currently on the Academic
Senate of the Chartered Institute of Marketing, the Executive of the Academy of Marketing, and is
Chair of the national research committee of the Academy of Marketing.

Lancaster University Liz Barnes Faculty of Food.Contributors Emma Banister Lancaster University Management School. Hopkinson Lancaster University Management School. and Hospitality Management. University of Manchester Andrew Lindridge Manchester Business School. Hull University Business School. Lewis Professor of Marketing. University of Hull Fiona Leverick School of Law. University of Manchester David Marsden School of Marketing and Tourism. University of Manchester Gary Davies Professor of Corporate Reputation. Lancaster University Margaret K. Hogg Professor of Marketing. University of Manchester Michael Greatorex Formerly of Manchester School of Management. University of Manchester Phil Harris University of Otago Dale Littler Professor of Strategic Management. University of Manchester Charles C. Lancaster University Management School. University of Manchester Mark P. Manchester Business School. Manchester Business School. Napier University Business School . Kitchen Chair in Strategic Marketing. Clothing. Cui Manchester Business School. University of Manchester Philip J. Manchester Metropolitan University Nigel Holden Kassel International Management School Margaret Bruce Manchester Business School. Healey Manchester Business School. Lancaster University Kalipso Karantinou Manchester Business School. University of Manchester Jim Freeman Manchester Business School. University of Aberdeen Barbara R. University of Manchester Steve Greenland London Metropolitan University Gillian C. Manchester Business School.

Contributors Vincent Wayne Mitchell Professor of Consumer Marketing. City of London Steve Worrall Formerly of Manchester School of Management. University of Manchester Andrew Newman Manchester Business School. Cass Business School. University of Manchester Rudolph Sinkovics Manchester Business School. based at Loughborough University Judy Zolkiewski Manchester Business School. University of Wolverhampton ix . University of Manchester Trevor Watkins Policy Adviser to East Midlands Universities Association. University of Manchester Dominic Wilson Professor of Strategic Management. University of Wolverhampton Business School. Associate Dean (Postgraduate and Professional Programs). University of Manchester David Yorke Formerly of Manchester Business School. University of Manchester Mohammed Yamin Manchester Business School.


and so on. 1993). m a r k e t i n g c o m m u n i c a t i o n s were divided into above and below the line. such as eco logical or demographic modification induced by an impinging culture. which today still accounts for the major proportion of the marketing communications budget. as with internal adjustments following upon the accept ance of alien traits or patterns. p e r s o n a l s e l l i n g was generally not placed in either category. This demarcation placed a high value on media advertising. Often. separating acculturation into two dis tinct outcomes: psychological and sociocultural. This may involve being the point of contact between the selling organization and the customer and acting as coordinator of all the activities within the selling organization aimed at delivering optimum value to the cus tomer. the outcome of the acculturation process is both culture’s selecting and adapting those cultural values that allow the individual and his/her group’s culture to continue to exist. The origins of this interaction arise as a ‘‘conse quence of direct cultural transmission’’ being derived ‘‘from non cultural causes. The latter refers to external psychological . The former refers to a set of internal psycho logical outcomes. b) add that accul turation can be distinguished further between the group and the individual attitudes and be haviors. is still recognized as perhaps the best: it describes acculturation as arising from the interactions of two separate. cultural systems. although nearly 50 years old. or it may be a reactive adaptation of traditional modes of life. it may be delayed. account manager Dale Littler The account manager has responsibility for managing major customers (see Pa r e t o ’s r u l e ). Often. and the individual being ultimately satisfied with his/her new cul ture. such as good mental health. Ward and Kennedy (1993a. d i r e c t m a r k e t i n g . including s a l e s p r o m o t i o n .’’ Ultimately. below the line activities are viewed as providing support for the media advertising campaign. which may today still be given the greater atten tion even in advertising agencies that provide a full range of services. Increasingly. p u b l i c i t y . the development of effective marketing communications is seen as involving a thorough analysis of target audience behavior and is not necessarily predicated on the basis that advertising is the prime means of addressing it.A See also key account above-the-line Dale Littler Traditionally. acculturation Andrew Lindridge The term acculturation describes the process of c u l t u r e change between two different cul tural groups who come in contact with each other (Sayegh and Lasry. autonomous. and maintaining varying levels of group and individual differentiation and integration. psychological wellbeing. important personal relationships are built between the account manager and his/ her counterpart(s) in the customer organization. The Social Sci ence Research Council (1954: 974) definition of acculturation. with a d v e r t i s i n g being in the former category and all other marketing communica tions being categorized as below the line.

Accultur ation then determines the individual’s sense of self identity (see a c c u l t u r a t i o n m o d e l s . an Indian Punjabi Sikh living in Britain who spoke fluent English would be iden tified as acculturated to British white society. Ward. Mendoza (1984) also cri tiques this approach for its assumption that ac culturation can be identified using a single dimension. Ward. These models identify acculturation in terms of the individual’s behavior and values and her identification with both her ethnic and domin ant culture.-C. language usage. acculturation. where the individ ual has a high level of involvement in both cultures. Social Science Research Council (1954). and Kennedy. Zak (1973. J. L. 1997)..2 acculturation models outcomes that relate individuals to their new cultural environment. and Fernandez (1980) and Szapocznik and Kurtines (1993). The bidirectional model of acculturation arose from criticisms of the unidirectional models by Szapocznik. and Kennedy. . Acculturation: An exploratory formulation. and Gerton. and values in favor of the dominant culture (Garcia and Lega. 1976) proposed that an ethnic minor ity group/individual may identify themselves negatively or positively regarding both their cul tures. a point recognized by the bidirectional accultur ation process models. Taking this approach. for example. Unlike the unidirectional model. Kurtines. C. Bibliography Sayegh. 34 (1). (1993a). A criticism of the unidirectional model is its underlying assumption of ethnic minority group/individual’s desire to lose their native culture and identity. American Anthropologist. Where’s the culture in cross-cultural transition? Comparative studies of sojourner adjustment. 1979). A unidirectional assimilation model describ ing the cultural changes undergone by individ uals of a minority group was first proposed by Gordon (1964). 24 (2). Journal of Cross Cultural Psych ology. Der Karabetian. Coleman. 1973. 56 (6). and Lasry. 221 49. C. 973 1002. 1980). This identifi cation process gives rise to four acculturation outcomes: 1 the bicultural individual. regardless of his identifying with his religion. In this model the ethnic minor ity relinquishes its cultural attitudes. Canadian Psychology. A. This process is called the straight line theory of ac culturation representing the eventual absorption of the ethnic group by the dominant ethnic population. behaviors. or positively toward one culture while remaining negative to the other. International Journal of Psychology. How an ethnic minority group or individual negoti ates the acculturation process has predomin antly focused on whether the dominant culture takes precedence for the ethnic minority group/individual (unidirectional) or whether acculturation represents a continued long period of interaction between the two cultures (bidirec tional). (1993b). 129 47. 28. customs. ‘‘white’’ society. This model stresses that acculturation problems encountered by immigrants are due to their own failure in assimilating into the dom inant culture (Bourhis et al. An underlying assumption of this model is that the ethnic minority group/individ ual loses their original cultural identity and ac quires an identity based upon the dominant new culture (LaFromboise. acculturation models Andrew Lindridge Ac c u l t u r a t i o n has been identified as an interaction between two cultures and the resulting c u l t u r e change that arises. Immigrants’ adaptation in Canada: Assimilation. 1976. 1993). these models recognize that ethnic minority and dominant cultural identities are not evident on either side of a bipolar scale but as dimen sions are independent of and orthogonal to each other (Zak. and orthogonal cultural identification. speaking Punjabi. and not wishing to engage with white cultural values. (1993). beliefs. This mode of accul turation may not be true for all ethnic minorities. s e l f c o n c e p t ) and ultimately affects his/ her consumer behaviors (see c o n s u m e r a c c u l t u r a t i o n ). A. Psychological and socio-cultural adjustment during cross-cultural transitions: A comparison of secondary students overseas and at home. and represents the acquisition of social skills and behaviors appropriate to engage with the new society on a daily basis. 98 109. for example.

and 4 marginalization (rejection in both their ethnic minority culture and the dominant culture). these four acculturation categories can be identified with Der Karabetian’s earlier accul turation categories. Berry (1997) argues that his pro posed framework should be used to identify acculturative stress amongst ethnic minority in dividuals by categorizing them according to four distinct acculturation strategies: 1 integration (an equal interest in engaging with both their ethnic and dominant cul ture). iden tified as having a low involvement in either his/her own ethnic minority or the dominant culture.. ethnic cultural maintenance and contact with the dom inant host group. Laroche et al. 3 assimilation (rejection of their ethnic minor ity culture in favor of accepting the dominant culture). 2 separation (retention of ethnic identity and rejection of dominant cultural identity). 1992. and Hui. Berry (1990. 1997) elaborated a bidirectional acculturation model drawing upon a two dimensional acculturation strategy. 4 A ‘‘no’’ to both questions indicates that the ethnic minority group views itself as being excluded from both its own ethnic group and society. In this model the existence of environmental influences. the bidirectional models of accultur ation have also been criticized for their inherent assumption that as interactions with the host society increase. is recog nized as having an effect on the ethnic minority individual. due to its influence and power in society. 2 A ‘‘no’’ to the first and ‘‘yes’’ to the second question indicates that the minority group expects to assimilate into the host society. 1976) research. 1980). such as the degree of multiculturalism in the host society. the ethnic minority individual’s interactions with his/her own ethnic minority culture will decrease (Laroche. 1997). In response to criticisms of the unidirectional model and in developing Der Karabetian’s (1980) and Zak’s (1973. 1997. However. and 4 the marginal bicultural individual. 3 A ‘‘yes’’ to the first and ‘‘no’’ to the second question indicates that the minority group expects to remain separate from the host society. This is a criticism that may not be resolvable owing to cultural and societal variables combined with the unique nature of all human beings. IAM asks both the host community and ethnic minority members two questions (the latter group’s are shown in italics): 1 Do you find it acceptable that (should we as) immigrants maintain their cultural identity? 2 Do you accept that (should we as) immigrants adopt the cultural identity of the host com munity? Four acculturation outcomes can then be derived: 1 A ‘‘yes’’ to both questions indicates the mi nority group wishing to integrate into soci ety.. with a high level of involvement in either his/her own ethnic minority or the dominant culture.e. 3 Hence. 1998). The latter group.acculturation models 2 the monocultural individual. 3 the marginal monocultural individual. where the individual shows low levels of interest in either his/her own ethnic minority culture or the dominant culture (Der Karabetian. Kim. In assessing acculturation amongst ethnic mi nority groups or individuals. IAM argues that acculturation strategies of ethnic minority members are interlinked with the acculturation orientations of host majority members.. concordance occurs when the host society and the ethnic minority group share virtually similar acculturation orien tations. and behaviors. According to the IAM. exerts a stronger influence on the accul turation preferences of ethnic minorities. Discordance between the host community and the minority group occurs when the acculturation orientation . i. The interactive acculturation model (IAM) arose from criticism of Berry’s bidirectional ac culturation model for the lack of importance regarding the host society’s influence on the acculturation preferences of minority group members (Bourhis et al. attitudes.

Hispanic Journal of Behavioral Sciences. Psychology of acculturation. M. (1993). 395 412. C. R. Hogg. 418 33. In J. but relative.. 1. M. S. W. and Hui. . 317 31. M. Gordon. acculturation. 247 61. Kim.). (1997). 1989: Cross-cultural perspectives.. Kim. Journal of Cross Cultural Psychology. Relation of two cultural identities of Armenian-Americans. Assimilation in American Life. H. Bhatia.. (1994: 456) state. ‘‘Self categories do not represent fixed.4 acculturation models profiles for the host society and for the minority group reflect little or no commonality (Bourhis et al. A. Lincoln: University of Nebraska Press. Hui. Perreault. 47. 2002). K. Toward an interactive acculturation model: A social-psychological approach.). pp. Turner and H. Oxford: Blackwell. J. Turner et al. 29 (3). with ethnic identity influencing language attitudes and usage (Sachev and Bourhis. J. (1997). International Migration. This process of code switching allows an ethnic minority individual to draw upon appropriate ethnic minority or host cultural values in appro priate situations.. Berman (ed. Theory and Psych ology. culminating in their effects on their consumer behavior (see c o n s u m e r a c c u l t u r a t i o n ).) The dialogical ac culturation model implies that acculturation and identity are both dynamic. and Sachev and Bourhis (1990) found that the extent to which individuals en dorse their ethnic identities was directly related to their choice of language. Acculturation. with language being a central aspect of the cognitive system of culture. and Shah. . Development of a Cuban ethnic identity questionnaire. Bhatia’s argument de velops the acculturation categories in Berry’s bidirectional acculturation model and addresses Turner et al. Laroche. C. and Tomiuk... (Hence.. and Johnson. flexible. 1990). Bibliography Berry.. K. L. M. Intergroup Behavior. Garcia. C. (1964). Giles and Johnson (1981). . 69 85. 199 272. (1981). 46 (1). L. An ethnic minority individual’s choice of language ultimately then influences the formation of an ethnic iden tity. while simultaneously holding positions of being assimilated. This model draws upon the philosoph ical assumptions of social constructionism and represents a dynamic. K. Nebraska symposium on motivation. and Gerton. (1998). (1997).. W. each being employed successfully in different situations. C. M. 114 (3). Moı¨se. 1996). P. Der-Karabetian. This provides useful criteria for market ers to assess individuals’ sense of engagement with culture and their sense of ethnic and self identity. 32 (6). M. An alterna tive acculturation model that addresses Turner et al. J. W. Giles. separated. Bhatia (2002) argues that the dialogical pro cess involves the ethnic minority group/individ uals moving continuously between opposing cultural positions. Psychological Reports. In examining the acculturation process. Pon. and adaptation. with the ethnic mi nority individual creating multiple presentations of the self depending on other individuals and situations encountered (Phinney. Berry. L. dialogical voices and the construction of the diasporic self. Journal of Social Psychology. Test of a non-linear relationship between linguistic acculturation and ethnic identification. 2004). Applied Psychology: An International Review. M. and Lega.’’ Rohner (1984) adds that incompatible mixed values often stand side by side within an individual. varying. and holistic ap proach to viewing acculturation in an ethnic minority group or individual (Bhatia. context dependent properties. and marginalized. Giles (eds. Current Theory and Research in Motivation. J.. A comparative investigation of dimensional structures of acculturation for Italian Canadians and Greek Canadians. New York: Oxford University Press. (1980). Liebkind (1992). Laroche. I.’s criticisms of uni and bidirec tional acculturation models. International Journal of Psychology. H. absolute properties . Coleman. M. (1979). Acculturation and adaptation in a new society. acculturation becomes the enactment of a variety of codes. 123 8.’s criticisms is the dialogical acculturation model. In criticizing the uni and bidirectional accul turation models. 12 (1). Immigration. S. 369 86. Bourhis. Bhatia’s dialogical acculturation model draws upon Oswald’s (1999) argument that ethnic minority individuals conduct a code switching process. 55 77. 201 34. In J. and Sene´cal. Berry. 137 (3). Psychological impact of biculturalism: Evidence and theory. representing the creation of multiple identities amongst ethnic minority individuals (Lindridge. Central to the code switching approach is language. Noels. Y. 37. 30. pp. 1997). and Cle´m ent (1996). Hence. The role of language in ethnic group. 5 34. (2002). (1990). (1992). T.. LaFromboise. Psychological Bulletin. A. S.

Language. Haslam. Toward a conception of culture for cross-cultural psychology. New York: Western Wheatsheaf. M. the others being the entrepreneurial and planning (see e n t r e p r e n e u r i a l s t r a t e g y . Psychological Reports. identity. strategy often emerges (see e m e r g e n t s t r a t e g y ) . 111 38. and t e l e m a r k e t i n g are now being used to generate a complete range of actions. 20. G. Triggering desired forms of ‘‘action’’ is best achieved by specific communication techniques such as a d v e r t i s i n g (for seeking further information) and p e r s o n a l s e l l i n g (for trial and purchase). and Bourhis. interest. Y. (1994). (1984). Marketing communications. repeat) purchase of the product or service. 147 85. Noels. (1990). and Lampel (1998). 918 27. 353 65. ch. R. (2004). and Cle´ment. C. W. M.. T. J. P. Mendoza. Journal of Consumer Research. The action stage can stretch over a sig nificant time and may be repeated each time the customer engages in the acquisition of the spe cific product or service. 211 29. P. International Journal of Inter cultural Relations. 38. desire. Bibliography Puth.). 48 (4). and McGarty. (1992). Social Psychology of Identity and the Self Concept. 51 (9). Imagined multiple worlds: How British South Asian women navigate the ‘‘border crossings’’ between household and societal contexts.. Ethnic identity: Challenging the boundaries of social psychology. R. (1973). 239 46. Oakes. Dimensions of Jewish-American identity. The action phase can involve several dif ferent activities and refers to positive acts of the buyer/customer/consumer such as seeking fur ther information from the supplying organiza tion. suggested by Mintzberg (1973). Oxford: Oxford University Press. 454 63. Rohner. Pon. organizations that will tend to be in the public sector.).. Psychological Reports. In G. Mendoza (eds. Turner. When we talk about American ethnic groups. Consequently.. they are still useful in providing an indication of the purposes and process of a communications cam paign. 15 (3). Bicultural involvement and adjustment in Hispanic-American youths. Blois (ed. Personality and Social Psychology Bulletin. Oswald.. and R. although more recent developments in d i r e c t m a r k e t i n g such as d i r e c t m a i l . The adap tive mode is suited to large. M. Szapocznik. and Shah. K. adaptive strategy Dale Littler This is one of three original strategic styles. R. among the best known being AIDA. now termed ‘‘schools. research and application. opportunities for theory. American Psychologist. K. Zak. Language and social identification. o f f t h e p a g e selling.. In K. Marketing and Culture. In D. t r i a l of the product or service. (1976). H. I. and Fernandez. 303 18. I. Self and collective: Cognition and social context. They have ambiguous goals and there are many different interest groups within the organization. 246 64.. Social Identity Theory: Constructive and Critical Ad vances. pp. what do we mean? American Psycholo gist.adaptive strategy Liebkind. Ahlstrand. and action (see a i d a m o d e l ). action David Yorke and Dale Littler The term ‘‘action’’ appears at the c o n a t i v e (or behavioral) s t a g e of models of the hierarchy of effects of m a r k e t i n g c o m m u n i c a t i o n s . often non profit oriented. A. A. G. each with its own ob jectives and agenda. Hogg (eds. M. (2000). 400 7. 33. Journal of Cross Cultural Psychology. 891 900. Szapocznik. Acculturation and socio-cultural variability. Phinney. In J. and adjustment: The role of linguistic selfconfidence in the acculturation process. (1996). The Oxford Textbook of Marketing. Abrams and M. L. Hogg. and Kurtines. (1980). R. Several other strategic styles have since been identified. Paper accepted for the Journal of Consumption. I. Structure of ethnic identity of Arab-Israeli students. A. 25. Journal of Lan guage and Social Psychology. S. Zak. Although it is widely recognized that the c o n s u m e r d e c i s i o n m a k i n g p r o c e s s is more com plex than represented in such models. 12.. 4. (1999). Jr. Breakwell (ed. W. 15 (2). p l a n n i n g s t y l e ). Sachev. Culture swapping: Consumption and the ethno genesis of middle-class Haitian immigrants. H. Lindridge. J. (1996). ultimately. together with the first (and. M. J. Family psychology and cultural diversity.). M.). Martinez. which 5 stands for the four stages of attention. London: Surrey University Press. Kurtines. L. (1993). J.’’ by Mintz berg. Chicano Psychology.. (1984). S. New York: Praeger. A. pp.

The original classification of ideal types still prevails. The process may not end there. to adopt an innovation previously tentatively rejected (see c o g n i t i v e d i s s o n a n c e . and confirmation (Rogers and Shoe maker. J. early adopters – respectable. and laggards – traditional. and Lampel. Golby and Johns. Mintzberg. (1971). particularly those with a dominant chief executive. in light of greater information and awareness. Golby. whereas personal forms of communication. (1973). 2 (Winter). such a perspective ignores research (e. (1963). 1991). or it may lead the consumer for various reasons. R. early majority (34 percent). when the consumer is stimulated to acquire more details about the innovation. It is gener ally recognized that all strategy development evolves through a process of adaptation to changing knowledge about the context within which the strategy will be applied. Ahlstrand. t r i a l . Rogers (1995) developed a cat egorization based on the normal distribution curve using the mean and standard deviation. A Behavioral Theory of the Firm. The relative importance of each stage may vary according to the ‘‘newness’’ of the innov ation. the environment will be modified or changed. are likely to assume a greater significance in the later. Strategy Safari. Englewood Cliffs. NJ: PrenticeHall. when the consumer first becomes knowledgeable about an innov ation either passively or through an active search. There are five categories of adoptors: in novators (2.5 per cent). impersonal channels... 1971). 44 53. H. W. An alternative paradigm of the adoption decision process consists of: knowledge. and finally adoption or rejection. There has been substantial research on the demo graphic and psychographic features of each in novator type. late majority (34 percent). and personal factors. 7. cultural influences. Strategy making in three modes. G. more evaluative phases. Mintzberg. Thus. G. 16. such as m a s s m e d i a . decision. and March. Finally. (1998). early majority – deliberate. M. late majority – skeptical. information search. California Management Review. however. in the order through which they are passed: awareness. often against competing possibilities. inter alia. H. Attitude and Motiv ation. may also engage in entrepreneurial strategy formation. This is generally a feature of small organizations dominated by the owner manager. adoption process Dale Littler The consumer adoption process for an innov ation is typically represented as a number of stages consisting of. similar to that identified by Cyert and March (1963). Research on the various socioeco nomic differences of each category has been . such as risk averseness (see p e r c e i v e d r i s k ). bureaucratic organ izations operating in relatively stable environ ments with the resources to afford the detailed analysis such an approach requires. when the consumer assesses whether or not the innovation satisfies his/her requirements. B. because the consumer may go through a process of reevaluation that may lead to satisfaction or dissatisfaction with the decision to adopt. when either physically or vicariously the consumer tries out the innovation in a way that minimizes the risk. persuasion. including changed circumstances. and laggards (16 percent). with their owners preferring to insure continued control rather than engaging in taking significant risks with a view to securing major growth. Individuals differ in their propensity to adopt an innovation. such as w o r d o f m o u t h c o m m u n i c a t i o n s .6 adoption process through a process of bargaining and consensus seeking. This approach to strategy forma tion can be contrasted with the entrepreneurial style of bold decision making.5 percent). c u s t o m e r s a t i s f a c t i o n ).. may be important in the ‘‘knowledge’’ phase. and that the original intentions and assumptions about. and different communications channels may have different importance at dif ferent stages. and Johns. However. early adopters (13. Large firms. C. evaluation. Bibliography Cyert. suggesting that many small firms tend to be rather conservative. the planning mode is the traditional approach to s t r a t e g i c p l a n n i n g and tends to be suited to large. London: Prentice-Hall. J. with the salient values of each being as follows: innovators – venturesome.g. Bolton Committee Research Report No.

London: Collier Macmillan. are becom ing increasingly complex. developing goodwill. Rogers. and Shoemaker. D. and com patibility. It may be planned and executed within an organization or handed over to specialists. including other organiza tions in the distribution chain. M. that is transmitted to a target audience through a mass medium. and retention (see c o n s u m e r p e r c e p t i o n s . Blackwell. Bamossy. selection. and evaluating advertising effectiveness. advertis ing frequency. M.. M. F. competition. There has been increasing questioning of whether or not there is a general trait of innovativeness (see i n n o v a t o r s ). Rogers (1995) initially identified these as: relative advantage.. Fort Worth. distortion. and product substitutability. predispositions. and channels of communications. and individuals’ reactions to innovation may be sig nificantly affected by their i n v o l v e m e n t or the particular intensity of their interests and requirements. P.g. by an identified sponsor. F. See also diffusion process Bibliography Engel. It has been argued that features of the product also affect the innovation process. the audience is not obligated to be attentive or respond. In setting the advertising budget. Rogers. Consumer Behavior. (1995). which is possible through repetition.e.. (1995). perception. 8th edn. Consumer Behavior: A European Perspective. E. characteristics of the company and its messages. employees. with respect to products and organizations/institutions (see c o m m u n i c a t i o n s o b j e c t i v e s ). and its expressive nature in so far as it dramatizes a company and its products or services. These and other variables are built into adver tising expenditure models which. which confers a legitimacy. shareholders. and reminding current and potential buyers/cus tomers/consumers. Product and brand advertising is typically focused on generating or defending sales. market share and customer base. S. as a result of developing computer technology. (1999). Key features of advertising are: its public presentation. Advertising objectives flow from prior deci sions on an organization’s target market (or segments) (see m a r k e t s e g m e n t a t i o n . and Miniard. m a r k e t i n g m i x ) and are various (e.e. persuading. planning messages. channels (of distribution) members. The advertising budget can be established on the basis of what . F. or improving a company’s relationships with various groups to include cus tomers. W. complexity. s e l e c t i v e e x p o s u r e . selecting the media. i. Colley 1961 lists 52 possible objectives). Communi cation of Innovations: A Cross Cultural Approach. The major stages in the development of an organization’s advertising are: setting advertis ing objectives. advertisement see a d v e r t i s i n g advertising Barbara R. G. Lewis Advertising is a paid form of non personal pre sentation and communication about an organiza tion and/or its goods and services. its persuasive nature. advertising agencies (see a g e n c y ). organizations may take account of factors such as stage in the p r o d u c t l i f e c y c l e . needs and values.. whereas institu tional advertising is usually concerned with pro moting an organization’s image or reputation. TX: Dryden Press. (1991). Advertising is an integral element of an organ ization’s m a r k e t i n g c o m m u n i c a t i o n s (see c o m m u n i c a t i o n s m i x ). J. and Askegard. Advertising is an industry in its own right although it employs relatively few people.. trialability. which in turn depends on: consumer 7 attributes. New York: Free Press. Diffusion of Innovations. and the gen eral public. deciding on the budget.advertising largely inconclusive. Advertising is a one way communication from an organization to a customer and is subject to the consumer selective processes of: exposure. s e l e c t i v e r e t e n t i o n ). They are con cerned with informing.. observability. suppliers. 4th edn. R. i.. E. Soloman. the major expenditures being for media time and space. London: Prentice-Hall.

H. e. The choice of media types is influenced by considerations such as the product/service being advertised. although it is accepted that relationships between advertising and sales are not necessarily causal due to: the influence of other variables in the marketing mix. target audience media habits.. it is neces sary to take account of the desired r e a c h . com petitors’ activities. by prod uct sensitivity and advertising controls. Bibliography Colley. and their costs. the Trades Descriptions Act. Examples of industry self regulation may be seen in various c o d e s o f p r a c t i c e .. or experiencing anger during a long wait for assistance using an automated telephone service. happiness. Various legal statutes impinge on advertising.g. Healey Affect is some degree of positive or negative subjective feeling. and sales. New York: Association of National Advertisers.. prefer ences. tobacco. An affective reaction is a valenced (positive or negative) mental sensation which diverges from an equilibrious or existing phenomenal state to bring about a certain mental and/or behavioral . They are distinguished from other forms of communication. For example. and sadness. Defining Advertising Goals for Meas ured Advertising Results. Jobber.g.8 advertising agency is affordable. and i m p a c t . are both examples of affective reactions. food and drug labeling re quirements.. The advertisements (see a d v e r t i s i n g ). Advertising media comprise: t e l e vision. 4th edn. adverts may not be seen immediately. or sales may be brought forward at the expense of future sales. and decide on media timing. e. desire. The effectiveness of advertisements may be assessed in two major ways: pre testing adverts (e. magazines. products. the Medicines Act. posters (billboards). copy testing) and post evaluating their ef fectiveness (e. impact may be later. London: McGraw-Hill. the advantages and limitations of the media. as a percentage of sales.g. D. (1961). In deciding on advertising media. and executing them effectively. advertising agency see a g e n c y affect Mark P. e. to gether with restrictions with respect to the advertising of alcohol. Developing of advertising messages and choice of media are influenced. Advertising messages represent the creative aspect of advertising (see m e s s a g e ) and organ izations are concerned with developing mes sages. recall and recognition tests). (2004). companies need to be aware of the sensitive nature of advertising alcohol and to bacco. Feeling excite ment viewing an advertisement for a forthcom ing film. p u b l i c i t y . in part. etc. knowledge. choose among the major media types and vehicles.. Advertising controls embrace government (legal) regulations and self regulation. consumer credit regulations. such as surprise. the misuse of which may contribute to health and social problems. for example. and the television advertising standards au thorities.g. pro fessional services. Advertisers also try to measure the communi cations effects on awareness. newspapers. The development of the Internet has created a new market for advertising with its incorporation in. or on the basis of objectives and tasks. evaluating and selecting among them. Principles and Practices of Marketing. and sales effects over time. the Advertising Standards Author ity. search engine sites (see In t e r n e t m a r k e t i n g ). and d i r e c t m a i l . R. and brands encountered in the marketplace frequently stimulate feelings and sensations in consumers. radio. t r a d e j o u r n a l s . it typ ically refers to feelings such as emotions and moods that result from interaction with con sumption stimuli.g. f r e q u e n c y . medicines. there may be carry over effects. because the time and/or space has to be paid for. In the marketing field. on the basis of competitors’ expenditures. while the emergence of more television channels mainly from satellite broad casting is leading to an increasing fragmentation of the market for television and therefore televi sion advertising.

tripartite models of attitudes distin guish between the affective (feeling) and cogni tive (knowing) components of attitudes. Several influential theories of consumption related affect have been drawn from the psych ology literature into the marketing domain. such as happiness or sadness. 1993). and Nyer. psychological pleasure combined with high physiological arousal results in feelings of joy. 2000). Oliver (1997) differentiates affect. and attitudes. for instance. and contrasted with cold (unfeeling) cognition. For example. anger may be felt where one attri butes product failure to the manufacturer. Arousal states. others argue that since physiological arousal is neutral in that it can be interpreted in a positive or negative manner. Despite this vacillation. Following a period in which marketing re searchers focused primarily on the non feeling.affect inclination. For example. coupled with visceral sensations from neural and physio logical arousal. often induce specific feelings. psychological pleasure. Non affective cognitions. may be viewed as distinct affects. emo tion. Russell’s (1980) circumplex model conceives affect as consisting of two main dimensions. 1999) hold that emotions result from cognitive evaluations or judgments of a product or a consumption experience in terms of its significance for a con sumer’s goals or personal wellbeing. Mattila. An affective response is distinguished from other valenced psychological responses to con sumption on the basis that it is characterized by a subjectively experienced feeling state. including emotions. and mood. cognitive determinants of marketplace behav iors. and Tan. which combine to produce affective feeling. with a t t i t u d e s differentiated as evaluative cognitions or thoughts rather than as feelings (Cohen and Areni. Some studies make meaningful conceptual and empirical distinctions between the constructs of affect. in the kind of higher mental processes generally analyzed in studies of marketplace behavior. corresponding to pleasure and arousal. including remembering and evaluation. In a different conceptualization. Different appraisals result in different emotional reactions. Affect entails some degree of arousal or excitation and a sense of pleasure or displeasure. Emotion includes arousal. pleasure or pain. arousal combines with valenced feelings to produce emotions of different intensities. and cognitive interpretations of feelings. Thinking about one’s possessions or purchases can engender certain feelings. affect is now viewed as a key influence on customers’ psychological processes and behav ior. whereas pleasure allied to low arousal results only in feelings of contentment. and current feelings and emo tions can influence the way customers think about and react to the products they encounter. affect (feeling) and cognition (thinking) are often intertwined in their order and experiencing. conceptualizing each as a dis crete response. Research has shown that positive and negative affect may be experienced simultaneously and contribute independently to customers’ feelings following a consumption experience (Mano and Oliver. but in themselves are affectively barren mental processes and can thus be differentiated from actual feeling states. regret where it is attributed to one’s own misuse. Various theories consider three constructs and their interactions as components of affect: physiological arousal. feelings of regret following the purchase of a disliked brand can leave consumers with the intention of avoiding future purchases of this brand. Gopinath. appraisal theories of emotion (see Bagozzi. moods. In contrast. 1991). For instance. differ ent feelings. However. Affect has been used as a generic term to describe all valenced mental processes. and moods. Affect is sometimes used to refer to feelings of lesser intensity. This has been particularly useful in understanding con sumers’ feelings toward consumption experi ences (see Wirtz. Moods are distinguished via their rela tively extended duration and lesser intensity. where emotions are viewed as more intense. emotion. affect has also been used to describe only valenced feeling states such as emotions and moods. such as surprise or excitement. affect is predominantly 9 conceptualized in terms of subjective feeling states. including pleasure and displeasure. Subtle differences in the usage of the term affect are evident throughout the marketing lit erature. and cognitive interpretation. However. Physiological arousal can influence how con sumers form brand attitudes when viewing . whilst others use these and other related terms interchangeably. Primary affect is feeling.

Investment of resources of time and money in attaining such an objective can be huge.. H. Furthermore. 184 206. S. Kassarjian (eds. pp. (1999). Cost is a major consider ation but other factors. that their concern for reducing the erosion of the earth’s resources is reflected in their product or service offerings. which is owned and controlled by the parent company. J. in relation to all others. A. Mano. Wirtz. (2001). Robertson and H. 1 (1). Handbook of Consumer Theory and Research. D. 167 88.. 281 300. R. M. The role of emotions in marketing. (2000). (1992). international edn. M. e. Jour nal of Personality and Social Psychology. Affect and consumer behavior. Sujan.’’ i. for example. and Bettman. 347 65. s a l e s p r o m o t i o n ) skills or use those of an agency. Journal of Retailing. and behaviors (see Pham et al. Assessing the dimensionality and structure of the consumption experience: Evaluation. H. affective stage David Yorke Ma r k e t i n g c o m m u n i c a t i o n s models. and Hughes. L.. 12 (December). (1993). cus tomer. 20. namely. The feelings associated with using a product can also shape c u s t o m e r s a t i s f a c t i o n . or consumer. affective.). In other words.. 1 (2). and c o n a t i v e (or behavioral). C. 1161 78. 3 (December).g. Affect monitoring and the primacy of feelings in judgment. or service in the target buyer’s or customer’s mind. and Sirdeshmukh. In T. Journal of the Acad emy of Marketing Science. Journal of Con sumer Research. after spending millions of financial resources and many man hours both on developing and testing safety features in its cars and on telling potential customers that it has effectively done so.10 affective stage advertisements. agency David Yorke An organization can develop its own a d v e r t i s i n g and promotional (see p r i c e p r o m o t i o n s . and Oliver. 27 (2). New York: McGraw-Hill. S. (1980). Journal of Consumer Psychology. P.. R. W. but there is plenty of research evidence to support the notion that it can be achieved. brand. Cohen. the c o g n i t i v e .. H. J. The moderating role of target-arousal on the impact of affect on satisfaction: An examination in the context of service experiences. A.. Pham. J. (1992). Bibliography Bagozzi. Miniard. and reinforce positive a t t i t u d e s in the mind of the target buyer. Cohen. or one that is independent. Russell. feeling.. The affective stage is that which attempts to create a preference for one product. R. and satisfaction. and remembering a happy product experience can enhance cus tomers’ positive feelings.. various works have demonstrated that mood influences different consumption behaviors.. S. and Areni. (1997). Satisfaction: A Behavioral Perspective on the Consumer. decisions. M. 28. which state that a target buyer or customer moves along a spectrum from a state of ignorance or unawareness of an organization and/or its products or services to ultimately making a pur chase.. G. S. Journal of Consumer Research.. W. 3 (Fall). T. Gopinath. Autobiographical memories. Oliver. P. Currently. Englewood Cliffs. U. P. . 53 82. M. Journal of Consumer Psychology. comprise three principal stages. B. NJ: Prentice-Hall. commu nications at the affective stage are designed to develop. J. L. Journal of Consumer Research. B.e. J.. P. A customer in a positive mood may evaluate brands more favorably and be more inclined to make immedi ate purchases than a customer in a negative or neutral mood. 2001). affect. D. Pracejus. such as generating an external perspective and the facility to offer a complete range of services from market research to distribution. (1991). and consumer information processing.. Baumgartner. L. major organizations are seemingly attempting to show that they are ‘‘environmentally conscious. Mattila. Mood states and consumer behavior: A critical review. 451 66. Consumers may use their feelings toward a product or advertise ment as a guide for judgments. P. Mood as a determinant of postconsumption product evaluations: Mood effects and their dependency on the affective intensity of the consumption experience. either in house. R. A circumplex model of affect. (1985). J. and Nyer. 76. and Tan. Gardner. 2 (September). Volvo is synonymous in many people’s minds with security or safety. Bhatla. maintain. 188 240. R. 173 95. 39 (December). may play a role in the client– agency relationship.

but pays the TV company this amount less. and the pur chasing of the relevant media space. The Psychology of Selling. where positive a t t i t u d e s toward and preference for the product or service are sought. Pacific Palisades. 5. and Enis. i. A substantial proportion of the income earned by the agency is from commission secured from the media owners.. and the overall visual design of the advertisement. It also focuses on the conversion of a non buyer to a buyer whereas. who is responsible for managing the relationship with the advertiser. uct. and so on. Action is the c o n a t i v e s t a g e (the purchase). Other communications might employ strong images to evoke an emotional response aimed at generating positive feelings (see f e e l b u y l e a r n m o d e l ). thus earning 750. the current advertising. yet there is little evidence to support that this arises in the case of at least inexpensive products. The full service agency will be con cerned with the creation of the advertisement. . such as in.. indicating a need for the marketing communicator to gain the receiver’s attention before attempting to do anything else. Recognizing that consumers may not be fa miliar with many innovative offerings. for example. It is one of a number of models of m a r k e t i n g c o m m u n i c a t i o n s based on a hierarchy of effects be cause. taking on advertising responsibility in several geographic markets. Measures taken before and after a form of communication is used will enable objective(s) to be set and the success of it to be analyzed. It is a l e a r n f e e l b u y m o d e l of con sumer reactions to communications. Developing i n t e r e s t and desire (to purchase) are elements in the a f f e c t i v e s t a g e . b u s i n e s s t o b u s i n e s s m a r k e t i n g . 569 71. The agency will manage the account with the advertiser through an a c c o u n t m a n a g e r or director. 2nd edn.g. Progression logically through the stages is not always possible – indeed. much depends on the product or service being offered and the target groups of receivers (see c o m m u n i c a t i o n s o b j e c t i v e s ). P. B. involving the development of copy (for print advertisements) or scripts (for television and cinema advertisements). others are more local. Produc tion charges and creative costs are often invoiced to the advertiser directly to cover such high costs. M. e. K.000. Principles and Practices of Marketing. 15 percent. The major objective in such markets is to retain buyers by reinforcing their favorable percep tions. say. New York: McGraw-Hill. Agencies can be international. pp. CA: Goodyear. (1925). K. (1972). R. and that often they engage in i m p u l s e p u r c h a s i n g . It will be involved in negotiating with media owners over price. For example. both in size and in expertise. the communications may for example exhort the consumer to try out a new product to find out if s/he likes it (see b u y f e e l l e a r n m o d e l ). Dickson. Some specialize. AIDA model Bibliography David Yorke and Dale Littler The AIDA model is an acronym for: attention ! interest ! desire ! action. The first term relates to the c o g n i t i v e s t a g e of the process. it is assumed that learning about a product will lead to feelings about the product that result in the purchase of the prod Cox.AIDA model 11 Advertising agencies vary. where the pub lished charge rate for a 30 second TV advertise ment is. London: McGraw-Hill. r e t a i l i n g . 4th edn. Jobber. simplistically. that will feed into the development of the advertising cam paign. certainly in mature markets. the agency charges its client this full rate card cost (the published standard amount). Large agencies will also have the facility for undertaking re search. fashion. The model assumes that the buyer will develop a strong desire prior to pur chase. for example on how consumers think and feel about the advertiser’s products. Strong. (2004). E. Marketing Management. or finance. London: Dryden Press/Harcourt Brace College Publishers. repeat purchasing dominates. D. K. It will also have responsibility for the selection of the media. The Marketing Re search Process. (1997). the scheduling of the advertisements.e. others handle a variety of accounts.

J. and Henderson. P. lifestyle represents ex ternal consumer patterns of behavior which are often categorized into a consumer’s activities (e. Levy. interests (e. P. Some manipulable elements of the service setting and their impact on company image and reputation. 4 (3). and image. work. food). J.g. J. Consumers who have different activities. P. in a variety of consumer settings. Atmospherics. lighting. Greenland. Distribu tion and Consumer Research. It is. opin ions. 49 (4). 67 80. family. however. Spangeberg. Newman. Maidenhead: McGraw-Hill. Other definitions focus upon the more subtle design effects that influence consumers at an almost subconscious level: ‘‘Atmospherics – the design of an environment via visual communi cations. 1974) environment to enhance the likelihood of desired effects or outcomes in users’’ (Greenland and McGoldrick. 48 64. improving staff satisfac tion and performance levels. 163 96. S. Research has established clear links be tween atmospherics and retail or store image. B. The branch environment. E. Kotler.. fashion. 287 304. pp. This testifies to the importance of the social as well as the environmental influences that shape the at mospherics of any given place. McGoldrick and S. The term atmospherics was coined by Kotler (1973) in relation to a retail environment’s con tribution to its buyers’ or customers’ purchasing propensity. J. Newman. P. International Review of Retail. Greenland (eds. music and scent to stimulate customers’ perceptual and emotional responses and ultimately affect their purchase behavior’’ (Levy and Weitz. Atmospherics as a marketing tool. (1994). Improving the store environment: Do olfactory cues affect evaluations and behaviors? Journal of Marketing. (2002).g. and Cullen.. Effective use of atmospherics can enhance a retail outlet’s designed environment. J. R.. the pres ence of staff and customers as well as the inanimate objects imbue atmospheric qualities. Bibliography Plummer. International Journal of New Product Development and Innovation Management. see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s See also store design AIO (activities. E. A. (2003). 2002). A. as well as stimulat ing favorable reactions and behavior in customers. and opinions (e. A. Retailing Management. relevant to a broad Greenland. Crowley. MA: MIT Press. colors. In P. An Approach to Environmental Psychology. and Russell. store patronage. A wider def inition of atmospherics would encompass a range of lifestyle and image related signage. 2003). and the future) (Plummer. and McGoldrick. hobbies. J. Such favorable outcomes might in clude a propensity for customers to spend more time in the store and improvements in levels of i m p u l s e p u r c h a s i n g . 1998). (1974). 32 3. social issues. Jour nal of Marketing Research. (1994). Mehrabian. M. and interests may in fact represent distinct lifestyle segments. 1994). holidays). thus demonstrating the importance of this di mension of the customer experience (Newman.).g. Hence. J. London: Thomson Learning. January. Bibliography atmospherics Steve Greenland and Andrew Newman ‘‘Atmospherics is the tailoring of the designed (sometimes referred to as ‘built’ – see Mehrabian and Russell. and Weitz. A. Retailing: Environ ment and Operations. T. (1996).12 AIO (activities. The concept and application of lifestyle segmentation. and opinions) alliances spectrum of product r e t a i l i n g and service environments and is an important consideration in both staff and customer management. Cambridge. Retailing of Financial Services. politics. W. 411 16. 1994). and opinions) Vincent Wayne Mitchell Whereas values and p e r s o n a l i t y represent internal characteristics. 3rd edn. interests. A. . (1998). (1994). interests. attitudes and behavior: Modeling the impact of designed space. Boston: McGraw-Hill. (1973). S. J. to guide and inform consumers in retail stores (Newman and Cullen... J. Journal of Marketing. 60. A.

complexity. the environment. a purchase. which refer to the features/aspects of a product that are critical in the decision to purchase a specific item or brand/model. in print media. such feelings derive from p e r s o n a l i t y . toward a model of car. strength of beliefs about the object. K. The Psychology of Selling. and levels of service.e. Broadly. (1925). 13 Attitudes have three components. a major question for marketers is the extent to which attitudes predict subsequent purchase behavior. the indi vidual features of a car such as its design. toward one or more aspects of a product or brand. including: in formation exposure – the cognitive content is largely built up from information from other people and from the media. e. and fixity. Attitudes vary along various dimensions: direction. attitudes are char acterized by a predisposition or state of readi ness to act or react in a particular way to certain stimuli.g. about a product or brand. promotion and price. for example.. E.. Cost effectiveness is vital in gaining attention. stores. e.e. The conative component or action tendency concerns the disposition to take action of some kind. The affective component refers to the emotional content of attitudes and arouses either like or dislike. per formance. which is a function of available information. motives. e. 1971). Attitudes structure the way customers per ceive their environment and guide the ways in which they respond to it. Alpert.g. i. product appearance and packaging. toward products and services. social norms. However. Fishbein’s model of attitude toward the object identified three factors that predicted attitudes: salient beliefs (about attributes of the object). e. e.g... attitudes can also be seen as having evalu ative components: ‘‘Attitude is a psychological tendency that is expressed by evaluating a par ticular entity with some degree of favor or dis favor’’ (Eagly and Chaiken 1993: 1). group membership – the attitudes and opinions of people one inter acts with have an impact on the individual.. Attitudes are held toward many aspects of buying and consuming. although personal selling and telemarketing may be of use with higher value products or services.attitudes attention David Yorke Attention is the first stage in the a i d a m o d e l of m a r k e t i n g c o m m u n i c a t i o n s . less personal forms of communication such as media a d v e r t i s i n g are more cost effective at this stage. How ever. i. exerting a directive or dynamic influence upon a customer’s response to all objects and situations with which he/she is related. a consumer may have favorable attitudes without making purchases or even intending to purchase. appearance.g. the initial verbal contact may be important. in p e r s o n a l s e l l i n g . A number of sources of influences are import ant in the formation of attitudes. for example. organized through experi ence. how positive or negative. to include economic factors. Depend ing upon the channel of communication em ployed... one can refer to overall or general attitudes.. cars and safety. The cogni tive component refers to beliefs. companies. 1968. will they change? With regard to complexity. In many cases consumer attitudes are considered as mental states of readiness. favorable or unfavorable.. or service provided.g. and evaluation of the salient attributes. and present levels of need satisfaction. New York: McGraw-Hill. in the broadcast media.e.g. various stimuli may be used to gain attention. the first five seconds may need something emo tionally appealing. and to particular or specific attitudes.. Hogg and Barbara R.. i. the use of a dramatic headline or color may have a positive effect. one can consider ‘‘determinant’’ buying attitudes (see Myers and Alpert. or in t e l e m a r k e t i n g . the know ledge or descriptive thoughts one has. Further. positive or negative. brands. i. Bibliography Strong. i. e. intensity. attitudes Margaret K.e. Lewis Attitude has been classically defined as ‘‘affect for or against a psychological object’’ (Thurstone 1931 cited in Ajzen 2001: 29). This has been considered . They are relatively enduring and are useful guidelines as to what consumers may do in certain circumstances.e. and previous experience.

Hawkins. (1993). The Psychology of Attitudes. D. In R. (2002). Schiffman. Nature and operation of attitudes. NJ: Prentice-Hall. A. Attitudes and prediction of behavior. D. TX: Dryden Press. M. London: Sage. 1985). Solomon. J.. P. F. M. (1985). 8. J. 7. Consumer Behavior: Buying. Belief.14 awareness by Fishbein (1967) and others (Sheth. Engel. (2001). S. D. and Zinkhan. 7. NJ: Prentice-Hall. In M. S. (1990). Goldsmith. pp. Consumer Behavior. ex treme attitudes are harder to change. I. D. and the m a r k e t i n g e n v i r o n m e n t . MA: AddisonWesley. and Miniard. 5th edn. 52. W. Englewood Cliffs. (1931). D. Upper Saddle River. one has to take account of ‘‘intervening’’ variables that may prevail between the stages of intention to buy and purchase: these include economic factors. 477 92. chs. Blackwell. Shiu. Consumer Behavior. e. L. C. Thurstone. J. Consumer Behavior. ch. ch. R. both the m a s s m e d i a and i n t e r p e r s o n a l c o m m u n i c a t i o n s . 15. Being. Eagly. 879 94.). (1996). Journal of Marketing Research. Ajzen and Fishbein. 2nd edn. Boston: Allyn and Bacon. 17. I.. A. New York: John Wiley. Determinant buying attitudes: Meaning and measurement. 32 (October). and Brown. pp. Consumer Psychology for Marketing. Understanding Attitudes and Predicting Social Behavior. and Minor. Journal of Marketing Management. Fernandez Ballesteros (ed. 1974. Alpert. R. 2nd edn. ch. 6. New York: McGraw-Hill. (1975). individual factors.. Myers. (1980).. Upper Saddle River. Consumer Behavior. inten sity.). Identification of determinant attributes: A comparison of methods. L. Ajzen. E. 89 114. and Warshaw. Wells. Solomon. I. 12. Consumer Behavior: A European Perspective. A. (1993). Fishbein. Hoyer. London: International Thomson Business Press. Reading. 5. (2000). New York: John Wiley. Boston: McGraw-Hill Irwin. 27 58. (1968). M. 16. Mowen. NJ: PrenticeHall. (2001). Journal of Advertising Research. H. 11. March. Consumer Behavior: A Framework. R. 7. NJ: Prentice-Hall. W. Ajzen. L. Upper Saddle River. M. and Della Bitta. 4th edn. 127 40. ch. M. ch. Fishbein and Ajzen. An investigation of relationships among evaluative beliefs. IL: Irwin. awareness David Yorke Awareness is the first step in the d a g m a r . K. and Clarke. Attitude change also needs to be taken into account to include changes in direction. Arnould. and Kanuk. Journal of Marketing. G. chs. and Askegaard. W. J. Upper Saddle River. ch. J. I. (1992). and Chaiken. 26. Boston and New York: Houghton Mifflin. 11. Price. chs. h i e r a r c h y o f e f f e c t s . Loudon. R. D. (1995). Mowen. 5th edn. 5th edn.. R. G. in particular economic variables and financial considerations.. (1967). Orlando. Encyclopedia of Psychological Assess ment. C. affect. Farley. Readings in Attitude Theory Measurement. Consumer Behavior. ch. I. J. Attitude. J. Howard. E. and MacInnis. P. 184 91. Journal of Abnormal Psychology. S. 8 (May).. E. Z. Fishbein. Upper Saddle River. M. Homewood. and L.. 13. Fort Worth. price. Foxall. In J. and Alpert. availability. and Coney. e. G. Having. and promotional activities.. 249 69. J. Attitudes and behavior. 8th edn. P. D. Consumer Behavior. N. R. Ajzen and Fishbein’s suggestion is that purchase inten tion may be a better predictor of behavior than merely having favorable attitudes. 12. J. Intention and Behavior. W. FL: Harcourt Brace Jovanovich. R. (1971). W. and complexity. M. personality and product needs. L. Ajzen and Fishbein (1980) present the theory of reasoned action model in which a consumer moves from beliefs to atti tudes to purchase intention to purchase.. ch. Best. (2004). NJ: Prentice-Hall. L. Attitude assessment. Bamossy. H. Ring (eds. I. 8. 1975. and Fishbein. Shaw. U. The measurement of social attitudes. I. Bagozzi. Theory and Application. Fishbein (ed. 9. (2002). 5. G. Even so. R. Bibliography Ajzen. M. NJ: Prentice-Hall.). Trying to consume.g. L. Wells. and Ajzen. D. Con sumers.g. 2nd edn. 1980. Consumer Behavior: Implications for Marketing Strat egy. (2004). M. Factors that affect attitude change are: the attitudes themselves. (1998). Sheth. Wells.. ch. A. The contribution of ethical obligation and self-identity to the theory of planned behavior: An exploration of ethical consumers. 40 4. Annual Review of Psychology. m a r k e t i n g c o m m u n i c a t i o n s . 14. (2001). I. Journal of Consumer Research. (2004). and Minor. behavioral intention and behavior.. 8th edn. Consumer Behavior. and i n n o v a t i o n a d o p t i o n models of m a r k e t i n g c o m m u n i c a t i o n s which focus on the . D. (1998). and Prensky. 2nd edn.. (1974).

Defining Advertising Goals for Meas ured Advertising Results. selective e x p o s u r e ). Lavidge. Diffusion of Innovations. (1961). and Wong.. Journal of Marketing. E. J. and Steiner. (1961).. Harlow: Prentice-Hall. R. service. Various stimuli may be used to create awareness in the buyer’s or customer’s mind. Armstrong. (1995). 15 Bibliography Colley. New York: Association of National Advertisers. (2001). 25 (October). G. Principles of Marketing. Awareness is sometimes difficult to achieve due to the consumer’s ‘‘selective’’ processes (see consumer perceptions. 4th edn. depending on the channels of communi cation used (see c o m m u n i c a t i o n s m i x ). 61. H. M. New York: Free Press. R. G. or organization supply ing it. ch. A. 18. P. Kotler. 3rd European edn. Rogers.awareness consumer purchasing process. Saunders.. . the potential customer/buyer is made aware of the existence of the product. J. A model for predictive measurements of advertising effectiveness. At this initial stage in the buying process. V.

’’ Businesses (or products) can then be categorized according to whether or not they are ‘‘stars’’ (high market growth. prod uctivity improvements from technological change and/or learning effects leading to the adoption of new production methods. ‘‘problem children’’ (high growth. is the eponymous technique developed by the Boston Consulting Group that gained popularity in the 1970s.B BCG matrix Dale Littler The BCG matrix. high share). distributing. ‘‘cash cows’’ (low growth. The first relates to what the BCG terms the e x p e r i e n c e c u r v e effect by which the total costs involved in manufacturing. low relative market share). through aggressive pricing. the Boston Consult ing Group argued that real unit costs fall by 20 to 30 percent for each doubling of cumulative ex perience. Generally. low share). as its name implies. The effects of experience can be depicted by plotting real unit cost against cumulative produc tion volume as a measure of accumulated experi ence. The stars of today should become the cash cows of the future. the modifications to or redesign of products to obtain lower costs. is that busi nesses should focus on securing high volume. From such a pictorial representation the decision maker is able to gauge how balanced is the busi ness or product portfolio. Businesses (or products) can be plotted in the matrix as circles representing their relative size (based. It is based on two major premises. then. confectionery. in particular cash. The second premise is that the consumption of resources. It was advanced as a technique for assisting companies to analyze their diverse business or product port folios. They therefore generate cash. The experience is a composite of economies of scale and specialization. Each is measured as ‘‘high’’ or ‘‘low. BCG developed a four box matrix (see figure 1) with market growth and market share relative to that of the next largest competitor (since this is the true indicator of competitive advantage) as the two parameters. low share). it is argued that the deletion of the ‘‘dogs’’ should be seriously considered. and the displacement of less efficient factors of produc tion. There may be problems in defining ‘‘market’’ and hence ‘‘market share’’: for example. or ‘‘dogs’’ (low growth. In fact. It may be referred to as the growth share matrix or the business portfolio matrix. and therefore high market share (reflecting greater experience). or chocolate bars (with it being possible to subdivide the latter in itself into Relative market share Market Growth High Low High Stars Problem Children Low Cash cows Dogs Figure 1 The BGC matrix . is a manufacturer of chocolate bars in the market for snack foods. The technique has been extensively reviewed and there have been many criticisms. The implication. which can be employed to convert some of the ‘‘question marks’’ into ‘‘stars’’ which are essen tially cash neutral. for example. a straight line is normally obtained. on the sales revenue). is a direct function of market growth. and selling a prod uct decline with increased experience in produc tion. If logarithmic scales are used. The cash cows should have lower costs than their rivals and demand comparatively lower investment.

Despite its prescriptive nature. Lewis As the discipline of consumer behavior has de veloped.g. in so far as people may be ‘‘problem solvers. 9 (6). Economists were the first aca demic group to offer a theory of buyer behavior (see b u y e r b e h a v i o r t h e o r i e s ). while rivals may leapfrog the firm by acquiring experience through the purchase of plant and equipment that embody state of the art technology.. positivist versus non positivist) about different ways of understanding con sumer behavior. social psychology. the approach is overly deterministic and the acceptance of its prescrip tions could lead to suboptimum and even signifi cantly dysfunctional decisions. drawing on such disciplines as psychology. 9 15. i.. complete mobility. behavior theories Margaret K. The model also assumes that consumers have complete informa tion with respect to supply. Strategy and the ‘‘business portfolio. which is an increasingly interdisciplin ary field. R. Hogg and Barbara R. witness the introduction of a new technology. portfolio analysis Bibliography Hedley. be deleted from the portfolio. The annual conference of the . the intensity of the competition. thereby undermining its future market position. The Journal of Consumer Research is the major journal that represents the range of debates (e. the possibilities of external financing are ex cluded from the analysis. the indi vidual seeks to spend his/her income on goods that will deliver the most likely utility (satisfac tion) according to his/her tastes and relative prices. consumers may well be ‘‘satisficing’’ rather than ‘‘maximizing’’ their utility. which might give a ‘‘groin kick’’ to the technology of the future cash cow. and the influ ence of n o n p r i c e f a c t o r s on demand tends to be ignored. These include eco nomic theory. 45.’’ The industry might. (1981). A fundamental approach to strategy development. so called ‘‘dog’’ businesses might have cost and demand interrelationships with other businesses.. Long Range Planning. 10 (1). a fact that the analysis seems to overlook somewhat. including regulatory influences. however. the ‘‘mature’’ stage is of sufficient dur ation to enable the company to reap the benefits of its previous investments in current ‘‘cash cows. can reach any market offer at any time. the analysis rests on the assump tion that businesses’ products have a life cycle (see p r o d u c t l i f e c y c l e ). In practice. (1976a). This model assumes that consumers derive satisfaction from consumption (probably not the case with expenditure on insurance. (1976b). Wensley. and to delete these. However. demand. In general. economics is only one of the many disciplines that now inform consumer behavior research.’’ trying to make rational and efficient spending decisions. the BCG matrix does not provide guidance on the criteria for deciding on which problem children are to receive invest ment. Journal of Marketing. Economic theory does have a role to play in understanding consumer behavior. etc. consumers typically are not aware of and cannot judge all product offerings and may have restricted access. B. For example. boxes or basics. 173 82. B. and prices. cash cows may require considerable investment in order to protect their competitiveness. in par ticular. See also directional matrix. i.e. various theories have contributed to understanding behavior. sociology.) and seek to maximize satisfac tion within the limits of income. Finally. the assumption that cash flow is determined by a business’s position in the matrix is questionable (some ‘‘stars’’ may in fact have a high cash flow). Strategic marketing: Betas. The emphasis on market share can blinker decision makers to such a pos sibility and perhaps further the dependence on a vulnerable industry.e. of which. 17 Hedley. and anthropology. could have adverse consequences for businesses at pre sent in more attractive quadrants. and that there is pure competi tion. Consequently.’’ Long Range Planning. Moreover. The Mar shallian theory holds that consumer purchasing decisions are largely the result of ‘‘rational’’ and conscious economic calculations. or harvested. dental treatment. the use of market growth as a measure of market attractiveness ignores many other factors that can affect market attractiveness. as the analysis implies.behavior theories various submarkets)? The measures of ‘‘high’’ and ‘‘low’’ are subjective and easily manipulable. 2 11.

Boston: McGraw-Hill Irwin. (2001). 1 6. Upper Saddle River. Con sumers. ch. J. and Cote. Consumer Behavior: Buying. Solomon. M.18 behavioral perspective Association for Consumer Research (whose pro ceedings are available online at www. Katona. L. Assessing the influence of Journal of Consumer Research: A citation analysis. Bamossy. (1953). 1. D. 508 21. R. Advances in Consumer Research. E. R. Consumer Behavior. 2nd edn. (1995). (1992). New York: John Wiley. and Minor. Having. J. NJ: Prentice-Hall. M. the task for marketers is to shape customer behavior by controlling the immediate environment (see m a r k e t i n g e n v i r o n m e n t ) in which consumption takes place. (1965). Belk. Consumer Behavior. Journal of Consumer Research. Behavioral models for analyzing buyers. N. (1976). W. G. S. Toward a sociology of consumption. C. D. M. org) also represents the range of ongoing debates about different theories of buyer behav ior. and Prensky.. M. Psychological Review. (1999). Kotler. Mowen. in order to take account of various social and psychological influences on buying behav ior. S. 14 (March). Wells. L. 1. See also behavioral perspective Bibliography Arnould. R. (1993). behavioral perspective Mark P. W. Cote. Nicosia. Alternative ways of seeking knowledge in consumer research. ch. (1996). 1990. L. 402 10. 1. 282 91. 1. J. and Holbrook. 139 68. M. (1993). 2nd edn. Consequently. Journal of Consumer Research. s y m b o l i c c o n s u m p t i o n ). ch. 37 (July). New York: McGraw-Hill. NJ: Prentice-Hall. J. 570 96. M. A. The behavioral perspective model: Consensibility and consensuality.. ch. J. and the associated ontological and epistemo logical issues. The role of products as social stimuli: A symbolic interactionism perspective. Journal of Marketing. perception. 3 (September). (2004). R. M. (1988). Consumer Behavior: A Framework. Upper Saddle River. NJ: Prentice-Hall. Journal of Consumer Research. W. Journal of Consumer Research. M.acrweb. 5th edn. Price. Solomon. 18 (December). Richins. S. G. 65 75. and Askegaard. J.). ch. www. Loudon. C. 1 5. P. ch. 505 17.. J. (1973). Journal of Consumer Research. (1992). L. M. Advances in Consumer Research. R.. In Daniel Miller (ed. and MacInnis. Healey The behavioral perspective views the actions of c u s t o m e r s as determined by the setting or situation in which consumption takes place. This means that it is necessary to consider and understand the impact that marketing and other stimuli have on buyer be havior (see c o n s u m e r b u y e r b e h a v i o r ). Acknowledging Consumption. 5th edn. M. D.. 19 (September). 1. and Ozanne. Upper Saddle River. 319 29. Knowledge development and scientific status in consumer behavior research: A social exchange perspective. Being. 1999). G. 10 (March). Boston and New York: HoughtonMifflin. (2001). D. Mowen. Possessions and the extended self. According to the behavioral perspective model (Foxall. (1993). D. A. R... (1988).. F. London: Routledge. September. and Saxton. (2002). W. Journal of Marketing. Wells. 29 (November). and Zinkhan. Solomon. and Della Bitta.. 58 95. European Journal of Marketing. (2002). Selected social psychological models for analyzing buyers. W. L. values). knowledge. and Mayer. B. (1983). 19. Journal of Consumer Research. 37 45. L. and Minor. Zinkhan. 4th edn. Foxall. Journal of Consumer Research. Constructing consumer behavior: A grand template (Presidential address). Rational behavior and economic behavior. rather than by internal mental processes such as a t t i t u d e s or intentions (see c o n s u m e r b u y e r b e h a v i o r ). J. Consumer Behavior..acrweb. Journal of Consumer Research. 19 (March). For an excellent overview of the debates see Belk (1995). Hoyer. 31 9. Hudson. Consumer Behavior. 15 (September). The intellectual structure of consumer research: A bibliometric study of author co-citations in the first 15 years. together with buyers’ individual characteristics (e. 19 (March). Valdosta. (1991). Discovery-oriented consumer research. D. ch. L. a t t i t u d e s . ch. 1. 2nd edn. D. 1. pp. G. 489 504. 19. Hoffman. Belk. GA: Association for Consumer Research. M. C. 33 (5/6). J. R. (1998).g. A. Consumer behavior as a social science (Presidential address). (2001). Studies in the new consumer behavior. 28. G. Roth. Siew. behaviors such as product or brand . Levy. 307 18. NJ: Prentice-Hall. D. Some of the latest theories center around the meanings which consumers invest in the prod ucts and brands that they buy (e. Upper Saddle River. Consumer Behavior: A European Perspective.g. Schewe.

R. Foxall. namely the purchase. but by the usage conse quences suggested by the product and other situational indicators. Bibliography Foxall. without recourse to private pre behav ioral cognitions or psychological traits. Both types of reinforcement often result from an act of con sumption (Foxall. A consumer’s learning history transforms otherwise neutral features of the situation into indicators of positive or nega tive consequences contingent upon a specific purchase action. (1999). and shapes the actions of the customer within the setting. The learning history and set ting are thus said to combine to produce the consumer situation. and brands. This his tory is activated only by the consumption 19 setting. will be repeated in future similar situations. Information about the consequences of purchasing and possessing may be communicated by situational features other than the product itself. or situational norms. salespersons’ descriptions. decreases this likelihood. However. 1995). Foxall. European Journal of Marketing. most purchase acts take place in relatively open set tings. R. Consumers’ learning history. their past ex periences with products and their consequences. R. Thus calls are often made for theories that embrace the environmental and situational determinants of consumption to augment marketing’s capacity for explanation and predic tion. encouraging a pluralism of per spectives may be considered more productive than marginalizing cognitive explanations of be havior. (1990). Experiencing aversive consequences. European Journal of Marketing.behavioral perspective choice (see b r a n d ) are determined by two situ ational factors: the consumption or purchase setting and the reinforcement indicated by fea tures of the setting as determined by the con sumer’s learning history. Focusing on the observable features of the setting as determinants of consumer choice be havior. the past behavior of a consumer dictates his/her future responses. may also encourage or discourage an act of consumption (Foxall. Consumer Psychology in Behavioral Perspective. Science and interpretation in consumer research: A radical behaviorist perspective. this is said to operate as a reinforcer. 3 99. which may appear unrealistic. 29 (9). G. Behavioral interpretations are most adept at explaining the actions of consumers in closed consumption settings in which they exercise little control over the situation. Proponents of behaviorist construals argue that relying on a single cognitivist paradigm to understand complex marketplace behavior limits the explanatory power of marketing the ories. G. London: Routledge. denoting the symbolic or social status gained from ownership. The interaction between these two factors explains consumer behavior. 2002). Managers should seek to find the combination of rewards in a product which produces emotional responses that will encourage repeated purchase. Acts of purchase and con sumption are not compelled by the features of a product or brand per se. 570 96. G. . for example. social. The products and brands within a setting signal positive or nega tive usage consequences to a customer based on his/her previous experiences with them. In this sense. in addition to direct contact with the products themselves. A specific retail store occupied by certain indi viduals at a particular time of day would be one discrete setting. Behav ioral interpretations may therefore be disadvan taged when explaining complex behaviors in open settings. and temporal dimensions. such as advertisements (see a d v e r t i s i n g ) and market place promises. such as social disapproval of a brand purchased. However. The behavioral perspective model: Consensibility and consensuality. 33 (5/6). When a consumer experiences a positive consequence as a result of a purchase. positions behavioral interpretations as an alternative to cognitive models of consumer behavior (see c o n s u m e r d e c i s i o n m a k i n g p r o c e s s ). The positive consequences of an act of con sumption can produce either utilitarian re inforcement. where consumers are free to choose amongst stores. (1995). The consumption setting is comprised of physical. the pleasurable or functional benefit from purchase or use. products. determines which features of the current situ ation act as reinforcers or punishers. These discriminative stimuli. or informational reinforcement. A reinforcer will increase the likeli hood that the behavior that produced it. such as the pleasant taste of a food brand bought.

Peter.. (2002). Bibliography Yankelovich. bidding Dominic Wilson and Mark P. an organiza tion selects the most competitive bid(s) and enters negotiation with the relevant bidders to amend or enhance the details of the bid until a favorable agreement is reached between the con tracting parties. where bids are invited from potential sup pliers without restriction. D.). terms. W. Nonetheless. in negotiated bidding. There are several advantages to competitive bidding or tendering for the customer: it can help to remove many possibilities for corrupt . One of the earliest at tempts at benefit segmentation was made by Yankelovich (1964). may be made public (Dibb et al. 1. (2001). Healey Bidding or tendering is a process in which po tential suppliers are invited to submit bids or tenders in which they set out their specifications. G. Harvard Business Review. 102 7. whereby bidding is restricted to an approved list of suppliers. Journal of Marketing. Reno. These were: a price sensitive segment. Bidding may be closed. 42 (March/April). DiClemente.20 below-the-line Foxall. New criteria for market segmentation. Problems are sometimes encountered with benefit segmentation in terms of determin ing the size of the resultant benefit group and differences in the semantic variations of the stated benefits. 203 33. when preparing and pricing a competi tive bid an organization should consider the bal ance between completing an unprofitable initial contract and the probability of winning subse quent follow on contracts. A. low in calories. Outside the box: The analysis of consumer behavior. Furthermore. For example. How to decide the price aspect of a bid or tender is made even more awkward by the u n c e r t a i n t y surrounding rival bids and the need to balance the wish to make a profit (or even just to cover costs) against the wish to secure the contract. Organizational Change. and R. There are variants of tendering. R. D. 1 (Spring). and a segment buying watches as symbols or gifts for some important occasion. In organizational markets (see o r g a n i z a t i o n a l m a r k e t i n g ). In pursuing such a bidding strategy. in open bidding. J. Because price is only one aspect (if often the most important) of the bid or tender. Also. A. (1964). it remains one of the most conceptually valid approaches to take. the benefits sought in the soft drinks market may be: energy. Hantula. the successful bidder will not always be that offering the lowest price. where suppliers often seek to build advantageous long term relation ships (see r e l a t i o n s h i p m a r k e t i n g ) with their customers. especially auction bidding and sealed bid pricing. vitamins. D. (1982). which is used in organizational markets (and Scottish real estate markets). though evidence of a lower bid may be used to renegoti ate the price offered by the eventual contractor. A clarification and extension of operant conditioning principles in marketing. and the benefits. K. details of bids. 2001: 629). F. Hayes. or open. or low cost. Journal of Customer Behavior. 46 (Summer). a tendering organization may submit a bid that is priced suboptimally in terms of its profit making potential in order to win an initial contract and help secure subse quent contracts. NV: Context. of winning those contracts. and Nord. 83 90. Marketing’s attitude problem and how to solve it. Austin. Flemming (eds. P. fi nancial and otherwise. 19 48.. a durability and general product quality segment. who identified three main benefit segments for watches.. J. below-the-line see a b o v e t h e l i n e benefit segmentation Vincent Wayne Mitchell Benefit segmentation is the division of a market according to the benefits consumers want from a product. In L. and Rajala. particularly the price or amount. These techniques for so liciting prices have the effect of orienting price decisions more toward competitive issues than toward issues of cost or demand. R. pp. and prices in response to a stated cus tomer requirement.

g. Such analyses reveal whether or not there exists an association. using a scatter diagram and. Because of its apparent efficiency and probity. but inter pretation becomes difficult because the in creased number of cells often leaves empty cells or a number of cells with small counts. (2001).) (1997). nominal/categorical. Bibliography Brooks. Marketing: Concepts and Strategies. visually. description. also referred to as simple correlation. a value close to þ1 means a very strong positive relationship. quality levels. interval/ratio).. while a figure . ch. For example. Boston: Houghton-Mifflin. In principle. W.. 4th European edn.. marketers may want to know whether a linear or straight line relationship exists between con sumers’ perceptions of service quality and their 21 satisfaction with the service. London: Dryden Press. 2nd edn. ordinal. the strength of the association. In such a case. it helps to insure value for money and cost minimization. competitive bidding or tendering is increasingly being used in large scale tenders where price is a major purchase constraint and/ or where it is important to insure that processes are seen to be equitable and ‘‘above board’’ (e. and Ferrell. The statis tical significance of the observed association be tween two variables from the cross tab is commonly assessed by the chi square statistic. Such a relationship is analyzed and statistically summarized by a bivariate analysis ‘‘product moment correlation’’ (or Pearson correlation co efficient.bivariate analysis or unethical practices. using simple correlation and regression (see r e g r e s s i o n a n d c o r r e l a t i o n ). service provision). Pride. D. (ed. bivariate correlation). D. If both variables are interval... and in o u t s o u r c i n g ). and discussion of the relationship between the two variables. C. 42 (January). the relationship between them can be studied. numerically. bidirectional acculturation model see a c c u l t u r a t i o n m o d e l s billboards see p o s t e r s bivariate analysis Charles C.g. 20. There are other types of bivariate analysis for analyzing different kinds of relationships between two variables. G. If both variables are measured on nominal (categorical) scales. The row and column totals are usually calculated and percentages across the rows and/or down the columns are also computed to aid in the inter pretation. Journal of Marketing. it provides important competitive information where this might other wise be difficult to gather. Cui and Michael Greatorex Bivariate analysis refers to a group of statistical methods for analyzing the relationship between two variables. Ford. Bidding for the sake of follow-on contracts. and it pro vides insight to the costs associated with differ ences in the terms of the contract (e. A cross tab is a table (also called contin gency table) with the categories (or values) for the two variables listed on the two axes and the counts of the number of times each pair of values occurs recorded in the cells of the table.g. cross tabs can be formed in more than two dimensions when data for more than two categorical variables are analyzed. or whether or not there are dif ferences between two variables. in delivery arrangements. The observed association is of interest only if the association is statistically significant. the relationship indicates the degree to which the variation in one variable (perceptions of s e r v i c e q u a l i t y ) is related to the variation in another variable (c u s t o m e r s a t i s f a c t i o n ). L. 35 8. Dibb.. S. in central and local government purchasing. Simkin. Relationships and Networks. M. c r o s s t a b u l a t i o n s (cross tabs) can be used (known as bivariate cross tabulations when two variables are in volved). (1978). Understanding Business Markets: Interaction. The product moment correlation coefficient measures the strength of a linear relationship between the variables: a value close to zero means no relationship or a very weak relationship. O. The type of analysis conducted on pairs of variables varies in accordance with the nature of the variables of interest (e.

investors. r e l a t i o n s h i p m a r k e t i n g ) argue that the firm is interpene trated with its environment so that the organiza tional boundary is blurred and permeable. depending upon the cir cumstances. chs. (2000). the Kruskal Wallis one way ANOVA (analysis of variance) test. histo gram. K.. the sample can be broken down into subsamples using the categorical variable and the data for the interval variable can be summarized for each subsample using a frequency distribution. 19. The appropriate test depends upon the type of measurement used for each variable. suppliers. the histograms or measures of average of the interval variable to see if and how they change with different values of the categorical variable. and the F test is used when there are two or more sub samples. Alternatively. However. European edn. boundary spanning Gillian C. cross tabs may be used to summarize the data. where a significant difference between groups may be noteworthy in both statistical and marketing terms. and Cramer. When one variable is interval and the other categorical. and the Friedman two way ANOVA test are used. a range of possibilities arises. For instance. If one variable is measured on an or dinal scale and the other on a categorical scale. If both variables are interval. the runs of signs test. Marketing Re search: An Applied Orientation. Hove: Routledge. recent theoretic developments (see n e t w o r k . The concept relies upon an implicit notion of the firm as a bounded organization so that boundary span ners are those who relate to people both intern ally and externally. (2001). These developments have heightened interest in how boundary spanning activities can be performed. D.e. correlation coefficients such as Kendall’s tau or Spearman’s rank correl ation coefficient indicate the strength of any relationship between the variables. when one variable is measured on an interval scale and the other on a categorical scale. and service agencies. among other things. and by whom. the way one variable affects the other is indicated by the straight line equation estimated using regression techniques. and Birks. bivari ate analysis of difference can also be conducted to determine if the variation in the distribution of one variable is statistically significant between two or more groups. the Kolmogorov Smirnov two sample test. London: Prentice-Hall. chs. Subsamples can be compared by looking at. A. the t test is used to test for the equality of arithmetic means of the interval variable when comparing just two subsamples defined by the categorical variable. 17. then tests such as the Mann Whitney U test. 7 8. Such external actors may include cus tomers. For instance. In addition to analyzing relationships. Quantitative Data Analysis: A Guide for Social Scientists. with external actors. When the variables are measured on scales of different types. policy bodies. If both variables are measured on ordinal scales. to best link the organization to its environment and support the achievement of organizational objectives. and/or measures of average and variation. for example. if both variables are measured on categorical scales. D. Common analyses of this type include the scrutiny of differences between males and females or ethnic groups (compari son/independent variable) on a variable of inter est such as sales volume (dependent/criterion variable). Hopkinson and Judy Zolkiewski Boundary spanning describes the location and activities of those organizational members who have contact. i. alliance partners. Bibliography Bryman. Malhorta. the t test and F test are two examples involved in testing hypotheses related to simple correlation and regression. the Wilcoxon test. They represent the organization to out . N. The regression analysis tells the form of the relationship. Many other tests are available for different sets of situations. either the chi square test or an exact test using the hypergeometric distribution is likely to be used depending. A range of h y p o t h e s i s t e s t i n g is avail able to see if there are any significant relation ships between the variables.22 boundary spanning close to –1 means a very strong negative relation ship. Boundary spanners perform many critical functions beyond the transacting of inputs and outputs. on behalf of the firm. on the size of the sample and the number of categories for each variable.

40 (8). sales and purchasing). Inter vention in flows of information also occurs as boundary spanners analyze and synthesize knowledge and disseminate it according to their perceptions of its relevance to particular internal actors. 2003). Zaheer. Industrial Marketing Management. Boundary spanning roles and organizational structure.. V. Additionally. (1981). Characteristics and external orientations of boundary spanning individuals.g. Wilson. An important area of inquiry has investigated the problems associated with boundary spanning for the individual. an ‘‘arbiter’’ depending upon the extent to which he/she identifies with internal or external audiences. (2003). J. (2003). G. Bibliography Aldrich. Aaker (1991) defines a brand as: ‘‘a distinguishing name and/ or symbol (such as a logo. 14 (4). and this is not limited to those in formally designated boundary spanning roles (e. (1977).’’ or. trademark. 2 (2). k e y a c c o u n t ) or global account managers. ideally. A. M. Several factors have been found to promote effective boundary spanning activities. and Herker. Free to be trusted? Organizational constraints on trust in boundary spanners. Public Administration. 21 (1). Problems center particularly upon role conflicts and role ambiguity that emerge from the diverse pressures arising from multiple audiences and multiple organizational cultures. it is clear that many organizational members are involved in boundary spanning. communication skills. Journal of Man agement Studies. D.. The competent boundary spanner. 217 31. brand Margaret Bruce and Liz Barnes The original thinking behind branding was to take a commodity and endow it with special characteristics through imaginative use of name. The organizational factors that support these behaviors are also crit ical and the degree of role autonomy allowed amongst boundary spanners is associated with higher levels of t r u s t across organizations (Perrone. Academy of Management Journal. K. 151 8. and a d v e r t i s i n g . L.g.’’ Essentially. and Scanlan.’’ ‘‘renegade. 83 99. Hopkinson. Tushman. Stories from the front-line: How they construct the organization. Perrone.. scan (see e n v i r o n m e n t a l s c a n n i n g ) and monitor aspects of the firm’s envir onment. This can be seen as involving the ‘‘trans lation’’ of ideas between arenas with diverse interests and cultures. . so that with respect to some issues they may be required to protect organizational information and act as g a t e k e e p e r s whilst being required to enable the flow of other information. (2003). 103 24. Indeed. Zaheer. effect ive boundary spanning relies as much upon in ternal links so that it is associated with the degree to which an organizational member is perceived as being competent and has internal influence. T. By stressing particular aspects. Williams. Organization Science. and Millman. 32 (2).. Academy of Manage ment Review. Loyalties and sympathies may be divided. and to achieve effective positioning (see p r o d u c t p o s i t i o n i n g ). The global account manager as political entrepreneur. H. manage ment styles that rely upon influence and negoti ation. 80 (1). p a c k a g i n g .’’ ‘‘partisan. Wilson and Millman (2003) argue that the boundary spanner may be a ‘‘self server. and McEvily. T. 2002). 1981). the underlying purpose of branding is to differentiate a product or service from competitor offerings. Some in 23 dividual competencies and styles of behavior are important (e. This has been explored par ticularly in the context of sales people and more recently key account managers (see a c c o u n t m a n a g e r . 1043 69. and McEvily. and link and coordinate activities with external actors. This is critical to enable the dissemination of knowledge and ideas to facilitate innovation and adaptation (see Tushman and Scanlan. (2002). The important effects that identification with other organizations has upon the individual’s work behavior are discussed by Hopkinson (2003). and an ability to manage complexity) and therefore should be a focus in recruitment and training (Williams.brand siders. or package design) intended to identify the goods or services of either a seller or a group of sellers and to distinguish those goods or services from those of its competitors. B. C. 422 39. Given the range of these activities. P. boundary spanners are critical to bidirectional flows of information.

decor. color schemes. Typically. Product attributes are the characteristics readily associated with a brand. de Chernatony (1993) maintains that brands ‘‘ultimately reside in consumers’ minds. Ford Mondeo. Also. The latter is termed overall family branding. branding has a part to play in organiza tional/industrial markets (see i n d u s t r i a l marketing. values.g. then the brand is damaged too and the associations of t r u s t and loyalty may be irreparably altered. and assurance. and remod . etc. brand awareness. organizational market i n g ). thus pulling demand through the supply chain. for example. reliability. consistency. Feldwick (1996) refers to ‘‘brand strength’’ as an indicator of the degree of a consumer’s attachment to a brand. Cadbury. and brand associ ations. Heinz tomato ketchup). impact on the environ ment. and benefits relate to the utility the consumer seeks from a brand. where they shop. Organizations operating in a number of sectors have sought to redefine or redevelop their corporate image through a process of corporate rebranding. Ford. Indeed. This is known as individual branding as part of a multi brand strategy and enables organizations to target more precise segments within a market where each individual brand connotes differentiated benefits designed to appeal to consumers in spe cific segments. Organizations in industrial markets often seek to develop brand identity in order to stimu late demand for their products in consumer markets. The notion of brand personality acknowledges that consumers may be attracted to brands that are congruent with their own self image/concept.)..g. which have an established brand identity inde pendent of their manufacturer. Other organizations seek to develop differentiated brand identities for multiple products. (2001) contend that the brand communicates four key types of message to cus tomers: attributes. and person ality. Cad bury’s Caramel.. it is appropriate to note the upsurge in corporate branding practice in the services sector as a means of defining new service offerings and communicating their benefits to potential consumers.’’ which can be regarded as major brands in their own right and may no longer be sold exclusively through the retailers’ own outlets. ‘‘Corporate rebranding’’ has also been mark edly prevalent in recent years. perceived quality. including b r a n d l o y a l t y . A manufacturer brand is initiated by a produ cer. which may be functional or emotional. as Procter and Gamble does with its Daz and Fairy detergent brands. and reliability.24 brand such as quality. such as Tesco’s ‘‘Value’’ product line (see p r o d u c t ). benefits. If reputation is diminished. McGoldrick (2002) identifies five different types of retailer brands ranging from retailer name brands to generic brands to exclusive brands. symbols. In addition to its role in consumer goods markets. It should be noted that branding can empha size the development of the identity of a manu facturer’s ‘‘parent’’ brand (e.’’ Central to the value or equity of the brand (see b r a n d e q u i t y ) is a set of assets. competitive edge. In doing so. Volvo buyers may value safety. what they eat. and higher profits/better margins.g. and company livery. such as Coca Cola.. Heinz) in addition to. where and how they travel. and a strategy that places the company name as the dominant identity across its products is termed a corporate brand strategy. Branding serves to differ entiate service offerings and to position them competitively in the market. It is generally accepted that the most integral com ponents of a brand are its ‘‘core values. For instance. use of sweat shops in production pro cesses. The benefits to the retailer can be evaluated in terms of store image/customer loy alty. Tesco exports its own brands to non competing retail ers in Europe. and so on. brands may influence what consumers wear. he is demonstrating the complex nature of ‘‘retailer own brands. such as British Airways and America Online (AOL). and a private or ‘‘own label’’ brand is initiated by a retailer.’’ the basic essence of the symbol. Allen (2000) defines a brand in terms of reputation ¼ brand ¼ behavior. such as Intel’s hi tech innovative stance. Kotler et al. which often involves renaming a business in addition to redesigning logos. Klein (2001) powerfully challenges the hegemonic nature of global brands by questioning the ethics of their production (e. the product level brand (e. or in conjunction with. service brands are derived from the company name. Brand values are associated with the values of a brand’s buyers.

2000: 221). D. 3rd European edn. as the Nestle´ takeover of Rowntree seemed to indicate. 85 104. especially in the US. which gener ally reinforce this general b r a n d i m a g e . Harris. Macrae. 31 (2). (2000). Low. brand equity Dale Littler There has been increasing contemporary consid eration of brand value or equity. Journal of Consumer Marketing. Successful brands generally have a set 25 of powerful associations attributed to them by customers that act to differentiate them clearly from competing products. and perceived quality. N. Perceived quality relates to the perception of the brand in terms of performance. G. P. Harlow: Prentice-Hall.. World Class Brands. This can be regarded as ‘‘the net present value of the future cash flow attributable to the brand name’’ (Doyle. L. inter alia. Brand awareness can generate a number of advantages including familiarity. European edn. (1993). J. De Chernatony. (1994). P. New York: Free Press. (1996). (1991). 2nd edn. No Logo. Journal of Marketing Management. S. Examples include Andersen Consulting’s en forced change to Accenture. Winter. Thus. MA: Addison-Wesley. (2001). 7 (2). such as performance. a d v e r t i s i n g and pro motion. the Virgin brand. Dibb. Klein. Armstrong.. G. and the additional revenues that can be obtained over the brand’s lifetime from existing customers through. It is argued that there has to be continued investment in the brand through advertising and product development (see n e w p r o d u c t d e v e l o p m e n t ) to project and support the brand’s values. What is brand equity anyway and how do you measure it? Journal of the Market Research Society. and Ferrell. 1074 90. J. 38 (2). The returns are in the form of higher margins that customers are prepared to pay for the particular benefits attributed to the brand. Categorizing brands: Evolutionary processes underpinned by two key dimensions. There continues to be pro longed debate about the inclusion of brand values on the balance sheet and the valuation of brand equity is a focus for research. for example. F. Allen. and Fullerton. L. A. Feldwick. Brand loyalty means that its existing customer base is unlikely to switch to rival brands and is especially important given the costs of replacing lost customers. Some companies have attempted to value their brands but to date there has been no agreed methodology for including these values in com panies’ balance sheets. 5 20.. is clearly associated with Richard Bran son who personifies a set of widely appealing values that enable the brand to be stretched across a range of products.. brand management and the brand manager system: A critical historical evaluation. Saunders. for example. 35 40. Living the brand. (1993). R. Corporate branding and corporate brand performance. Boston: Houghton Mifflin. Kotler. (2001). giving pref erence to the brand against those less familiar. D. C. ch. brand image Bibliography Aaker. and other qualities that may be re inforced by. Managing Brand Equity: Capitalizing on the Value of a Brand Name.brand equity eling public relations and advertising exercises in an attempt to establish a new corporate identity. b r a n d l o y a l t y . S. Doyle. Brand associations are those at tributes that are linked to the brand by the cus tomer which assist in differentiating it from its competitors. 441 56. V. European Journal of Marketing. Firms often seem pre pared to pay significant amounts to acquire brands. Aaker (2001) suggests that brand equity has four major components: brand awareness. McGoldrick. brand associations. The International Accounting Stand ards Committee has recommended that acquired . (2000). Pride. (2002). (1991). P. and de Chernatony. (2001). 173 90. O. W. These qualities em brace intangible factors which collectively form the image of the brand. See also brand extension. Special edition on Corporate Marketing. 1. 32 (11/12). cross selling of other prod ucts. P. Retail Marketing. durability.. 35 (3/4). Design Management Journal. Brands. Building successful brands: The strategic options. Maidenhead: McGraw-Hill. Simkin. C. as well as other aspects of the product. London: Flamingo. Marketing: Concepts and Strategies.. and spontaneous recall at significant points in the decision process. Principles of Marketing. Journal of Marketing Research. and Wong. A. reliability. L. Reading.

high priced and visible brands. are being compelled to supply retailer branded merchandise. in order to insure continued volume of output. Chichester: John Wiley. the potential for brand extension may be low (inelastic) in that the benefits associated with the brand will not be applicable in a new category. aiding recognition and ac ceptance. High elasti city brands such as Disney successfully offer branded products across diverse categories due to their brand values of family oriented enter tainment and associations with secure enjoy ment. See also brand. S. Brand extensions may facilitate greater promo tional efficiency than individual brands and enable a new product to enter a market with an established identity. The effects of brand extensions on market share and advertising efficiency. and Alba. word of mouth (see w o r d o f m o u t h c o m m u n i c a t i o n s ). and Park.g. a d v e r t i s i n g . Many distribution intermediaries have de veloped their own label brands which may or may not be manufactured by the manufacturers of other brands (see o w n b r a n d i n g ). Brand extension strategies afford considerable benefit to both organizations and consumers. can be included on the balance sheet. Journal of Marketing Research.26 brand extension brands. 31 (May). Healey A brand extension is a new or modified product or service that is marketed and promoted with strong associations with a preexisting brand. b r a n d i m a g e and higher order associations (e. (2000). advertising. for example. However. and capitalizing on brand associations and existing loyalties. a product may dem onstrate high or low extension elasticity. has consistently used its rebel lious brand connotations to launch new products and services in new categories. Smith. and so on. D. Journal of Marketing Research. Value Based Marketing. (2001). . J. but not those developed internally. from airline and rail transport to mobile telecommunications. C. brand image Dale Littler The consumer builds up associations with the brand based on personal experience. in order to infer the positive associations customers hold for the existing brand upon the new or modified offering. and promotion. security. Strategic Market Management. However. Where a brand becomes closely linked with particular concrete or functional attributes. brand extension Bibliography Aaker. 214 18. The importance of brand in brand extension. This means that the power of manufacturers to influ ence the channel of distribution through their own brands which have influential customer franchises is being eroded and more manufac turers. A. For example. W. (1992). Doyle. P. such as Burberry. D. brand equity. leaving a weakened brand. Further. (1994). ch. visual signs. 296 313. where a brand is applied excessively to numerous extensions without coordination of image and association. Chichester: John Wiley. they have to be amortized over 20 years on a straight line basis. Brands may be purchased because they may be widely regarded as possess ing particular values that are bestowed on their owner. 29 (August). may be seen as offering status. brand extensions may not be effective where the existing brand associations conferred upon the new symbiont are incompat ible with the new product category. Depending upon its Broniarczyk.. pp. brand loyalty Bibliography brand extension Mark P. 7. The consumer therefore constructs an image of the brand which may or may not correspond to the identity that the brand owner wishes to project by means of its product form. name. A brand extension strategy involves the introduction of a new or enhanced product either to the same product category in which the brand principally operates or. C. W. 165 9. to a new category. The Virgin organiza tion. M. its positioning (see p r o d u c t p o s i t i o n i n g ) may become ineffectual and brand dilution may result. excitement). more often. See also brand. 6th edn.

Some definitions also refer to ‘‘biased choice behavior’’ with respect to branded merchandise.. brand equity.g. pp. bringing together attitudes and behavior. socioeconomic variables. which is one that offers clear values (e. continuous price deals. group influence. Brand loyalty implies purchasing the same brand more than once.. Con sumers may be loyal to a particular brand in one product category. as would be evidenced by some attitude measurement. brand extension. e. though a number of empirical investigations have sug gested and looked for relationships between brand loyalty and: personal attributes. research suggests that brand loy alty is not unique to certain individuals. brand loyalty Bibliography Doyle. Heinz) and distributors’ brands (e.g. Value Based Marketing. or the propor tion of purchases a consumer (or household) devotes to the brand most often bought. (see h a b i t u a l b u y i n g b e h a v i o r ). P. (2000). over a specified period of time. Further. again assuming that this is the preferred brand. etc. The complexity of brand loyalty phenomena is illustrated by evidence that shows varying levels of allegiance to brands across product cat egories and within individuals. Day (1970) offers a two dimensional concept of brand loy alty. When a consumer is intentionally loyal and insists on a particular brand. brand loyalty Barbara R. Consumption in some product categories appears to be more brand loyal than in others: petrol and tinned goods have been found to inspire little brand loyalty.g. Distinctions have also been made between brand loyalty in the markets for consumable goods. a dis tinctive identity. which are learned over time. However. as suming that they are in the market for the prod uct. Spurious loyalty may just be habit or consistent purchase of one brand due to non availability of others. Definitions of brand loyalty have evolved and are typically concerned with a degree of consist ency in the preference for each brand by a con 27 sumer. and services. either positive or negative. breakfast cereals). which means that ‘‘customers can recognize it and ask for it by name’’. good physical appearance). it is awareness or recognition. and loyalty may prevail with respect to stores. Br a n d i m a g e is a set of associations or perceptions that consumers have for a brand. better shelf space. See also brand. Healey Consideration of c o n s u m e r b u y e r b e h a v i o r over a period involves an understanding of brand loyalty which follows from the formation of brand images and brand preferences. durable goods. ‘‘Can behavior patterns be equated with preferences to infer loyalty?’’ and distin guishes between spurious and intentional loy alty. or the pre ferred brand may not be available. It also implies atti tudes toward a brand. has functionality. 232). 232 3. there are occasions when the product may not be needed or the consumer cannot afford the preferred brand. Brand preference and brand loyalty may exist in relation to manufac turers’ brands (e. rather than accept a substitute. and added values ‘‘that elicit confidence in con sumers that it is of higher quality or is more desirable than similar products’’ (p.g. Tesco).g. Furthermore. There are inherent dangers in looking at sequences of purchases to define and measure loyalty as indi viduals and households may be buying more than one brand on a regular basis (e. Intentional loyalty occurs when consumers buy a preferred brand. or defer purchase if the brand is unavailable. Brand preference is a definite expression of positive attitude.. Research has been unable to pinpoint particu lar determinants of brand loyalty. Lewis and Mark P.brand loyalty Doyle (2000) argues that a successful brand image has three components: a ‘‘good’’ product. although this may not necessarily be the case. levels . tooth paste. He asks. Chichester: John Wiley. One would normally expect people to buy a preferred brand or brands... whilst cigarettes and coffee have been noted as more likely to engender customer loy alty to the brand. or ‘‘con sistent’’ purchasing of one brand. and may demonstrate consid erable switching behavior in others. he/she will be prepared to shop around for this brand.

consumers may be multi brand buyers for reasons of: indifference. S. Journal of Marketing Research. New York: Ronald/John Wiley. demand. G. J. although the opinions of marketers as to the strategic implications of this effect remain equivocal. will be shared by several products and allocation can be problematic). and availability. predicts that brands with large market share benefit from increased rates of repeat pur chase in comparison to smaller brands. Ehrenberg. The ‘‘double jeopardy’’ phenomenon. (1990). A. Brand Loyalty: Meas urement and Management. Addition ally. (1970). Journal of Marketing. several preferences within a household. and the allocation of costs (many costs. Correlates of brand loyalty: Some positive results. Although many of the same products will be bought by both business and consumers. Day. sensitivity to promotion. See also brand.. Goodhardt. manufacturers and dis tributors are concerned to encourage loyalty to their brands and switching away from other brands. 82 92. New York: North Holland. (1970).28 brand managers of demand. (1972). 67 76. Repeat Buying: Theory and Applications. especially fixed costs. business-to-business marketing Fiona Leverick Business to business marketing refers to the marketing of products and services to organiza tions rather than to households or ultimate con sumers. Business to business marketing has also been termed variously: industrial marketing. chance. The implied alternative is c o n s u m e r m a r k e t i n g . P. G. the point in time at which the sum of fixed (or ‘‘indirect’’) costs and vari able (or ‘‘direct’’) costs involved in the produc tion and distribution of a good or service is matched by the sum of its accumulated sales. Jacoby. institutional marketing. brand managers see m a r k e t i n g o r g a n i z a t i o n brand preference see b r a n d l o y a l t y branding see b r a n d break-even analysis Dominic Wilson A break even analysis is meant to identify the break even point. inducement. disappointment with present brand. T. R. S. although the distinction between the two areas is not entirely clear cut. Nevertheless. Break even analysis is an important aspect of pricing calculations in that it can help to show the profitability of a product over time according to different assumptions about price. Double jeopardy revisited. it is possible to identify a number of ways in which the emphasis of business to business marketing differs from that of consumer marketing and this is reflected in the large volume of literature and .. and o r g a nizational marketing. re assurance with respect to a favored brand. (1978). M. and store factors. The diffi culty of anticipating demand response to differ ent pricing policies emphasizes the importance of undertaking extensive break even analysis for different assumptions.. Buyer Attitudes and Brand Choice Behavior. C. J. Consumers switch brands for reasons of: curiosity with respect to new/different brands. commercial marketing. and as a re sponse to availability and promotions. S. Chicago: Free Press. and Chestnut. brand equity. brand extension Bibliography Carmen. perception that brands are perfect substitutes. dis covered by sociologist William McPhee in the 1960s. 7 (February). This effect has been demonstrated empirically in sev eral product categories in varying countries over the past three decades. C. Beyond this break even point the profitability of the good or service will be a function of the excess of sales revenues over variable costs. Ehrenberg. and Barwise. A. for variety’s sake. 54 (July). J. i.e.

those who do have formal authority for supplier selection but whose influence is often usurped by more powerful members of the buying center (see o r g a n i z a t i o n a l b u y i n g b e h a v i o r ). whether or not they have the formal authority to do marketing research programs devoted exclusively to the business to business marketing area (Chisnall. with the demand for business products and services said to be dependent to an extent on the level of activity the buying organ ization generates in its own markets. since such decisions are necessarily made by personally motivated employees in a social interactive context. 1989). and competitor organ izations. and delivery criteria.e. or have a pur chasing department. buyer. d e c i d e r s . 1972). 1967. involving several people. who actually make the purchase decision. and b u y e r s . with business markets tending to have a greater con centration of both buyers and sellers in compari son to consumer markets. Improvements in. 1989.’’ or ‘‘task’’ considerations. These include u s e r s of the product or service in question. some or all of which may be played by individuals in the buying center. Various dif ferent organizational purchasing roles have been identified by Webster and Wind (1972). These differences are seen to have considerable implications for the manner in which business to business marketing is undertaken. The various differences in emphasis between business to business marketing and consumer marketing have led to attempts to develop the scope of the m a r k e t i n g c o n c e p t and to reappraise such marketing tools as the m a r k e t i n g m i x . The manner in which purchase decisions are made is another area in which businesses are said to differ from consumers. where the role of m a r k e t i n g m a n a g e m e n t is seen in terms of the management of a range of individual buyer–seller relationships in the context of a broader network of intercon nected supplier. the importance of long term. although it has been noted that the purchasing department is often not the most powerful influence on supplier choice (Webster and Wind. than the purchases of individual consumers. with extensive work conducted by researchers involved in the International Market ing and Purchasing (IMP) Group (Ha˚kansson. 1997). relatively stable rela tionships between buyers and sellers has been emphasized. The scale of business purchases is often seen as greater than that for consumers and products are gener ally held to be more technologically complex. which is seen as inappropri ate in its traditional form. frequently 29 from different departments. and Wind. Some authors assert that the ‘‘rational’’ nature of business buying behavior has been overemphasized. g a t e k e e p e r s . Many organizations employ professional purchasers.. Ford.. 1981). Finally. or procedures. and cultural influences as important in business purchase decisions.’’ ‘‘eco nomic. and perhaps most importantly. Webster. information technology have exerted . and Cunningham. 1991. who control information to be received by other members of the buying center. Reeder. refers to the influence of ‘‘non task’’ factors such as motivation. 1982. although both of these factors are relative and something of broad generalizations (Chisnall. Purchases are gener ally made not for self gratification but to achieve organizational objectives and are therefore often held to be based more on ‘‘rational. and Reeder. 1991).. social. such as price.g. all organizational members involved in the buying decision. 1961). quality. Brierty. i. Market structure is the first of these. Chisnall (1989). for instance. Faris. and increased adoption of. A number of researchers have studied the concept of the b u y i n g c e n t e r . Cross. it is widely recog nized that business buying is more likely than consumer buying to be guided at least by formal ized rules. Gross et al. However. Johnston and Bonoma. Business purchase decisions are also typically seen as a more complex process than those of consumers. e. 1987. for example. and have noted that this is likely to vary considerably according to the purchasing situ ation (see. although this will clearly not always be the case. showed that in 106 industrial firms three or more persons influenced buying processes in over 75 percent of companies stud ied (see Alexander. or political. personal values. D e r i v e d d e m a n d is another feature. This recognition has led to the development of the n e t w o r k and interaction approaches to business to business marketing (see i n t e r a c t i o n a p p r o a c h ). Robinson. A pioneer study in 1958. evaluation criteria. 1993.

The purpose of such models is to try to understand the buying process and aid market research. Miniard. Andreasen (1965). Lewis and Mark P. Y. (1981). The buying center: Structure and interaction patterns. T.. explain. R. D. Engel. and liking/preference are developed after purchase rather than prior to it. W. Homewood. and Blackwell (see Black well. P. P. The well known available models of consumer buyer behavior are descriptive and include those of Howard and Sheth (1969). 2nd edn. H.... Understanding Business Markets: Interaction. Ha˚kansson. C. Descriptive models are designed to communi cate. the effect of advertising on sales). C. (1993). M. M. for example. Kollat. income. Relationships and Networks. organize. and the exchange of. NJ: Prentice-Hall. a model at a micro behavioral level may create hypothetical consumers and dealers who interact – with resulting behavior patterns being investigated. Healey Parallel to the development of thought about the variables that are important in understanding c o n s u m e r b u y e r b e h a v i o r have been at tempts to organize the variables into models of the buying process and consumer behavior.. They may postulate at a macro level some variables and the relation ships between them (e. and Wind. Englewood Cliffs. F. H. Business Marketing. and Ford. International Marketing and Purchasing of Industrial Goods: An Interaction Approach. 143 56. feel buy learn model. 2001). and predict. . 571. Marketing Management. Y. Bibliography Alexander.. Jr. and Wind. and formal ize the range of influences that affect purchase decisions. (1961). Chichester: John Wiley. E. and Cunningham. Webster. F. B. or. Strategic Industrial Marketing. Organizations have developed systems that enable them to share technical and product data with customers. I. at a micro level. Industrial Marketing Strategy... and Bonoma. and Reeder. receive and process orders and payments. (ed. S.. The BFL model typically applies to i m p u l s e p u r c h a s i n g and/or for new brands. Boston: Allyn and Bacon. learn feel buy model Bibliography Dickson. New York: John Wiley. V. Indus trial Buying and Creative Marketing. and provide customer service support facilities via interactive commercial websites and Internet based exchange systems. 45 (Summer). M. where attitudes. (1991).30 buy-feel-learn model considerable influence on business to business marketing. Englewood Cliffs. (ed. Chisnall. London: Dryden Press/Harcourt Brace College Publishers. information via the Internet is now a common feature of many business to business relation ships. Nicosia (1966). NJ: Prentice-Hall.) (1982). N. know buy grid model see p u r c h a s i n g p r o c e s s buyer behavior models Barbara R. R. Reeder. E. (ed. price. Jr. Boston: Houghton Mifflin. pp. A. Ha˚kansson. Models serve to simplify. 2nd edn. ledge. sales. In addition. and try to show the extent of inter action between influencing variables. Webster. Gross. Johnston. (1991). Some models are descriptive and others decision models. 3rd edn. Industrial Marketing.) (1987). G. Faris. R.) (1997). J. 2nd edn.g. London: Dryden Press. and Engel. D. (1972).. L. Journal of Marketing. Industrial Technological De velopment: A Network Approach. Englewood Cliffs. consider more detailed links between a variable and its determinants (e. See also AIDA model. H. E. (1997). 572. Industrial Marketing. Meredith. NJ: Prentice-Hall. R. J. London: Croom Helm. (1989). R. W. buy-feel-learn model David Yorke The buy feel learn (BFL) model in m a r k e t i n g c o m m u n i c a t i o n s suggests that in some situations buyers/customers do not follow the logical learn feel buy sequence. S. Banting.. (1967).g. Ford. P. Organizational Buying Behavior.. Cross. IL: Irwin. P. a d v e r t i s i n g ). 2nd edn. Brierty. Robinson. J..

and from exposure to the environment and the company’s marketing effort forms pre dispositions. the key to change being exposure to information. either voluntary or involuntary. stochastic learning models and queuing models. since it represents most of the elements of human psychology.g. usually pur chases of brands in a product category. Howard and Sheth. attitudes. for memory and computation). and when required to make a choice or purchase decision for a product/service may compute preferences ad hoc.g. and culture. The dominant buyer behavior models of the mid twentieth century (e. 1966. Luce. perceptual and learning constructs.. From these elements.g. that is not to say that the influence of the early models is not felt in approaches to the study of consumer behavior. decision process. The focus is on repeat buying. then market shares for the future can be computed. Bettman. Subsequent models of buyer behavior that have received widespread attention include Bettman’s (1979) information processing model of consumer choice and Foxall’s (1990) behav ioral perspective model. and Blackwell focus on motiv ation. financial status. mathematical programming.. Nicosia. e. In addition to these descriptive models are others which are also predictive. not derived from a predefined set of values. Finally. The consumer starts off with no experience of the product. The basic approach is that an individual consumer learns from past behavior and the degree of satisfaction will influence future purchases. via information search and evaluation. Stochastic learning models contain probabilistic elements and consider buying over time. to purchase. output response variables. He used computer simulation techniques to explain the structure of consumer decision making. Kollat. and learning in the buying decision process and their model has elements such as a central control unit. Nicosia’s model is also focused on individual consumers’ decision making and considers the relation between a firm and its potential custom ers with respect to a new product. Andreasen’s model is a general one based on specific conceptions about attitude formation and change. and Payne (1998) suggest that consumer decision making is constructive in nature: consumers have limited processing capacity (e. and they include optimization models to find a best solution. statistical decision theory. may not have well established preferences for all stimuli. and game theory. information pro cessing. and therefore the model incorp orates the dynamics of purchase behavior over time. and exogenous vari ables to include environment. They incorporate differential calculus. perception. and environmental in fluences. and heuristic ones which use rules of thumb to find reasonably good solutions.buyer behavior models The Howard and Sheth model is concerned with individual decision making and has its roots in stimulus response learning theory (see c o n s u m e r l e a r n i n g ). Also.. The model thus appreciates that con sumer preferences may be context dependent. Engel. . and motivations which lead. it is possible to consider the impact of decision mediators in consumer motivations and brand choice deci sions. These models analyze the relative purchase frequencies of brands in a product category and 31 estimate the probabilities of switching brands on the next purchase. The advent and rising popularity of informa tion processing and cognitive research on con sumer decision making and buying behavior has led to an increasing appreciation of models which eschew theories of rational choice in favor of models that proffer bounded rationality (the theory that decision making may be ‘‘im perfect’’ due to cognitive limitations) as a more realistic perspective on how consumers actually make purchase decisions. If such probabilities are as sumed to be constant. The model has four central parts: inputs or stimulus variables to include products and social factors. and the diffi culty inherent in empirically testing the generic models. decision models have been designed to evaluate the outcomes from different deci sions. Simonson et al. 1969) no longer wholly dic tate theoretic and applied research in the discip line. (2001) contend that two main factors contrib uted to the decline in emphasis on comprehen sive buyer behavior models: the realization that buyer behavior is too complex to be captured in a single model. more recent buying experiences with a particular brand/product will have greater effect than those which took place at a more distant time.

and Payne. The model also . L. (1998). Foxall. 33 (5/6). Drolet. In L. Sheth. New York: Dryden Press. W. (2001). R. F. 570 96. M.). Nicosia. F. Miniard. i. W. (1990). R. G. (1991). L. dental treatment. and Kanuk. 19. Journal of Consumer Research. Englewood Cliffs. and Nowlis. G. (1966). J.. Consumer Behavior. the individual seeks to spend his/her income on goods that will deliver the most likely utility (satisfaction) according to his/her tastes and relative prices. Foxall.. New York: Harper and Row. An Information Processing Theory of Consumer Choice. (1993). NJ: PrenticeHall. Consumer research: In search of identity.. G. Schiffman. 1 16. A. Bettman. The Marshallian theory holds that consumer purchasing decisions are largely the result of ‘‘rational’’ and conscious economic calculations. (1969). Carmon. N. M.. 9th edn. and Sheth. A. European Journal of Marketing. Reading. Barbara R. 25 (3).. pp. D. N. 1999) behavioral perspective model (BPM) of consumer choice proposes that the determinants of buyer behavior should be sought in the consumption environment rather than explaining buyer behavior merely by refer ence to intrapersonal information processing (see figure 1). New York: Routledge. buyer behavior theories Bibliography Andreasen. R. This model assumes that consumers derive satisfaction from consumption (probably not the case with expenditure on insurances. These include eco nomic theory. ex plain. Specifically. Consumer Behavior. M. R. Loudon. Consumer Psychology in Behavioral Perspective. New York: McGraw-Hill. Constructive consumer choice processes. A. University of California. Models of Consumer Behavior.) and seek to maximize satisfac tion within the limits of income. New Research in Marketing. A. the BPM suggests that certain dimensions of buyer behavior can be predicted based on the contextual consump tion setting and customers’ reinforcement his tory in similar settings. and predict buyer behavior. Simonson. Annual Review of Psychology. Z. J. P. Englewood Cliffs. J. R... Economists were the first profes sional group to offer a theory of buyer behavior. 4th edn. 4th edn.. 187 217.) (1974). 20. various theories have contributed to understanding behavior. Luce. J. Consumer Decision Processes. Berkeley Institute for Business and Economic Research. (1979).e. I.. (2001). R. Lewis As the discipline of consumer behavior has de veloped. D. New York: John Wiley. Z. Preston (ed. ch. MA: Addison-Wesley. J. L. J. and Della Bitta. (ed. etc. ch. Blackwell. Bettman. (1965). Dhar. Attitudes and consumer behavior: A decision model. 1999: 573) and looks to intrapersonal cognitive phenomena such as memory and choice goals to model. Howard. 249 75. R. J. 52. J. S.32 buyer behavior theories UTILITARIAN REINFORCEMENT CONSUMER BEHAVIOR SETTING CONSUMER BEHAVIOR CONSUMER'S LEARNING HISTORY AVERSIVE CONSEQUENCES INFORMATIONAL REINFORCEMENT Figure 1 Behavioral perspective model of consumer choice (Foxall. Foxall’s (1990. F. Consumer Behavior. NJ: Prentice-Hall. (1999). The Theory of Buyer Behavior. The behavioral perspective model: Consensibility and consensuality. and Engel.

). 2001). and investments from both parties (Turnbull and Leek. a crucial. and g a t e k e e p e r s are other roles that have been identified (Cova and Salle. and the relation ships that develop between buyers and the sup plier organizations constitute an important aspect of the buying process (Dibb et al.’’ trying to make rational and efficient spending decisions. Kotler. u s e r s . The import ance of the buyer can vary depending on the organization’s philosophy and attitude toward the purchase function and the level of risk associated with the purchase (McDonald and Christopher. from dif ferent functions and organizational levels (Turnbull and Leek. (1973). Industrial marketers have long been aware that some buying decisions are not made by the purchasing agent alone. demand. Behavioral models for analyzing buyers. Understanding these factors and their interrelationships is critical to the development of appropriate business to business marketing strategy (Turnbull and Leek. to take account of various social and psychological influences on buying behavior. Journal of Marketing. Draper (1994) contends that organ izational buyers are controlled. i. Journal of Marketing. The buyer’s role within the buying center can range from a clerical officer. In that respect. 2003). C.. 37 (July). to being the purchasing team leader. but actively search out and interact with sup pliers. initiators. responsible for making the final recom mendation to senior management. . D. together with buyers’ indi vidual characteristics. A considerable amount of research has been conducted on the importance of the purchasing agent (the buyer) in influen cing buying decisions (Turnbull and Leek.. G. due to its key position as an intermediary between the organization and the supply market (Cova and Salle. output.. complete mobility. and t r u s t (ibid. Buyers in business to business markets (see b u s i n e s s t o b u s i n e s s m a r k e t i n g ) are not passive. (1953). Schewe. consumers typically are not aware of and cannot judge all product offerings and may have restricted access. 2003). Selected social psychological models for analyzing buyers. can reach any market offer at any time. 2000). in so far as people may be ‘‘problem solvers. role of buyers is managing relationships with suppliers. bureaucratic. In many cases. or cultural control) that provides the key to understanding their behavior. as relationships between companies need substantial effort. 2000. they are not the only ones involved in decision making. it is also necessary to consider and understand the marketing and other stimuli that impact on buyer behavior (see c o n s u m e r b u y e r b e h a v i o r ). However. The organizational buyer is influenced by a wide variety of factors. and often overlooked. 2003). d e c i d e r s . however.buyers assumes that consumers have complete informa tion with respect to supply. consumers may well be ‘‘satisficing’’ rather than ‘‘maximizing’’ their utility. Consequently. 2000). The buying function of an organization has a significant strategic role. 2003. In practice. and that there is pure competi tion.e. P. See also buyer behavior models Bibliography Katona. in the context of o r g a n i z a t i o n a l b u y i n g b e h a v i o r (Cova and Salle. and prices. but occur with the in volvement of other members of the customer’s organization (Cova and Salle. and it is the way in which they are controlled (through per sonal. 29 (November). see i n t e r a c t i o n a p p r o a c h . 2000) within the decision making unit or b u y i n g c e n t e r . i. September. Rational behavior and economic behavior. Psychological Review. 307 18. 2003). 31 9. 37 45. o r g a n i z a t i o n a l m a r k e t i n g ). both from outside and within the organization. active management. mutual dependency. Economic theory does have a role to play in understanding consumer behavior. 2003). 2003).e. Business markets are characterized by interaction. 33 i n f l u e n c e r s . (1965). buyers Kalipso Karantinou Buyers are those individuals with formal respon sibility and authority for contracting with sup pliers and ordering products or services. requiring customized products and ser vices (Turnbull and Leek. filling in forms and placing the order. Turnbull and Leek.

28 (11)... Boston: Houghton Mifflin. 44 (1). M. Bibliography Cova. as is often the case in consumer purchasing (see c o n s u m e r b u y e r b e h a v i o r ). power balances. and suppliers (Hill and Hillier. S. and a desire for intra organizational political gain can significantly affect buyers and the buying function within an organization. It is now recognized that internal politics.. using rational persuasion) that are in general congruent with their respective power base (e. pp. International Journal of Market Research.). 131 49. 5th edn. Pride. buying center Judy Zolkiewski In business to business markets (see b u s i n e s s t o b u s i n e s s m a r k e t i n g ) buying deci sions tend to be made by a group of people in the organization (the decision making unit. ch. 33 (11/12). purchasers. Blois (ed. 4th European edn. expert. pp. 1161 70. un affected by personal factors. (1999). d e c i d e r s . 5. legitimating. and deciders (Turnbull. Organizational buying behavior. and Schroder. DMU) rather than by an individual... Oxford: Oxford University Press. referent. and Salle. Farrell and Schroder (1999) demonstrated that members of buying centers use influence strat egies to influence others and ultimately the pur chasing decision (such as pressurizing. consult ants. 31 51. ch. Baker (ed. technologists. 2001). M. In M. that marketers not only pay attention to the formal or informal types of power held by individuals. and g a t e k e e p e r s (Webster and Wind. However.g. Draper. and optimization oriented decision makers. Furthermore. 50 62.) and they tend to employ not only rational but also emotional cri teria in decision making (Dexter. Simkin. and Leek. personality. and income level can in fact influence decision making (Dibb et al. position in the organization. relationships and networks. influencers. In that respect. i. London: ButterworthHeinemann. i n f l u e n c e r s . and . Marketing: A Complete Guide. The Marketing Book. Dexter. offering rewards. and Wind. Faris. reinforcement. W. It is argued that the buying center includes players with different roles. the different levels of the organizational hierarchy and the different functional depart ments involved. In K. European Journal of Marketing. 1980). 2. as a result. They recom mend. (2002). or information power). L. Much of the research into the operation of the buying center has taken the buy grid model (Robinson. and Christopher..). using inspirational appeals. Johnston and Bonoma (1981) also point out the need to consider both lateral and vertical involvement in the buying center. idealists and corporate animals: Segmenting business markets. the individual characteristics of buyers. C. S. legitimate. For example. B. Egotists. W. aiming to make efficient purchase decisions and maximize or ganizational benefits. (2000). Power and influence in the buying center. but also consider the way such power is exercised.34 buying center Buyers in organizational markets have trad itionally been assumed to be rational. 1981). buyers also can have personal goals that may influence their buying behavior (ibid. Naumann. (2003). Turnbull. influential individuals within the purchasing or ganization should be targeted with appropriate information that is relevant to both their power bases and the corresponding influence strategy. or policy makers. B. users. 2002). and in fluences in the buying center can be traced back to the 1960s (Wind and Thomas. M. M. 1967) (see p u r c h a s i n g p r o c e s s ) as the basis for investiga tion.e. (1994). Basingstoke: Palgrave Macmillan. J. roles. McWilliams. such as age. education. Research into the composition. Marketing: Concepts and Strategies. 1977) and that members of the buying center may have more than one role. and that its com position varies by organization and also according to the buying situation (Johnston and Bonoma. 1999). It should also be noted that the buying center may include members from out side organizations such as customers. such as u s e r s . A. O. The Oxford Textbook of Market ing. (2001). (2003). R. gatekeepers. Farrell. and Ferrell. 142 70. Organizational buyers as workers: The key to their behavior? European Journal of Marketing. A. 1972). Business-to-business marketing: Organizational buying behavior. The people in the organization who are involved in the buying process are collectively known as the buying center. P. McDonald. Dibb. unbiased.

for example. (1967). (1981). The Marketing Book. Industrial Marketing Management. 35. 143 56. Journal of Marketing. 14 (5/6). Jr. Ronchetto. Organizational buying behavior: Toward an integrative framework. 239 63. (1980). and Wind. R. Johnston. Journal of Marketing. Webster. Y. W.. 45 (Summer).. Baker (ed. Oxford: Butterworth-Heinemann. J.. R. n e w t a s k ). J. D. (1992).. 51 62. (1972). J. Englewood Cliffs. R. Hutt. who consider the influence of the p e r c e i v e d r i s k of the buying decision on the buying center. J. Wind. Y.). relationships and networks. European Journal of Marketing. M. H. and Wind. information search will be more inten sive. Hutt. and Scott. Conceptual and methodological issues in organizational buying behavior. Johnston. 4th edn. Organizational Buying Behavior. (1999). Robinson. C. Naumann. T. Faris. and Bonoma. and interfirm (buyer–seller) relationships and communication networks become increas ingly important. Jr. Determining buying center size. However. Y. (1989). R. Embedded influence patterns in organizational buying systems. the number of members was lower for the supplier selection phase than for the need identifica tion phase. This finding is supported by the work of Johnston and Lewin (1996).. E. London: Macmillan. E. The buying center: Structure and interaction patterns. P. the buying center will become larger and more complex. These authors suggest that as the purchase gets riskier. McWilliams. they must also insure that these roles are not taken to be prescriptive. S. and Reingen.. P. J. Business-to-business marketing: Organizational buying behavior. W.. proven suppliers will be favored. Journal of Business Research. McWilliams et al. and Reingen (1989) also remind us that the role of the internal social network within a firm needs to be con sidered when the buying center is being investi gated. P. 43 9. Organizational Buying Behavior. NJ: Prentice-Hall. and Hillier. Ronchetto. D. E. 21. (1992) also found that the membership of the buying center changed as the purchase phases changed. 1 15. W. (1977). In Michael J. See also organizational buying behavior 35 Bibliography Hill. members will be more experienced. W. and Lewin. Indus trial Buying and Creative Marketing.buying process Scott (1992) found that the buying center con sisted of fewer members when it was undertak ing a s t r a i g h t r e b u y and that the number of members increased as it moved through modi fied rebuy situations to new buy situations (see m o d i f i e d r e b u y .. Turnbull. It is important for business to business mar keters to be aware of the interactions and power dynamics within the buying center. J. buying operations see c o n s u m e r d e c i s i o n m a k i n g p r o c e s s buying process see p u r c h a s i n g p r o c e s s . J. T. V. W. F. Boston: Allyn and Bacon. 53 (October). and Thomas. (1996). They also speculate that the trend toward r e l a t i o n s h i p m a r k e t i n g may re sult in buying center membership expanding as firms develop wider sets of inter organizational linkages.

making more productive use of salespersons’ time. the require ments of the customer. J. can be planned. Principles of Marketing. i. and the level and importance (in terms of sales volume or profitability). causation means that an independent variable is expected to produce a change in the dependent variable in the direction and of the magnitude specified by the theory (e. For example. Kotler. the time available to the salesperson. V. Macmillan Dictionary of Marketing and Advertising. the strategic significance of the customer. therefore. (2001). it is extremely expensive and increasingly so. and C accounts according to. . the dependent variable).. London: Macmillan.C calibration equivalence Bibliography see c o n s t r u c t e q u i v a l e n c e Baker. However. is to use the resource of personal selling as efficiently as possible with no unnecessary or duplicated calls. (ed. time should be set aside for possible emergency calls as requested by customers. category equivalence see c o n s t r u c t e q u i v a l e n c e causal research/causation Charles C. Cost effective ness of the personal selling effort. call planning David Yorke and Mark P. Clearly. hypotheses). four factors are of importance. for example. In marketing.g. their sales volume and specify the frequency of calls per period for each of these accounts. B. P. However. the marketing manager may want to understand whether the reduction of a d v e r t i s i n g efforts (the inde pendent variable) has caused consumers to switch to the competitor’s mobile phone (the consequence... some customers may need more frequent contact with salespersons and may even specify the fre quency and the times to meet. the bigger accounts having more frequent calls. i. Cui Causal research is a research design that uses sample data and statistical methods to obtain evidence of cause–effect relationships (causation or causality) between the variables of interest. Some companies may classify accounts into A.) (1998). Call planning therefore involves defin ing the effort (the number of visits per planning period and the amount of time to be directed to servicing each) each salesperson is to allocate. Healey Pe r s o n a l s e l l i n g (by representatives from supplier organizations to customers) is con sidered a vital element in the marketing c o m m u n i c a t i o n s m i x . Armstrong. Saunders. causal research is often used to infer causation or causality. The objective of call planning.. namely. and Wong.. which variables are the cause (called independent variables) and which variables are the consequence or effect (called dependent variables). In other words. will be enhanced if the schedule for calling on cus tomers. The scientific notion of causation holds that caus ality cannot be proven but can only be inferred. J. However.e. Harlow: Prentice-Hall.e.. M. 3rd European edn. G. both actual and potential.

Several fundamental causes of conflict in marketing channels have been identified. These include role incongruities (the defining of appro priate behavior for any member). 13. 9. New York: John Wiley. where the channel leader is more formally designated. the quantity of supply of products. Time order of occurrence of variables requires that the causing event occur either before or simultaneously with the effect. research has explored the association between levels of conflict and power bases. since to have the ability to reward is to have the ability to withhold . a relation between two variables cannot be explained by a third variable (also called nonspurious relation or nonspur iousness).. chs. expert. see French and Raven. (2000). and absence of other possible causal factors. 1996). Conflict has been widely defined as the perception of one person that his/her interests and goals are im peded by another (Gaski. communication difficulties. London: Prentice-Hall. Causal Models in Marketing. In other words. The interde pendence of actors in a marketing channel. domain disagreements relating to which parties should be able to make particu lar decisions. Hopkinson Channel conflict refers to any conflict amongst members of a retail channel of distribution (see r e t a i l d i s t r i b u t i o n c h a n n e l s ). The factors that are associated with high levels of channel conflict are held to differ according to the governance form of the channel because of the ways in which power structures vary with governance. 3. channel conflict Gillian C. The absence of other possible causal factors refers to the fact that the variable being investi gated should be the only possible causal explan ation. style of premises. The forms in which con flict appears are complex. there are additional conflicts associated with. D. 6th edn. New York: John Wiley. K. In contractual channels. Evi dence of concomitant variation (or covariation) can be obtained by identifying correlation be tween phenomena. V. Causal research is conducted by means of causal modeling and h y p o t h e s i s t e s t i n g through e x p e r i m e n t a t i o n (experimental re search). provision of training. D. and Day. felt. legitimate. their likely divergence of goals. making this a difficult phenomenon to identify and analyze. 1984). and resource scarcities (Berman. N. P. Pondy (1966) suggests a model of conflict stages com prising latent. Bibliography Aaker. amongst other issues. it has been shown that the possession of coercive power is associ ated with high conflict levels. the introduction of bureaucratic tasks. Malhorta. 1959).. Among many other techniques. Kumar. Of five widely recognized power bases (coercive. time order of occurrence of variables. perceived. present in some form. G. such as in the case of f r a n c h i s i n g . This suggests that what we would commonly recognize as con flict is only a restricted part of a phenomenon that. A. retailer territory. Concomitant variation requires that a cause (X) and an effect (Y) occur or vary together (called covariation) as predicted by the hypothesis. the supply to competing outlets. Marketing Re search: An Applied Orientation. ch. Marketing Research. and referent. or the use of power of the more powerful channel member (assumed to be the franchisor). and manifest con flict as well as conflict aftermath. European edn. Reward power may also lead to high conflict. Bagozzi. S. goal incompatibilities. reward. Of particular importance are conflicts regarding p r i c i n g and retailer margins (see m a r g i n ). differences of expectation. struc tural equation modeling (see s t r u c t u r a l e q u a t i o n m o d e l s ) is most widely used for causal research in marketing. is influential to many interactions. Where power is relatively formalized. (1980). differences of perception. and the dependence of each upon the effective running of the system 37 form the conditions in which there is a high potential for conflict. and conflict Three conditions should be satisfied if we want to draw causal inferences: concomitant variation. These give rise to conflicts with respect to many issues that vary somewhat according to channel struc ture and industry. R. (1998). as it is held to be in a franchise context. and the use of cooperative a d v e r t i s i n g . and the use of incentives.

Conflictual relationships may therefore remain appropriate according to the particular goals and strategies of channel members. 1983. commit ment.competition commis sion. for example. available online at www.g. There has recently been a decline in studies of conflict in channel contexts. Frazier (1999) argues that we require a more complex understanding of the conflict processes and stages in order to make the important link to performance. it has been argued that conflict can coexist with cooper ation. its findings can only tentatively be applied to independent channel contexts.38 channel conflict reward and may therefore be seen as a form of coercion. but an understanding of channel behavior calls for theories that inte grate conflict with cooperation and trust. Pride. Dapiran and Hogarth Scott (2003) examine category manage ment amongst food retailers and key suppliers and find this model of close and committed retail relationships to be underscored by a continued presence of conflict and imbalanced pub/reports/index. The association between conflict and coercion is broadly supported by work that has related styles of management to channel conflict. Since the focus is upon how the channel leader may influ ence conflict. and cooperation (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ) that seem to sit un easily alongside conflict. although there is now some understanding of how conflict can be reduced. The key focus of research and comment with respect to channel conflict has been vertical con flict (between members at different levels in the channel) and has considered the dyad (e. the relationship between one retailer and one sup plier). which offers new routes to . 1999. for example where threats and legal pleas are less used and communication involves higher levels of requests and information exchange (Boyle et al.. the costs of estab lishing and maintaining committed and trusting relationships may outweigh the benefits that such relationships can offer (Frazier. and Lumpkin. consistent relationship has been found between conflict and performance. Such channels where. However. 1996). The UK Competition Commission reported ‘‘a cli mate of apprehension’’ among many suppliers in their relationships with large retailers (Competi tion Commission Report 2000 on supermarkets. The functionality of manifest con flict is supported by Bradach (1998). and Little. The ories of conflict are not. This focus has led to a lack of attention to both horizontal conflict (between channel members at the same level) and inter type con flict in dual distribution systems or multiple channels. performance may be adversely affected by dysfunctional conflict but enhanced by func tional conflict. Pelton. 1999). who argues that the franchisees’ argument with franchisors can lead to more questioning of ideas and. made redundant by the more relational orientation that pervades current marketing theory. The link between the two is likely to be complex and not linear (Duarte and Davies. The combination of ostensibly opposed phenomena within any one business relationship has gained greater attention through recent introduction of the notion of co opetition (Nale buff and Brandenburger. Several factors have contributed to this. better solutions to business problems. Firstly. The growth of dual distribution systems is likely to be fueled by the introduction of Internet retailing. ultim ately. a manufacturer sells both directly and through independent channels or through channels with different types of intermediaries (e. This work was conducted largely in contractual channels in which there is a relatively formalized power struc ture and a recognized channel leader. mu tuality. 1999).org. there is less conflict and better means of conflict resolution (Schul. Hop kinson and Hogarth Scott. no strong. Where channel leaders use managerial styles that emphasize participation and promote a favorable channel climate. Alter natively. 1992)..htm. Since Frazier and Rody (1991) find that manifest conflict can be functional. category killers and independent specialists) are now be coming ‘‘the rule rather than the exception’’ (Frazier. The work relating conflict and power was mostly carried out in the 1970s and 1980s and Gaski (1984) provides a thorough and useful summary of much of it. and flexibility is likely to be found where less coercive influence strategies are used. A climate that encourages solidarity. Strutton.g. then.. A movement of interest toward r e l a t i o n s h i p m a r k e t i n g amongst both marketers and academics has also contributed toward a de creased emphasis upon conflict in research. 1995). 2003). In some retail channel situations. Re lationship marketing draws upon more healthy sounding concepts such as t r u s t .

Hopkinson. J. 21 (3). sometimes positive since it forces channel members to adapt to changing environments. 91 138. bulk. B. and sometimes dan gerous as it threatens the economics of the chan nel. L. Administrative Science Quarterly. The theory of power and conflict in channels of distribution. 827 43. 33 (9). (1991). and Hogarth-Scott. Frazier. 150 67. Nalebuff. 55 (1).. Co opetition. Schul. Bradach. This is posing a particular challenge for Berman. and their geographic dispersion.. European Journal of Marketing. A producer may employ an intermediary be cause it is the traditional practice of the industry. T. L. Using the plural form in the management of restaurant chains. and Lumpkin.. Channel conflict: When is it dangerous? McKinsey Quarterly. 207 16.. 276 303. (1983). J.. channels of distribution Dale Littler . P. C. (1996). 246 57. A. T. D. Pelton. giving rise to what has been termed d i s i n t e r m e d i a r i z a t i o n . and Raven. M. In both organizational and consumer markets. direct selling is employed widely in consumer markets and is gaining more widespread appeal. F. (1959). (1999). Duarte.. Thomas-Graham.). whether or not it is an industrial or consumer product). Organizing and managing channels of distribution. The ample trade press evidence of the conflicts that arise because of dual channels of distribu tion is illustrated by Bucklin. and Rody. G. Bucklin. such as expensive capital goods or bulk raw materials. has led to a widespread and sub stantial increase in direct selling. Such sales involve high value dispatches. and Webster. Frazier. Marketing Channels. M. R. R. However. Strutton. and retailers (see r e t a i l i n g ). P. R. C. Gaski. The use of influence strategies in interfirm relationships in industrial product channels. The relative absence of knowledge with respect to inter type conflict is a shortcoming of the literature and calls for a greater under standing of retail systems as networks (see n e t w o r k ) whereby activities in different areas of the system are interdependent. 9 (3). and Hogarth-Scott. L. and Webster (1997). B. Selling direct (see d i r e c t m a r k e t i n g ) can be employed by firms selling particular categories of industrial products. J. 52 70. A. A systems theory of organizational conflict. frequency of purchase.. (1997). (1998). G. (2003). d i r e c t m a i l ) or it can consist of one or more intermediaries. Ann Arbor: University of Michigan Press. 9 30. G. w h o l e s a l e r s . J. (1996). P. B. and Brandenburger. (1966). Bibliography Products and services are moved from their source of production to the customer by means of a channel of distribution. 27 (2). 31 (4). Are cooperation and trust being confused with power? An analysis of food retailing in Australia and the UK. The bases of social power. Journal of Marketing. These authors argue that such conflict is sometimes harmless. E. Dapiran. S. particularly in the form of the Internet. such as agents. Cartwright (ed. B. A. and Davies. Testing the conflictperformance assumption in business-to-business relationships. relatively infrequent pur chases. L. G. pp. 462 73. International Journal of Retail and Distribution Manage ment. French. 42 (2). Journal of Marketing. Franchise relationship quality: Micro-economic explanations. L. Pride. the development of information and communi cations technologies. W. (1995). and Little. The channel may be simple when the producer sells direct to cus tomers (through.. The impact of channel leadership behavior on intrachannel conflict. 256. Boyle. L. 226 41. In D. Journal of Marketing. (1992). and Simpson.channels of distribution 39 the consumer (see In t e r n e t m a r k e t i n g ). G. (1984). Thomas Graham. (2003). London: HarperCollins. Studies in Social Power. Pondy. Journal of the Academy of Marketing Science. partly because of the often considerably lower costs. 29 (4). New York: John Wiley. Academy of Marketing Science Journal.g. (1999). L. The influence of psychological climate on conflict resolution strategies in franchise relationships. 21 35. Academy of Management Journal. Dwyer. 36 44. R. C. J.. 47 (3). 48 (3). Robicheaux. Influence strategies in marketing channels: Measures and use in different relationship structures. The form and complexity of the distribution channel employed depend on the product (its perishability. M. J. e. E. B. Industrial Marketing Management. Journal of Marketing Research. the customers for the prod uct. A. R. S.. 32 (2). and special pre sale n e g o t i a t i o n on price and technical specifications. F. although often significant competitive advan tages can be gained from innovating.

the abil ity to download music may have significant re percussions for traditional record retailers as well as the chain of companies involved with the preparation of traditional music CDs. which are necessary for cluster analysis. Using measurements on several vari ables for a number of cases. ranging from the initial raw materials.. for example. a small number of exclusive and exhaustive groups or clusters are formed. See also electronic commerce. . D. Physical goods transfers: The movement of goods.e. a cluster analysis may precede the application of . A broker will attempt to find pos sible purchasers of the product and bring the manufacturer and these potential customers to gether.g. Retailers. the ownership of the physical goods can change. socioeconomic. Influence transfer: The way in which differ ent elements in the chain attempt to promote themselves and thereby influence other elements in the chain. the St a t i s t i c a l Pa c k a g e f o r t h e So c i a l Sc i e n c e s (SPSS). The vari ables used to define the clusters could be the needs and l i f e s t y l e s of individuals and the subsequent profiling may involve demographic. 3rd edn. sell ing and distributing the product) without pur chasing the product (i. Generally. These both buy and sell. Ownership transfer: As the product passes through the chain. a distinction can be drawn between those who act merely on behalf of the manufacturer (e.g. carry stock on consignment. and those who take title and undertake all further responsibility for distribution and perhaps other aspects of marketing. small retail ers). (2004). and provide ancillary services such as financing. Five types of transfer can be identified: . Once the sample has been parti tioned and the clusters have been identified using some of the variables in the analysis. London: McGraw-Hill. Where independent intermediaries are used. retail distribution channels Bibliography Jobber. Large retailers will generally take de livery direct from manufacturers... The usefulness of cluster analysis in marketing to help in segmenting populations (see m a r k e t s e g m e n t a t i o n ) should be obvious. they do not take title). and so on. There are various transfers between the dif ferent elements of the distribution chain. mostly sell to the final customer. Intermediaries who do take title include wholesalers and retailers. which carry out a similar function. or when customers are widely scattered geo graphically.g. Usually a measure of the distance be tween individuals is used to build up clusters.40 cluster analysis many consumer industries: for instance. If the researcher has a large sample. . Intermediaries who do not take title include brokers and manufacturers’ sales agents. through components and subassemblies. wholesalers sell to other companies or to retailers. to the final product. . in stallation. electronic data inter change. the remaining variables can be investigated to obtain profiles of the clusters and to see if and where there are differences between clusters. When the number of cases is small. Manufacturers’ sales agents fulfill similar functions. Cluster analysis differs from d i s c r i m i n a n t a n a l y s i s in that there is no external means of grouping the cases. although they will often employ their own sales staff. Wholesalers are used when. but with larger numbers of cases faster clustering is used and less detailed output is provided by computer packages. e. and other variables to see where the clusters differ and to see if the clusters can be named. cluster analysis Michael Greatorex Cluster analysis refers to a body of techniques used to identify objects or individuals that are similar. . the cluster ing can be observed. Wholesalers will collect a range of goods from various manufacturers and usually sell them to other intermediaries (e. Both brokers and agents receive a commission on any sales. Each cluster has high within cluster homogeneity and high between cluster hetero geneity. the amount sold per customer is relatively small.. Information transfer: The flow of information between different stages in the chain. Payment transfer: The movement of money for the payment of goods and services. Principles and Practices of Marketing.

Broadly. However. Englewood Cliffs. when the alternatives are dissimilar with little cognitive overlap. codes of practice David Yorke It is desirable that industries conform to certain rules or regulations in the conduct of their busi ness. to each cluster in turn. R. decisions and commitments tend to exist in harmony with one another. Lewis Consistency theory in the psychology of a t t i t u d e s ‘‘refers to the idea that people’s mental 41 representations of their beliefs. over which they have little control or influence. consumers may remain aware of positive features of rejected alternatives. A.. and attitudes tend to exist in clusters that are generally both internally consistent and consistent with behavior. Applied Multivariate Statistical Analysis. and codes may offer a cheaper and quicker means of resolving grievances than using more formal legal channels... The ad vantages claimed for codes of practice are: they can help to raise the standards of an industry. there is inconsistency between cognitive elements. emphasis added). (1998). attitudes and attitudinally significant behaviors. honest and truthful. 1993: 472). 4th edn. which are inconsistent/dissonant with the action taken. and that disharmony motivates cognitive changes designed to restore harmony’’ (Eagly and Chaiken. and Wichern. when the purchase is a high involvement purchase (see i n v o l v e m e n t ).g. Trade or industry associations are encouraged to adopt codes of practice and to update them constantly as the m a r k e t i n g e n v i r o n m e n t changes. and an individual strives for consistency within his or her self. When making choices between alternatives. the choice between a television or a washing machine. organizations within the industry are often happy to accept restrictions imposed by volun tary codes of practice rather than be subject to the law. 1993: 469. and others. If.. Central to Festinger’s (1957) theory of cognitive dissonance ‘‘is the assumption that the presence of dissonance gives rise to pressures to eliminate or at least reduce it’’ (Eagly and Chai ken. decent. opinions. codes of practice such as advertising industry standards and those en forced by professional service firms). either psycho logically or in terms of financial outlay. Hogg and Barbara R. after a purchase. the Council of American Survey Research Or ganizations.g. it is a post purchase state of mind. by law) or they may be self imposed (e. For example. and negative features of a selected alternative. when a number of desirable alternatives are available.g.’’ In the case of market research. i. a consumer has a state of conflict which makes it difficult to make a choice. such regulations may be imposed by external organizations (e. The existence of cognitive dissonance is psy chologically uncomfortable and so consumers develop strategies to reduce/eliminate it in . Individual consumers’ cogni tions for products which are expressed in terms of values. the UK Market Research Society. e. then cognitive dis sonance is said to exist. in the UK the Advertis ing Standards Authority is responsible for im plementing the British Code of Advertising Practice that requires that a d v e r t i s i n g should be ‘‘legal. Thus cognitive dissonance relates to the sense of loss associated with the choices that have been forgone. D.cognitive dissonance other statistical methods. there are compre hensive codes that have been developed by ICC/ ESOMAR. Cognitive dissonance will be high when: the buying decision is important. and when the individual has dissonance tendency. beliefs.e. If such an inconsistency exists in a pre purchase situation. any two cognitive elements or atti tudes may or may not be consonant with each other. NJ: Prentice-Hall. including other multivariate techniques (see m u l t i v a r i a t e m e t h o d s (a n a l y s i s )). W. Bibliography Johnson. cognitive dissonance Margaret K. consumers invariably experience cognitive dis sonance as on few occasions do they make a completely ‘‘right’’ decision. when decision choice is a result of free will with no help or applied pressure from others.

This process comprises three principal stages: cognitive. (1957). The Psychology of Attitudes. NJ: Prentice-Hall. Solomon. and Della Bitta. For marketing managers. however. New York: John Wiley. denying. chs. p e r s o n a l s e l l i n g is less cost effective when the number in the target group is large. Robertson (eds. Journal of Marketing Research. 15. and develops a clear understanding of what is being offered. ch. Eagly. S. Mowen. 303 8. Aronson. (1976). 469 79. and behavioral stages in that order (see a i d a m o d e l ). 355 84. and Askegaard.. 8th edn. NJ: Prentice-Hall. August. The Psychology of Interpersonal Rela tions. Solomon. ch. (1993). 5. W. J. L. A Theory of Cognitive Dissonance.g. (1958). G. Heider. M. M. It includes all the techniques available to the marketer which may . M. Consumer Behavior. returning the prod uct. or brands. D. Cummings. F. In L. 8.. Boston: McGraw-Hill Irwin. G. reevaluating the de sirability of the chosen product favorably and/or the alternative product negatively. (2004). Consumer Behavior. and Minor. and esp. collective self see c u l t u r e a n d s o c i a l i d e n t i t y communications mix David Yorke The marketing communications mix is a subset of the m a r k e t i n g m i x . 4th edn. E. FL: Harcourt Brace Jovanovich. a f f e c t i v e . and Prensky. (1993). Stanford. ch. dis torting. creates an a w a r e n e s s of their existence. These strategies include: eliminating responsi bility for the decision. 10. Con sumers.g. Being. It is. W. M. ch. affective. Z. A. pp. and Kanuk. (1973). G. 5th edn. ch. R. its products. M. widely recognized that buyers may not necessarily proceed through the predeter mined sequence of the cognitive. Bibliography Arnould. L. In S. and c o n a t i v e . ch. although t e l e m a r k e t i n g and d i r e c t m a i l can reduce the cost. 5th edn. e.). ch. Upper Saddle River. Venkatesan. (2002). changing attitudes toward the product to increase cognitive overlap. Consumer Behavior. and Chaiken.). A. The cost effectiveness of achieving this is determined largely by the media used (see m a s s m e d i a ). NJ: PrenticeHall. Orlando. Consumer Behavior. 9. or reducing the importance of the decision. (2002). S. (1996). Price. R. Upper Saddle River. L. service. Consumer Behavior. and Venkatesan. R. 215 20. or forgetting information (e. Cognitive consistency and novelty seeking. Englewood Cliffs. Con sumer Behavior: Theoretical Sources. New York: McGraw-Hill. H. cognitive stage David Yorke Models of the m a r k e t i n g c o m m u n i c a t i o n s process suggest that a target buyer or customer moves from a state of ignorance or unawareness of an organization and/or its prod ucts or services to ultimately making a purchase. 18. and the size and type of the target group(s). (1998). Cognitive Theories: Social Psychology. and Zinkhan. L. J. (2002). E. 2nd edn. NJ: Prentice-Hall. Consumer Behavior: A European Perspective. The theory of cognitive dissonance: A current perspective. L. H.. C. and a d v e r t i s i n g is considered to be relatively successful at the cognitive stage providing there are media appropriate for reaching only the target group. Upper Saddle River. Berkowitz (ed. 427 98. (1978). Bibliography Solomon.. seeking new in formation to confirm one’s choice. Consumer Behavior: Buying. one important commercially salient strategy for reducing or lowering dissonance is to provide consumers with positive information that confirms their purchase decision. D. Schiffman.. Wells. CA: Stanford University Press.42 cognitive stage order to reachieve consistency or consonance. S. 11. (2004).. Loudon. Cognitive dissonance and consumer behavior: A review of the evidence. D. NJ: Prentice-Hall. pp. Bamossy.. Upper Saddle River. pp. Festinger. London: Academic Press. For example. Having. The cognitive stage is that which draws the a t t e n t i o n of the buyer or customer to an organization. 7. 2nd edn. NJ: Prentice-Hall. New York: John Wiley. 4. Ward and T. M. 5th edn. cigarette smokers and health warnings).

London: Prentice-Hall. P. although not necessarily in that sequence. 2nd edn. a f f e c t i v e . p e r s o n a l s e l l i n g . The use of information and communication technologies is affecting the means by which marketers strive to communicate with their different audiences. Marketing Communications: Prin ciples and Practice. buyer/consumer) through several stages of readiness to buy. These models assume that a buyer moves through the cognitive. affective. s a l e s p r o m o t i o n . the ‘‘learn feel buy’’ sequence (see l e a r n f e e l b u y m o d e l ). i. Different techniques have different strengths (and.. encourage sales from new customers.. whether they are delivered personally (e. e. introduce price conces sions. the use of targeted emails and text messages.e. A similar situ ation exists for products or services of high or low value (where the degree of p e r c e i v e d r i s k in the target’s mind will vary) and depending on whether the target group is concentrated or dis persed. for example. (1998). and i n n o v a t i o n a d o p t i o n m o d e l . and c o n a t i v e (or behavioral re sponse) s t a g e s .. or they may relate to consumers’ a t t i t u d e s and responses toward organiza tions.g.g. There is a need for the marketer to define the target groups. and market shares (see m a r k e t s h a r e ). aida model. a d v e r t i s i n g . techniques may be classified using two dimensions: first. generating goodwill and creating a corporate image. increase sales among existing customers. ‘‘purchase’’ behavior is typically the end result of the c o n s u m e r d e c i s i o n m a k i n g p r o c e s s and the marketing commu nicator wishes to move the target audience (e. and to evaluate the most cost effective means of reaching the target(s) and attaining the objectives. weaknesses). and secondly. hierarchy o f e f f e c t s m o d e l .g. i. and stage in the consumer deci sion making process. conversely. depending on the product category and consumer i n v o l v e m e n t . in crease market share. Specific objectives might be to: provide infor mation about a new p r o d u c t or b r a n d and create awareness of the product/brand. consumer involvement.e. communications objectives Barbara R.g. together with 43 achievement of corporate goals such as profits.. and behavioral stages in that order.’’ Examples of ‘‘non commercial’’ techniques are p u b l i c i t y and opinion leaders (see i n t e r p e r s o n a l c o m m u n i c a t i o n s ). f e e l b u y l e a r n m o d e l ). A different mix. and educate customers or the general public about features/benefits of the product. London: International Thomson.. generate interest in the product or brand from a target market (or segment. As a consequence.g. are buy feel learn and feel buy learn (see b u y f e e l l e a r n m o d e l . . with. Generally. dagmar model. or con sumers. Marketing Management and Strategy. All of the first group are thus ‘‘commercial. Communication objectives might also be concerned with providing information and generating attitudes and responses from other organizations in the distribution chain. en couraging new distributors or improving dealer relationships. J. P. p a c k a g i n g . p u b l i c r e l a t i o n s ). growth.g. Marketing communications objectives that are concerned with consumers’ responses to prod ucts/brands are reflected in various response hierarchy models that have been offered. t e l e m a r k e t i n g ) or whether the medium used is impersonal (e.. communications objectives may be set depending on the product. (1999). customers. see m a r k e t s e g m e n t a t i o n ). and ultimately with con sumer purchase and satisfaction. e. for example. e. Kitchen. See also marketing communications Bibliography Doyle. provide information on product changes and availability. return on investment. Lewis The objectives of m a r k e t i n g c o m m u n i c a t i o n s are concerned primarily with informa tion and education about companies and their products and services. whether or not the technique in volves a payment by the sponsor.communications objectives be ‘‘mixed’’ in order to deliver a message to the target group of buyers. However. to set objectives for each. alternative sequences. would be employed at different stages of the p r o d u c t l i f e c y c l e .. through the c o g n i t i v e ..

(1961). 79 86. pp. Taking the case of advertising. It may well be that there is a steep rise in sales stemming from the advertising. Value Based Marketing. 4th edn. heartbeat. and that the sales increase was weaker in Du Pont’s high market share territories (Buzzell. p. it is possible to have a distorted picture of its general effectiveness. without carefully controlled experi mentation. A classic study of advertising effectiveness using experi mentation involved Du Pont’s paint division. Chichester: John Wiley. (1995). in its absence. say. (2000). Rogers. a d v e r t i s i n g effectiveness tends to receive more emphasis because it usu ally commands much higher expenditures than other elements of the communications mix. 1964). Even if all the extraneous variables are controlled. others may. G. Journal of Marketing. (1961). when considering the impact of advertising at any given time. Of . First. and the manner in which this is to be communicated. assessing the target audi ence’s reactions to the possible content of the communications (the m e s s a g e ). However. for various reasons. P. 61. but this may be because the advertising has brought forward sales that. there are too many other variables involved. It divided its 56 sales areas into high. It may involve. some people who are acquainted with the advertising in the early stages of the campaign may react quickly. The relationship between sales and expend iture on communications is much more diffi cult to ascertain. Generally. one cannot conclude that there is any direct link between the communication and the sales/profits secured. E. R. would have been made some time in the future. ranging from the gathering and analysis of a t t i t u d e s to laboratory tests using equipment to measure physiological responses such as pupil dilation. there are difficulties in assessing the impact of communications on sales. Pre testing focuses on gathering information before the im plementation of the communications. Post testing is concerned with the evaluation of the ‘‘effectiveness’’ of the m a r k e t i n g c o m m u n i c a t i o n s . R. by the use of carefully designed experiments (see e x p e r i m e n t a t i o n ) it may be possible to measure the sales effect of. M. delay a response. for example. A variety of re search techniques may be employed. The increasing so phistication of information and communications technologies means that it is possible to collect data at the point of sale on specified products and relate these to changes in various communi cations stimuli in confined areas. unthought of by the experimenters. and Steiner. A further group of people may not learn of the advertising for some time after it starts. for example. advertising. so the total sales may be unaffected. 25 (October). and blood pressure. Defining Advertising Goals for Meas ured Advertising Results. Diffusion of Innovation. there may well be a ‘‘carry over’’ effect. though.44 communications research Bibliography Colley. Thus. In the same way. and low m a r k e t s h a r e territories and allocated the usual amount to advertising in one third. 306. there might still be some external influence. Secondly. two and a half times the amount in another third. A model for predictive measurements of advertising effectiveness. the full effects of reducing or stopping advertising may not become apparent for some time. Doyle. communications research Dale Littler Communications research is aimed at optimizing the effectiveness of communications through pre testing and post testing of various aspects of the c o m m u n i c a t i o n s m i x . A. Pre testing (before the communication is used on the public at large) may be employed to assess reac tions to different forms of the communication in order to identify the version that is likely to yield the most favorable response. The experiment suggested that an increased spend on advertising increased sales at a diminishing rate. H. and four times the usual amount in the final third. New York: Free Press. average. the full impact of the communica tion may be spread over time. the expenditure on advertising using advanced statistical techniques. that may affect the results. J. Other research on effectiveness has attempted to identify a his torical relationship between sales and. Post testing can include evaluating consumers’ ability to recall or to recognize communications (generally adver tisements). New York: Association of National Advertisers. Lavidge.

a higher market share (and earlier). (1997) have noted the importance of dynamic capabilities. the resource endowments the business has accumulated (e. or with ‘‘pos itional superiority in the market. market sensing capability. of poor quality. investments in the scale. Dynamic capabilities thus reflect an organization’s ability to achieve new and innova tive forms of competitive advantage given path dependencies and market positions’’ (p. 516). They have some similarity to the core competencies described by Prahalad and Hamel (1990) except that these are seen as the capabil ities that support multiple businesses within an organization.’’ They include skills and processes. and capabil ities. Because of the specificity of most of the marketing variables (i. 1989). or has undesirable side effects. fails to stimulate interest.’’ it being used interchangeably with ‘‘distinctive competence’’ to mean relative superiority in skills and resources.g. Thus. E. 157 79. Du Pont de Nemours and Co. the development of a specific campaign for a specific product).e. and efficiency of facilities and systems. regarded as securing a relative . it becomes difficult to make general conclusions about the effectiveness of an additional dollar spent on advertising. D. Teece et al.’’ as providing greater customer value yields high market share. Pisano. of course. and are often tacit.’’ These are defined as ‘‘the glue that brings these assets together and enables them to be deployed advantageously’’ (Dierickx and Cool. In Mathematical Models and Marketing Management.competitive advantage course. and customer linking capability. this may well be what the advertiser desired as he/she will have the advantage of obtaining. there will be resulting higher sales revenue in the early stages of the p r o d u c t l i f e c y c l e concerned. competitive advantage Dale Littler Competitive advantage may be secured through differentiation of the organization and/or its products and services in some way in order to gain preference by all or part of the market over its rivals. I. Bibliography Buzzell. in addition. 1997: 516). Capabilities differ from assets in that they cannot be given a monetary value. any communication will be ineffective. scope. for example.: Measurement of effects of advertising. Graduate School of Business Administration. according to Dierickx and Cool. defined as ‘‘the firm’s ability to integrate. They may.). b r a n d e q u i t y . build. Day and Wensley (1988) argue that there is no common meaning of ‘‘competi tive advantage. or lacks credibility. Resource based theories argue that there are mainly two related sources of competitive advan 45 tage: assets.. which embraces the ‘‘skills. etc. and reconfigure internal and external competencies to address rapidly changing envir onments. and Shuen. In general. which is the ability to detect changes in the market and to anticipate the possible responses to marketing actions that may be taken. perhaps.e. Boston: Division of Research. which may also be referred to as ‘‘compe tencies’’ and ‘‘organizational routines. This may result in higher m a r k e t s h a r e and/or margins (see m a r g i n ) than competitors. i. competitive advantage will be obtained through offering higher cus tomer value. Recently. Organizational routines/competencies involve assembling firm specific assets into ‘‘integrated clusters spanning individuals and groups so that they enable distinctive activities to be per formed’’ (Teece. namely. Thirdly.’’ Littler (2004) suggests that there are at least four dimensions to com petitiveness. R.. if the product is unreliable. the creativity of the communication can be expected to influence its effectiveness.. Similarly. abilities and processes needed to achieve collaborative customer relationships so that individual cus tomer needs are quickly apparent to all functions and well defined procedures are in place for responding to them. ‘‘so deeply em bedded in the organizational routines and prac tices that they cannot be traded or imitated. They are. Day (1994) suggests that two capabilities are particularly critical to competitive advantage. spending large amounts of money on ad vertising will not lead inevitably to substantial sales if the campaign itself leads to resentment. Harvard University. (1964). in the medium term. include the ability to coordinate all the activities involved in n e w p r o d u c t d e v e l o p m e n t to produce innova tive products effectively and efficiently. pp.

S. These are: marginal differentiation. New York: Free Press. Strategic Man agement Journal. Companion Encyclopaedia of Marketing. New entrants pose a threat as they augment existing capacity and may be disruptive because they will have to secure a market pos ition in order to justify the costs of entry. Littler. Dierickx. imperfectly imitable. the existence. flexibility. J. Journal of Strategic Marketing. Innovation and sustainable competitive advantage. Journal of Marketing. (1989). D. ‘‘competitive strategy’’ tended to be accepted as a new ap proach to organizational strategy (see c o r p o r a t e s t r a t e g y ). and there are switch ing costs. 520 1. 1980) during the 1980s. K. 509 33. 10. customers. A. J. Porter. S. not easily eroded by environmental changes or imitated by existing or potential com petitors. rare. G. K. Porter argues that there are five major forces that affect the attractiveness of an industry. 1504 11. Pisano. Management Science. (1980). R. and there are high fixed costs presenting significant barriers to exit. Supplier power can lead to higher input costs and is increased where suppliers are highly concentrated relative to the customer industries. and there are no strategic ally equivalent substitutes. Bibliography Barney. Sub stitutes place a ceiling on the price that can be charged. and the product accounts for a significant proportion of the buyer’s cost and. However. I. have a unique product. (1991). of substitutes. 58 (October). rivals’ exploitation of changes in customer preferences. and Cool. Day. London: Routledge. and Hooley. Firm resources and sustained competitive advantage. or the capability to respond to the unexpected. Prahalad. growth is slow. and Shuen. 68. and Hamel. (1988). is enhanced where they purchase in large volume.e. M. pp. Marketing strategy. Baker (ed.46 competitive strategy advantage to competitors. Sustainable competitive advantage in electronic business: Toward a contingency perspective on the resource-based view. D. (2002). Porter. 35.). Fahy and Hooley (2002) suggest that ‘‘value and inimitability are both essential elements of key resources and determine the sustainability of competitive ad vantage in a rapidly changing technological en vironment’’ (p. i. Dynamic capabilities and strategic management.g. Journal of Management. or potential development. (1995). G.. In M. J. 241 53. which can result in downward pressure on margins (see m a r g i n ). J. the product they purchase is standard or undifferentiated. The . These are: intra industry rivalry. G. In P. E. 17 (1). Day. Barney (1991) suggests that there are four features of assets that provide a sustainable competitive advantage: they are valuable. (1990). insuring that the customer perceived values are delivered at a cost at least comparable to that of the nearest competitors. Harvard Business Review. the scope for protecting the ad vantages that the business has. it is important to establish a competitive advantage that is sustain able. or through the concerted efforts of competitors using differ ent marketing and other strategies. and suppliers. new regulations that un dermine the competitive advantage. (1997). 250). 99 120. competitive strategy Dale Littler Widely popularized by Michael Porter (e. the product is undifferentiated. Rivalry is likely to be intense where there are many firms of equal size. Teece. Assessing advantage: A framework for diagnosing competitive superiority. the ability to be perceived as different in valued ways by potential purchasers. the threat of new entrants. (2004).). The capabilities of market-driven organizations. profits. the advantages that any organization has at one stage can be effectively challenged through technological innovation. and Wensley.. Kitchen (ed. and par ticularly the structure conduct performance paradigm. Wensley. Journal of Marketing. (1994). C. efficiency. J.. G. 215 33. Basingstoke: Palgrave Macmillan. Competitive Strategy: Techniques for Analyzing Industries and Competitors. therefore. 79 91. Marketing Mind Prints. Its roots are within the traditional area of industrial economics. The core competence of the corporation. G. As Porter (1980) argues. Porter argues that it is these specific industry factors that are important since macroeconomic and other factors (see e n v i r o n m e n t a l a n a l y s i s ) will affect all industries equally. 37 52. The power of customers. 18 (7).. R. and proprietariness. 3 (May/June). Fahy. Asset stock and accumulation and sustainability of competitive advantage.

Porter. (1988). 519 32. (1980). it can be argued.. 12. for example. Bibliography Cronshaw. then. 66. They can aim at the lowest cost position (see c o s t l e a d e r s h i p s t r a t e g y ) or differentiation (see d i f f e r e n t i a t i o n s t r a t e g y ) within the market as a whole. Ohmae. 58. Hall.. Firms which aim neither at the lowest cost position nor at the differentiated position become. it emphasizes the importance of exit barriers as an influence on corporate behavior. There may be mobility bar riers inhibiting the movement of firms from one cluster to another. Thus. Strategic Management Journal. Porter argues that the major focus of competi tive strategy is to provide customer value. Porter has noted the need to adopt a more dynamic approach to competitive strategy formation (Porter. there has been increasing evi dence that high performers can follow high levels of efficiency as well as having a signifi cantly differentiated market position (e. (1991). M. Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1991). 1994). m a r k e t s e g m e n t a t i o n ). that do. they may strive to establish or reinforce barriers to entry. On being stuck in the middle or Good Food Costs Less at Sainsbury. Survival strategies in a hostile environment. Getting back to strategy. and third. for example. the approach is essentially descriptive and. decline). Cronshaw. Porter assumes that industries evolve. maturity. for organizations to position themselves favorably with regard to each of these five forces. perhaps at the expense of providing adequately satisfactory offerings to customers. or build in switching costs. W. However. (1994).’’ 95 117. M. Special issue. 5 (September/ October). M. K. This can be perceived in terms of lowering customer costs and/or allowing the customer to secure higher quality. collab orative product development with other possible suppliers.. there is little empirical evidence to substantiate his thesis. Porter’s work and that of his followers makes at least three important contributions: first. Harvard Business Review. and Kay. however. J. Davis. and that this may lead to tit for tat com petitive rivalry. Toward a dynamic theory of strategy. lacks robustness since firms can be clustered in two or more ways depending on the criteria employed to define the clusters. 75 85. Ac curate comprehension indicates that the receiver has extracted the source’s intended meanings from the communication (Jacoby and Hoyer. it focuses on the means of 47 providing customer value. E. or develop alternative sources of supply through. 6 (November/December). For example. Comprehension can also specifically refer to the second step in the d a g m a r . and Kay. comprehension Emma Banister Comprehension refers to the point at which a consumer attaches meaning to a stimulus. He develops the concept of strategic groups based on the view that industries can be disaggregated into clusters of firms with each cluster pursuing different strategies. thereby opening up opportunities to those. for example. technological developments or new entrants that have a different basis of competitiveness. Davis. E. Firms can follow one of four generic competitive strategies (see g e n e r i c s t r a t e g i e s ). 1989). according to Porter. is subjectively rooted and all forms of cognitive biases may affect how it perceives its environment. Harvard Business Review. Porter. 149 56. and he applies the five forces framework to each of these stages. ‘‘Fundamental Research Issues in Strategy and Economics. second. However.comprehension major objective is. K. (1980). there may be an inability to identify or acknowledge significant challenges to the firm’s competitive position from. New York: Free Press. including new entrants. E. or they can strive for one of these pos itions aimed at a particular segment/or segments of the market (see f o c u s s t r a t e g y . In later work. indeed. growth. A firm’s analysis of its competitive arena. Commentators such as Ohmae (1988) believe that the focus on ‘‘competitive strategy’’ can lead to an emphasis on competitors per se rather than on the changing values and requirements of cus tomers. it provides a coherent framework for analyzing industries. Hall. ‘‘stuck in the middle’’ with suboptimal returns.g. 1980. British Journal of Management. with distinct phases to their life cycle (nascent.

The comprehension/ miscomprehension of print communication: Selected findings. W. The use of scanners at the point of sale is revolutionizing marketing research by providing management with timely data on sales that help decisions on new products. (1961). Campo. Computers can be used to represent different consumption ex periences (simulated shopping) or provide a range of visual product concepts. check on the productivity of the interviewers. Such methods as multiple regression (see r e g r e s s i o n a n d c o r r e l a t i o n ). using a keyboard. 1999). 15 (March). especially the latter. d i s criminant analysis. Multiple regression is useful in f o r e c a s t i n g along with such time series methods as exponential smoothing and autoregressive mov ing average methods. Jacoby. Computers can be used in telephone interviewing to select members of the sample using random digit dialing. Mu l t i v a r i a t e m e t h o d s (a n a l y s i s ) is only possible using computers. and m u l t i d i m e n s i o n a l s c a l i n g including c o n j o i n t a n a l y s i s are carried out using either general packages such as those mentioned above or specialist software available for some of the methods. Computers are being utilized increasingly for the storage and retrieval of data using databases (see d a t a b a s e ) and marketing information systems. 1988. and packaging. p r i c i n g . and Hoyer. In p r i m a r y r e s e a r c h . Data can be collected directly by the computer (Brooks. but the use of the computer can be taken further in telephone interviewing when the questionnaire appears on a screen used by the interviewer as a prompt and a means of recording the answers given by the respondent. styles. An important use of computers is in the analy sis of p r i m a r y d a t a collected using both qualitative and quantitative methods. In computer interviewing. designs. 1992. Large samples need computers for data analysis even to obtain simple summaries for each variable such as tabulations of frequencies or d e s c r i p t i v e s t a t i s t i c s such as measures of average and dispersion.48 computers in marketing m o d e l of communications. D. Burke et al. These data can form the basis of the monitoring of an organization’s external and in ternal environments. Wirtz and Bateson. or touch screen. The statistical analysis of surveys is carried out using computer packages such as the St a t i s t i c a l Pa c k a g e f o r t h e So c i a l Sc i e n c e s (SPSS) and Mi n i t a b . and on such routine decisions as inventory control and production planning for established products. Journal of Consumer Research. Gijsbrechts. J. and generally help in the management of the interviewing stage of a survey. It describes the part of the c o g n i t i v e s t a g e (see t a r g e t m a r k e t ) when the target buyer or customer understands the product or service and what it is designed to achieve. mouse. In b i v a r i a t e a n a l y s i s . cluster analysis. New York: Association of National Advertisers. The com puter will dial numbers. (1989). computers in marketing Michael Greatorex Computers have had far reaching effects on m a r k e t i n g r e s e a r c h and m a r k e t i n g and their use stretches to all aspects of marketing. R. Further examples of the use of computers to capture data occur in the use of electronic devices in observational research (see o b s e r v a t i o n ). Defining Advertising Goals for Meas ured Advertising Results. make recalls if needed. Bibliography Colley. and Guerra. 434 41. software is avail able to help in the design of questionnaires (see q u e s t i o n n a i r e d e s i g n ).. 1999. factor analysis. structural equa t i o n m o d e l s . which permits the analysis of opportunities and threats (see s w o t a n a l y s i s ) facing the organization. Computers are useful in the selection and development of a suitable . Again. point of sale a d v e r t i s i n g . the respondent. analyses such as c r o s s t a b u l a t i o n s or compari sons of means are readily specified and obtain able using these packages. directly communicates answers to ques tions as they appear on the screen without the use of an interviewer. A satisfactory questionnaire can be printed and used in postal surveys or personal interviews. on sales promotions (see s a l e s p r o m o t i o n ). H. such data are useful in the preliminary problem identification stages of the marketing research process.

A product concept is ‘‘a printed or filmed representation of a product or service. International Journal of Service Industry Management. Action is not necessarily a purchase. E. M. 82 99. (1988). T. Harlam. and computer aided learning modules. and gauge potential customer acceptance to warrant further product develop ment (see n e w p r o d u c t d e v e l o p m e n t ). concept testing Margaret Bruce and Liz Barnes Concept testing is concerned with the evaluation of a new p r o d u c t c o n c e p t to: determine ways to improve the concept. s a l e s p r o m o t i o n . J. 71 82. 22 61. 19. computers are also useful in the application of the chosen procedures for the different products. Obvious examples include business games centered around marketing topics. Avatars: Virtual incarnations and their implications for life and work on the web. it may be seek ing further information about the product or service. B. G. Bibliography Brooks. 1987). Introducing uncertain performance expectations in satisfaction models for services. Data can be collected at the point of sale to develop profiles of consumers and purchasing patterns for specific products (see e p o s ). Using the Microcomputer in Marketing. budgeting. and. and Guerra. J. es pecially those concerning the elements of the marketing mix. Search monitor: An approach for computer-controlled experiments involving consumer information search. There has been a significant growth in online (Internet based) purchasing and consumption (see e l e c t r o n i c c o m m e r c e . (1992). K.. crucially. and forms of d i r e c t m a r k e t i n g such as t e l e m a r k e t i n g . what is desired by organizations. Wirtz. although this is. J. Journal of Consumer Research. The conative or behavioral stage is that which elicits some action on the part of the buyer or customer. Burke. Computers are also useful in teaching marketing and marketing research. and conative. 14. B. Marketing decision support systems have been devised to help marketing decision makers with a variety of problems. E. Gosling. Journal of Consumer Research. e l e c t r o n i c d a t a i n t e r c h a n g e ). S. (2001). ascertain the best target markets. (1999). Ma r k e t i n g d e c i s i o n s u p p o r t s y s t e m s involve databases. those which are more likely to initiate action in the conative stage are p e r s o n a l s e l l i n g . or product t r i a l . strengths and reasons for being’’ (Schwartz.concept testing forecasting procedure for a particular problem such as the demand for a specified product. Marketing decision support systems have been created using spreadsheets. Campo. L. 10 (1). Manchester. Maidenhead: McGrawHill. conative stage David Yorke Consumer decision making models (see c o n s u m e r d e c i s i o n m a k i n g p r o c e s s ) which suggest that a target buyer or customer moves from a state of ignorance or unawareness of an organization and/or its products or services to ultimately making a purchase comprise three main stages: c o g n i t i v e . computer hardware and software and a communication interface so that the user can interact directly with the databases and marketing models.. Comparing dynamic consumer choice in real and computer-simulated environments. Spreadsheets have also been used in marketing for forecasting. rather. It is simply a device to communicate the subject’s benefits. July. Gijsbrechts. marketing models. L. (1999). The concept is a description . Since organizations often require forecasts for many products. K. Computer-simulated shopping experiments for analyzing dynamic purchasing patterns: Validation and guidelines. F. and controlling. ultimately. (1987). and Parkinson. Of the m a r k e t i n g c o m m u n i c a t i o n s techniques available in the c o m m u n i c a t i o n s m i x . d i r e c t m a i l . a f f e c t i v e .. computer based mar keting case studies. exercises. Journal of Empirical Generalizations in Marketing Science. 49 Parkinson.. 117 21. and Bateson. Kahn. R. and o f f t h e p a g e sell ing.. Paper presented at Critical Management Studies Conference. and Lodish. 4.

‘‘Working with lead users. the way the product is used. They also provide an estimate of the percentage of people who may try the new product (Moore and Pressemier. 2002). The product a d o p t i o n p r o c e s s can be longer than could be predicted in a concept test. A single exposure may not be a good predictor of eventual reaction to a product. It is important to note that concept tests are likely to overstate the realized market ac ceptance. in home research where prod ucts are tested where they will be used (Wilson. in the product development process. A variety of techniques are available for con cept testing. for example. Bessant. have yielded successful applica tions. and so on. members of different organizational functions. 1994).e. and an indication of the intention to purchase.. and personal inter views (see s u r v e y r e s e a r c h ). Another aspect of concept testing is that of pilot testing the concept amongst those with specialist knowledge with the intention of avoiding problems at a later stage. and people may tend to respond posi tively to concept tests where money and commitment are not involved. so that a result of ‘‘30 percent of respondents would definitely buy’’ is not likely to translate into a m a r k e t s h a r e of 30 per cent. 2003). The concept may be subject to simulation testing. (1997) argue could lead to ‘‘stretching the con cept to meet their needs’’ and so insure that the needs of most other potential users are taken into account during concept testing. Suppliers of components and subsystems may be engaged in the process and their specialist knowledge could save costs and time in subsequent development and production. . f o c u s g r o u p s . a comparative measure with compet ing products/brands currently in use. Objectives for the concept test include: a measure of the customer’s interest in the pro posed product. external experts suppliers. in order to refine the concept further. All of this can affect the accuracy of the predictions from concept tests. consumer a t t i t u d e s can change. The respondent may well continue to buy competing products. telephone interviews. Whilst some concept tests may involve buyer evaluation of a concept in a written or simple visual format (Ozer. for example. Others argue that competitive tests. for example. which involve presenting the new concept along side a rival concept. and other new prod ucts may be introduced between the test and the market introduction. a measure of the liking of the product. The concept can change between the test and the market intro duction (see t e s t m a r k e t i n g ). potential buyers may lack information on the product because they may not be reached by a d v e r t i s i n g and pro motion. Typical problems with concept tests include asking the ‘‘wrong’’ respondents. Concept tests identify: whether or not there is sufficient consumer appeal to warrant further development. Concept tests can only estimate the number of people who will try the product. for example. This may involve securing the per spectives of different parties. Tidd et al. It is considered that concept testing is particularly difficult for radical innovations as consumers have nothing with which to compare the con cept (Duke. promising more than the product will actually deliver. qualitative discussions with potential customers to assess their reaction to possible new product ideas. a test designed to convey to the final customer what the final product will be and do.’’ who are often the major customers in a particular sector and regarded as the most demanding. postal question naire surveys. Tidd. Concept testing can also be used to help assess a d v e r t i s i n g or p o s i t i o n i n g approaches by identifying which benefits should be offered. are more realistic. Cooper (1993) argues that the most reliable results arise from a full proposition con cept test. and ways to improve the concept. key customers. automated bank teller machines took years to become fully accepted. product mapping. and issues surrounding ‘‘leaking’’ of information on new products. and Pavitt (1997) note that environmental concerns have led to the ‘‘greening’’ of existing product ranges and firms may explore alternative and complemen tary concepts that provide an environmentally friendly dimension. where respondents evaluate one concept. the appropriate t a r g e t m a r k e t . i. 1993). and helping to refine the concept/product specification.50 concept testing of the product that also includes the benefits it offers. Monadic tests.

K. performance. J. European Journal of Innovation Management. and so on. E. in addition to reporting that the best point estimate of the population average is 200. the population mean.. Marketing Research: An Integrated Approach. ch. Thus. the best estimate of the population mean based upon data collected by a simple random sample is the sample mean. 3 (1). hatchback. The greater the variability. respond ents are offered hypothetical combinations of levels of the attributes and asked to evaluate the overall offerings. 6. trade offs involving differ ent levels of different attributes can be evaluated. country of origin. chosen in a manner similar to the way experiments (see e x p e r i m e n t a t i o n ) are designed. Understanding customer abilities in product concept tests. The relevant sampling distribution is often the t distribution or the standard normal distribution. If the numbers of attributes and levels are small. When a prob ability sample (see s a m p l i n g ) has been taken. 5 (4). and Pressemier. relatively simple methods and formulae are available to provide best single point estimates. L. interval estimates are also calculated. . p. R. the larger will be the confidence interval. Market and Or ganizational Change. C. based upon data from a sample are often required. (1994). Schwartz. 1975). 8. and the specified level of probability. Wilson. a single point estimate is unlikely to give an exactly true estimate. (2003). 208 13. all possible combinations can be offered to the respondent for evaluation. Duke. (1987). (1997). However. In more typical circumstances a reduced set of combinations. conjoint analysis Michael Greatorex and Mark P. New York: American Management Association. 2nd edn. as well as pro viding single point estimates. the attributes for a car may be style. Moore. Concept Testing: How to Test New Product Ideas Before You Go to Market. the values that the attribute style may take could be saloon. 48 57. For instance. D. 153 61. M. is offered so that sufficient informa tion is efficiently collected. the smaller the sample and the greater the specified level of probabil ity. London: Financial Times/Prentice-Hall. A. G. and.conjoint analysis Bibliography Cooper. Bessant. Winning at New Products: Acceler ating the Process from Idea to Launch. color. Ozer. 136. it can more realistic 51 ally be said that there is a 95 percent chance that the population mean lies in the range 190 to 210. Healey Conjoint analysis is a set of techniques that allows the researcher to derive indirectly the re lative importance respondents place on different attributes and the utilities assigned to differ ent values of each attribute when selecting from among several brands (see b r a n d ). 253 65. the appropriate sampling distribu tion. by the very nature of sampling. It assumes that products are evaluated by purchasers as attribute bundles (Green and Wind. Journal of Product and Brand Management. (1993). conceptual equivalence see c o n s t r u c t e q u i v a l e n c e confidence intervals Michael Greatorex Estimates of population parameters. Chicester: John Wiley. as an example. The implied utility attached to each possible level of an attribute is calculated by the computer and the relative im portance of each attribute can be identified. (2002).. Tidd. MA: Addison-Wesley. estate car. Thus. Rather than ask the respondent to evaluate the attributes and their values directly. A. which are calculable for data from probability samples. The several attributes (and the levels they can take) that are used to characterize a product are identified.. Therefore. and Pavitt. Managing Innovation: Integrating Technological. W. running costs. Reading. New York: McGraw-Hill. R. pp. Product Planning and Management: Designing and Delivering Value. Confidence intervals. Combinations not evaluated by respondents can then be analyzed. J. for example. etc. the size of the sample. Concept testing of Internet services. price. ch. (1993). pp. Confidence interval estima tion is a way of computing two points between which the population parameter will lie with a given level of probability. depend upon the variability of the data in the sample.

Conceptual equivalence can be achieved through using the derived etic solution (see e t i c e m i c d i l e m m a ). July/ August. Functional equivalence suggests that behavior in two separate cultures/ societies is related through a common functional problem. while recognizing the desirability and need for equivalence in cross cultural/societal re search in marketing. insuring that any significant differences between the cultures/societies being studied arise from cultural/societal differences and not extraneous variables. however. Harvard Business Review. believe. and Peterson. I. 107 17. The application of construct equivalence. Conjoint analysis can be employed for deter mining consumers’ perceptions of attribute im portance in choice processing. that m a r k e t i n g r e s e a r c h has not yet reached the stage where equivalencies can be imposed onto hypotheses. and Wind. Keown. This implies that the meaning of research con cepts. arguing that the pursuit of con struct equivalence may partially or wholly des troy the very cultural/societal differences that are being measured. and Hawkins. and Jacobs. Whether marketing research into differing cultures and societies since Green and White’s (1976) comment has reached a stage where hypotheses can be imposed is unclear. Marketing Re search: Measurement and Method. through identifying universal values from interviews. . Agarwal. children’s birthdays are celebrated throughout the world. Functional equivalence. interviews with representatives of the research sample group. D. Y. 1993). Conceptual equivalence holds that certain beliefs or values may be cul ture/society specific and should not be used in cross cultural/societal research (Yu et al. however. To achieve functional equivalence. For example. and screening the re search tool with representatives from the cul Conceptual equivalence. (1993). pp. Fay.. the researcher in conducting cross cultural research should recognize the impor tance of construct equivalence in cross cultural/ societal methodology. D. Green and White (1976). 1996). Specialized software for PCs is available to help the researcher conduct conjoint analysis.52 construct equivalence and the utilities of potential new brands can be compared to those of brands on the market. Bibliography Green. Tull. summarized in figure 1. P. therefore attempts to control influen cing variables (Malhotra. 405 19. Simulations can be used to estimate m a r k e t s h a r e . 6th edn. Yu. owing to insufficient know ledge about consumer behaviors in different cul tures/societies. and segmentation (see m a r k e t s e g m e n t a t i o n ) based on homogeneous preference seg ments. a literature search. estimating market share of products differing in attribute levels.. analyzing the composition of preferred brands. 1993). The methodological requirement for construct equivalence arose from Campbell’s (1964) observation that a major cross cultural/societal methodological problem was falsely attributing behavioral differences to cultural/societal causes. resulting in similar behavioral goals (Bhallah and Lin. The subsequent identification of commonly shared behaviors should then be used to form the basis of the marketing research design. Construct equivalence consists of a number of subequivalencies that need to be addressed during the cross cultural/research design stage. E. However. as a methodological ap plication. 1987. S. The concept of construct equivalence has been criticized. New York: Macmillan. materials. (1975). New way to measure consumers’ judgments. construct equivalence Andrew Lindridge Construct equivalence aims to identify whether the constructs being measured in a cross cul tural/societal study hold the same meaning and value in the different cultures/societies being researched (see c u l t u r e ). Sechrest. the research tool must have the same meaning for respondents in all the cultures/societies being studied. 1996). Van Raaij (1978) suggests that functional equivalence can be achieved through pilot studies to identify similar cultural/societal behaviors and their antecedents. and stimuli should be equiva lent across cultures/societies (Malhotra et al. and Zaidi (1972) describe the concept of equivalence as misleading.

construct equivalence 53 Construct equivalence Functional equivalence Conceptual equivalence Instrument equivalence Calibration equivalence Category equivalence Linguistic equivalence Measurement equivalence Response equivalence Figure 1 Construct equivalence ture/society being measured (Triandis. Instrument equivalence. For example. and response equivalence. response categories. Category equivalence re quires sample groups to share similar socioeco nomic backgrounds to minimize those variables that may adversely affect interpretation of the data analysis. Calibration equiva lence. as research respondents may be unwilling to ex press an opinion categorized from ‘‘strongly agree’’ to ‘‘strongly disagree. Mal pass. Instrument equivalence insures that questionnaire stimuli (such as brands). Instrument equivalence would then be achieved through the use of a semantic differential scale. Calibration equivalence requires the research tool’s measurement units to have the same value in the cultures/societies being investi gated. 1971. For example. does not provide a resolution to this problem. a scale suitable for a wide variety of cultures/ societies. 1973). then the researcher should either not proceed with the research or recognize that this . a female partner’s influence in the c o n s u m e r d e c i s i o n m a k i n g p r o c e s s may differ between Argen tina and the US. and address these differences either through acknowledging that differences exist. linguistic. or accept that calibration equivalence cannot be achieved. This is particularly important in cross cultural/societal studies where cultural differences may affect the r e l i a b i l i t y and the v a l i d i t y of the research data. Cross cultural comparisons between two cultures/societies must recognize Category equivalence. Cross cul tural/societal research regarding a t t i t u d e s and behaviors toward cars would not then be equivalent. For example. The researcher must either decide to measure cross cultural/societal at titudes and behaviors using a product that all cultures/societies can relate to in the same equal manner. Measurement equivalence. . or prefer ably through the research sample group satis fying a strict matched sampling criterion (see m a t c h e d s a m p l i n g ). and Davidson.’’ instead choosing a middle score to avoid offending the researcher. If calibra tion equivalence cannot be achieved. a car in Canada may be viewed as a necessity product but in China as a high status luxury product. This is achieved through calibration. the use of a Likert scale (see r a t i n g s c a l e s ) in Far East Asian countries may be problematic. and scale items are interpreted identically by different cul tures/societies. Measurement equiva lence is based on the premise that the research tool should strive to measure underlying con struct equivalencies. however.

S. consumer acculturation Andrew Lindridge Consumer acculturation is an aspect of the a c c u l t u r a t i o n process. 81 7. CA: Stanford University Press. Problems of translation in cross-cultural research. G... H. 1993). (1972). S. C. Sechrest. R. Triandis. It describes an eclectic process of learning (see c o n s u m e r l e a r n i n g ) and demonstrating consumption behav iors. International Marketing Research. A. (1971). Y. knowledge. 6 (March). (1983). may attempt to copy the consumption patterns of the host culture. Jun. 355 78. A second inde pendent translator then translates the ques tionnaire back into the original language. This process is con tinued repeatedly until there are no more idiomatic differences between the original questionnaire and the back translated ques tionnaire. Linguistic equivalence is achieved using a back translation method. Campbell. J. which occur at the group and indi vidual levels (O’Guinn. H. L.. Triandis. International Marketing Review. T.. (1976). Cross-cultural psychology. may provide answers that they believe will please the researcher. Methodological considerations in cross-national consumer research. 1983). Where bias may be evident in the data. Siegel (ed. Methodological and theoretical issues and advancements in cross-cultural research. where the original research tool is translated by an independent translator into the representative language of the country being studied.e. P. U. 61 73. As individuals are not objective in their opinions there is a possibil ity that their responses may be (un)inten tionally biased. and Craig. See also Galton’s problem Bibliography Bhallah. (1978). C. Fay. However.. The twice translated questionnaire is then compared to the original questionnaire to identify idiomatic differences. 275 85. 24. using consumption information they perceive as representative of their culture. L. i. R. Journal of Cross Cultural Psychology. and Faber. W. M. Van Raaij. L. (1964).. 13 (5). C. and White. are addressed. Linguistic equivalence argues that idiomatic issues. 1988. 14 (Fall). 693 701. . Ball. such as grammatical and syntax diffi culties arising from translating a question naire into another language. Where idiomatic differences exist. Biennial Review of Anthropology. and Davidson. L. 5. Journal of International Business. hospitality bias (Douglas and Craig. 7 43. Penaloza. and Gentry. Annual Review of Psychology. H. H. K. and Davidson. the researcher can either attempt to weight the data accordingly or accept that the bias is a cultural response in itself. (1996). Distinguishing differences of perceptions from failures of communication in cross-cultural studies..). Cross-cultural research methodology as a case of construct validity. Stanford. R. S. those question naire areas are rewritten to address these differences and resubmitted to the back translation method. and Jacobs. D. New York: Harper and Row. however.54 consumer acculturation issue represents a severe limitation to his/ her research. Malhotra. 7 (3). and Zaidi. Sekaran. pp. F. Psychology and Marketing. pp. A. 4 (4).. D.. New York: Prentice-Hall. Agarwal.. 41 56. (1993).. Cross-cultural marketing research: A discussion of equivalence issues and measurement strategies. P. Response equivalence attempts to assess bias in respondents’ answers. Sekaran. Palo Alto. N. F. Yu. and skills specific to a c u l t u r e . Lee. In B. For example. Keown. (1973). Initially indi viduals. worthy of recognition within the re search. Penaloza (1989) argues that consumer accultur ation is characterized by a number of stages encountered by ethnic minorities. Journal of International Consumer Marketing. Methodological issues in cross-cultural marketing research: A state of the art review. Advances in Con sumer Research. such as gram matical and syntax difficulties. M. J. 45 63. 1989. (1983). and Peterson. 1983. . CA: Annual Reviews. 1 84. Journal of International Business Studies. Green. Malpass. S. (1987). Bhallah and Lin (1987) indicated that British respond ents’ responses lay between understating and overstating their intentions. T. W. In Epistemology in Anthropology. Douglas. C. Psychology and culture. the dominance of their . Malpass. and Lin. 6 (2). Asian re spondents. Attitude scale methodology: Cross-cultural implications.

A. pp. M. and interactions with other South Asians resulted in a desire to demonstrate conformity. it behoves manufacturers and distributors to re search and understand their needs and prefer ences and to respond accordingly. Paper presented at the AMS Multicultural Marketing Conference. 20.. and Shah.. S. Product life cycles (see p r o d u c t l i f e c y c l e ) are shorter and so it is necessary to anticipate con sumer l i f e s t y l e s and to develop products to satisfy future needs. 579 83. J. for a number of reasons.-N. Lewis Consumer buyer behavior has developed. Penaloza. (1993). Dhillon. Hogg. (1988). Symbolic consumption being indicative of ac culturation has also been noted to be situation ally determined. To reduce this dissonance. J. T. Lincoln: University of Nebraska Press. M. This situationally determined consumer acculturation behavior was identified with the dialogical model of acculturation. acculturation. 110 18. consumer attitudes see a t t i t u d e s consumer buyer behavior Margaret K. Imagined multiple worlds: How British South Asian women navigate the ‘‘border crossings’’ between household and societal contexts. Hogg and Barbara R. For example. 76 82. D. Bibliography Berry. com panies need to search for better information about what people are willing to buy. In J. The impact of the m a r k e t i n g c o n c e p t through out all industries. Nebraska symposium on motivation. Psychology of acculturation. M. J.consumer buyer behavior native cultural values can cause dissonance in ethnic minorities’ consumer behavior (see c o n s u m e r b u y e r b e h a v i o r ). after a period of time. C. W. 37. in both the public and private sectors. W. Finally. Consumers are better educated and informed and thus more discriminating in their selection of goods and services. Hence. Acculturation and adaptation in a new society. W. The growth of m a r k e t s e g m e n t a t i o n as a m a r k e t i n g s t r a t e g y enables companies to better cater to the needs of specific homogeneous groups of consumers. Berry. R. O’Guinn. 18. to South Asian culture. L.. 46 (1). 201 34. Applied Psychology: An International Review. M. International Migration. with symbolic consumption among ethnic minorities often being determined by the dominant group with which the individ ual engages in differing situations. spurred by technological development. individuals then resort to familiar products from their native country.. since the 1960s. 69 85. 16. there is: increased interest in c o n s u m e r p r o t e c t i o n and the growth of private consumer groups. South Asian women’s choice of prod ucts was determined by their interactions with both British white and British South Asian soci ety. Immigration. J. Acculturation: The impact of divergent paths on buyer behavior. A. Further. With the fast pace of product introductions. and adaptation. Ball. Jun. This allows the individuals to adapt to their new consumer culture surroundings. (1990). the setting of public policy to protect the interests and wellbeing of consumers . through consumption. the immigrants’ consumer confidence and knowledge increase. W. M. 1997) bidirectional acculturation categories (see a c c u l t u r a t i o n m o d e l s ). 1992. and Shah. 30. and Shah (2002) argued that consumer acculturation can be identified with Berry’s (1990. Lee. Lindridge. Advances in Consumer Research. and on an international basis. 5 34. as a separate discipline within m a r k e t i n g . (2004). and Shah (2004) found that in Britain. Berman (ed.. They concluded that s y m b o l i c c o n s u m p t i o n was indicative of ethnic minorities publicly demonstrating both their chosen acculturation style to their own ethnic group and their relationship with the dominant culture. Lindridge. Lindridge. Interactions with the former resulted in a desire to conform.. Paper accepted for the Journal of Consumption. and Faber.. Immigrant consumer acculturation. W. (1997). Advances in Consumer Research. (1989). Marketing and Culture. has led to increasing consumer a w a r e n e s s and sophisti cation. Current Theory and Research in Motivation. Spain. 1989: Cross-cultural perspectives. Advances in Consumer Re search. J. Valencia. (1992). Berry.). A. (2002).. Hogg. The role of products in perpetuating cultural marginality: 55 The case of Punjabi Sikhs in Britain. Dhillon. Lindridge. Modes of consumer acculturation. and Gentry. K.

namely. and group memberships influence their buying behavior. These roles are typically: . However. and growing anxiety about consumer privacy with the growth of web based marketing (see In t e r n e t m a r k e t i n g ) and new opportunities to capture consumer information. purchaser: the purchasing agent who goes into a shop. one can consider who pays for/ funds the purchase. initiator: someone who first suggests the idea of buying a particular good or service. . place. 1972).’’ ‘‘buyers. and technological elements in the m a r k e t i n g e n v i r o n m e n t . Consumer buyer behavior Marketing Stimuli Other Stimuli Buyer's Characteristics Buyer's Decision Process Buyer's Decision Product Price Place Promotion Economic Technological Political Cultural Culture Social Personal Psychological Problem recognition Information search Evaluation Decisions Post-purchase behavior Product choice Brand choice Dealer choice Purchase timing Purchase amount Figure 1 Influences on consumers (Kotler. Personal motives include: role playing. Davis. as a function of their involvement in buying and consuming. decider(s): a person who decides on any com ponent of a buying decision in relation to whether to buy.g.e. it is also necessary to consider social and psycho logical explanations..g. physical activity. Social motives include social experience outside the home. 1974. and . computer and statistical developments provide the tools and techniques to facilitate research into consumer behavior and develop customer databases (see d a t a b a s e ). where two or more people fulfill buying role(s) (see. political. and the extent to which joint decision making is evident. 1994: 174) . lifestyles. purchase. i. the debates about genetically modified food stuffs). and pleasure of bargaining. Consumer buyer behavior is concerned with a series of processes in buying and consuming goods and services. Marketing stimuli relate to the activities and inputs of manufacturers and distributors. . communication with others having a similar interest. and how to pay. and promo tion. This is better understood in terms of buying roles within a household or family. 1976. visiting the retail shopping environment.. Davis and Rigaux. which approximately cover pre purchase. to include marketing and other stimuli and buyer charac teristics. what to buy. i. product.. 1980). self gratification. Other stimuli include economic. Additionally. user(s): those who use or consume the prod uct/service. price. status and authority. peer group attraction.e.56 consumer buyer behavior (cf. together with other influ ences on consumers (see figure 1). which is characterized by various personal and social motives (see Tauber. In addition one needs to consider the makeup of consumer psychological characteristics (e. various market ex changes take place between companies and ‘‘consumers’’ who may be described as ‘‘con sumers. These impact on buyers whose social and cultural background (see c u l t u r e a n d s o c i a l i d e n t i t y ). this in turn may depend on stages in the c o n s u m e r d e c i s i o n making process. Consumer buyer behavior is partly explained and understood in terms of economic theory (see b u y e r b e h a v i o r t h e o r i e s ).’’ ‘‘customers. diver sion. Filia trault and Brent Ritchie. In consumer m a r k e t s .’’ ‘‘purchasers. increasing environmental concerns. where from.’’ etc. learning about new trends. and sensory stimula tion. in par ticular the components of their m a r k e t i n g m i x . influencer(s): those who have implicit or ex plicit influence from within or outside the household. In addition... and post purchase stages. when. e. . One can also consider consumer shop ping behavior.

L.consumer buyer behavior personality. (1976). H. and Price. 449 70. Maclaran. methods of have centered around ontological and epistemological issues that can be divided very roughly into positivist and non positivist approaches to understanding con sumer behavior. P. successive postmodern issues have also been raised about the interrelationship between con sumer behavior and marketing (Brown. and the semi 57 otic interpretation of advertisements (Mick and Buhl. 14 (March). (2004).. consumer needs and mo t i v e s . consumers pro gress through a decision making process that results in various buying decisions in relation to p r o d u c t and b r a n d choice. J. 1 38. R. 2 (March). Journal of Consumer Research. E. A naturalistic inquiry into buyer and seller behavior at a swap meet. F. Recent studies have highlighted the import ance of experiential and hedonic aspects of con sumption which are not necessarily captured by traditional models of consumer buyer behavior. (1989). In most buying situations. (1993). there is increasing discussion about how far consumers necessarily follow the ‘‘ra tional man’’ approach as embodied in many of the complex models of consumer behavior. Buying decisions of special interest to researchers and practitioners include those that involve a time dimension. L. 16 (June). L.. TX: Dryden Press. Arnould. Davis. many of which only started to appear in the Journal of Consumer Research in the 1990s. 1 3. purchase time. Wallendorf. R. D. G. and Zinkhan. Con sumers. J. B. L. 1. 21. together with an understanding of the ways in which consumer a t t i t u d e s are formed and developed (see c o g n i t i v e d i s s o n a n c e ). Brown. P. F. De bates in the Journal of Consumer Research and in Advances in Consumer Research (available online via www... perception. chs. ch. J. Blackwell.. L. Bamossy and W. Thompson’s key papers on phenomenology. Fort Worth. Hirschman (1991) called for more attention to contemporary prob lems such as crime. 1995). Engel. H. Decision-making within the household. and Wallendorf.. b r a n d l o y a l t y and the a d o p t i o n p r o c e s s for prod uct innovations (see p r o d u c t i n n o v a t i o n ). Brown. An analysis of ‘‘the intellectual structure of the field of consumer research’’ (Hoffman and Hol brook.).g. van Raaij (eds. A. Journal of Consumer Research. (eds. (1995). Three per spectives have been identified in researching consumer behavior: decision making perspec tive. R. experiential perspective. but not all. although both these approaches encompass a variety of different philosophical positions in terms of formulating and research ing issues. 2nd edn. and c o n s u m e r l e a r n i n g ). M.. of the variety of approaches and methods employed for exploring consumer behavior research. 1996) studies on rhetoric in a d v e r t i s i n g . However. 20 (June). F. London: Routledge. . Catterall. In G. R. 1. 1 4. M. Linda Scott’s work on advertise ments. River magic: Extraordinary experience and the extended service encounter. store/dealer choice. W. Boston: McGraw-Hill Irwin. Journal of Consumer Research.. and Rigaux. 24 45. The future of the Association for Consumer Research: Backward to the past. 1998: 11). Consumer Behavior. P. 8th edn. Arnould. W. European Advances in Consumer Research. 51 62. F. Journal of Consumer Research. M. 1992). The sacred and the profane in consumer behavior: Theodicy on the odyssey. L. and so on. (1998). for example. Mick’s work on semiotics. e. 4. McQuarrie and Mick’s (1992. and Stevens. E. (1988). Sherry. and generating theory. chs. Bibliography Andreasen. London: International Thomson Business Press. J. London: Routledge. S. Davis. 23. W. S. Journal of Consumer Research. and Andreasen (1993) at the first European As sociation of Consumer Research conference in Amsterdam called attention to public policy issues and s o c i a l m a r k e t i n g . Postmodern Marketing 2: Telling Tales.. for example. (1993).acrweb. (1974). and their 1999 paper which combined three different methods with different philosophical underpin nings. In addition.) (2000). 241 60. Perceptions of marital roles in decision process.. Belk. Price. and the ways in which consumers perceive and handle risk in buying situations (see p e r c e i v e d r i s k ). and the behavioral influence perspective (Mowen and Minor. and addiction. prostitution. Belk. 1993) captured some. and Miniard. and Sherry. and implications for methods of data collection and analysis. Postmodern Marketing. Examining the presidential addresses in Ad vances in Consumer Research also shows the key emergent issues in researching consumer behav ior since 1990. 5. (1995). Marketing and Feminism: Current Issues and Research.

experimental. Upper Saddle River. J.) (1998). 19 (December). E. K. and Mick. Loudon. M. D. A meaning-based model of advertising experiences. (2001). 16. i ii. W. E. Mick. Consumer Behavior.. (1999). and Hirschman. Bettany. and Miniard. and Buhl.58 consumer decision-making process Filiatrault. Carmon. chs. 132 40.. 249 75. G. Journal of Consumer Research. G. Consumer Behavior: Buying. 46 9. Journal of Consumer Re search. F. M. R. (1974). Images in advertising: The need for a theory of visual rhetoric. (2004). NJ: Prentice-Hall.. Putting consumer experience back into consumer research: The philosophy and method of existential phenomenology. D. 131 40. and McAlexander. R. Plan ning. Z. 22. R. and Nowlis. J. 424 39. M. The intellectual structure of consumer research: A bibliometric study of author co-citations in the first 15 years of the Journal of Consumer Research. C. Thompson. Journal of Consumer Research. G. New York: John Wiley. Scott. 2. Journal of Consumer Re search. 8th edn. (1991). 2. (1998). The bridge from text to mind: Adapting reader-response theory to consumer research. acrweb. Consumer research: In search of identity. J. Schiffman. Journal of Consumer Research.. (1995). (4). Maclaran. The experiential aspects of consumption: Consumer fantasies. Simonson.). (1980). M.. chs. 19 (March). (1992). and L. Views and Visions. Drolet.. chs. D. 17 (December). J. M. 180 97. Visual rhetoric in advertising: Text-interpretive. A. C. chs. I. Figures of rhetoric in advertising language. 11. S. (1994b). Journal of Consumer Research.. L. 22 (June). Journal of Consumer Research... E. and Mark P. McQuarrie. R. (2002). Hoffman. NJ: PrenticeHall. 1 4. NJ: Prentice-Hall. 317 38. M. 1. Upper Saddle River. Healey The consumer decision making process is con cerned with buying operations and the stages in which a buyer (individual or household) may be involved when making purchases. 36 (October). Frank. W. M. 17. Having. 174. New York: McGraw-Hill. W. Thompson. 2. Consumer Behavior. www. Consumer Behavior. W. L. NJ: Prentice-Hall. Kotler. M. and MacInnis. Engel. and Della Bitta. (1996). Why do people shop? Journal of Marketing. (2002). Hogg. and Katona. and Askegaard. D. Journal of Consumer Research. W. G. C. 43 61. and Mick. 461 80. consumer decision-making process Margaret K. and Pollio. H. D. (1972). Catterall. 1. Hogg.. (1990). B. 4th edn. G. Shifting the discourse: Feminist perspectives on consumer behavior research. D. Consumer Behavior. Scott. H. B. G. L. (1996). Representing Consumers: Voices. Bamossy. Hirschman. (ed. The Powerful Consumer. J. information search. McQuarrie. 21. M. Marketing Management: Analysis. (2001). 2 (September). 16. and Kanuk. 18.. chs. 1 (June). P. J. Stevens (eds. and Prensky. 17. Advances in Consumer Research. 7. 1995) as problem rec ognition. (1960). McQuarrie. 19. Journal of Consumer Research. A. Being. Barbara R. J. Marketing and Femi nism: Current Issues and Research. Tauber. (1994a). Boston and New York: Houghton Mifflin. (2001). Consumer Behavior: A European Perspective. Subcultures of consumption: An ethnography of the new bikers. Locander. H. The Journal of Consumer Research: An introduction. 252 74. and Minor. chs. Consumer Behavior. Locander. and reader-response analyses. S. E. G. New York: McGraw-Hill. 505 17. E. L. 1 (June). D. (1982). 18. and Long. 5th edn. 17. NJ: Prentice-Hall. Journal of Consumer Research. M. Annual Review of Psychology. 1. R. 12. 16 (September). chs. Journal of Consumer Re search. R.. 346 61. 112 28. B. (1989). 1. L. p. London: Routledge. 9. (2000). and Mick. Implementation and Control. Solomon. L. B. P. Upper Saddle River. C. Consumer Behavior: A Framework. 8th edn. 5th edn. (1992). C. E. E. information evalu . Wells. G. These stages are usually referred to in complex models of c o n s u m e r b u y e r b e h a v i o r (e. 6 (September). 14. 2nd edn. 133 46. In M. R. C. 52. Secular mortality and the dark side of consumer behavior: Or how semiotics saved my life. 26. On resonance: A critical pluralistic inquiry into advertising rhetoric. F. 9 (September). The lived meaning of free choice: An existential-phenomenological description of everyday consumer experiences of contemporary married women. Journal of Consumer Research. Hoyer. D. London: Prentice-Hall.. (1993). 1. J. Schouten. Upper Saddle River. G. and Brent-Ritchie. London: Routledge.g. S. Joint purchase decisions: A comparison of influence structure in family and couple decision-making units. Solomon. B. J. Stern. Mowen. Holbrook. and Minor. (1994). Blackwell. Mowen. and Pollio. D. Lewis. 37 65. M. Journal of Consumer Research. pp. Dhar. P. D. C. 21 (December). 2nd edn. (1993). F. feelings and fun. Upper Saddle River.

one has to be aware that intervening variables may come into play between purchase intention and purchase decision. of store location. etc. perceptions of the costs and value of information search. and from experience/use. price. or an intention to purchase a satellite television may be postponed because a washing machine suddenly breaks down and has to be replaced. These include a t t i t u d e s of other consumers. such as friends. those products/brands or other aspects of buying and consuming that a con sumer (or household) is intending to carry out in the form of purchase decisions.. For example. operating costs. displays. role in volvement.g. previous experience and knowledge of the product. availability. 59 Formal organization might include detailed fi nancial analysis. These are related to: costs. Purchase Decisions At this point one can refer to consumer purchase intentions. consumers experience some levels of satisfaction or dissatisfaction with each . durability. Sources of problems are various and include: assortment deficiency (e. stores. e.. such as finance. and post purchase evaluation. reaction to price deals.. i. risk perceptions and risk handling styles (see p e r c e i v e d r i s k ).. Information may come from: personal sources. style. e.. e. A readiness to buy thus emerges. Product decisions include choice of brands (including distributors’ versus manufac turers’ brands). suitability. Indi vidual factors.e. credit availability). Those which meet ini tial buying criteria fall into a consideration set. degree of i n v o l v e m e n t with the purchase. alternatives are evaluated with respect to various decision cri teria. and intensity of need. more resources available. family. store image. service. Further. Information Evaluation When considering consumers’ evaluation of in formation with respect to product and b r a n d alternatives. expanded means (e. Purchase decisions are made with respect to products and services. m a s s m e d i a and consumer organizations.g. Post-Purchase Evaluation After purchasing.. efficiency. 1979). and satisfaction to be gained from searching. dependability. Information Search Information search is the stage at which con sumers attempt to match needs with market of ferings to identify purchase alternatives and find out more about them. e. or opportunity). money. and changing expectations and needs (see c o n s u m e r n e e d s a n d m o t i v e s ). servicing.. and impulse purchase decisions (see i m p u l s e p u r c h a s i n g ).g. extras. or search styles. an unsatis fied or unfilled need. home shopping. However. Problem Recognition Problem recognition occurs when a consumer recognizes a buying problem or goal. services. commercial sources. avail ability of information without search. e. the coffee jar is empty). and may delay purchase deci sions or cause them not to take place at all. personnel. m a i l o r d e r . Decisions also relate to choice of store (to include location.g. of brand. time. and convenience. time available. for example with respect to house or car purchase. services. with respect to income and employment). formal or informal organization of information may occur (see Bettman. and so on. appearance. brands. and salespeople. social conspicuousness. public sources. price. neighbors. urgency. which leads to a choice set. purchase decisions.g.. per formance.g. and methods of payment. exposure to new infor mation. stores.consumer decision-making process ation.. Alternatives that are evaluated will be part of an a w a r e n e s s set as the consumer does not necessarily have information with respect to all the alternatives available. car parking. Product factors include frequency of purchase.. and unexpected situational factors (e. The amount of information sought will be a function of both p r o d u c t and individual factors. include values and aspirations. essenti ality of the product. and frequency of shopping. repairs. etc. Buying needs may relate to products. economy.g. and a variety of needs will prevail at any one time which have to be prioritized (for an individual or household) as a function of time.g. atmosphere. atmos phere. plans for a holiday may be canceled owing to unforeseen financial circumstances or ill health. expanded desires for more or better products and services. a d v e r t i s i n g and promotion.

it is important to note that not all the stages may be relevant. However. .. for memory and com putation). active information search and evaluation.g.g. knowledge. who identi fied four types of consumer buying behavior based on the degree of buyer involvement and the degree of difference among brands: . 2001). when consumers are highly involved and there are significant differences between brands (e. low involvement (often repurchase) situations with no motivated search for information (the costs are likely to outweigh the benefits). when consumers are highly involved in a purchase . and looks to intrapersonal cognitive phenomena such as memory and choice goals to model. or more formally. and information to be used in future purchasing decisions. and when required to make a choice or purchase decision for a product/ service may compute preferences ad hoc. 1985). petrol and com modities). and Payne (1998) suggest that consumer decision making is constructive in nature: consumers have limited processing capacity (e.. With respect to product/brand choice.g. or have positive refer ence group influence (see i n t e r p e r s o n a l c o m m u n i c a t i o n s ) may be referred to as high involvement situations and subject to ex tensive problem solving. if performance does not meet expectations (i. because of the difficulty inherent in empirically testing the generic models (Simonson et al. At the other end of the continuum are routine. but see little difference between brands (e. Dissatisfaction leads to one of several post purchase activities. Foxall’s (1990. including returning the product. The advent and rising popularity of informa tion processing and cognitive research on con sumer decision making and buying behavior have led to an increasing appreciation of models that eschew theories of rational choice in favor of models that proffer bounded rationality (the theory that decision making may be ‘‘imperfect’’ due to cognitive limitations) as a more realistic perspective on how consumers actually make purchase decisions.. dissonance reducing buying behavior. there is decreasing reliance on com plex models of consumer decision making. personal computers). 1999) b e h a v i o r a l p e r s p e c t i v e model. results of purchasing activities can be evaluated either informally. soap powders).g. and predict buyer behavior. Products that are expensive. complex buying behavior.g. with respect to car performance and costs.e.. with low involvement but significant differences be tween brands (e.e. rather than . carpets).. Further. Subsequent models of buyer behavior that have received widespread attention include Bettman’s (1979) information processing model of consumer choice and Foxall’s (1990. biscuits. among family and friends. and secondly. One can consider a con tinuum of low–high involvement consumer decision making. reflect self image. and feedback loops exist.60 consumer decision-making process of their decisions (see c u s t o m e r s a t i s f a c t i o n ). habitual buying behavior. e. and the consumer proceeds on the basis of what he/she already knows. timing between stages varies. disconfirmed expectations). firstly because of the growing realization that buyer behavior is too complex to be captured in a single model. Their model thus appreciates that consumer prefer ences may be context dependent. When considering models of the consumer decision making process. explain. the extent to which a formal process does happen will depend on the extent of con sumer involvement. seeking information to confirm the choice made (see c o g n i t i v e d i s s o n a n c e ). if perceived product performance meets consumer expectations then the customer is satisfied.. may not have well established prefer ences for all stimuli. risky. Luce. Post purchase evaluations provide the consumer with an idea of how well he/she is doing in the market and add to his/her state of experience.. i. by comparison with others. 1999) behavioral perspective model (BPM) of consumer choice proposes that the determinants of buyer behavior and consumer decision making should be sought in the consumption environment.. then dissatisfaction occurs..g. This is further developed by Assael (1987). not derived from a predefined set of values. Further. since it represents most of the elements of human psychology. or complaining (see Gilly and Hansen. . Bettman. characterized by low consumer involvement and little differ ence between brands (e. and variety seeking buying behavior.

J. 5 16. 33 (5/6). (1993). NJ: Prentice-Hall. (2001). R. 9. Knowledge structures serve to organize in memory con sumers’ product and consumption related knowledge. and Hansen. linked together.. (1996). Consumer Behavior: A European Perspective. Wells. A knowledge struc ture organizes information in memory and is activated when a relevant object is encountered. NJ: PrenticeHall. R. A. and Kanuk. Upper Saddle River. 6th edn. C. Healey One of the principal aims of basic or theoretical m a r k e t i n g r e s e a r c h is to understand how consumers think about and react to marketplace stimuli. and Nowlis. M. Specifically. D. . 16. Hawkins. Boston: Irwin. Bettman. and MacInnis. Upper Saddle River. 1.. 9. Consumer Behavior. NJ: Prentice-Hall. W. L. or a set of consumption experiences. R. 18. H. chs. Solomon. and Payne. Consumer research: In 61 search of identity. For example. (2003). 7. chs.. enabling them to make sense of the consumption environment and to process infor mation effectively. Fort Worth. R. 8. Consumer complaint handling as a strategic marketing tool. Consumer Behavior. Boston: McGraw-Hill Irwin. W. European Journal of Marketing. chs. (2002). 2nd edn. 12. Loudon.. Assael. and Zinkhan. D. A. S. Wilkie. M. 187 217. G. 11th edn. Journal of Consumer Research. M. 8. W. J.. Simonson. (1985). Two generic characteristics of knowledge structures can be distinguished: cognitive struc ture and content. Marketing Management: Analysis. 7. I. D. 10. 5. R. Consumer Behavior: Buying. and high in preservatives. F. R. Constructive consumer choice processes. (1994). Engel. Annual Review of Psychology. 2nd edn. 11. 16. 5. 9. Bamossy. G. F.. Mowen. Implementation and Control. Upper Saddle River. Consumer Psychology in Behavioral Perspective. (1999). M. D. 8th edn. J. Consumer Behavior. Upper Saddle River. (2002). A knowledge structure is an abstract mental representation of known infor mation about an object or group of objects such as a b r a n d . Best. Boston: Kent. D. chs. D. Consumer Behavior and Marketing Action.. J. M. Reading. Foxall. Consumer Behavior. and the interpretation and judgment of new information. Consequently. 19. L. (1998). whereupon it influences cognitive processes such as perception. C.. 12. G. chs. TX: Dryden Press. chs. Consumer Behavior. 52. D. Bettman. Consumer Behavior: Implications for Marketing Strat egy. Consumer Behavior. consumer knowledge structures Mark P. 15. MA: AddisonWesley. 5th edn. chs. 17. slightly sweet. Having. and Minor. and Askegaard. G. 4. E. J. 11.. 2nd edn. the BPM suggests that certain dimensions of buyer behavior and decisions can be predicted based on the contextual consumption setting and customers’ reinforcement history in similar set tings. P. Price. memory encoding. J. 13. Fall. K. Kotler. Cognitive structure refers to the organizational properties of representations – how information is arranged. 14. 6. W. (2001). Englewood Cliffs. L. a know ledge structure developed through repeated con sumption of soft drinks enables a customer to infer that these are typically carbonated. New York: John Wiley. I. (2001). (1979). 4th edn. Consumer Behavior. Knowledge structures are developed through direct and indirect experience and have specific organizational properties. Z. C. and Miniard. Blackwell. Journal of Consumer Marketing. NJ: Prentice-Hall.consumer knowledge structures by explanations which refer to intrapersonal information processing. chs. 10. Z. 17. L. New York: Routledge. New York: McGraw-Hill.. and Coney. Upper Saddle River. 16. Dhar. Information Processing Theory of Consumer Behavior. W. Hoyer. L. a p r o d u c t category. W... Bibliography Arnould. J. 25 (3). New York: John Wiley.. NJ: Prentice-Hall. 5th edn. (1995). Drolet. Plan ning. R. Luce. (2004). P. M. R. 8th edn. R. (1998). Gilly. 18. Schiffman. and Della Bitta. M. Mowen. ch. Boston and New York: Houghton Mifflin. 1. Con sumers. NJ: Prentice-Hall. The behavioral perspective model: Consensibility and consensuality. and Prensky. 12. G. (1987). Carmon. exploring the way in which information about these is represented in memory and cognition has become a major re search objective. (1995). chs. Foxall. (1990).. S. Solomon. Consumer Behavior: A Framework. R. A. 15. 570 96. 249 75. part 3. J. 3rd edn. and Minor. (2004). Being. J.

and can thus be evoked to generate expectancies (see c u s t o m e r e x p e c t a t i o n s ) and guide behavior in familiar contexts. whether this is verbal or visual. such as exemplar or prototype data (see Carlston and Smith. 2001). preference. Hubbert. which specifies default values for product attributes. Cognitive content refers to the nature of the information contained within a structure. including categories and stereotypes. information is stored in nodes connected by links between re lated knowledge. the operation of category based product evaluations (Sujan. Busch.62 consumer knowledge structures and specified by the configuration of the struc ture – and how this influences processes such as memory and judgment. A related type of knowledge structure is the cognitive script. In associative network models. depends on their existing knowledge structures. market ers. thinking about hamburgers may bring to mind associations with the brands McDo nald’s or Burger King. and are structured hierarch ically around the goals of an activity. for example (see Meyers Levy and Tybout. goal for mation. The notion of script has been particularly relevant to services research (see Solomon et al. 1989). The knowledge structures of managers. The way that new infor mation is processed. and choice (Henderson. 1996). Sharma. Recent writings have taken a wider per spective on consumers’ mental representations . Iacobucci.. that calculators are rectangular. what is perceived and stored. through a process of spreading activation. by amalgamating the key events of indi vidual experiences to form abstract cognitive structures containing central actions and behav ioral contingencies. and Kumar. Sehorn. and memory. and contact employees have also been studied to elucidate the cognitive underpin nings of their behaviors and skills. thinking of one concept in a networked structure will increase the likelihood that others related within the structure will also be activated. For example. Many of those studied in marketing have their conceptual origins in asso ciative network and schema theories popularized in cognitive and social psychology in the 1970s and 1980s. 1985). 1996). which enable them to operate effectively as con sumers. Built up from repeated experience with a brand or product. for example. and Calder. and can influence memory for past experiences (Smith and Houston. 1995). 1985. evaluation. including how price knowledge may be constructed from underlying frame structures (Lawson and Bhagat. such as the behavior of airline employees. The nature of different knowledge structures varies according to their function and the type of knowledge stored within. for example (see Leong. Market related knowledge is represented in different types of structure. as does the way in which the past is remembered. Scripts contain knowledge per taining to familiar consumption events and ex periences. Levy. such as eating in restaurants or visiting the theater. and Brown. 1983). Alba and Hasher. A new product may be evaluated based on an existing product schema. schemata enable customers to make inferences about typical properties and attri butes. 2002). and Roeder. the representation of product knowledge in category structures. including categorization. Schematic know ledge structures are frequently invoked to ex plain features of consumers’ memory and evaluations (cf. The perform ance of effective salespersons has been linked to the complexity and abstractness of their knowledge structures. which hold different kinds of information. for example. A schema is an organized representation of knowledge abstracted from experience. Knowledge structures have proved particu larly useful concepts for understanding various aspects of consumer psychology. and how it is dealt with by consumers. 2002). Marketing research has sporadically investi gated the nature and influences of other types of consumer knowledge structures (see Lawson. depending on the nature of one’s knowledge structures. Expert consumers are thought to pos sess product knowledge structures which differ from those of novices in complexity of both structure and content (Mitchell and Dacin. Scripts specify the typical attributes of experiences. 1985). judgment. 1998). and the role of associative net works in brand perception. Young people develop shopping scripts. 1989. or the usual wait required at one’s bank branch. Associative networks predict that. 2000). knowledge that is often applied to en counters with both familiar and new products (see Gregan Paxton.

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D. G.. 2nd edn. Consumer Behavior: Implications for Marketing Strat egy. chs. and Zinkhan..g. Bamossy. 2nd edn. L. ch. . R. (1994). Engel. C. On the other hand.. G. Price. Blackwell. D. Consumer Behavior: A European Perspective. and Prensky. although the distinction between the two areas is not entirely clear cut.. R. R. NJ: Prentice-Hall. R. D. New York: John Wiley. L. 15. change. and to solve problems con sumers need information about products and services. New York: McGraw-Hill. J. 4. W. they learn to shop alongside their parents). the view of m a r k e t i n g m a n a g e m e n t presented in standard texts such as Kotler (1994) or McCarthy and Perreault (1993) is often essentially synonym ous with consumer. L. P.. Upper Saddle River. I. 3rd edn. (1995). Mowen. 10.. Consumer Behavior. and Della Bitta. 5th edn. thinking. insight learning. D.64 consumer marketing and Minor. (2002). W. ch. for example r e l a t i o n s h i p m a r k e t i n g (see s e r v i c e s m a r k e t i n g ).. F. (1993). J. Consumer purchase decision making is also generally held to be subject to the influence of ‘‘non task’’ or ‘‘irrational’’ factors to a far greater extent than business to business marketing. Consumer Psychology for Marketing. R. The sugges tion here is that individuals acquire habits not only from stimulus response repetition but also by using their insight. Con sumer Behavior. (2004). (1995). C. (2001). S. consumer marketing Fiona Leverick Consumer marketing refers to the buying of products and services for personal or household use. Foxall. with the result that specialized textbooks tend not to be exclusively devoted to consumer marketing in the same way as for business to business marketing. 2nd edn. 3. 4th edn. TX: Dryden Press.. 7. and Askegaard. Being. Upper Saddle River. or reinforce attitudes toward products/brands. E. ch. (2001). L. The implied alternative is b u s i n e s s t o b u s i n e s s m a r k e t i n g . Information will include that which is stored from previous experience to help form. in particular. and Kanuk. (1998). M. ch. Consumer Behavior: Buying. latent learning) view learning as a process of restructuring individual cognitions with respect to specific problems. consumer marketing. especially for services.. 7. as opposed to business to business. More re cently. M. 5. J. R. Hoyer. ch. Consumer Behavior. Schiffman.. S. as opposed to buying by organizations. 4. NJ: Prentice-Hall. Indeed. Solomon. and Minor. New York: John Wiley. Best. Consumer Behavior. D. L. 9. W. 5th edn. consumers are receptive to and retain some information (see c o n s u m e r p e r c e p t i o n s ). NJ: Prentice-Hall. Boston: McGraw-Hill Irwin. W. London: International Thomson Business Press. 8. D. which in turn leads to knowledge about products/brands that may or may not lead to purchase or repurchase. M. J. D. Fort Worth. cognitive theories (e.. (1996). A. which might encourage reinforcement of prevailing attitudes and stimulate repurchase. ch. Upper Saddle River. 12. 2nd edn. using intellectual activities. Consumer Behavior. (2002). Bibliography Arnould. Mowen. if a product performs well. (1998). Consumer Behavior. and Coney. Z. 3.e. ch. (2004). has developed somewhat in nature and scope to include. Con sumers. G. and Brown. G. i. E. Having. Upper Saddle River. 4. ch. Consumer Behavior: A Framework. M.g. Ob servational learning or social learning is when people ‘‘develop ‘patterns of behavior’ by ob serving the actions of others’’ (Mowen and Minor. Boston and New York: Houghton Mifflin. Boston: Irwin. NJ: PrenticeHall. NJ: Prentice-Hall. marketing management. 8th edn. Problem solving becomes the focus of consumer behavior.. The tech niques of consumer marketing management dominate most standard marketing textbooks. Wells. 8th edn. acquisition of which may be planned or incidental. Upper Saddle River. A. 1998: 147) and is very important in the consumer socialization of children (e. or lead to product/ brand rejection. ch. K. some of the techniques more traditionally found in business to business marketing. and Minor.. and MacInnis. 1998: 139). Hawkins. 6th edn. J. 3. Solomon. J. Wilkie. In the context of con sumer behavior this could involve the likelihood of repurchase. Given the range of information available. and Miniard. however. and prob lem solving techniques. chs. Loudon. Goldsmith. 10. chs. Consumer Behavior.

. McCarthy. They organize. l i f e s t y l e s ).e. sustain. or lifestyle influences. defendance. Hogg and Barbara R. cognitive. e. sentience.g. exhibition. (1993). symbolic. affiliation. or psycho logical.. and Perreault. Marketing Management: Analysis. emotional.. the desire for prestige. (2003). autonomy. e. 1998: 169–85).. personal influence. for security. harm avoidance. however. they are an internal driving force or stimulus to purchase.. recognition and appreciation. nurturance. and power. and direct activities toward diverse objects and needs. Consumer motives activate and direct action to be taken in satisfaction of identified needs. to: safety needs. and a t t i t u d e s ). dominance. group deci sion making influences (such as opinion leader ship. and intel lectual interests. Basic Marketing. and is another broad theory of motivation. pri mary needs for food and shelter. assurance and insurance. reference groups. Although a number of critiques have been offered of Maslow’s hierarchy (e. succourance and understanding’’. atten tion.. Bibliography Kotler. it is still widely used by marketing practitioners. motivation to avoid risk. Lewis It may be argued that m a r k e t i n g rests on the premise that consumer needs are the starting point from which business activity should be planned. consumer motivation see c o n s u m e r n e e d s a n d m o t i v e s consumer needs see c o n s u m e r n e e d s a n d m o t i v e s consumer needs and motives Margaret K. Englewood Cliffs. sex. con sumers may well be influenced by higher level needs when lower needs have not been satisfied. and motivation to attribute causality (see Mowen and Minor. and experiential. reputation. belongingness and love needs. and Brown (1998: 151): physio logical. counteraction.g. IL: Irwin. order. aggres sion. def erence. esteem needs. 1998: 167): ‘‘abasement. and the need for self actualization. hedonic. and cultural influences on con sumer behavior. 11th edn. A number of different motives are relevant for consumers.) and motivation. cultural. E. motivation for hedonic experiences and experiential consumption. education and 65 training. and by Foxall. including: opponent pro cess theory.e. and are subject to social and other influences. inconsistent research findings). product reliability. Other lists of needs have been generated. Primary needs are often modified by psychological needs. Consumer needs are biological. i. i. for example by Murray (1938. emotional. e. sense of being part of a group..g. e. Homewood. including rational buying motives that take account of economic factors such as price. Maslow (1970) offered a hierarchy of needs from the level of physiological needs. in reality.g. achievement. see i n t e r p e r s o n a l c o m m u n i c a t i o n s . i. protection. affiliation. cited in Mowen and Minor. McLel land identified three basic learned motivational needs: needs for achievement. the trend in consumer behavior research has been toward ‘‘midrange theories that explain the narrower facets of human behavior’’ (Mowen and Minor. c o n s u m e r p e r c e p t i o n s . all affecting c o n s u m e r buyer behavior.consumer needs and motives Co n s u m e r b u y e r b e h a v i o r is a major area for research in marketing (see m a r k e t i n g r e s e a r c h ) and has involved the investigation of such areas as: individual decision making influ ences (such as p e r s o n a l i t y . J. play. 11th edn. Con sumers have a sophisticated structure of needs relating to social. cash and credit facil ities. Implementation and Control.g.e. affiliation. Goldsmith. relating to primary or physiological elements. McLelland’s theory of learned needs has been well supported by research. R. The hier archy suggests fulfillment at one level before progressing to the next. confidence. desire to maintain be havioral freedom. maintaining optimum stimulation levels. rejection. and irrational buying motives that relate to higher level consumer needs. 1998: 169ff. P. social. for affection.. NJ: Prentice-Hall. Plan ning. More recently. achievement and success. in order to take .

J. and Della Bitta. 6. (1997). and affiliation (Solo mon. New York: McGraw-Hill. 6. K. which is problematic. chs. New York: John Wiley. and Brown. Hoyer. G. R. M. 8th edn. Bamossy. Having. and Coney. (2002). 7. ch. and Zinkhan. selecting appropriate programming. in providing links with the past. (1998). Upper Saddle River. 2nd edn. and Kanuk. R. L. J. 2002: 12–13). C. (2001). NJ: Prentice-Hall. Mowen. Consumer Behavior. G. 4. Sheldon.. Goldsmith. 4. Z. more recently. (2004). Mowen. ch. there are other important motives that are less obviously linked to the functional character istics of products and brands. Bandura. J. M. Wilkie. S.. Consumer Behavior. Consumer panel data can be gathered at the point of sale using barcoding and related elec tronic systems. Consumer Psychology for Marketing.. M. C. (2004). Home audits involve research staff visiting panel members’ homes and physically checking household stocks of specific products (‘‘dustbin check’’). New York: Freeman. How ever. (1964). A. Solomon. Consumer Behavior: A European Perspective. or in the home by means of: (1) home audits. L. Wells. Schiffman. R. 6th edn. NJ: Prentice-Hall. The Handbook of Consumer Motiv ations. Consumer Behavior. diary media panels. but rather relate to their symbolic characteristics. (1998). (1993). M. 2nd edn. (2001). (2) diaries. 6. Kim. consumer panels Vincent Wayne Mitchell In m a r k e t i n g r e s e a r c h . and profiling viewer or listener subgroups. London: International Thomson Business Press. but it should be remembered that extrapolation assumes that market conditions remain relatively unchanged.. Being. Consumer Behavior. 5th edn. (1996). 80 (2). Boston and New York: Houghton Mifflin. often asked questions on the same topic. D. and Askegaard. A. Hawkins. Bibliography Arnould.. R. 5. D. E. 17 (1). New York: John Wiley. ch. G.. Con sumers. Consumer Behavior: Implications for Marketing Strat egy. ch. Y. 2nd edn. Upper Saddle River. Elliot. in helping us establish our identity. Boston: Irwin. New York: McGraw-Hill. Foxall. D. for example.. 4th edn. R. Consumer Behavior: A Framework. J. Maslow. Loudon. I. and Guliz. The cost of recruiting the sample can also be spread over several pieces of research. Self Efficacy: The Exercise of Control. 5th edn. H. Belk. 139 68. Possessions and the extended self. ch. 55 78. 2nd edn. W. Consumer Behavior: Buying. (1994). Upper Saddle River. L. Journal of Economic Psychology. NJ: Prentice-Hall. S. Some advantages of panels are that they allow the study of trends over time. Boston: McGraw-Hill Irwin. ch. passion. New York: Harper and Row. asked the same questions at different points in time. Dichter. NJ: PrenticeHall. L. (1995). W. G. (1970). ch. Upper Saddle River. (2002). ch. . Solomon. T. (3) electronic scanners used in panel households (computer assisted panel research. and Prensky. Panel research data are particularly useful in developing forecasts (see f o r e c a s t i n g ) for the long term sales of new products that have been subject to t e s t m a r k e t i n g . R. (1996). and. Motivation and Personality. D. Such a sample of consumers is called a panel and this type of continuous research is becoming more and more prevalent compared to ‘‘one off’’ research. Journal of Personality and Social Psychology. ch. CAPAR). One variation. E. What is satisfying about satisfying events? Testing 10 candidate psychological needs. 10. the same sample of individuals may be used over and over again. Best. NJ: Prentice-Hall. R.. and thus facilitate the search for causes of changes. E.. M. D. They place less reliance on recall and more reliance on recording behavior as it happens. Price. Journal of Consumer Research.. 8. K.. A. 15 (2). G. and Minor. 3. In recent years Internet panels have grown in popularity. D. 2nd edn. allow changes to be identified. (1988). Consumer Behavior. (2001). yields information helpful for es tablishing a d v e r t i s i n g rates by r a d i o and t e l e v i s i o n networks. A. 4. Belk. Cross-cultural differences in materialism. 5. 325 39. A. what role the products play in our lives. Upper Saddle River. The need for benchmarks is less important in continuous research as com parisons with previous results provided by the same panel are integral to this research design. W. L. 3rd edn. J. and MacInnis. J. and Minor.66 consumer panels account of the influence of other people. ch. or in eliciting strong emotional bonds linked to warmth. indeed. Consumer Behavior. and Kasser.

L. W. and interpret stimuli and information according to existing beliefs and a t t i t u d e s . G. 2nd edn. (1998). modern laws concerned with food and drink go back to 1860 and modern weights and measures legislation began in 1878. some members of the panel will drop out and equivalent replacements will have to be found. P. R. F. Bibliography Dickson. difficult to forecast and much of the legislation is often a response to effects realized after marketing. The regulations regarding the testing of new pharmaceutical products are es pecially rigorous. organize. 67 change. N. consumer protection Bibliography Malhotra. partly to forestall fatigue. ch. inter alia. more stimuli become available. Z. perception changes as needs and mo tives (see c o n s u m e r n e e d s a n d m o t i v e s ) David Yorke Despite the notion of caveat emptor (let the buyer beware). 8. it is harder to recruit individuals to the sample if they know that they will be expected to cooperate again and again. Goldsmith. For example. London: International Thomson Business Press. and as a function of increasing experience as consumers. R. Dickson (1997) notes that it took from 1967 to 1976 for the Federal Drug Administration (FDA) to approve beta blockers that are used for the treatment of cardiovascular disease and hypertension. Marketing Management. 2nd edn. It can also be difficult to investigate a t t i t u d e s or motivations (see c o n s u m e r n e e d s a n d m o t i v e s ) on a continuous or repetitive basis because the first questioning will have alerted respondents and caused them to develop differ ent attitudes. (1998). There may be a policy of rolling replacement of a given proportion of the panel each period. E. Third. however. Consumer Psychology for Marketing.. Second. consumer perceptions Barbara R. and behavior. The perceptive process is subjective and indi viduals tend to select. and Zinkhan. (1997). by changes in consumer awareness and attitudes. 298. ch. London: Financial Times/Prentice-Hall. Arnould. S. selective perceptions (and sometimes distortion). The adverse conse quences of. Fur ther. G.. driven. in the UK.consumer protection There are disadvantages of panels. There is now a whole raft of consumer and environ mental protection legislation that in Europe mainly emanates from the European Commis sion. G. (2004). Schiffman. For example.. L. Consumer Behavior: A European Perspective. (2004). Consumer Behavior. the environ ment. respondents’ behavior may be affected because they know that they are on the panel or because their behavior is conditioned by answering questions on a previous occasion. for example. which may be defined as the result of interaction between stimuli and individual/per sonal factors.. . In fact. p. and Brown. Marketing Research: An Applied Approach. 6. Bibliography Antonides. attitudes. 6. ch. E. L. there are limits to the number of stimuli that consumers can pay attention to and compre hend at any one time and so the receptive process becomes selective. the continued use over extended periods of particular products are. 8th edn. First. 2nd European edn. and Birks. consumers have se lective exposure to stimuli. Consumers. F. Price. R. Boston: McGraw-Hill Irwin. London: Dryden Press/Harcourt Brace College Publishers. D. which in turn influence consumer reaction. and in turn selective retention and selective decision making. NJ: PrenticeHall. 2nd edn. New York: John Wiley. In addition. and Kanuk. Lewis Consumers are continually exposed to a multi tude of stimuli from companies. and van Raaij. Foxall. consumer protection is now a part of the legal framework of most developed countries. G. (2003). and other people and endeavor to make sense of visual stimuli through the perceptive process. K. Upper Saddle River.

Germany has the strongest standards for truth where deception is defined as occurring when 10 to 15 percent of reasonable consumers. and (3) advertising to children. Best. more than 100 national organizations look out for various consumer interests. one of the most successful con sumer groups was founded around this time. independent organizations. in a number of areas of business activity. One UK group. National Consumers’ League. In Germany deception cases are tried in courts and even the words best or better are considered misleading (Jeannet and Hennessey. Consumerism can be seen as the ultimate expression of the m a r k e t i n g c o n c e p t since it compels companies to think from the consumer’s perspective. (2) deceptive selling practices. several laws were passed which established fairer practices. 1980). such as a more impersonal marketplace. and the UK. and Coney. adequate food labeling of nutrition and ingredi ents. Several reasons have been given for the growth of consumerism in western economies. and consumers themselves which help protect consumers against unfair or unethical business practices. labels. even gullible ones. which involved the sending of unsolicited goods to people. the right to be informed and protected against fraudulent. The basic problem for consumer advocacy is that young children. the right to safety. and the emergence of less materialistic values in con sumers (Hawkins. In addition.g. Following similar investi gations into meat processing and money lending. the prac tice of inertia selling. rights for US consumers in the information age have been suggested and in clude: . and the right to be heard by government and business regarding unsatis factory or disappointing practices. as determined by research (Petty. have not yet developed the cognitive abilities to distin guish between the advertisment and the pro gramme (Meringoof and Lesser. and the use of ‘‘sell by’’ and ‘‘open by’’ dates. and organ izations such as the Better Business Bureau in the US and the Consumers’ Association in the UK have fought for truth in a d v e r t i s i n g . 1992). in Scandinavia. Japan. successfully insured the existence of naturally fermented beers. For example. perceive a message as mis leading. For example. In addition to government and industry agencies. in creased product complexity. following publication of his book Unsafe at Any Speed (1965). was curbed in the UK by laws passed in 1971 and 1975. e. The doctrine of responsibility expects that companies should be able to anticipate normal risky uses of a product/service and can be held responsible for misuses that might occur from normal con sumption of a product or service and that could have been prevented or at least minimized. Re cently. deceitful. advertisements. The main era of development for the con sumerist movement was in the US in the early 1960s when President John F. which was a detailed examination of the automobile industry. Ralph Nader’s Public Citizen group lifted con sumerism into a major social force. the Netherlands. the Campaign for Real Ale (CAMRA). e. business. namely. Kennedy pre sented his consumers’ Bill of Rights to Congress in 1962. and misleading statements. m a s s m e d i a which are quick to publicize unethical or questionable practices by marketers (see m a r k e t i n g e t h i c s ). 1997).. France. This Bill established the basic principles of consumerism. particularly those under 7 years of age. and so on and to be educated on how to use financial re sources wisely. more intrusive ad vertising. Action for Children’s Tele vision. environ mental groups have raised consumer awareness of green issues and companies have responded to the opportunity by creating ‘‘green’’ products. Regulators have long been interested in m a r k e t i n g c o m m u n i c a t i o n s and the extent to which they violate consumer rights in areas such as: (1) deceptive advertising and labeling. which were in danger of being phased out by the major brew eries. the right to choose and be as sured access to a variety of products and services at competitive prices – although when competi tion is not possible government regulation should be substituted..68 consumerism consumerism Vincent Wayne Mitchell Consumerism involves those activities of gov ernment.g. 1995). to be protected against dangerous and unsafe prod ucts. Consumer organizations have won battles for consumers in many other countries. Germany.

As it becomes clearer which scenario is unfolding. 29 42. . Journal of the Market Re search Society. (1997). Consumer Behavior: Implications for Marketing Strat egy. H. Hoyer. Coleman. 15 19.. D. Child Development. and Preston.continuous innovation .-P. Global Marketing Strategies. A. the organ ization can draw on the appropriate contingency plan. J. Bloom. The Marketing Book. (1981). The Effect of Tele vision Advertising on Children. ranging from in cremental or continuous innovations to the more radical or discontinuous innovations (see . The right to privacy. and Lesser. (1995). F.. Preschoolers’ awareness of television advertising. organizations should be able to devise and implement plans based on their analysis of the important variables likely to affect demand and supply. K. See also scenario building continuous innovation Dale Littler It has been suggested that innovations. 933 7. D. G. strive to forecast a possible range of future states or scenarios and to devise appropriate plans for each of these. J. 1993). not all organizations have em braced or implemented the marketing concept fully. therefore. (1992). Harvard Business Review. I. K. Best. Ward. Snider.. Public Citizen Group. K. ch. Baker (ed. p. 4 (October). 59. Consumer Behavior. and energy. R. (1994). Boston: Houghton Mifflin. D. 1 13. However. Consumers in the information age. H. t’ Petros. However. MA: Lexington Books. preventing sellers and others from abusing personal information gained in product transactions (Snider. 21. New York: Holt. (1937). pp. J. 6th edn. S. and Macinnis. Jeannet. . G. Nader. Boston: Irwin. and Petrella. R. and Coney. (1995). rich or poor. The maturity of consumerism. S. A. Journal of Public Policy and Marketing. to access the information infrastructure. 2 13.. The right of all Americans. 352. therefore.). Mystery customer research: Cognitive processes affecting accuracy. L. Meringoof. The Futurist. Personality: A Psychological Interpret ation. In one sense. Hawkins. N. and in particular technological innovations. (1974). (1980). Journal of Con sumer Research. Organizations may. can be viewed along a continuum. A. Bibliography Allport. organizations must produce goods within certain cost parameters to insure profit. J. 2nd edn. In R. the diversity of consumer needs means that it is virtually impossible to produce products that satisfy every individual’s needs. In M. P. Sec ondly. D. R. Advertising law in the United States and European Union. The right to be educated about product strengths and weaknesses. September. and Hennessey. G. 37. D.). August. The right to trust sources of product infor mation. (1965). Boston: Houghton Mifflin. C. Fletcher. in gen eral. C. P. contingency planning Dale Littler In stable environments. Even in relatively stable environ ments there is always the probability of some unforeseen event that can affect the outcome. . Children’s ability to distinguish television commercials from program material. 69 Morrison. S. Lexington. Spring. J. Thirdly. W. Adler (ed. money. M. J. organizations operate in environments where there is significant change and. The right to a state of the art information infrastructure that empowers consumers to efficiently use their time. Unsafe at Any Speed. The evolution and use of information technology in marketing. . whether urban or rural. Petty. there is a philosophical conflict between the existence of consumerism and the marketing concept. some u n c e r t a i n t y about the possible future outcomes. Rinehart and Winston. Oxford: Butterworth-Heinemann. L. because if the market ing concept were operating properly. January/February. L. November/ December. 3rd edn. Consumer socialization. This is contingency planning. there should be no need for consumerism. (2001). and Greyser. 130 9. (1982). (1993).

i. for example. (1971). and Winston. Marketing productivity analysis: A research report.70 contribution innovation. Therefore. products with low contribu Conviction is the third step in the d a g m a r m o d e l of m a r k e t i n g c o m m u n i c a t i o n s . discontinuous innov a t i o n ) according to the degree of technological change involved. the buyer or customer is convinced that the product or service will meet the need or specification.e. ch. whether or not it has a ‘‘good name’’ in the eyes of its various stakehold ers. Overall.g.. Oxford: Philip Allan. (1961). a more relevant criterion is the extent to which innovations affect demand. tion will generally be low priorities for invest ment purposes and in strategic marketing planning (see s t r a t e g i c p l a n n i n g ). It is how the customer/ buyer perceives the innovation that many regard as the critical issue. the cost of the railway network. S. Although it is the penultimate step before a c t i o n . D. (1988). Littler. corporate reputation Gary Davies The reputation of an organization is the term used to denote its standing. New York: Holt. sta tions. from a m a r k e t i n g perspective. (1986). though. New York: Association of National Advertisers. Defining Advertising Goals for Measured Advertising Results. H. and rolling stock). a product or service may seem to be unproductive and un profitable (e. continuous innovation involves relatively little change in such dimensions as technology. 3 71 (entire issue). Robertson. and working practices. An innovation does not have to be radical to lead to substantial changes in demand: relatively minor changes in the features of an offering might have significant implications for demand. engine. Bibliography See also product innovation Bibliography Thomas. Most con sumers or buyers are concerned less about the intrinsic aspects of the offering and more about what values it provides in terms of functionality. motiv ations. ease of use. the link between conviction and a sub sequent purchase is difficult to measure. R.g. a predetermined contribution m a r g i n is some times assigned to a product for the purposes of calculating price because it is not possible (or practicable) to identify its contribution more precisely. which have already been incurred. making it difficult to calculate price on the basis of cost plus methods (see p r i c i n g m e t h o d s ).g.g. Marketing Intelligence and Planning. a train with very few passengers) and yet still earn a worthwhile contribution be cause the variable costs involved (e. 1. 1986). However. perhaps because they are shared by several product ranges and variants. conviction David Yorke contribution Dominic Wilson The contribution of a product or service is the residual sum (after deducting variable costs) that a product contributes toward profit and toward the fixed costs of its production and distribution. The concept of contribution is particularly useful where fixed costs may be difficult to assign to any specific offering. Thus. Equally. after sales warranty services). 4 (2). Innovative Behavior and Commu nication. A. M. Definitions of reputation tend to emphasize ... a prod uct may have a low (or even negative) contribu tion while being a necessary prerequisite for another more profitable offering (e. It is important to take into account interlinkages among products whereby.. and quality. Thus. Rinehart. habits. the fuel to run the train) are very low compared to the fixed costs (e. Bibliography Colley.. T. It is part of the a f f e c t i v e s t a g e . contribution is an internal measure used to analyze the performance of a product in con tributing to the productivity and profitability of an organization (Thomas. Technological Development. J.

1999). there are two im portant questions that the management of cor 71 porate reputation seeks to address: ‘‘Who are you?. 1990). A superior reputa tion will attract better employees and pro mote lower employee turnover (Markham. IOD. They reflect the philosophy and culture of the organization. and. Still more definitions emphasize that reputa tion is an intangible asset. Others use the words to label very specific and quite different ideas. 1984). Corporate brands must. appeal to internal as well as external stakeholders (Upshaw. the internal values of the firm. 1955). A common way of examining corporate repu tation is through the lens of corporate branding (Balmer. de Chernatony. Milewicz. There is some confusion between the terms reputation and i m a g e . An image can be developed by external stake holders depending on their image of the internal . b). ideally. is also relevant to reputation but they are not one and the same thing (even though design companies often imply that they are). and create more favorable media reputation (Deephouse. Some writers use the three words interchangeably. 1996: 37).g. 1995). and this is com pounded by the use of the term ‘‘identity’’ in a similar context. the company mission and vision statement (see m i s s i o n s t a t e m e n t . e. Others focus on one particular stakeholder. as they emphasize the affective nature of the construct. Albert and Whetten. The latter is close to definitions of ‘‘corporate image’’ used by marketing scholars. and how they perceive the company (Gray. 1985). Many emphasize the need to consider more than one stakeholder and the time a reputation takes to build. Other defin itions of corporate reputation are similar to those used to define b r a n d . How the company is seen internally transfers to the customer through the interactions the customer has with employees. and Golden.corporate reputation different aspects of the concept. best denoted by the term organ izational identity (e. 1997).’’ a discourse about the company encapsu lating many of its myths and legends (van Riel. however. 1997).. Reputation is seen from a strategic perspective as something that is difficult to imi tate and which can therefore provide a sustain able c o m p e t i t i v e a d v a n t a g e (Fombrun. 1984).. . 2001). ‘‘How others (the customers) see us.’’ the question most likely to be asked by an external stakeholder. visual representation such as logos and the design of corporate note paper.’’ and ‘‘What we say we are’’ (e. to the com pany’s name’’ (Fombrun. Reputation management is often seen as the alignment or coordination of two or more elem ents. 1999).. In the same way that a product can become a brand.’’ ‘‘Who we really are. Corporate identity. but what these ideas are varies from one source and from one academic discipline to another. 1972. the customer. A favorable reputation may cause desirable consequences such as the charging of premium prices to the customer and the at traction of more investors (Fombrun and Shan ley.g. The point is that the corporate brand is more than what is tangibly offered by the firm and is something that has. and Sever. ‘‘The reputation of an organization is the accu mulated impression that a stakeholder has of the organization’’ (Fombrun. but what the customer believes or feels about the company from his experiences and observation’’ (Bernstein. 1986). 1982: 243) or ‘‘the result of how consumers per ceive the firm’’ (Gro¨nroos.’’ the question most likely to be asked by an internal stakeholder. increase buying intention among corporate customers (Yoon. The second con cerns the way employees view the organization they work for. and Kijewski. Gardberg. like a consumer brand.g. for example. and ‘‘Who are we?. 2003a. capable of affecting the performance of the company in its various markets. 1993). Guffey. Davies and Miles. 1995. v i s i o n s t a t e m e n t ) can provide the ‘‘glue’’ that holds all aspects of reputation management together (Chun and Davies. where reputation is typically described as ‘‘not what the company believes. 1996). It has been claimed that reputation management com mences with a company’s employees. Alternatively.. which should be aligned with or even become its external brand values (Davies et al. create higher credibility (Her big. 1998). a company name can become a corporate brand. 1994). the ‘‘attitudes and feelings consumers have about the nature and underlying reality of the company’’ (Pharoah. an emotional appeal (Gardner and Levy. One co ordinating mechanism can be the ‘‘corporate story. 2000). Whatever labels are used. The first is best understood as the company’s market reputation. . as in ‘‘the net affective or emotional reaction .

employee. 1973. Selame and Selame. The CEO can be thought of as the corporate brand manager responsible for managing the image of the firm. The idea of consistency is useful in that it emphasizes again the need for coherence be tween the many factors that can influence in ternal and external image. Sundgren. or supplier perceives is being delivered and will be at best a waste of time. The resulting media comment in Britain’s tabloid newspapers led to the collapse of his global jewelry retail business. and at worst actually damaging to reputation (Davies et al. 1991. Meuter. and s o c i a l r e s p o n s i b i l i t y (McGuire. quipping that the sandwich would prob ably last longer than the earrings. 1993). corpor ate communication (including but not only ad vertising). a pair of gold earrings. 2001). then a positive interaction between them is more likely to occur. conduct toward employees. the links between reputation and financial performance . and business performance. Shostack (1977). Wartick. which provide intangibles. a d v e r t i s i n g and p u b l i c r e l a t i o n s (Meyers. Some claim that advertising can only be used to communicate a reputation and should not be used to try to create one. Kotler and Barich (1991) provide a long list of attributes that might affect image. 2001).’’ which consists of three elements: the behaviors of (in particular customer facing) employees. d e s i g n and other tangibles (Olins.72 corporate reputation stakeholders they meet or see (King. The view that customer facing employees have of their organization is held to influence the impression that customers form of the organization (de Chernatony. For example. 1999) because the contact between customers and employees can shape the image customers hold of it (Bettencourt. Corporate symbols will include tangibles such as buildings and in tangibles such as design. Herbig. There is a debate about what can be used to best shape reputation and the relative import ance of c u l t u r e (Alvesson. Staff were dis illusioned by both the jokes and the media cov erage. and Gwinner. The role of key individuals. and this can influence how various stakeholders perceive the organization (Chun and Davies. Ratner compared the price of one of his products. 1978. was early in explaining that images for service companies. plus corporate social conduct. while images for tangible products are created through the intangible imagery of media advertising. Customers catch the displayed emotions of employees through a process of ‘‘emotional contagion’’ and this affects their image of the service they receive (Pugh. particularly that of the CEO and his or her style. are created through tangibles (such as building design). In the case of such a crisis. Topalian (1984) cites tangibles such as the company size. 1984. If these links between the internal and external perspectives exist. tangibles include all that is to do with graphic and building design. 1992). and Schneeweis. its products and structure as influencing external image. Kennedy. a corporate website can be used to communicate a company’s mission and vision. To those coming at the area from a design perspec tive (Ind. The role of advertising in reputation manage ment is a controversial one. Managers should be cognizant of any differences between the content of communications that might affect employees and customers directly or indirectly and the current perceptions held by both. Many corporate names do not represent tangible prod ucts. Advertising what you are not will raise expectations that will not be met by the experience the customer.. 2001). Van Riel and Balmer (1997) suggest that companies can manage their external reputation through the ‘‘corporate identity mix. then the potential is there to influence both simultaneously.1988). and symbolism. Gerald Ratner’s poor choice of joke in a speech in London’s Albert Hall in the 1980s is an extreme example of how the actions of a CEO can influ ence the reputation of the company. as customers returned products but did not return themselves. Milewicz. 1977). This includes all the elements of the m a r k e t i n g m i x (the 4Ps and 2Ss). Kitchen and Proctor. to that of a prawn sand wich. both internally and externally and to a multiplicity of stakeholders. and Golden (1994) link external image/reputa tion (defined as the consistency of outcomes with market signals over time) with credibility (the belief that a company will do what it says it will). 2003a). will influence the way both internal and external stakeholders see the firm (Dowling. If a customer facing employee and the customer share the same positive view of the organization. 1990). a bank executive and an academic writer. 1992). 1988).

then. and Sever (2000). Gardberg. However. Adverse media comment creates a de cline in confidence that can become a collapse if not well handled. difficult to deny. 1998). The BSE crisis in the 1980s had a long term impact on beef sales in Britain. whose dimensions include an emotional appeal factor (admire. empha sizing the strong links between public relations and reputation management in companies.’’ Markham (1972) was early in suggesting the use of a generic ‘‘personality’’ scale to compare the customer’s perception of any company with that of its competitors. Vergin and Qoronfleh. A different opinion was that reputation is a leading indicator of performance. friendly. and a Fortune ranking correlates with superior finan cial returns (Roberts and Dowling. 1962). McDonald’s.g. Aaker (1997) validated a scale including five dimensions for ‘‘brand personality. There has been a tradition of assessing the customer’s view of retailers using the ‘‘organization as person’’ metaphor since Martineau (1958) first coined the ex pression ‘‘the personality of the retail store. 2001).g. Metaphor is often useful to make what is com plex accessible for researcher and respondent alike (Black. British Airways. since financial performance is a major input to the Fortune rankings. consumers were reacting emotionally. An im provement to the approach of Fortune has been that of Fombrun. the Catholic Church. more recent work has opened the door to quantifica tion.corporate reputation are clear. and. The fall of Arthur Andersen globally has been ascribed to a loss of confidence in the firm following allegations of its involve ment in the Enron saga. A similar approach in using the organization as person metaphor has been used to define a ‘‘corporate character scale’’ validated for both internal and external stakeholders (Davies et al. Thus far. Other measures have been developed to assess reputation from the perspective of customers (e. KPMG) as. While 73 both frameworks and techniques are available for image measurement. whether they exist for profit or not. Simi lar approaches to that of Fortune can be seen in the UK’s Management Today Britain’s Most Admired Companies and Asian Business Asia’s Most Admired Companies surveys. Hanby. there is no generally accepted method of measuring reputation. Evidence for a link between reputation and performance is appar ent in most service organizations (e. 1999).. However. One problem in proving the link is the ephemeral nature of reputation and the difficulty in measuring it. waiting for hard facts before deciding finally to cull the beef herd. trust) that can assess how members of the public feel about a firm. one view was that it is misleading to see them as linked in causality. Busi ness practice tends to rely upon measuring the amount and content of media comment. encouraged by media comment that will always be sensational rather than ob jective in such circumstances. 2003b). they will depend for their success upon the associations the public makes with their corporate names. 1988.. 1997. The British Ministry of Agriculture handled the crisis in a very logical way. because a good reputation is a given for all larger businesses. Fortune’s annual Amer ica’s Most Admired Companies survey has been a key data source for exploring linkages between reputation and financial performance. What has been widely labeled as ‘‘brand personality’’ has been seen as being accessible for researchers more through qualitative than through quantitative means (Durgee.’’ each with a number of traits.. there is more than one definition of the construct. . Oxford University. 1997). The scale is used to assess the customers’ view of a brand but has been found to be less valid in the context of corporate reputation where the views of other stakeholders must be considered (Chun and Davies. van Riel and Balmer. In one survey of those responsible for reputation management. The ultimate sense of there being a link between reputation and performance is. Corporate reputation is a complex construct. However. 1998).. The seven dimensions are labeled as: agreeableness (e. respect. While the links between reputation and finan cial performance are brutally obvious in a crisis. How reputation is measured will depend on how it is defined. Wal Mart. the measure is heavily influenced by a financial halo and such correlations are unlikely to offer proof of causality. but the two do not necessarily go hand in hand (Davies and Miles.g. as we have seen. a conviction that reputation and performance are more generally linked is not universally shared. rather than just how they perceive its per formance financially.

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customers as well as suppliers. E.’’ i. Journal of Business Research. the ‘‘what. Academy of Man agement Journal. purposes or goals and essential policies or plans for achieving those goals. 13). Andrews (1971) defined corporate strategy as: ‘‘the pattern of major ob jectives. companies are aware of the need to demonstrate a wide societal commitment. V.’’ ‘‘why. M. Van Riel. L. Business and Society. the markets it is or should be operating in. Vergin. 3. its measurement and management. 55 62. (1998). 44 (5). rate of return. J. Often. J. (1997). E. Journal of the Market Research Society. competitive s t r a t e g y ). the firm has to satisfy the sometimes contradictory expectations of several differing constituencies. G. Increasingly also. G. Shostack. (1995). Corporate Reputation Review.. The effects of information and company reputation on intentions to buy a business service. by definition. Roberts. 73 81. holistic. or stakeholders. Journal of Marketing. Pugh. and the products it markets or should market in order to achieve those objectives. it embraces ‘‘why the company is in business. the company needs to decide ‘‘when’’ it aims to achieve those goals and the period over which it defines its strategy. M. The value of a firm’s corporate reputation: How reputation helps sustain superior profitability. The relationship between intense media exposure and change in corporate reputation. Thirdly. Corporate identity: The concept. to increase shareholder value. it embraces all of the company’s different busi nesses and functions. European Journal of Marketing.’’ ‘‘how. stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be’’ (p. share holders. L. of the firm. Business Horizon. and Selame. 409 18. 19 26. and Kijewski. N. R. 4 (6). the short term requirements of institutional shareholders pre vent longer term investments.e. Guffey. (1984). namely. companies engage in formal s t r a t e g i c p l a n n i n g as a means of developing a coherent corporate strategy. Building Brand Identity: A Strategy for Success in a Hostile Marketplace. Corporate reputation and the stock market. Finally. and the corporate strategy may be embodied in written strategic plans. 340 55. (1993). Beyond the visual overstatement. Wartick. New York: John Wiley. 27. 41. Corporate image research in brewing industry from red revolution to country goodness in ten years. (1997). B. the specific sales. (1977). 24 (3). J. the company needs to define ‘‘how’’ it aims to achieve those targets. T. New York: John Wiley. the desired future state. profit. 1 (1/2). C. Breaking free from product marketing. 28). Topalian. Upshaw. 215 28. often to the detriment of sustainable competitiveness (see competitive advantage. (1988). It has been suggested that in countries such as the UK. (1982).e. (1992). Van Riel. Secondly. B. and Qoronfleh. C. and Dowling.. in defining its corporate strat egy. Nevertheless.’’ and ‘‘when’’ of the organization. It is viewed as being concerned with adding value to all of the constituent parts of the organization. D. M. and employees. according to a dominant contemporary em phasis. It is. S. Selame. corporate strategy Dale Littler Corporate strategy is regarded as encompassing the aims and objectives of the organization to gether with the means of how these are to be achieved. The Company Image.corporate strategy Pharoah. W. obvi ously. i. Chandler (1962) believed that it 75 should also be concerned with ‘‘the allocation of resources necessary for carrying out these goals’’ (p. It is widely believed that corporate strategy should address the essentials of the organiza tion.. M. and growth targets it has or should have. (2001). such as the technologies it will use. 31 (1). 1018 27. Journal of Brand Man agement.. Yoon. W. C. International Journal of Advertising. 72 6. R. B. 240 56. there has been much emphasis on competitive strategy with the focus on identifying the various structural deter minants of performance and p o s i t i o n i n g the . A. H. (1997). Service with a smile: Emotional contagion in the service encounter. and Balmer. S. 31 (5/6). April. the major purpose being. and some even publish s o c i a l r e s p o n s i b i l i t y audits to demonstrate this. 33 49. including. In recent years. P. It is concerned with ‘‘what businesses is the company in or would like to be in?’’ This may involve the articulation of the organization’s m i s s i o n s t a t e m e n t or definition of the vision (see v i s i o n s t a t e m e n t ) or strategic intent. Protecting the corporate brand by orchestrated communication.

. Companies may follow a focused cost leadership strategy aimed at par ticular customers or market segments (see m a r k e t s e g m e n t a t i o n ). and generally not direct resources to activities that are seen as being extraneous to achieving con tinued lowest cost. and Sudit. IL: Irwin. In general. (1962). Corporate accounting policies (e. F. E. whereas variable costs are those that vary directly in proportion to the level of actual production (e. and other corporate development policies. be highly efficient. there are risks to the emphasis on cost leader ship. Cambridge.. . and substitutes. it is probably problematic for a company in a developed country to secure a . because they will be better able to react to them in terms of cost. also affect cost calculations. Investment in capital assets (and therefore the level of fixed costs) is generally higher at the start of a prod uct’s life cycle (see p r o d u c t l i f e c y c l e ) than toward the end. premises. Fixed costs are those that are incurred in order for production to take place and so are. It can sometimes be very diffi cult to identify the costs of a product unambigu ously. in particular the bases of customer choice may move toward n o n p r i c e f a c t o r s and technological change may shift the c o m p e t i t i v e a d v a n t a g e to rivals. environmental vicissitudes or sheer opportunism can mean that formal cor porate strategies may need to be frequently reviewed and consequently modified or substan tially revised. 76. (1995). production assets. because they are able to respond to demands for lower prices. Companies having the lowest costs should be in a strong position with regard to: .g.. costs of R&D. A. or a broad market cost leadership strategy. Apart from the fact that by definition there can only be one cost leader. However. including late en trants. E.g. 37 9. customers. assessing costs is obviously a crucial part of assessing price. cost leadership strategy Bibliography Dale Littler Andrews. The Concept of Corporate Strategy. competitors. despite the many problems involved. because they can more easily absorb increases in costs. in depreciation and asset valuation) can . Homewood. These costs can be divided into fixed costs and variable costs. In order to be a cost leader. because they will always be able to undercut them. How manufacturers price products. correlation see r e g r e s s i o n a n d c o r r e l a t i o n . suppliers. not directly related to the volume of actual production (e. Management Accounting. 8 (February).g. How ever. broadly speaking. Bibliography Shim. Chandler. and in particular of its existing and potential customer targets. while taking advantage of a higher m a r g i n to invest in increasing market share. In practice. especially where fixed costs are shared by a wide range of products at different stages of their life cycles. the company must have low overheads. costs of materials and energy). it has been convincingly argued that a sound corporate strategy will be informed by a close monitoring of the evolving requirements of the various constituencies that the organization has to satisfy. Strategy and Structure. new product devel o p m e n t . cost Dominic Wilson The production and distribution of any good or service involves costs. D.76 correlation company to exploit these advantageously. MA: MIT Press. K. This is one of the g e n e r i c s t r a t e g i e s pro posed by Porter (1980) (see c o m p e t i t i v e s t r a t e g y ). (1971). which will vary over the life cycle of the good/service. basic workforce).

and typeface (Bruce and Greyser. J. or they may need to be collected in order to be redeemed against a future purchase or to receive gifts or cash. a hospital’s i m a g e through the use of color. Bibliography Porter..g. symbol. D. The use of retailer loyalty cards (see r e w a r d / l o y a l t y c a r d s ) means that retailers can cap ture data on customers’ purchasing behavior that enable them to target their customers directly with coupons that are related to their demon strated purchasing preferences. The creative content of these elements reinforces. cross-tabulations Michael Greatorex Cross tabulations are very popular in the analy sis of survey data and they are concerned with . Coupons are likely to appeal most to the price conscious consumer. in turn. or heavy users. cost per thousand Dale Littler Traditionally. this fails to differentiate be tween different buying habits of members of the audience such as whether or not they are non users. ch. NJ: Prentice-Hall. Englewood Cliffs. They may offer a discount on the first or subsequent purchase of a product/service. it’s what we make pos sible. the words and visuals) of an advertisement or brochure or other form of communication usually contains four elements: the principal benefit offered by the product or service. A Caterpillar corporate communications brochure (1994) points out that the visual elements cannot just show pictures of the products but ‘‘they have to show what we make possible for our customers.’’ So. We have to demonstrate their superiority in terms people find meaningful and impor tant. Competitive Strategy: Techniques for Analyzing Industries and Competitors. . 2. Teaching case. The creative content of a brochure or an adver tisement or a pack is a tangible expression of the organization and offers signals of its values which. (1994). we have responsibility to show products being used by the types of people who actually use them. and the uses of the product or service. M. S. (1987). Bibliography Aaker. the image of the product or service. Advertising Man agement.’’ Similarly with the text. 15. Peoria. ‘‘we can’t just say Caterpillar products and services are best. Communicating Caterpillar: One Voice. Inc. the creative content (e. M. G. New York: Free Press. (1995). light users. Changing Corporate Identity: The Case of a Regional Hospital. the characteristics of the product or service. ch. (1980). 3rd edn. However. IL. Caterpillar. . and through the purchase of more efficient versions of the technology as embodied in plant and equipment. See also reach 77 creative content Margaret Bruce and Liz Barnes Creative content refers to the visuals and words or elements of the visual identity system of an organization. influence the perceptions and opinions of its various publics. E.cross-tabulations longer term advantage from pursuing a cost leadership strategy because developing countries will generally be able to secure a cost advantage through access to lower cost resources such as cheaper labor and natural resources. 1995). . To our many audiences. logo type. for example. it’s not what we make that counts. and Myers. A. coupons David Yorke Coupons are a s a l e s p r o m o t i o n device which try to persuade buyers/customers to pur chase. For this reason advertisers are more interested in meas uring the cost per thousand of the target audi ence delivered. and Greyser. media costs have been measured in terms of the cost per thousand of delivered audience. Redemption rates of coupons are traditionally low. Boston: Design Management Institute and Harvard Business School. Bruce.

D. Bibliography Loudon. may provide a stimulus as to how to satisfy a salient motive. or the physical environment in which the interaction is taking place. and a t t i t u d e s may be subtly encour aged by m a r k e t i n g c o m m u n i c a t i o n s techniques (e. culture and social identity. Other tests and summary statistics are available depending on the type of data. but interpretation may become difficult as the in creased number of cells often leaves empty cells or a number of cells with small counts. S. Thus. the hands. a cross tab can be used to present sum mary statistics of other variables for the cases in each cell. J.g. one of the most commonly cited and applicable definitions of culture is . 610 12. Further analysis of such data may involve analysis of variance. pp. (1993). If two of the variables are measured on nom inal (categorical) scales. Again. but the cross tab analysis described above is a convenient way to get a feel for these data and to present results in a conveni ent. culture and societal behavior culture Andrew Lindridge Triandis et al. Simi larly. Looking and Seeing: The Role of Visual Communication in Social Interaction. usually to see if there are any relationships between the variables.. New York: Macmillan. desired impressions. (1994). and Hawkins. A. if both variables are measured on ordinal scales. The variables may be ordinal variables such as those measured on rating scales or interval vari ables where the data have been grouped into a few classes for each variable. Coleman. cross tabulations (cross tabs) can be used to summarize the sample data. difficult to define construct.’’ and LaFramboise. 6th edn. (1993). Bibliography Tull. An adver tisement. Rutter. the posture. c u l t u r e a n d b e h a v i o r . Chichester: John Wiley. cue David Yorke A cue is a non verbal signal communicated by a person. t e l e m a r k e t i n g ). D. p e r s o n a l s e l l i n g . for instance. cultural environment see c u l t u r e . Although culture may ultimately be difficult to define. and Gerton (1993) criticized definitions of culture for either omit ting a salient aspect or generalizing beyond any real meaning. 4th edn. p a c k a g i n g . Consumer Behavior. descriptive manner. For instance. or a d v e r t i s i n g messages. L. (1986) described culture as ‘‘a fuzzy. and dis cussion of the results. Spearman’s rank correlation coefficient or Ken dall’s tau may be used. description. Information is communicated via the aggregate of social cues provided by visual and physical presence. and Della Bitta. broken down by gender and occupation. R.78 cue the quantitative analysis of data where several variables are analyzed together. it is possible to present the average income (or the average of any similar variable) of the cases in each gender/occupation cell. The row and column totals are usually calculated and percentages across the rows and/or down the columns are also computed to aid in the interpretation. People draw inferences from visual interpersonal con tact that gives access to the face. As well as recording the number of cases in each cell. or service that serves to give direction to customer drives or motives (see c o n s u m e r n e e d s a n d m o t i v e s ). I. New York: McGraw-Hill. Cross tabs can be formed in more than two dimensions when data for more than two categorical variables are analyzed. the cross tab records the counts of the number of cases falling into each cell of the table. Marketing Re search: Measurement and Method. products and services also communicate evaluative information via intrinsic and extrinsic stimuli such as physical attributes. for example. feelings. while a basic cross tab may count the sample numbers. D. A cross tab is a table with the categories (or values) for the two variables set out on the two axes and the counts of the number of times each pair of values occurs recorded in the cells of the table. D. Hy p o t h e s i s t e s t i n g relating to cross tabs often involves the chi square test. p r o d u c t .

so to speak.culture Taylor’s (1891: 1): ‘‘That complex whole which includes knowledge. . it is a thing sui generis. law. prerequisite to culture. disagree ment. morals. Culture is a logical construct. which are at tributed to behavior. Problems in defining cul ture and whether it can be researched may be related to its ontological reality. as the cultural realists believe. 1984. Oyserman. customs and any other capabilities and habits acquired by man as a member of that society. The cognitive system. If culture exists as an entity external to individuals. internal or external industrialization. its own laws. It was concluded that this was evi dence of the women expressing attitudes rele vant to that particular language world (Farb. . Culture is not determined by man. Man is. and the manner in which they are learned and acted upon by individuals. it is neither a superorganic reality external to the organism. ‘‘It is a time of great unhappiness’’ (evi dence of group sorrow). Cultural realists’ definition of culture offers a more acceptable approach for marketing re 79 search. When respondents were interviewed in both languages. one that remains inde pendent of external influence. creativity. nor is it an idea in the mind of the organism. is problematic. will. For example. of course. Instead.’’ To this we can add Sojka and Tansuhaj’s (1995: 469) definition of culture as ‘‘a set of socially acquired behavior patterns and meanings com mon to the members of a particular society or human group. drawing upon the work of Le´vi Strauss. . abstracted from human behavior. Farb’s (1974) re search among bilingual Japanese women married to American servicemen supports this idea. the catalyst that makes the interactive process possible. fears. typified by Segall’s (1983) cultural definition. structuralist. attitudes expressed differed markedly depending on the language used. can only exist in the mind of the individual. Cultural nominalists argue that ‘‘Culture has no ontological reality. 1993). Its elements interact with one another forming new combinations and syntheses. ’’ in Japanese were. and modernization (Rohner. art. identifies culture as a system of three ideational systems that can be identified with human behavior: cognitive. can culture then be measurable and ob servable for marketing research? Keesing’s (1974) definition. not biologically or psychologically’’ (White. societal structures. democratization. Instead. and symbolic (see s e l f c o n c e p t ). focuses on the social or ganization. un examined variable. then that concept is not available to those people (Hayes. argues that individuals are cognitively dependent on the categories and distinctions within their language. But the culture process is culturally determined. The belief of cultural nominalists that culture exists only in the mind of the investigator. it exists only in the mind of the investi gator’’ (Spiro. Culture. written responses to the statement ‘‘When my wishes conflict with my family . They argue that culture represents a continuum of extrasomatic elements. . culture changes through conflict.’’ Venkatesh (1995) adds that the concept of a pure culture. and as such. If no words exist to express a concept. The structuralist approach. i n n o v a t i o n . culture should be viewed as a complex bundle of independent variables. Farb’s research suggests that bilingual individuals may subconsciously alternate be tween differing cultures and subsequently dem onstrate noticeably different behavior patterns. Culture is viewed as a set of shared . 1974). The language we are taught from birth intentionally shapes and structures both our social behavior and our vision of the world. hopes. then. Yet does an inability to reach a consensus definition of culture pose a problem for m a r k e t i n g r e s e a r c h ? Whiting (1976) argues that culture should be kept as a packaged. ‘‘I do what I want’’ (evidence of individual strength). etc. he is. 1949: 374). or to determine what about culture produces the claimed effects. beliefs. represents an ongoing and evolving set of norms and values adhered to by a group of people. drawing upon the cultural realists. by his wishes. to determine what culture is. moving ‘‘in accordance with its own principles. drawing upon the Sapir–Whorf hypothesis. 1994). Acceptance of this argument would imply that any marketing research investigating the role of cul ture might be attributable to the researcher’s imagination. typified by the contrasting arguments of the cultural nominal ists and cultural realists.’’ Segall (1983) argues that this approach is accept able as attempts to define culture are irrelevant. 1951: 24). but in English were. while Rohner (1984: 111) adds that ‘‘little attempt is made. . as a rule.

P. Brenes.. (1984). Human Assessment and Cultural Factors. Georgas. C. Berry (eds. A. 461 74. Toward a conception of culture for cross-cultural psychology. B. V. Sojka. Foundations of Psychology. H. 1984). 14 (1). A comparative analysis of subjective culture. (1983). Subjective culture is defined as a group’s characteristic way of per ceiving and controlling its social environment through norms. 65 (5). New York: John Murray. (1986). (1984). arguing from a cul tural nominalist perspective. Hui. Journal of Personality and Social Psychology. and de Montmollin. Culture and personality: The natural history of a false dichotomy.. (1972). P. culture and social identity. New York: Bantam. M. Spiro. 993 1009. Leung. The lens of personhood: Viewing the self and others in a multicultural society. 68 104. R. Ethnological theory. White. In R. These values dictate desirable or prescribed behaviors for those hold ing positions in the social structure. P. Annual Review of Anthropology. B. R. H. The problem of the packaged variable. pp. E. K. H. (1949).. In The Analysis of Sub jective Culture. Hayes. perceptual and motivational dispos itions that may. culture and societal behavior Bibliography Farb. Triandis. (1985). Bontempo. Whiting. and myths (Keesing. 257 67. P. culture and behavior Andrew Lindridge Culture’s relationship with measurable human behaviors is problematic. 3. J. W. Journal of Cross Cultural Psychology. Advances in Consumer Research.. M. Betancourt. Keesing. C. in varying degrees. N. Bond. (1994). Nationalism and Cultural Identity.. P. L. kinship.. Venkatesh. 15 (2). H. Coleman. which are recognized by individuals as part of their culture. Sinha. New York: John Wiley. pp. B. H. Word Play: What Happens When People Talk. (1974). J. V.80 culture and behavior symbolic systems which are a construct of cu mulative creations in the individual’s mind. culture and behavior. (1976). and Tansuhaj. Rohner.. London: Penguin.). Farber (eds. Beverley Hills. Psychological Bulletin. (1993). notes that the concept of culture is so difficult to define and conceptualize that it is impossible to identify any relationship to behavior. The third ideational theory views culture as a symbolic system manifesting itself through a system of shared meanings and symbols. and values (Trian dis and Vassiliou. Rather. pp.. Cross-cultural consumer research: A twenty-year review.. Objective culture is defined as a physical object whose status or function is publicly veri fiable and is not dependent upon internal mental processes. Touzard. Oyserman. Reber (1985) adds that the structuralist approach should also in clude religion. as religion exists as a societal structure. 19 46. Theories of culture. T. 73 97. K. See also acculturation.. commenting that ‘‘the behavior of individuals in various work settings is never guided by culture per se. Psychological impact of biculturalism: Evidence and theory. Taylor. J. S. Irvine and J. In S.. Sellars. J. and Gerton. Segall (1983). 1972). J. L. The Penguin Dictionary of Psychology. In The Developing Individual in a Changing World. E. Austra lian Journal of Psychology. Z. W. 111 38. Marin. language. The measurement of the etic aspects of individualism and collectivism across cultures. J. (1951). C. Rohner (1984: 116–17) agrees with this. This structure provides a system of beliefs with either institutionalized or tradition ally defined patterns of behavior and ceremony. New York: Plenum Press. Philosophy for the Future.). J. Setiadi. 114 (3). Verma. Cited in Rohner. Spangenberg. Segall. 395 412. In Marketing in a Multicultural World: Ethni city. London: Routledge.. 111 38. (1995). 127 37. affective. 1974). M. 395 415. A. McGill. (1974).. (1995). B. LaFramboise. (1993). On the search for the independent variable in cross-cultural psychology. it is guided by the individual’s own cognitive. G. Jour nal of Cross Cultural Psychology. G. also be what the analyst ultimately comes to call culture. Primitive Culture. Ethno-consumerism: A new paradigm to study cultural and cross-cultural consumer behavior. rules. 15 (2). Toward a conception of culture for cross-cultural psychology. R. Psychiatry. The symbolic system can be categorized into objective and subjective culture (Rohner. a statue of the god ‘‘Ganesha’’ becomes a physical manifestation of Hindu religious beliefs. H. B. R.. M.. manifesting themselves in art. 38 (3). roles. For example. (1891). New York: Macmillan. and M. D. H. H. A. CA: Sage. and Vassiliou. 22. Triandis.’’ .. reflecting wider cul tural nominalist and realist arguments (see c u l t u r e ). Reber. S.

U. then this implies a collective knowledge of their cultural values.culture and social identity If culture is a set of ideas. Irvine and J.. Douglas and Isherwood (1979) add that the self becomes a product of c u l t u r e . This interaction between culture and self identity provides the individual with a means of self identification with a group. Kitayama. allowing the individual to engage with his/ her cultural values. Journal of Personality and Social Psychology. H. H. 72 (6). 127 37. Individuals will then be . enabling ‘‘a person to act.-C. On the empirical identification of dimensions for cross-cultural comparisons. (1994) add that individuals are aware of their cultural values but use them for guidance only. 15 (2). which bond together a group of people. Finding universal dimensions of individual variation in multicultural studies of values: The rokeach and Chinese value surveys. fears. H. Method and Applications. norms. In S. P.’’ Greenwald and Breckler (1984) and Greenwald and Pratkanis (1984) describe the individual’s sense of self as consisting of three motivational facets: the collective. M. or select any cultural value. (1984). K. Therefore.. Berry (eds. 1997). S. Individual and collective processes in the construction of the self: Selfenhancement in the United States and self-criticism 81 in Japan.). for example. (1997). 1 16. M. and Norasakkunit. In Individualism and Collectivism: Theory. live and function naturally and adaptively to the respect ive cultural context’’ (Kitayama et al. and Yoon. maintain that culture and the individual are interrelated. Leung. H. culture and social identity Andrew Lindridge Hoare (1991) states that an individual exists within a society that anchors and sponsors iden tity. etc.. Toward a conception of culture for cross-cultural psychology. 1997: 1246). society. R. Journal of Personality and Social Psychology. and Kasulis. being a Mexican American. Journal of Cross Cultural Psychology. Cambridge. Giddens. culture cannot. 55 (6). pp.. drawing upon the arguments of cultural realists. Rohner (1984: 122) argues against this. culture does affect human behavior. H. culture and societal behavior Bibliography Bond.. Kitayama et al. Dissanayake. Introduction. W.. A. V. The Constitution of Society: Outline of the Theory of Structuration. MA: Polity. allowing individuals. reject. (1994). as in themselves they are self directing.. Rohner. With each situation encountered by society or its members. 1995: 659).’’ Reber (1985: 676) describes the term ‘‘self’’ as an ‘‘inner agent or force with control ling and directing functions over motives. as no single indi vidual can know ‘‘the full range of meanings that define the culture of his or her people. 1984). and Sugimori. Kuhlman. G. (1989). How individuals’ sense of identity is con strued within collectivist and individualistic cul tures/societies is dependent upon their sense of ‘‘self. R. New York: Plenum Press. Journal of Cross Cultural Psychology. Markus. 20 (5). Segall. (1983). Choi. 1995). 1245 67. Triandis. the family (Ames. Matsumoto. be attributed to behavior. H. Human Assessment and Cultural Factors.. Leung and Bond (1989) suggest that this interrelationship encourages interdependence. H.. Kim. Kitayama et al. S. and Bond. and social structures of a culture and the individuals that belong to that culture (Giddens. C. culture and social identity. Bond (1988) and Kim et al. See also acculturation. M. and public self. and their culture to function. These groups are typically ones with which the individ ual has a strong affiliation and ultimately will help to define his/her identity (Wong and Ahu via. Kagitcibasi. This interrelationship is manifested in inter actions between the beliefs. for example. London: Sage.’’ There fore. Such behavior is typical of collectivist values where the individual’s identity is con strued through the expectations of significant others and social relationships. needs. On the search for the independent variable in cross-cultural psychology. 111 38. (1984). pp. C. prompting behavior acceptable to the society. The collective self is defined as a need ‘‘to gain a favorable evaluation from a reference group by fulfilling one’s role in a reference group and achieving the group’s goals’’ (Yamaguchi. cultural conventions are drawn upon. (1997) and Kim et al. private. The individual can then accept. organiza tions. 133 51. from a cultural nominalist perspective. 1994. (1994). 1009 15. (1988).

(1979). and Isherwood. the collective or public self. G. (1995: 659) define the pri vate self as the motivation ‘‘to act so that one can attain a positive self evaluation according to in ternal standards. M. H. The self. noting that the western self is able to consider situations using analytic and inductive modes of thinking. Hoare. Dissanayake. Indi viduals can therefore observe events or objects as existing separately from themselves.. and Kasulis. this allows the individual to view reality as an aggregation of parts. Matsumoto.’’ a belief inherent in many western cultures (Markus and Kitayama. International Marketing Review Journal. 3. A. 91 137. NJ: Lawrence Erlbaum. 72 (6). (1991). with products often purchased for the ability to satisfy inner needs and not arising from a desire to gain external approval. i... Sinha’s distinction of differing public selves. P. possessions. reinforcing the belief in their unique self identity. This may be unreal istic. Johnson. Lindridge. Journal of Personality and Social Psychology. To whom is the self presented? In The Self and Social Life. 1989) argues that the public self is evident in both collectivist and individualistic societies. A. Individual and collective processes in the construction of the self: Self-enhancement in the United States and self-criticism in Japan. and Shah. M. where pos sessions were shown to visitors to demonstrate the family’s success. W. may however be too simplistic as it infers that individuals in individualistic cultures do not conform to the norms of their environment. Dhillon. the comment that ‘‘People think I’m successful’’ demonstrates the public self (Triandis. F. The role of products in perpetuating cultural marginality: .. Douglas. and Shah (2002) found that South Asians in Britain consumed products with the specific need to enhance their public self within their wider South Asian community. Consumers with a collective self would then be motivated to purchase those publicly identifiable products that are synonym ous with materialism and that represent an indi vidual’s family success. 1995: 659). India. individuals may consume those products which enhance their sense of individuality. M. Ultimately. Albany: State University of New York Press. Lindridge. vol. In The Handbook of Social Cognition. K.. for example. (1984). For example. cited in Triandis. for example. See also acculturation. An individual with a public self strives ‘‘to gain a favorable evaluation from important others who are not necessary in one’s reference group’’ (Yamaguchi et al. R. G. Hillside. Lindridge (2004) argues that in western cultures the individual’s sense of private self is a strong motivator in product purchasing. and Pratkanis. Sinha (1985. Lindridge. In collectivist societies the public self manifests itself as a need to achieve conformity with the norms of the individual’s environment. R. 1991: 226). Markus. 1989). M. culture and behavior. and speech patterns.e. 126 45. Dhillon. pp. and Breckler. A. P. (1985). H. New York: Norton. Kitayama. Culture’s manifestation in brown-good purchases: A cross-cultural comparison. 70 (September/October). based upon society’s cultural values. J. pp. Greenwald. H. C. Individualistic individuals would therefore not be expected to seek external approval in achiev ing a sense of self identity. (2004). This be havior relates to the individualistic cultural values noted earlier. The World of Goods: Toward an Anthropology of Consumption. (2002). S.82 culture and social identity motivated in their social relationships to follow those norms that reinforce and perpetuate a positive image of their family. Greenwald. pp. Psychological identity development and cultural others. S. A. (1994). This may be demonstrated in the consumption of products that signify the individual’s social status and wealth.’’ These internal standards are ‘‘based on the belief of the inherent separateness of distinct individuals. A. T. 45 53. B. Western concept of self. In Culture and Self: Asian and Western Perspectives.. as demonstrations of individuality through choice of dress and so forth may still be motiv ated by a need for external recognition. 129 78.. New York: McGraw-Hill. cul ture and societal behavior Bibliography Ames. (1997). 1245 67. Yamaguchi et al. Journal of Counseling and Develop ment. London: Tavistock. Mehta and Belk (1991) infer the collective self as being evident amongst Indians in Mumbai. (1984). The collective self relates to behaviors that are typical of col lectivist cultures. and Norasakkunit. V. T. demonstrated through choice of dress. Johnson (1985) supports this view. pp. Within individualistic societies the public self is associ ated with individual autonomy. Self as a Person in Asian Theory and Practice. Therefore...

emotion and motivation.. . L. Winter Educators Conference. A. and Kitayama. and Ahuvia. identify individuals’ roles within these societies. Yamaguchi. Wong. primacy of personal goals over in group goals. R. M. Marsden. fosters and facilitates the needs. W. Kuhlman. . and initiative. H. and Sugimori. S. 1986: 336). In dividuals in these societies subordinate their own needs to suit the perceived wishes of those in their social milieu.. This generic classification of societal behavior does not. Reber.’’ These two generic terms provide a classification of a country’s c u l t u r e a n d b e h a v i o r . 1996). Journal of Cross Cultural Psychology. Triandis (1990: 36) describes the consequences of individual sub ordination as ‘‘homogeneity of affect. Personality correlates of allocentric tendencies in individualist and collectivist cultures.. 96 (3).e. R. 6 (November). Markus. Psychological Review. (1995). Triandis. Swidler. . D. pp. and Belk. culture. the individual has a right to behavior regulated by his/her own individual attitudes.. Any attempt at conformity is shunned as a sign of weakness (Tafarodi and Swann. (1996). Tafarodi and Swann. mutual deference or compromise. emotional inde pendence. See also acculturation. 224 53. S. The Penguin Dictionary of Psychology. This is utilitarian because it ‘‘sees life as an effort by individuals to maximize their self interest. 98 (2). 1988. 26. identity and transition: Favorite possessions of Indians and Indian immigrants to the United States. Triandis. Journal of Consumer Research. S. Valencia. creativity. R. Expressive individualism emphasizes individual assertive ness. Collectivist cultures/societies emphasize the need for a collective identity derived from con nectedness. N. M. and Tipton. Pride is then taken in the group’s successes and achievements rather than any one individual’s contribution.. 1988).’’ Individualistic societies can be categorized as either expressive or utilitarian. Psychological Review.. A. wishes. Mehta. earning and saving money’’ (Halman. W. property. 1996: 198). S.’’ Yamaguchi. 506 20. H. . 1996). A. Kuhlman. if group 83 members are sad.culture and societal behavior The case of Punjabi Sikhs in Britain. (1985). 112 19. 1989. New York: Perennial Library. (1986). Triandis. Furthermore. This is important as individuals are vassals of their respective cultures who will identify with that culture and behave accord ingly.. i. 658 72. material success. Habits of the Heart. (1989). Self Concepts and Ma terialism: A Cross Cultural Approach. accomplishment. Culture and the self: Implications for cognition. however. R. Individualism in individualized society: Results from the European values surveys. S. 1996). C.. 1989. 1996). desires and values of an autonomous and unique self over those of a group. 1980. Markus and Kitayama (1991) argue that the individual is encouraged to view others in terms of autonomy (independent of specific others) and abstract dispositions (in ternal attributes that are invariant over time and context). autonomy. Utilitarian individualism stresses ‘‘personal interest. culture and societal behavior Andrew Lindridge Hofstede’s (1980) research on cultural values in 53 countries applied a construct entitled ‘‘col lectivism’’ and ‘‘individualism. and privacy (Triandis et al. N. 17 (March). Paper presented at the AMS Multicultural Marketing Conference. Tafarodi and Swann. R.. Artefacts. in group (Tafarodi and Swann. international marketing Bibliography Bellah. (1991). one is sad. Individual subordination is then accepted in return for affiliation to the majority group (Triandis et al. which is relevant to m a r k e t i n g r e s e a r c h . and Sugimori (1995: 744) describe these terms as ‘‘the degree by which a culture encourages. (1991). and social interdependence (Hofstede. Societal behaviors have been identified as being either collectivist or individualistic. The individual’s role and sense of identity within a culturally determined society and its subsequent effects is discussed in c u l t u r e and social identity.. The self and social behavior in differing cultural contexts. Sullivan. 398 411. (1995). Spain. London: Penguin. Utilitarian individualism views societies as arising from a construct that individuals enter into only in order to advance their self interest’’ (Bellah et al. work. Chicago: American Marketing Association. M. Halman. personal responsibil ity.

27. they require evaluative meaning. H. 9 (Summer). Secondly. H. M. Markus. Yamaguchi. they are often assumed to have certain defining characteristics. Roese. Hofstede. In this sense. Perhaps chief amongst these is personal experience. Ex pectations are often based on previous experience. (1980). M. Lincoln: University of Nebraska Press. for example. Journal of Personality and Social Psychology. Tafarodi. R. Personality correlates of allocentric tendencies in individualist and collectivist cultures. When forced to endure this with regularity. they are beliefs held with varying degrees of certainty of realization. 6 (November). often in readiness for further contact with it. C.. Triandis. The service one expects from healthcare providers may be influenced by the service one receives from one’s bank. and Sugimori. 6 (November). 96 (3). 98 (2). C. H. leadership and organization: Do American theories apply abroad? Organiza tional Dynamics. Individualism collectivism and global self-esteem. almost all acts of consumption are based on expectations that a product will meet certain needs or wants (see c o n s u m e r n e e d s a n d m o t i v e s ). 26. Villareal. Journal of Cross Cultural Psychology. Expectations may be gener ated based on direct experience with a focal prod uct or brand. G. S. (1996). although consumers’ salient expect ations may often be consciously articulated. and Swann. N. although this may not be explicitly expressed at the time of purchase. Oliver and Winer (1987) further argue that expectations may be active or passive. Thirdly. J. and Kitayama. C. 42 63. Asai. 1997). 651 72. such as a new product developing a fault the consumer did not know was possible (Oliver. They are brought to mind when a customer thinks about an object such as a b r a n d . Whilst the possible outcomes of a purchase are often known. Individualism and collectivism: Cross-cultural perspectives on self in-group relationships. S. or customers’ ex periences online may affect their expectations for . M. where passive expectations are not pro cessed until disconfirmed. expectations are anticipa tions or predictions of the consequences of an impending action such as a product purchase or brand choice. (1989). S.. in anticipation of purchase. Healey Customer expectations are the future oriented beliefs about a p r o d u c t or act of consumption. emotion and motivation. A customer will know that an airline flight might be delayed.. Journal of Cross Cultural Psychology. Bontempo. customer expectations Mark P. 506 20. Moreover. The self and social behavior in differing cultural contexts. R. 54 (2). or may be generated from relevant experience with other product categories. D. B.. W. but anticipate this as unlikely.. the conse quences of a purchase may be unknowable in advance. and purchase specific brands anticipating that these will possess the desir able attributes advertised. where expectations function to guide behavior. Consumers buy mobile telephones because they expect them to permit remote contact with friends. ranging from possible to almost certain. situational clues.. for example. and Zanna. many expectations are held and processed impli citly or unconsciously (Olson. That is. Con ceived functionally. Cross-cultural studies of individualism collectivism. 35. for example. Culture and the self: Implications for cognition.84 customer expectations International Journal of Comparative Sociology. Motivation. (1990). (1995). R. a product or service must be evaluated as potentially good or bad in terms of its likely benefit for the individual. expectancies have sub jective probability. he/she may come to expect it with greater probability. 658 72. 1997). the probability that they will occur is not. Since expectations are used by consumers to anticipate the future from existing knowledge. Nebraska Symposium on Motiv ation. for example. or other external information. Triandis. Firstly. Kuhlman. 323 38. 33 41. Customers’ expectations are drawn from a var iety of sources.. 37 (3/ 4). (1991). (1988). and Lucca. Psychological Review. W. Triandis. H. 1996). but they may also implicitly expect it to possess track search and programming facilities. Psychological Review. Jr. The unknowable outcomes of purchase or patronage may be represented in customer expectations by apprehensions and anxiety (Oliver. 224 53. 195 214. Purchasers of a CD player may choose a particular model based on the anticipation that it will provide superior sound quality.

desires. Journal of Marketing. word of mouth (see w o r d o f m o u t h c o m m u n i c a t i o n s ). Attitude. personal values. In E. 17 (November). Upper Saddle River. J. and Berry. and desires. R. Journal of Marketing Research. L. chs. R. and Berry. Expectancy value theory. 1993). 211 38. Perception of marketplace stimuli may also be influenced by expectancies. such as their perceptions of quality. N. Berry. V. 2nd edn. The nature and determinants of customer expectations of service. Belief. Oliver. expectations can guide interpretations in a confirming direc tion. Berry. customers will accept. if it occurs without. M. 3.. pp. (2002). New York: Guilford Press. Brand loyal customers may inter pret ambiguous product or service attributes in a more favorable manner than those without firm expectations (see b r a n d l o y a l t y ). R. Consumers may base ex pectancies on norms derived from the typical performance of a specific brand or product. S. L. customers will respond negatively.. Journal of Marketing Research. 24. In m a r k e t i n g r e s e a r c h . 8. E. Expectations and norms in models of consumer satisfaction. 2. customer portfolios Judy Zolkiewski The application of portfolio theory (see p o r t f o l i o a n a l y s i s ) to customer and/or supplier . Customers may hold expectations of the desired. for example. ch. Zeithaml. Parasuraman. needs. B. Customers’ expectations can further be influenced by a d v e r t i s i n g . Social Psychology: Handbook of Basic Principles. M. however. A. expectation is a construct key to understanding both pre and post consumption phenomena. R. New York: McGraw-Hill. (1980). and Jenkins. Zeithaml. Kardes. (1993). R. Higgins and A. Custom ers are satisfied when a product meets their expectations. F. p r i c i n g and en vironmental cues. encapsulating their hopes. and Parasuraman.. 1994). Some con fusion exists over whether organizations should ‘‘under promise and over deliver’’ to optimize responses by engendering and then exceeding lowered expectations. international edn. Moreover. In satisfaction research expectancies are often viewed as pre consumption predictions or anticipations of product performance. (1997). as well as their predic tions. NJ: Prentice-Hall. L. Oliver. Oliver. has led to managerial concern with managing expectations. Zeithaml. However. and Zanna. for example. Kruglanski (eds. and internal factors such as availability in memory. L. Generic ex pectations of performance may encompass min imum and ideal performance levels. A... customer expectations may exist at different levels.. and fears. W. Reassessment of expectations as a comparison standard in measuring service quality: Implications for further research. adequate. 21 (1). 58. P. A. Olson.. and predicted levels of service offered by an organization (Zeithaml. L. between adequate and desired) which. R. 1987). states that consumers’ pre purchase a t t i t u d e s are a function of their beliefs about product attributes and the evalu ation of those beliefs (Fishbein and Ajzen.customer portfolios offline transactions. as well as to brands and other items that are expectancy consistent. R. and Jenkins. Consumers are known to afford significant attention to sur prising advertisements that conflict with expect ations. See also customer satisfaction Bibliography Cadotte. Woodruff. 7. if product or service perform ance occurs within.. V. 305 14. MA: Addison-Wesley. L. A zone of tolerance represents a range of expectancy values (e. M. as well as over the precise nature and role of expectations in determining consumers’ evaluations (Parasuraman. I. (1987). A cognitive model of the antecedents and consequences of satisfaction decisions. with multiple expectations being held simultan eously.. and Ajzen. Satisfaction: A Behavioral Perspective on the Consumer. situational factors. 111 24. and Winer. Inten tion and Behavior: An Introduction to Theory and Re search. Woodruff. Reading. Expectancies. (1994). Journal of Economic Psych ology. The importance of expect 85 ancies to consumer reactions. L. T. (1975). Journal of the Academy of Marketing Science. such that customers may often see what they expect to see. (1996). and Parasuraman.). 1 12. J. or on norms based on the average performance of a group of brands or products within a product category (Cadotte. 1975). L. Roese. (1987). Fishbein. A framework for the formation and structure of consumer expectations: Review and propositions. 469 99. A. Consumer Behavior and Managerial Decision making.g. 460 9.

E. R. Customer analysis for strategy development in industrial markets. M. 1997: 320) t o m e r r e l a t i o n s h i p m a n a g e m e n t .). (1982). the growing power of databases (see d a t a b a s e ) and the introduction of activity based costing. This is probably due to the rela tive power of a small number of players in such markets. Salle. CT: JAI Press. and indeed its viability. (1987). K. and Ellram. W.. C. Hence the need to implement customer portfolio analysis. Journal of Marketing. See figure 1 for an example of such a model.86 customer portfolios relationship analysis has essentially been ‘‘borrowed’’ from traditional corporate and marketing strategy theory (see c o r p o r a t e s t r a t e g y . M.). A portfolio approach to supplier relationships.. V. 101 13. and threats (see s w o t a n a l y s i s ). P. V. R. C. seem to be leading to increased interest in their use.. 9. Krapfel. 26. (1997). and Spekman. two step. (1982). These models include those proposed by Cun ningham and Homse (1982). Cova. Turnbull and Zolkiewski (1997). European Journal of Marketing. and the mix of objective and subjective values on the axes used. Rangan. T. therefore.). M. mean that customer/supplier portfolios have not been as widely adopted as could be expected. B. T. Segmenting customers in mature industrial markets. Jr. BCG (see b c g m a t r i x ). M. G.. Profitability in customer portfolio planning. P. and Swartz (1992). (1987). Salmond. (1992). and Zolkiewski. London: Dryden Press. In David Ford (ed. D. vol. 53 62.. 11. Moriarty. Manage customers for profits (not just sales). weaknesses. Portfolios of supplier customer relationships. Bibliography Campbell. Moriarty. R. Account portfolio analysis for strategy development. and Swartz. Greenwich. In Arch Woodside (ed.. Harvard Business Review. Advances in Business Marketing and Purchasing. Shapiro. and so on. Yorke (1984). and three dimensional portfolio models have been specifically developed to ad dress this situation. R. R. E.. Shapiro et al. Industrial Marketing Management. Rangan. 22 37. and Pardo. Salmond. and Homse. To date. m a r k e t i n g s t r a t e g y ): the an alysis of strengths. exacerbated by the difficulty in accurately collecting some of the more insightful data. B. Fiocca (1982). A strategic approach to managing buyer seller relationships. They have taken the rela tionship as the unit of analysis and can be assumed to be based upon an understanding that long term interactive relationships are often the norm in this type of market structure. F. 56 (October). E. the add ition or loss of a major customer can have dra matic effects on the company’s turnover. Yorke and Droussiotis (1994). In Ha˚kan Ha˚kansson (ed.. and Spekman (1991). Fiocca. Turnbull. 369 80. (1983). opportunities. T. K.. During the last 15 years a number of one step. 4. J. September/October. the majority of which have taken into account cus tomer profitability. relationship value. and Ross. Understanding Business Markets. 72 82. R. An interaction approach to marketing strategy. and Olsen and Ellram (1997). B. the develop ment of customer and supplier portfolio plan ning has largely been related to business to business markets (see b u s i n e s s t o b u s i n e s s m a r k e t i n g ). R. and Cunningham. profitability. 25 (9). . New York: John Wiley. Campbell and Cunningham (1983). Rangan. (1997). particularly in relation to the appropriate dimensions of analysis. T. it is common for a firm serving busi ness markets to be highly dependent on a small number of customers and. S. along with an emphasis on c u s High Low High Net price Low Low High Cost to serve Figure 1 Three-dimensional customer classification matrix (Turnbull and Zolkiewski. (2000). L. N. (1991).. G. The models have all used a variety of axes. Strategic Management Journal. International Marketing and Purchas ing of Industrial Goods. 101 8. Moriarty. However. Industrial Marketing Management. Its application to customer/supplier analysis is still problem atic. The issues of customer prof itability. Krapfel. Olsen. 2nd edn. Cunningham.

(1994). as with relationship marketing. Wilson. the confusion over the definition of the term also reflects the complexity of the concept. J. Successful implementation of CRM relies heav ily on internal markets (see i n t e r n a l m a r k e t i n g ). efficient in quiry/sales/complaint handling processes and measurement systems. plotted. and Macthynger. and motivated. 2000). it comprises the organization. and categorized (McDonald and Christopher. A. particularly the technology which attempts to manage all customer contact points and provide a single picture of the cus tomer (O’Malley and Tynan. and Turnbull. (1984). 3rd edn. P. 6 18. and systems through which an organization manages its relationships with its customers (McDonald and Christopher. given the strategic implications of CRM. Manchester: UMIST. all departments should par ticipate in the development of CRM systems. The most usual interpretation of CRM is essentially as a type of data mining. Woodcock. CRM refers to the management of the lifetime relationship with the customer and is usually associated with the use of information technol ogy (IT) in managing these relationships (Ryals. In Peter Turnbull and Stanley J. September. However. Relationship portfolios: Past. enabling company wide distribution and availability of information on customers. planned. London: Thomson Learning. customer relationship marketing and relation ship management are terms that many managers or marketers use but define in different ways’’ (Stone. there is a danger that managers may allow the scope of their CRM software to dictate the scope of their CRM strategy (McDonald and Christopher. customer relationship management Kalipso Karantinou According to one of the many definitions put forward for CRM. not databases (O’Malley and Tynan. Human resource issues are central to the success of CRM (Harris and Ogbonna. Rather. 2003). both the cross functional working . Understanding Business Marketing and Purchasing. big databases that contain informa tion about customers (see d a t a b a s e ). 2000). 2003). Stone et al. Zolkiewski. The aim is to facilitate the efforts to build customer retention and profitability. G. (2002a). Along the same lines. 2000: 1). 2003) and must be combined with a deep under standing of the market and the needs of custom ers within market segments (McDonald and Christopher. Do relationship portfolios and networks provide the key to successful relationship management? Journal of Business and Industrial Marketing. Paliwoda (eds. D. The reason there is no exact and widely accepted definition for CRM is because it is still in the formative stages of development and has yet to be given a universally agreed meaning. are par ticularly useful back office tools for CRM (Ryals. Yorke. variously understood as cus tomer relationship marketing and/or customer relationship management (O’Malley and Tynan. D. Adopting a CRM approach to managing cus tomer relationships promises to reduce unpre dictable customer behavior to data that can be analyzed. Furthermore. 17 (7). W. Data warehouses. present and future. Pro ceedings of Research Developments in International Marketing. 2003) through 87 combining the IT systems relating to the cus tomer interface (McDonald and Christopher. used to identify profitable customers and classify cus tomer segments (see m a r k e t s e g m e n t a t i o n ) for differential targeting (Evans. relationship marketing. (2000) pinpoint four requirements necessary for CRM initiation and success: good operations and distribution. Zolkiewski. Jour nal of Business and Industrial Marketing. 2003). A. P. 2003). it is not sufficient to involve the technology man ager alone.customer relationship management Yorke. Daniel. processes. and McDonald (2002) propose that. J. Although philosophically in line with r e l a t i o n s h i p m a r k e t i n g . the focus in CRM is on technology. In David Ford (ed.). which have to be designed from a user point of view if they are to be acceptable by all relevant parties within the organization. and Turnbull. (2002b). 2003). real relationship marketing should be characterized by more affective factors (Evans. An interaction approach to the management of a portfolio of customer opportunities. and Droussiotis. 2003). The use of customer portfolio theory: An empirical survey. 9 (3). it must ultimately be remembered that the objective is to build relationships. Rather than focusing solely on data mining. appropriate information technology systems. 2003). well trained per sonnel.). 575 97. W. 2000). ‘‘As with many management fashions. 2003).

It is an intrapersonal re sponse to the various physiological. M. These are the people who have to be ‘‘won over’’ if a CRM strategy is to be implemented and be successful. McDonald. As a construct of interest to marketers and theoreticians. Organizing for relationship marketing. and services. 5th edn. 193 219. How ever. H. However. Stone. London: Butterworth-Heinemann. since it is derived from evaluations that may take place at various stages of consump tion. It is generally held to occur after a choice. In M. (2000). CRM is about achieving and sus taining a c o m p e t i t i v e a d v a n t a g e . Ryals. since they will often repurchase positively evaluated products. psycho logical. E. J. Market segmentation. c o n a t i v e s t a g e ). (2003). Satisfaction is a key determinant of customers’ subsequent behavior. The Marketing Book. Factors for success in customer relationship management systems. . L. In Cranfield School of Management. during.. the act of consuming. or buying unit. or rewarded based upon. L. 34 (3/4). Bibliography Evans. ch. Satisfaction is. and Christopher. M. including product attributes and usage consequences. Journal of Marketing Management. L. and Tynan. or experience. 5th edn. and the out comes of consumption. pur chase. London: Kogan Page. The responses of frontline employees to market-orientated culture change. (2002). affective reaction. group of individuals. c o g n i t i v e s t a g e . and goals. with a brand or an organization’s total service. O’Malley. including repurchase behavior and loyalty. products (see p r o d u c t ). judgments.. customer satisfaction Mark P. M. and overall satisfaction. employees in many organizations still tend not to be encouraged toward. Healey Customer satisfaction refers to the evaluations. expectations. Marketing: A Complete Guide. Baker (ed. Neverthe less. N. uniting the three phases of consumption. Basingstoke: Palgrave Macmillan. desires. 13. and feelings that result from custom ers’ interactions with objects of consumption. or consequence for subse quent behavior (see a f f e c t i v e s t a g e . satisfaction judgments entail the comparative evaluation of consumption stimuli and their per formance referents. M. and continue to patronize organizations whose services engender pleasurable feelings. (2000). E. Customers compare the products and services they consume to vari ous external and internal standards when evalu ating them in terms of their benefit for the individual. 18. Satisfaction completes the loop. and IT (McDonald and Christopher. for example. and conative implication. since a customer seeks to fulfill these through some act of con sumption. marketing. then. Daniel. 2003). M. and Ogbonna. Woodcock..).88 customer satisfaction between departments and the willingness of in dividual employees to work with new technolo gies (Ryals. pp.. Customer Relationship Marketing. (2000). Marketing Man agement: A Relationship Marketing Approach. Feelings of pleasurable contentment or gratification thus comprise this response. More specifically. the psycho logical response to judgments of met needs. and symbolic benefits that consumption confers upon an individual. 318 40. 32 52. Wilson. satisfaction may be determined at any time a salient evaluation takes place: prior to. and McDonald. Relationship marketing. C. customer relationship man agement needs to be based on three aspects in order to work: strategy. European Journal of Marketing. including brands (see b r a n d ). Ultimately. satisfaction provides an empirical and conceptual link between pre purchase deci sion making. Satisfaction is generally held to comprise a post consumption evaluation of a product or service that results in feelings of fulfillment. In M. pp. 2000). and is therefore often con sidered solely as a post consumption reaction. functional. 249 63. It can thus be said to have three progressive facets: cognitive evaluation. and Macthynger. collecting data on customers or forming emotional bonds. Baker (ed. and the organizations that produce them. London: Macmillan. Customers’ needs and desires are therefore cen tral to satisfaction formation. London: Butterworth-Heinemann. C. 246 83. whether CRM on its own can achieve this goal is questionable. Harris. pp. J. L. A distinction is often made between satisfaction with a specific product or transaction.). (2003). or at any time after consumption. (2003). The Marketing Book.

Organizations as diverse as the National Health Service (NHS). Through such be havioral loyalty organizations will benefit in . Motorola promulgates the satisfaction of its customers as its very raison d’eˆtre. global competitiveness. satisfaction is considered important at the macroeconomic and societal levels as ‘‘critical to improving a nation’s economic per formance. In addition to its importance to individual companies. vi). 1994: 242). whilst the m i s s i o n s t a t e m e n t of the BBC stresses that the corporation’s primary goal is to satisfy all of its audiences. Consequences of Customer Satisfaction Perhaps the most elementary premise of the marketing field is that satisfied customers will make repeat purchases of a product.’’ In 2001 the Sony Corporation established a customer satisfaction charter. Similarly. reflected by its inclusion in several key conceptual definitions of marketing. Kotler and Levy (1969) suggested that marketing is a perva sive societal activity concerned with customer satisfaction engineering. perhaps owes most to the ‘‘rediscovery’’ of the import ance of the consumer in the mid twentieth cen tury. or brand which satisfies them. the official definitions of marketing constructed by the Chartered Institute of Marketing and the Ameri can Marketing Association both embrace the notion of marketing as a process designed to satisfy customer requirements and objectives. A similar focus can today be found in business practice. and Ford regularly assess the success of their output based on research showing levels of customer satisfaction. where the rhetoric of both public and private sector organizations often identifies sat isfaction as a key concern. Yet the genesis of the contemporary notion of customer satisfac tion. Perhaps more indicative of the real import of satisfaction to organizations is the explicit interest many com panies demonstrate in the reactions of their cus tomers. some early writings devoted to understanding consumer behavior viewed the anticipated outcomes of consumption as its drivers. marketers in both academia and industry have been con cerned with the nature and function of satisfac tion’s relationship with subsequent customer activities. service. and thus insure the con tinuance of demand for its products. Its customer satisfaction center includes a human interface laboratory aimed at increasing satisfaction through consumer focused product d e s i g n . since satisfaction is integral to relational success in both consumer and organizational markets. or organization. British Airways. and distinguished the pleasures of acquisition and possession of material wealth as one form of simple pleasure. The notion of satisfying customers has con tinued to assume a privileged role in marketing thought. The purported reconceptualization of the m a r k e t i n g c o n c e p t is evinced in the corpus of the 1950s North American m a r k e t i n g school expounding the emergence of customer orientation as the distinguishing feature of the marketing lens. 89 The contemporary emphasis on r e l a t i o n s h i p m a r k e t i n g further emphasizes the im portance of customer satisfaction to firms. Due to its commercial importance. whilst the Asda/Wal Mart brand guarantee promises buyers ‘‘complete satisfac tion or your money back. Bentham argued that human behavior was governed by judgments of the po tential of actions to produce pain or pleasure. Moreover. The emphasis placed on the im portance of customer satisfaction to organiza tional success by influential writers of this period is typified by Drucker’s (1961) view of business as being ‘‘directed toward the satisfac tion of a customer want’’ (p. From this re emerged customer satisfaction as a direct concern for marketers.customer satisfaction Development of Interest in Customer Satisfaction The modern origins of the satisfaction concept can usefully be traced to the utilitarianism of Jeremy Bentham. This apparent innovation in economic thinking reasoned that a customer’s satisfaction with an organization’s products would develop into a favorable attitude toward the product. connoting the commercial focus on achiev ing corporate goals by insuring pleasurable customer reactions and thus loyalty. seeking to make satisfaction the cor nerstone of its corporate culture. brand. and quality of life’’ (Anderson and Fornell. The degree to which organizations are directly concerned with customer satisfaction varies from tokenism to corporate permeation.

2001). In the event of a dissatisfying experience. Sasser. the impact of satisfaction on repurchase intentions can decay to insignificance after as little as two weeks (Mazursky and Geva. Furthermore. 1995). 1999). 1997). Szymanski and Henard.. Due to the role of such mediating variables. and will be more resistant to price changes and the advances of competitors. leading to improvements in satisfaction levels. understanding. 1990). however. In what is often modeled as a four stage linear causal chain (satisfaction–attitude–intention–behavior). empirical support at micro and macro levels (see Rust and Zahoric. 1993. or brand consumed (see Oliver. switch ing costs. Consumers with low thresholds are more likely to make repurchases than those with high thresholds at the same level of satis faction (Mittal and Kamakura. and Schlesinger. Satisfaction also directly in fluences company profits by improving cus tomer retention (see Anderson. The dominant cognitive perspective views as integral to satisfaction for mation the evaluation of the product. 2001). Early b u y e r b e h a v i o r m o d e l s recog nized that satisfaction influences post purchase attitude (see a t t i t u d e s ) and behavioral inten tions to repurchase. Satisfaction is also influential in terms of more immediate post consumption behaviors such as complaining. or switching. Post purchase attitudes in turn impact upon be havioral intentions toward the object or act. including the desirability of competitive alternatives. complaining. al though satisfaction can also influence intentions to repurchase directly. since customers are thought to hold different satisfaction thresholds for repurchase behavior. 1994). Information provided by customer complaints can be used to diagnose and rectify performance problems. The principle at the core of most models is that satisfaction is the result of a com parative evaluation. particularly in certain product categor ies. then also play an important role in their future choices (see Lynch. service. As a result. customers’ memorized evaluations or likes and dislikes. Fornell. 1989). behavioral inten tions are considered a major determinant of product approach or avoidance. satisfied customers are more likely to increase their consumption rates. 1980). These assumptions drive commercial interest in customer satisfaction. and Weigold. Moreover. . if mixed. the satisfaction evaluation is thought to influence the consumer’s attitude toward the object evalu ated (e. although this relationship is mediated considerably by internal and situational factors such as social pressures. Causes and Models of Customer Satisfaction Due to its significance. but is strong and beneficial once developed (see Oliver. and increased revenue and profits (see Reichheld. and when customers directly attribute poor performance to the organization (see Oliver. Customer loyalty is achieved in part through continued satisfaction.g. as can company recovery efforts. Finally. 1997). It is note worthy. the correlation between satisfaction and behav ioral intentions is consistently found stronger than the link between satisfaction and actual behaviors such as repurchasing and repatronage. or brand) or toward the act of buying or consuming that object. individual differences mediate the relationship. Resulting product attitudes. customers judge the positivity or negativity of a product or service. 1988). but rather in its behavioral consequences. and modeling the causes of satisfaction has become an important research goal (for a review. Loyalty is difficult to achieve. few organizations are interested in satisfaction per se. service. The indirect relationship between customer satisfaction and future consuming behaviors has received much. the product. predict ing. the catharsis of complaining can actually improve a customer’s satisfaction level. and situational forces. self professed satisfied customers are found to engage in switching behavior and dissatisfied customers may exhibit considerable ‘‘loyalty’’ (Keaveney.90 customer satisfaction terms of improved customer retention and posi tive word of mouth (see w o r d o f m o u t h c o m m u n i c a t i o n s ). Complaining and word of mouth responses are most prevalent where dissatisfac tion results from perceived inequity. That is. enhanced m a r k e t s h a r e . see Yi. Marmorstein. Heskett. Even where they are highly correlated when measured simultan eously. that the influence of post con sumption satisfaction on future behaviors is often obfuscated by more potent and direct de terminants of consumer choice that become sali ent at the time of decision making. and Lehmann. 1996.

g. According to disconfirmation theory. 1997). or judgments of the fairness of an exchange (Oliver and Desarbo.. to protect oneself from harm) create lower level desires (e.. or to fairness norms. In de ciding if they have received what they deserve. combine these perceptions with expectation levels. 1996). salespersons. and the relationship between the inputs and outputs of other parties to the trans action (Oliver and Swan. needs. consumers may make comparisons of the rela tionship between their own inputs (e.g. whereas unmet desires may result in dis satisfaction and all it entails. or that a vendor has not provided what the customer considers is deserved or has profited unduly from the customer (merchant equity). Furthermore. Desires exist at higher and lower levels connected in a means– end chain. and Olshavsky. Subjective disconfirmation judg ments exert greater influence on satisfaction. or calculated by. quantifiable performance and expectancy referents are not always available to.g. This model views satisfaction formation as a process in which consumers ‘‘form preconsumption ex pectancies. compare performance with expectations.customer satisfaction including its attributes or usage outcomes. wants.g. The feelings and emotions that result from such evaluations constitute satisfaction’s phenomenal basis and can be distinguished from the psychological evaluation process itself. However. or be contrasted with them (known as assimila tion and contrast effects). and other customers. 2001). Satisfaction results where the customer perceives his/her input to output ratio to be at least pro portionate to that of the comparative operator. Performance consistent with expectations produces expect ancy confirmation and moderate satisfaction. The preceding models show that the stand ards to which consumers compare a product or . and better than expected performance generates positive disconfirmation and high satisfaction. and the distinction between their oper ation as satisfaction influencers is sometimes unclear.. when making satisfaction judgments customers make subjective comparisons between their per formance perceptions and personal desires. in relation to an exogenous reference point. a dis tinction is typically made between objective (calculated) and subjective (inferred) discon firmation. such that higher level desires (e. 1993: 418). Perhaps the most prominent model of con sumer satisfaction is the expectancy disconfirm ation model (see Oliver. the performance of products and services is evaluated based on the extent to which they fulfill existing desires (Spreng. 1994). which in turn influences overall satis faction. for a package to be delivered before a deadline) can exert greater influence on satisfaction than ex pectancy disconfirmation (Wirtz and Mattila. In simple form. price paid) and outputs (e. The extent to which service or product perform ance meets customers’ explicit needs (e. Grayson. and Ostrom. Models based on equity theory assert that satisfaction can be influenced by customers’ per ceptions of justice. antilock brakes installed in a car).. 1988). or some normative or ideal benchmark.. Performance which closely matches consumers’ desires will produce feelings of satis faction. expect ations are predictions of attribute or product performance. the disconfirmation model predicts that performance below custom ers’ expectancy levels results in negative discon firmation and thus dissatisfaction. and values are terms used interchangeably in the lit erature.g. benefits gained) to a transaction. The expectancy disconfirmation framework has been subjected to many modifications and criticisms (see Iaco bucci.g. 1989). According to the desires congruency model of satisfaction. form disconfirmation perceptions. 1980. desires. Mac Kenzie. Unfavorable comparisons result where an individual judges that other cus tomers have received better treatment or prices from the same provider (interpersonal equity). Such invidious comparisons are likely to result in perceptions of inequity and therefore customer dissatisfaction. to buy products which are safe) 91 and ultimately attribute level desires (e. The resulting judgment of desires congruency determines satisfaction with specific product at tributes. since objective. A related conception postulates that satisfac tion results from judgments of need gratification. and form satisfaction judgments’’ (Oliver. consumers. Parties to which consumers may compare include the producing company. Satisfaction judgments may be as similated toward customers’ prior expectations. observe product (attribute) perform ance. other products. such as their expectations.. In this view.

Many further models are variants on this theme. contributes to overall satisfaction with the prod uct. Halstead..92 customer satisfaction service are multifarious. several studies have shown that multiple comparison standards can simultaneously influ ence consumers’ post consumption evaluations (e. contentment) emotions and moods (see a f f e c t ) are viewed as distinct re sponse states which influence satisfaction by . However. Affective Dimensions of Customer Satisfaction Recent research has sought to elucidate the emo tional dimensions of satisfaction. such as the typical performance of a category (Cadotte. 1988). Another line of research shows. for example (see Maddox. and to brands and products from other categories (Gardial et al. or brand. The first. 2000). Satisfaction with individual product attributes.g. 1993). In service industries.g. 1994). joy. interpersonal di mensions such as the behavior of contact employees. low involvement satisfaction judgments may be based on the most available information. Con sumers’ performance attributions will also influ ence their satisfaction levels. such as the fuel economy of a car or the taste of a restaurant meal. and tangible dimensions such as the pleasantness of the physical s e r v i c e e n v i r o n m e n t .g.. 1997). to the performance of forgone alternatives (Dro¨ge. including waiting times. 1984). Further more. Although the importance of different performance referents to satisfaction judgments does vary between products and con texts. Research shows that satisfaction results where customers compare their perceptions of how a product has performed to experience based norms. negative (e. and Jenkins. Diff erent perspectives exist which explain how emo tions influence satisfaction. since strategies for achieving each may need to be different. when making satisfaction judgments. poor performance attributed to personal misuse may be less dissat isfying than poor performance that is attributed to flawed product design. they can shape the other main deter minant of consumer satisfaction. Two factor theory holds that satisfaction and dissatisfaction have different causes. For example. the perform ance of a product. Much research assumes that satisfaction for mation requires complex and effortful psycho logical endeavor by the consumer. satisfac tion may be influenced by utilitarian perform ance (the basic or core features of a product) or by hedonic outcomes (the intangible pleasures that result from consumption). and these can be separated into two major approaches. Boulding et al. it is commonly assumed that customer satisfaction and dissatisfaction are the opposing extremes of a single bipolar construct. to con jectures of how performance might have been different (counterfactual standards: Tsiros and Mittal. The quality of a product or service also has a considerable influence on satisfaction. that consumers may often rely on heuristics. which one might term precursive theories of affective satisfaction. 1998) and infer ring judgments from current moods (Bickart and Schwarz. fear) and positive (e. The satisfaction formation process may also be different for high and low i n v o l v e m e n t products and situations. or mental short cuts.. service. for example (Folkes. and MacKoy. Woodruff. Whilst marketers may exercise little control over what a customer compares their goods or services to. and will influence satis faction indirectly through comparative evalu ation. 2001). Moreover. Here. Since the performance attributes that determine satisfaction vary be tween products and services. for example. anger. have been found to be key determinants of satisfac tion. Taxonomies of universally important elements of product performance necessarily operate at high levels of abstraction. 1987). several researchers have sought to establish satisfaction and dissatisfac tion as distinct response states that should be modeled and measured separately. traditionally viewed as a cognitive evaluative response. several dimensions of performance have been found to be influential across contexts.. to ideal standards (Tse and Wilton. 1981). views emotions as causal antecedents of (dis)satisfaction judg ments. in addition to service outcomes.. the process or functional elements of performance (the way service is de livered). These include basing satisfaction on previously formed judgments (Mattila. marketers must often establish which particular attributes determine satisfaction in a specific context. however. This is potentially important for market ers seeking to avoid dissatisfaction and boost satisfaction.

Emotions and moods provide information that is inputted into evaluative judg ments. and MacKoy. 1991). W.. V. and Nyer. Customer satisfaction is an important market ing concept because knowledge of its function ing allows managers some direct control over the future behavior of existing and potential custom ers. Comparing . D. Oliver (eds. 18 30. T. Journal of Marketing Research. 93 satisfaction with a product evolves dynamically as the benefits customers gain from product performance facilitate their current life themes and social roles. 30. A dynamic process model of service quality: From expectations to behavioral intentions. B. 10. (1994). in addition to satisfaction. R. Recent research has therefore examined the causes and implications of specific post consumption reactions such as regret and delight. Service experiences and satisfaction judgments: The use of affect and beliefs in judgment formation. W. R. R. Viewed as a longitudinal construct. 1997). (1961).. Fournier. As satisfaction research broadens. R. These emerge and de velop across repeated interactions with a product in complex social environments (Fournier and Mick. and Lehmann. and Zeithaml. R.. and Fornell. Boulding. 1999). pleasure. B. New York: McGrawHill.. Fornell. The role of emotions in marketing.. Bickart. L. anger. R. L. may be better predictors of customers’ intentions than satisfac tion alone (Nyer. Woodruff. which results from consumers’ evalu ations. (1994). 24. since the act of consuming a service is a socioexper iential activity that may produce multitudinous emotional reactions. and relief. The evaluative and affective dimensions of satisfaction will vary in their pre dominance and concatenation across different situations (see Oliver. Expectations and norms in models of consumer satisfaction. D.. D. and meanings. 58 (July). Gardial.customer satisfaction being factored into its judgment (see Westbrook and Oliver. and Jenkins. marketers are likely to gain greater insight into the conduit between post consumption reactions and cus tomers’ subsequent behaviors. M. Clemons.. Customer satisfaction. excitement.). Drucker.. F. Management in Marketing. (1999). 11 (1). 29 42. Folkes. Journal of Marketing Research. 53 66. Journal of the Acad emy of Marketing Science. F. Schumann. However. The role of competitive alternatives in the postchoice satisfaction formation process. Anderson.. 27 (2). pp. Journal of Marketing. 398 409. 1997: 316). Staelin. and joy. 241 68. (1997). Corbin (eds. (1984). 305 14. Consistent with these notions. and Mick. 184 206. and that the interplay between the two is complex. M. The second perspective conceptualizes satisfaction as an actual emotional response in itself.. R. CA: Sage. C. W. Woodruff. A. and profitability: Findings from Sweden. (1994). and both emotions and evaluations serve to facilitate consumers’ subsequent behaviors. S. market share.. and Schwarz. Here. R. P. disgust. the feeling of satisfaction is equated with emotions such as pleasure. V. In different conditions. Emotional or affective post consumption responses have been considered particularly significant components of con sumers’ reactions to service exchanges. 1999). D. satisfaction is an adaptive re sponse. Such specific emo tions. P. Dro¨ge. (2001). Journal of the Academy of Marketing Science. N. and Burns. including frus tration. and Nyer. Kalra. (1993). S. 25 (1)... Some might argue that the cognitive evaluative core of satis faction is more important for future product choices. D. emotions. The debate over whether satisfaction is best conceived as a cognitive or emotional response has somewhat clouded the truism that customers will inevitably experience emotions and feelings as a result of their consumption experiences and make various appraisals of their purchases and possessions. E. Cadotte. J. E. Preface... A. Bagozzi. Rust and R. Journal of Consumer Research. G. 5 23. Thousand Oaks. service quality Bibliography Anderson. In R. satisfaction has recently been described as a blend of cognitions. Halstead. In H. B. Consumer reactions to product failure: An attributional approach. Such distinct states may reflect more accurately customers’ specific reac tions than the generic term satisfaction (Bagozzi.). Journal of Consumer Psychology. happiness. 63 (October). Lazo and A. W. S. Gopinath. C. consumers may ex perience a variety of emotions resulting from product and service interactions. Rediscovering satisfaction. 7 27. E. S. D. anxiety. See also customer expectations. Gopinath. Journal of Marketing. (1999). Service Quality: New Directions in Theory and Practice. A customer satisfaction research prospectus. (1987). U. C. P.

Heskett. L. Journal of Consumer Research. services. and Desarbo. M. 3. Journal of Marketing. A. N. 15 32. (1991). and Geva. 20. Oliver. Journal of Marketing Research. A. R. 25 (4). Profits. 11 (3). acquiring. P. Oliver. 16 (3). R. Sasser. (1997). Journal of Retailing. and attribute bases of the satisfaction response. R. Oliver. Journal of Consumer Research. The calculus of service quality and customer satisfaction: Theoretical and empirical differentiation and integration.94 customer service consumers’ recall of prepurchase and postpurchase product evaluation experiences. Money. W. A reexamination of the determinants of consumer satisfaction. Customer satisfaction. 460 9. D. 181 92. pp. Journal of the Academy of Marketing Science. A. Oliver. 14. R. Journal of Consumer Research. J. experiences. S. Yi. R. W.. Response determinants in satisfaction judgments. F. and Schlesinger. 193 215. L. (1999). New York: Free Press. E. and Wilton. R. L. 401 17. goods. Mazursky. (1988). (1995). (2001). Reichheld. services. M. Jour nal of Marketing Research. M. D. 63. Kotler. CT: JAI Press. and ideas (Mowen and Minor. L. S. Models of consumer satisfaction formation: An extension. 211 27. Maddox. Journal of Consumer Research. 1998. Advances in Services Marketing and Man agement. Oliver. In V. D. 204 12. (2000). 2002). T. Temporal decay in satisfaction purchase intention relationship. (1994). Jour nal of Consumer Psychology.. Szymanski. A cognitive model of the antecedents and consequences of satisfaction decisions. The Service Profit Chain. and Olshavsky. G. Cognitive. Tsiros. (1980). 29 (1). (1988). and Mittal. A critical review of consumer satisfaction. (1988). 296 304. 6 (3). (1996). Satisfaction: A Behavioral Perspective on the Consumer. A. 38 (1). Whence consumer loyalty? Journal of Marketing. Journal of the Academy of Marketing Science. Bowen. R. and Levy. 33 (January). customer service see s e r v i c e q u a l i t y customers Kalipso Karantinou Customers can be defined as social actors (Bagozzi. L. 495 507. R. Journal of Marketing. Oliver. Psych ology and Marketing. E. 17 (November). E. R. L. Journal of Consumer Research. Swartz. New York: McGraw-Hill. Satisfaction. (1998). 8. H. repurchase intent. Tse. J. S. W. which involves the transfer of re sources between social actors. V. K. Journal of Consumer Research. Grayson. Lynch. M. W. U. Zeithaml (ed. F. 1 67. A. A.. Equity and disconfirmation perceptions as influences on merchant and product satisfaction. Journal of Consumer Research. S. 548 60. Iacobucci. and Kamakura. Westbrook. Boston: Harvard Business School Press. and Lasting Value. and Swan. 10 15. J. D. (1969). 418 30. and Zahoric. The dimensionality of consumption emotion patterns and consumer satisfaction. Marmorstein. and information. Wirtz. and Ostrom. J. and Henard. Chicago: American Marketing Association. R. affective. and Weigold. 169 84. 68 123. 97 102. The Loyalty Effect: The Hidden Force Behind Growth. A study of the relationships between consumption appraisals and consumption emotions. (1990). (1989). Brown (eds. Central to the concept of customer. D. 59. 477 501. (1993). 372 84. consuming. Regret: A model of its antecedents and consequences in consumer decisionmaking. 60 (July). 33 44. P. In T. V. MacKenzie. and S. Psych ology and Marketing. An examination of consumers’ use of heuristic cues in making satisfaction judgments. 131 42. Mattila. (1993). A. 15 (5). F. 16 35. Review of Marketing.. L. A. customer retention. Y. 84 91. P. Greenwich. Spreng. and indeed to that of m a r k e t i n g . R. and repurchase behavior: Investigating the moderating effect of customer characteristics.. (1997).. 69 (2). H. Journal of Con sumer Research. Choice from sets including remembered brands: Use of recalled attributes and prior overall evaluations. (2001). L.). international edn. and Oliver. 15 (September). 20 (March). A. Solomon. A. L. L. Mittal. J. (1996). Rust. Customer switching behavior in service industries: An exploratory study. Customer satisfaction: A meta-analysis of the empirical evidence.). R. 1975) – individuals or social units – involved in selecting. Two-factor theory and consumer satisfaction: Replication and extension. pp. (1997). Broadening the concept of marketing. B. Journal of Marketing Research. and market share. D. A. Keaveney. but also status and feelings. W. (1989). and Mattila. 18. 71 82. Nyer.. J. C. (1981). J. Journal of Marketing.. is the concept of e x c h a n g e . vol. can act as resources in the exchange . Exploring the role of alternative perceived performance measures and needscongruency in the consumer satisfaction process. K. 26. (2001). and disposing of products.

Focusing on these broader exchanges rather than on prod ucts or services only has widened the relevance of marketing to other areas beyond business and thus expanded the notion of the customer. 1975). Lewis (eds. (2001). Consumer Behavior. Customers are some times rational. Marketing: Concepts and Strategies. B.). P. Internal marketing in the light of relationship marketing and network organizations. and Minor. Barnes (eds. 1969). J. Lewis. NJ: Prentice-Hall. (1969). J. M. It centers on the notion that every member of the organization has a ‘‘supplier’’ and a ‘‘customer’’ (Dibb et al. Being. Glynn and J. R. however. 4th European edn. 1. and Levy. Broadening the concept of marketing. Kotler. O. This ‘‘internal customer’’ concept is often ascribed to the founder of Toyota. The utilitarian exchange theory views customers as rational in their be havior. In W.). S. This is considered to play a vital role in developing a customer focused organization (Dibb et al. C. 33 (January). and Armstrong. Simkin. involving both utilitarian and symbolic aspects. G. engaging in utilitarian as well as symbolic exchanges (see s y m b o l i c c o n s u m p t i o n ). with programs of communication 95 targeted at internal audiences. 1995). L. (2002). Understanding Services Management. C. motivated by tangible as well as intangible rewards. M. J. R. free from external influences and pos sessing complete information on alternatives available to them in exchanges (Bagozzi. who was reported to have said in the 1950s: ‘‘the next process is your customer’’ (Gummesson. Marketing is there fore concerned with satisfying customer needs (Kotler and Armstrong. Marketing as exchange. . more often than not basing their decisions on incomplete infor mation and settling for less than optimum gains in their exchanges. Consumer Behavior: Buying. Social relationships are also characterized by the existence of complex exchanges (not in the simple quid pro quo notion characterizing most economic exchanges) (Bagozzi. which are often very difficult to separate (Bagozzi. Pride. 5th edn. ch.. (2000). sometimes irrational. Mowen. J. 27 42. NJ: Prentice-Hall. Satisfy ing the needs of internal customers is believed to upgrade the organization’s capability to satisfy the needs of external customers (Lewis. London: Routledge. Customer care in services. 2001). (1975). customers engage in exchanges to increase the total utility of the assortment of goods they possess. Having. 1975). According to economists. Journal of Marketing. E. 10 15. 32 9. Kotler. Bibliography Bagozzi. organizations should view their employees as customers and apply marketing internally within the company.. In R. Internal Marketing: Directions for Management. Varey and Barbara R. ch. W.. Principles of Marketing. R.customers process (Mowen and Minor. Dibb. Other developments in the scope of marketing expand the notion of customer even further. According to i n t e r n a l m a r k e t i n g theory. Boston: Houghton Mifflin. P. pp. 23. marketing exchanges are complicated. Indeed. 5th edn. Journal of Marketing. 1998). 2001). 1975). G. Gummesson. 39 (October). in a variety of different contexts. S. (1998). (1995). has revealed other aspects that lead to a different overall picture. NJ: Prentice-Hall. 55 88. M. 2000). Upper Saddle River. New York: John Wiley.. 10th edn. 2004) and with facili tating exchanges. P.. Solomon. (2004). Upper Saddle River. and Ferrell. Upper Saddle River. pp. which led to the broadened concept of market ing (Kotler and Levy. Research into c o n s u m e r b u y e r b e h a v i o r . by internal as well as external forces. Internal marketing therefore aims to develop internal and external customer a w a r e n e s s and to remove functional or human barriers to organizational effectiveness.

DAGMAR model

David Yorke

Vincent Wayne Mitchell

The DAGMAR model (Defining Advertising
Goals for Measured Advertising Results) is a
model of m a r k e t i n g c o m m u n i c a t i o n s
that was developed by Colley (1961) specifically
for the measurement of a d v e r t i s i n g effect
iveness. It postulates that the customer/buyer
moves from a state of unawareness through
a w a r e n e s s of the product or service, c o m
p r e h e n s i o n (an understanding of what the
product or service will do), c o n v i c t i o n that
it will meet requirements, to a c t i o n (a pur
chase). A benchmark measure is first taken of the
position along the spectrum to which members
of the target group(s) have progressed. Object
ives are then established, advertising is pro
duced, and a further measure is taken to
discover whether or not any effective shift
has occurred (i.e., whether or not the objectives
have been met). Precise measurement is impos
sible as so many other variables are present.
Furthermore, such variables become more
numerous the further one moves toward
action. The principal contribution of the
DAGMAR model is in acknowledging that
the effectiveness of advertising can only be val
idly assessed where specified criteria for judg
ing effectiveness are derived from explicit
advertising objectives.

A database is a collection of related infor
mation which is capable of being organized
and accessed by a computer. Depending on the
software being used, information can be entered
as numeric, text, voice, or image. Common nu
merical database systems such as spreadsheets
allow a high degree of querying, analysis,
sorting, and extraction of information. Data
warehousing is a term that managers of informa
tion technology use to refer to the process that
allows important data collected from day to day
computer systems to be stored and organized
into separate systems designed for simplified
The most common usage of databases in
m a r k e t i n g is to develop a customer data
base that can help in the wider process of
customer relationship management
(CRM) (see r e l a t i o n s h i p m a r k e t i n g ).
Typically, customer information such as pur
chase history, value and timing of orders, re
sponses to previous offers, name, address, and
demographic characteristics (see d e m o g r a p h
i c s ) will be gathered as well as additional infor
mation from salespersons’ reports and external
sources such as geodemographic profiles (see
g e o d e m o g r a p h i c s ). Database marketing
allows closer monitoring of a company’s custom
ers and can be used to: identify the most profit
able/least profitable customers; allow cross
selling of goods; identify possible customer seg
ments; and help in communicating individually
with customers.
Database marketing has developed hand in
hand with a more tailored approach to marketing

See also communications objectives
Colley, R. H. (1961). Defining Advertising Goals for Meas
ured Advertising Results. New York: Association of National Advertisers.

goods and services, since more is known about
customers as individuals and they can be reached
through direct mail campaigns. ‘‘Shopping
basket analysis’’ from data gathered from cus
tomers using loyalty cards (see r e w a r d / l o y
a l t y c a r d s ) can show what sets of products or
brands are bought together among the different
segments. Indeed, database marketing is a self
enhancing activity where every iteration and
addition improves the total value of the database.
So when consumers ‘‘hook up’’ to an online
company, through their home computers, tele
vision, or even mobile phone, they help to de
velop the customer database. Data mining is the
process of digging deeply into vast amounts of
data to extract valuable and statistically valid
patterns that cannot be obtained through
Databases can also be useful for bibliographic
searches, site location, media planning, market
f o r e c a s t i n g , m a r k e t p o t e n t i a l studies,
and m a r k e t s e g m e n t a t i o n . Many com
mercial numeric databases exist which contain
information on sales, population characteristics,
the business environment, economic forecasts,
specialized bibliographies, and other material.
For example, ABI/Inform contains abstracts
of articles in approximately 1,300 business
publications worldwide. Predicasts (PTS) pro
vides numerous online databases on products,
markets, competitors, demand forecasts, annual
reports, etc. Pr o f i t Im p a c t o f Ma r k e t i n g
St r a t e g i e s (p i m s ) is an ongoing program of
research conducted by the Strategic Planning
Institute (Cambridge, MA) into the impact of
marketing strategies: over 250 companies pro
vide data on over 2,000 businesses for at least
four years’ trading. Given the huge diversity of
databases available, several networks have been
established to allow users easier access to each.
One of the largest of these host networks is
DIALOG, which contains over 600 different
databases. NEXIS is another large system as
well as PROQUEST, INFOTRAC, and the
Web of Science.
Zikmund, W. G. (2003). Exploring Marketing Research,
8th edn. Mason, OH: Thomson South-Western.


Dominic Wilson

Deciders are those members of the decision
making unit (DMU) who are responsible for
the final purchase decision (though they do not
always sign the purchase contract). For major
purchase decisions the decider may be the chief
executive, a director, or the chief procurement
officer, but for relatively insignificant purchase
decisions the decider may be a junior member of
the purchasing staff.
See also buying center; organizational buying be
havior; purchasing process

decision-making unit

see b u y i n g c e n t e r

Dominic Wilson

At its simplest, demand for a product/service
over a set period of time can be defined in
monetary terms as the number of buyers in the
market, multiplied by the volume of their pur
chase over the period in question, and multiplied
by the average price at which they buy. How
ever, each of these variables is problematic, with
extensive potential variation in the volume pur
chased and in the price paid by each buyer,
different patterns in different markets and
over different time periods, and even variability
in the actual product/service purchased by dif
ferent buyers and at different times.
Some products tend to be regarded as essen
tial (e.g., salt, televisions, insurance, water), with
important implications for p r i c i n g . The
demand for most products tends to be variable
(‘‘elastic’’) with respect to price, whereas the
demand for an ‘‘essential’’ product is said to be
largely ‘‘inelastic’’ with respect to price. How
ever, it is difficult to make use of this fundamen
tal economic principle in making real pricing
decisions because there are very few products


demographic environment

that are ‘‘essentials’’ in contemporary global
markets with multiple suppliers and a high rate
of p r o d u c t i n n o v a t i o n and rivalry. Closer
examination suggests that such essential prod
ucts are dependent on the cultures, economies,
and even the segments in question. For example,
rural consumers in developing economies are
likely to have different ‘‘essential’’ products to
those in affluent urban economies, while both
contexts will also each comprise multiple seg
ments with significantly different priorities
(e.g., consider vegetarians, commuters, parents).
The principle of elasticity may be more useful
when applied to other influences on demand,
such as a d v e r t i s i n g expenditure and dispos
able income, and has been subsumed to some
extent within the broader notion of sensitivity
between multiple variables (aided by spread
sheet analysis).
Nevertheless, and despite the difficulties in
volved, the assessment of demand is crucial to
professional pricing analysis and decision
making. While simplistic formulae may be
worthless in many cases, the accumulated ex
perience and professional insight of the analysts
and managers involved (too easily dismissed as
‘‘intuition’’) can be invaluable – so long as it
is coupled with careful analysis of appropriate
data (where ‘‘appropriate’’ is generally deter
mined intuitively). These ‘‘appropriate data’’
should be analyzed in terms of extrapolated
trends based on the evolution of demand (in
cluding changes in the broader socioeconomic
environment, the patterns of use, rival offerings,
and psychosocial product associations), rather
than just a statistical extrapolation of historic
sales records (as with the Ford Edsell motor
car) or wishful guesswork propped up by select
ive data (as with the Sinclair C5 electric
mini car).
The demand for a product or service can be
seen as historic, existing, latent, or potential (see
l a t e n t d e m a n d ; m a r k e t p o t e n t i a l ).
Historic demand describes customers (individ
uals and organizations) who have purchased a
particular product or service in the past, whereas
existing demand describes customers who are
currently purchasing the product or service. Po
tential demand describes those customers who
might purchase the product or service in the
foreseeable future given various changes in

m a r k e t i n g s t r a t e g y or environmental cir
cumstances (e.g., protectionism). Some author
ities also use the term latent demand to refer, in
effect, to demand that could be developed (so
distinguishing latent demand from potential
demand) with appropriate marketing strategies
but which meanwhile remains dormant. The
most easily adapted aspect of marketing strat
egies is pricing, and this is usually the quickest
way to translate latent demand or potential
demand into existing demand. Yet too much
demand can be just as problematic for a supplier
as too little demand and a responsible pricing
policy will therefore depend crucially on careful
assessment of demand.
Clearly there will often be similarities between
these forms of demand, but there can also
be important differences. For example, the
product or service in question may well have
changed significantly over time to the extent
that historic demand is no longer a useful indi
cation of potential demand. The characteristics
of demand can also change over time (e.g., in
d i s p o s a b l e i n c o m e , customer sophistica
tion, and sensitivity to particular product
aspects). In addition, there is usually sufficient
environmental change and u n c e r t a i n t y
about the data to mean that demand should
generally be assessed cautiously. Demand is
even more difficult to assess where a product or
service is innovative, making historic reference
points even more problematic. This caution is
captured in the concept of r e a l i z a b l e
d e m a n d , which refers to that fraction of poten
tial demand which an organization considers it
can achieve realistically with its chosen
marketing strategy and pricing decisions.
See also price elasticity

demographic environment
Dominic Wilson

The demographic environment is one of the
elements of the m a r k e t i n g e n v i r o n m e n t
and includes such important aspects as popula
tion size and growth rates, age and sex profiles,
family life cycle stages, occupation patterns,
levels of education, actuarial health and morbid

ity projections, etc. Every country produces
basic demographic statistics, sometimes on a
regional and local basis, most of which are read
ily available to the marketing analyst. Trends
and dramatic shifts in demographic data are
vital factors in determining marketing decisions,
both to identify opportunities and to anticipate
declining demand. An example of this is the
postwar ‘‘baby boom,’’ which has combined
with trends of improving medical technology
and individual affluence to generate a substantial
increase in the size and wealth of the ‘‘gray
market’’ (i.e., consumers over the age of 50),
with a flood of new products and services
targeted at this market. The opportunities are
evident (e.g., cruise holidays, financial planning
services), but there are also waning markets (e.g.,
funeral savings schemes).
See also demographics; environmental analysis

Barbara R. Lewis

Demographics comprise probably the most im
portant variable in the m a r k e t i n g e n v i r o n
m e n t of any organization. Demographics
describe, and provide a statistical study of, a
human population in terms of its size, structure,
and distribution. Size is the number of individ
uals in a population and is determined by: fertil
ity and birth rates; life expectancy and death
rates; and migration between and within coun
tries. Structure describes the population in
terms of age, gender, education, and occupation,
and distribution refers to the location of individ
uals in terms of geographic region or rural,
urban, or suburban location.
Demographic data are developed, primarily,
from population censuses and the study of
demographics is concerned with understanding
trends to include forecasts of future demo
graphic size, structure, and distribution.
Demographics affect the behavior of con
sumers and contribute to the overall demand
for goods and services. They are changing in a
number of ways, influenced by social and cul
tural variables (see c u l t u r e ). Such trends, in
developed economies, include:


. increased life expectancy and an aging popu
. a slowing down of the birth rate and popula
tion growth;
. growing per capita income and d i s c r e
tionary income;
. changing mix of household expenditure;
. increasing participation of women in the
workforce and their changing roles at home
and at work;
. increasing proportion of white collar
. trends in literacy and education;
. geographic shifts in population, e.g., urban
to rural and city to suburbs and new towns;
. changing ethnic and racial mixes;
. changing family and household structure,
to take account of age profiles, later mar
riage and age of childbearing, fewer chil
dren in a family, divorce and single parent
families, increasing numbers of single
person households, and total number of
. increased home ownership and increased
ownership of consumer durables;
. widespread availability of credit;
. fewer traditional shoppers and more home
. increased leisure time and participation in
leisure activities;
. changing media habits;
. increases in crime and social problems;
. increased access to mobile communications
and the Internet.
These changes/trends are of key interest to
marketing organizations. For example, they
may see opportunities arising as particular age
groups increase, or threats occurring as some age
groups decline. Demographic trends have impli
cations for: product and service development;
identification of target markets (see t a r g e t
m a r k e t ) and market segments (see m a r k e t
s e g m e n t a t i o n ), and other elements in the
m a r k e t i n g m i x . These impact not only on
manufacturers and distributors but also on those
organizations that supply consumer good manu
facturers, e.g., producers of commodities and
capital equipment.
See also lifestyles


depth interviews

Blackwell, R. D., Miniard, P. W., and Engel, J. F. (2001).
Consumer Behavior, 9th edn. London: Harcourt College
Pubs., ch. 7
Central Statistical Office. Annual Abstract of Statistics.
London: HMSO.
Hawkins, D. I., Best, R. J., and Coney, K. A. (1995).
Consumer Behavior: Implications for Marketing Strat
egy, 6th international student edn. Boston: Chicago
Irwin, ch. 3, pp. 78 88.
United States Bureau of the Census. Statistical Abstract of
the United States. Austin Reference Press.

depth interviews
Kalipso Karantinou

A depth interview is a one to one interview that
explores issues in depth (Parasuraman, Grewal,
and Krishnan, 2004) and is considered to be
a powerful research technique for interpretive
research (see q u a l i t a t i v e r e s e a r c h ). It is
a useful method for exploring new and under
researched topics, as it enables the researcher/
interviewer to gather rich and meaningful data
(Carson et al., 2001) and is one of the most
commonly recognized forms of qualitative re
search method (Mason, 1996). The central dif
ference of this form of interview from structured
interviews (see s u r v e y r e s e a r c h ) is its open
ended character (May, 1997).
Although depth interviews vary in form and
level of structure (Carson et al., 2001), the term
depth interview or qualitative interview is usually
intended to refer to in depth, semi structured or
loosely structured forms of interviewing
(Mason, 1996). The researcher/interviewer nor
mally does not have a specific set of pre specified
questions that must be asked according to the
order imposed by a questionnaire. Instead, there
is freedom to create questions and to probe fur
ther those responses that appear relevant (Tull
and Hawkins, 1993). This is believed to help
challenge the preconceptions of the researcher/
interviewer, as well as enable the interviewee to
answer questions within his/her own frame of
reference (May, 1997).
Depth interviews are considered to be the most
revealing instrument of inquiry, allowing the re
searcher/interviewer to step into the mind of

another person, to see and experience the world
as he/she does (McCracken, 1988). Such inter
views therefore yield rich insights into people’s
experiences, opinions, aspirations, a t t i t u d e s ,
and feelings (May, 1997). Structured interviews,
on the contrary, are thought to allow very little
room for people to express their own opinions in a
manner of their choosing. They must fit into
boxes or categories which the researcher/inter
viewer has predetermined (May, 1997).
Commonly, a tension is thought to exist be
tween subjectivity and objectivity in the inter
viewing process (May, 1997). The personal
interviewing process is characterized by the
interaction of the following entities: the re
searcher/interviewer, the interviewee, and the
interview environment. Collectively, these char
acteristics influence the interviewing process
and, ultimately, the interview itself (Kumar,
Aaker, and Day, 2002). Considerable bias can
be introduced by the presence of the re
searcher/interviewer (Maxwell, 1996), as he/
she can have an effect on the interviewee and
hence the material collected (May, 1997), as well
as by the overall way verbal and non verbal
communication is handled, the topics addressed,
and the sequence of the questions. As a result,
the researcher/interviewer should always be
careful not to impose his/her own perspective
on the respondent (Carson et al., 2001) and
should very carefully manage the complex rela
tionship between investigator and respondent
(McCracken, 1988).
Although depth interviews can be particularly
rewarding, generating rich data, they are intellec
tually, practically, socially, and ethically difficult
(Mason, 1996) and require a great deal of plan
ning. In the absence of a pre designed set and
sequence of questions, the researcher/inter
viewer has to be able to make on the spot deci
sions during the interview process about the
content and sequence of the interview, quickly
and in ways which are consistent with the re
search questions (Mason, 1996). Depth inter
views are therefore time and effort consuming,
both in preparation and in execution and analysis.
Carson, D., Gilmore, A., Perry, C., and Gronhaug, K.
(2001). Qualitative Marketing Research. London: Sage.

descriptive statistics
Kumar, V., Aaker, D. A., and Day, G. S. (2002). Essentials
of Marketing Research, 2nd edn. New York: John Wiley,
ch. 8.
McCracken, G. D. (1988). The Long Interview. London:
Mason, J. (1996). Qualitative Researching. London: Sage.
Maxwell, J. A. (1996). Qualitative Research Design. Thousand Oaks, CA: Sage.
May, T. (1997). Social Research: Issues, Methods and Pro
cess, 2nd edn. Milton Keynes: Open University Press,
ch. 6.
Parasuraman, A., Grewal, D., and Krishnan, R. (2004).
Marketing Research. Boston: Houghton Mifflin, ch. 7.
Tull, D. S. and Hawkins, D. I. (1993). Marketing Re
search: Measurement and Method, 6th edn. Upper
Saddle River, NJ: Prentice-Hall, ch. 13.

derived demand
Dale Littler

The demand for organizational goods and ser
vices is derived from the demand for the goods
which they help to produce or in which they are
incorporated and ultimately from consumer
demand for the final product.
See also demand

derived etic

see e t i c e m i c d i l e m m a

descriptive statistics
Michael Greatorex and Jim Freeman

Unless the sample in a market research project is
very small, the data will be tabulated and ana
lyzed using a computer. The simplest kind of
statistical analysis of data involves descriptive
statistics where the object is to summarize the
data and describe the results for the sample. The
alternative kind of analysis involves statistical
inference, covering such topics as estimation
and h y p o t h e s i s t e s t i n g . Descriptive statis
tical analysis can be carried out on a univariate,
bivariate, or multivariate basis (see b i v a r i a t e
a n a l y s i s ; m u l t i v a r i a t e m e t h o d s (a n
a l y s i s ); u n i v a r i a t e a n a l y s i s ).


Univariate analysis involves the quantitative
analysis of data where each variable is analyzed
in isolation and is often the first stage in the
analysis of a survey. Without some form of ag
gregation it is unlikely the analyst will be able to
make much sense of original (raw) data. This is
true even for a single variable. Typically, one of
the first steps in the summarization process is
for sample values to be tabulated as a frequency
distribution, using a convenient number of
classes (or ‘‘bins’’ if the data are interval).
A frequency distribution may be in actual counts
or in percentages, in cumulative or non cumula
tive form. Another stage may be to present the
data in a graphical form, using a pie diagram, bar
chart, histogram, ogive, etc., as required. A fur
ther stage in the summarization process is to
calculate and present descriptive statistics such
as measures of location (mean, median), vari
ation (standard deviation, variance, range, inter
quartile range), skewness, and kurtosis for each
variable. In this way, surveys yielding thousands
of numbers on each variable can be summarized
into a small number of diagnostic results for each
variable. This enables comparisons to be made
more easily between variables and with other
surveys, and allows the researcher to report
his/her results in a condensed form and to in
corporate the results using the summary de
scriptive statistics into the text of the report.
Exploratory data analysis (EDA) methods are
increasingly used in descriptive analysis – graph
ical tools such as boxplots, stem and leaf plots,
and dotplots enabling statistical comparisons to
be made routinely and automatically.
Bivariate analysis is concerned with the quan
titative analysis of data where pairs of variables
are analyzed together, usually to see if there is
any relationship between the variables. The an
alysis depends upon the types of measurements;
c r o s s t a b u l a t i o n s can be used to com
pare variables measured on nominal scales or
even variables measured on interval scales where
the cases are grouped into classes. At the other
extreme, correlation (in terms of the Pearson
coefficient) and regression (see r e g r e s s i o n
a n d c o r r e l a t i o n ) is useful for data meas
ured on interval scales. If one variable is meas
ured on a nominal scale and the other on an
interval scale, the nominal variable can be
used to split the sample into subsamples, and



arithmetic means for the other variable can be
calculated to enable the subsamples to be com
pared. Graphical representations such as scatter
diagrams, bar charts, etc. are useful aids in
bivariate statistical description.
The methods of multivariate methods analy
sis, including those methods which require an
understanding of statistical inference for max
imum appreciation, can be used in a descriptive,
explorative way. Methods such as multiple re
gression, d i s c r i m i n a n t a n a l y s i s , f a c t o r
analysis, cluster analysis, conjoint
a n a l y s i s , and m u l t i d i m e n s i o n a l s c a l
i n g are available in computer analysis pack
ages to help the researcher analyze the
quantitative data on many variables obtained in
Tull, D. S. and Hawkins, D. I. (1993). Marketing Re
search: Measurement and Method, 6th edn. New York:

Margaret Bruce and Liz Barnes

The term ‘‘design’’ covers a wide range of activ
ities – architecture, interior design, graphic
design, industrial design, and engineering
design. Designers usually specialize in one of
these disciplines. All design terms involve the
creative visualization of concepts, plans, ideas,
and the representation of those ideas (as
sketches, blueprints, models, or prototypes) so
as to enable the making of something that did not
exist before, or not quite in that form. Marketing
managers tend to regard design as a tool to
differentiate products, to entice consumers to
buy; and consumers want the design to satisfy a
given need – fun, function, price, etc.
Also, design is referred to as ‘‘the process of
seeking to optimize customer satisfaction and
company profitability through the creative use
of major design elements (performance, quality,
durability, appearance and costs) in connection
with products, environments, information and
corporate identities’’ (Kotler and Rath, 1984).
Design activities lead to the creation of new

products or services, new packs, corporate iden
tities, and advertisements. It is design that takes
the values of the organization and the ideas about
the product or service and transforms them into
the desired artifacts. In order to communicate
Body Shop’s m i s s i o n s t a t e m e n t , ‘‘We will
be the most honest cosmetic company,’’ this has
to be translated into a strategy for design in
terms of: a corporate identity program, the prod
uct presentation, the labeling and container
design, and the retail outlets.
Mounting evidence supports the case that
investment in design expertise contributes to
commercial performance (Lorenz, 1986; Walsh
et al., 1992). Walsh et al. (1992) carried out an
international study of different industries,
ranging from electronics to furniture, to assess
systematically the economic effect of design in
vestment on business performance. The results
of the study showed that design investment
made a positive contribution to business per
formance, but only if the design resource was
well managed and integrated with other corpor
ate activities, notably m a r k e t i n g and produc
tion. Another study of over 200 British firms
found that investment in design positively influ
enced project performance. Over 90 percent of
products launched into the market achieved
profitability and a return on investment within
a short time frame (average 15 months). Critical
factors affecting project outcome were top level
commitment to design investment and the abil
ity of managers, particularly marketing, to liaise
effectively with the design resource (Potter et al.,
Kotler, P. and Rath, G. A. (1984). A powerful but
neglected strategic tool. Journal of Business Studies, 5,
216 21.
Lorenz, C. (1986). The Design Dimension. Oxford: Blackwell.
Potter, S., Roy, R., Capon, C., Bruce, M., Walsh, V., and
Lewis, J. (1991). The Benefits and Costs of Investment in
Design Expertise in Product and Graphics Projects. Milton Keynes: Design Innovation Group, Open University.
Walsh, V., Roy, R., Bruce, M., and Potter, S. (1992).
Winning by Design: Technology, Product Design
and International Competitiveness. Oxford: Blackwell,
ch. 1.

design management
design management
Margaret Bruce and Liz Barnes

Design management refers to the process
entailed in the generation, integration, coordin
ation, and evaluation of corporate communica
tion strategies. Von Stamm (2003) defines it
succinctly as: ‘‘the conscious decision making
process by which information (an idea) is
transformed into an outcome, be it tangible
(product) or intangible (service).’’ Design man
agement has the responsibilities of defining, in a
visual way, the nature of the organization and
insuring that this visual expression is reinforced
throughout the organization. The physical
manifestations of a service organization, for
example, are planned to convey the nature and
quality of the organization, such as the environ
ment, company logo, and packaging. British
Airways, for instance, has a distinctive identity
which is conveyed throughout the organization
by its logo, staff uniforms, brochures, and so on.
For product companies, the functional and aes
thetic elements of the product are supported by
the presentation of the product, its p a c k
a g i n g , and a d v e r t i s i n g . For example,
Volvo communicates its attention to safety in
car design in its promotion and advertising;
Citroe¨n focuses on price and fun for a ‘‘youth’’
The main activities undertaken by design
managers are: conducting design audits; prepar
ation of design briefs; sourcing of design expert
ise from within the organization and from
external suppliers; and project management of
the design process.

Design Audits
This involves examining, periodically, the cor
porate use of design, through every aspect of
product, environment, and communication.
Oakley (1990) regards design audits as serving
much the same function as financial audits –
‘‘basically to review the return (or potential
return) being achieved on the resources
employed, to check whether the level of re
sources is adequate for the tasks involved and
to highlight the relative successes and failures.’’
Cooper and Press (1995) suggest that a design
audit covers a number of topics: firstly, environ


mental issues (such as legislation and market
trends); secondly, corporate culture (e.g., an or
ganization’s values and vision); thirdly, ‘‘tac
tical’’ management of design projects and
processes; and, finally, the physical manifest
ation of design (i.e., the offering and its commu
nication by the organization).

Design Brief
For the design function to have a good grasp
of the project, objectives, and the work entailed,
a design brief is prepared. The brief needs
to indicate the t a r g e t m a r k e t , the intended
price, and timescales and should include inputs
from the functions involved in developing
and implementing the end product, including
marketing and production. If the brief is not
fully prepared, then critical technical and other
information may be missing that can delay pro
ject completion, or the design may be developed
to a higher price than intended, e.g., more ex
pensive materials may be used by the design
function (Walsh et al., 1992).

Design Sourcing
Organizations use a range of different skills from
graphic, interior, engineering, and industrial
design. These may have to be outsourced and,
if so, design managers have to identify and liaise
with external design professionals. Choice of
external design suppliers is based on the compe
tence of the designer to accomplish the object
ives for a set fee, as well as more intangible
considerations of the design–client relationship,
such as t r u s t and loyalty.

Project Management
Regular contact between design and other func
tions, notably marketing, during the project is
critical to insure that the concepts and proto
types are meeting their requirements and that
the project is on time and to the appropriate cost
(Bruce and Morris, 1994).
It is considered that design management pro
vides benefits to a business through management
of design activities, integration of the design
function into all business processes, and inte
grating design methods and decisions into the
design vision within the company’s strategy
(Sinah, 2002).

M. 34. and additional functionality in ways which are perceived by customers as adding value.). Von Stamm.g.e. Chichester: John Wiley. M. The differentiation strategy can be focused on par The diffusion process is concerned with how product innovations (see p r o d u c t i n n o v a t i o n ) are spread or assimilated within a market or industry.. p a c k a g i n g . p. or idea) is spread by communications (imper sonal and interpersonal) to members of a social system (e. service. some products may be an overnight success (e.g. as suggested by Porter (1980). (1997).. E. R. Assembling and managing a design team. Bruce. 149. R. 2. Techno Vation. In effect. (1990). P.. S. B. Bruce and T. In M. dishwasher)..g. Winning by Design: Technology. Design Management: A Hand book of Issues and Methods. Roy. M. The mechanics of fashion. Oxford: Butterworth-Heinemann. Bruce. (1994). video recorder). Chichester: John Wiley. ch. 7. London: International Thomson. In other words. Cooper. while there may be macro economic changes that result in purchasers be coming price sensitive. and some may be very slow to diffuse (e. Roy. relative advantage with respect to ease of operations and reliability: the degree to which a new product appears superior to . ticular customers or market segment(s) (see m a r k e t s e g m e n t a t i o n ) or devised for the general market. and Morris. V.. It is a macro process and may be defined as the process by which the acceptance of an innovation (product. (2002). Design and Creativity.. Managing external design professionals in the product development. V. Oakley (ed. and Cooper. Hines (eds. A number of product characteristics influence the diffusion of innovation and the rate of adop tion by users (see a d o p t i o n p r o c e s s ).. Design Management and Marketing. These characteristics are: . 325. C. (2002). Or ganizations strive to secure a c o m p e t i t i v e a d v a n t a g e by distinguishing themselves from their competitors using such means as d e s i g n . Design in Business: Strategic Innovation Through Design.. (1980). See also competitive strategy Bibliography Porter.). Harlow: Pearson Education. it embraces everything other than being the most efficient and demands in particular knowledge based competencies such as design and research and development. market or target segment) over a period of time. Lewis dialogical acculturation model see a c c u l t u r a t i o n m o d e l s differentiation strategy Dale Littler This is the alternative generic strategy (see g e n e r i c s t r a t e g i e s ) to the c o s t l e a d e r s h i p s t r a t e g y . B. Open University. Sinah. ch. i m a g e . Walsh. Fashion Marketing. 6. M. Milton Keynes: Design Innovation Group. Product Design and International Competitiveness. i. and Potter. Bruce. Oxford: Blackwell. Potter. (2003). J. (1992). In M. ch. New York: Free Press. M. and Lewis. (1991). R. S. J. M.. Walsh. Competitive Strategy: Techniques for Analyzing Industries and Competitors. The Benefits and Costs of Investment in Design Expertise in Product and Graphics Projects. Oxford: Blackwell. M. and Bessant. Bruce. ch. The risk of pursing the differ entiation strategy is that an over emphasis on producing additional features will add costs that result in a price that some customers/ buyers find too high. 585 99. (1995).104 dialogical acculturation model Bibliography Bruce. customer service.. it is the spread of a new idea from its source of invention or cre ation to its ultimate users or adopters. R. and Press.. Managing Innovation.. diffusion of innovation see d i f f u s i o n p r o c e s s diffusion process Barbara R. Capon. Oakley. The Design Agenda: A Guide to Successful Design Management. M.

Z. so that direct mail messages (see m e s s a g e ) may be carefully targeted to create consumer a w a r e n e s s and/or to generate action. 14 19. the increasing marketing orientation of the postal services with various incentive dis counts. specifically. It is not a medium but a m a r k e t i n g technique. E. NJ: PrenticeHall. . divisibility: the degree to which a new prod uct may be tried on a limited basis – the more opportunities to try. inter alia. L. i. in particular in generating personal ized direct mail sources. fashion) are more easily dif fused. the easier it is for a consumer or user to evaluate. (1962). S. .g. complexity: the degree to which a new prod uct is difficult to comprehend and use – more complex innovations take longer to diffuse. direct mail David Yorke Direct mail is a part of d i r e c t m a r k e t i n g and.. and communicability: the degree to which results from product use and ownership are observ able and describable to others. Journal of Marketing. Computers are an indispensable tool in direct marketing. print. (1967). direct marketing Bibliography David Yorke Robertson. or data obtained from subscriptions that may be passed on to third parties (with the customer’s permission). loyalty cards (see r e w a r d / l o y a l t y c a r d s ). Evidence of the growth of direct mail is seen in the following: . and behavior.e. Insuring a rapid diffusion of new products has become particularly important given the rapid rate of technological change and the increased intensity of competition. 105 directly to the mailing address of a target cus tomer. the buyer than previous products and existing substitutes. (2004). January. the success of direct marketing depends on the acquisition and maintenance of a d a t a b a s e of customers or potential customers. i. Such specific targeting is enhanced by the use of customer information obtained from the use of. and . . and can therefore charge premium prices that enable them to re cover the often high costs of development and make an appropriate return on their investment. or complementary processes in the case of industrial innovations. The process of innovation and the diffusion of innovation. but much direct marketing either lacks personalization or is personalized with computer fill ins. Diffusion of Innovations. Its objective is to make a sale or obtain a sales lead inquiry. which uses one or more communications media (direct marketing . direct mail offers the advertiser the opportunity for high audience selectivity and targeting. Increasingly. Consumer Behavior. telephone. and Kanuk. Thus. leading to a ‘‘junk mail’’ ap pearance. Upper Saddle River. Schiffman. the ease of seeing a product’s benefits and attributes – so that products with a high degree of social visibility (e.. comprising an inter active system of marketing. L. the growth of specialized direct mail agen cies.. T. i. Indeed. is consequently shorter. It can be personalized (via individual letters).e. broadcast) for the purpose of solicit ing a direct and measurable consumer response.e. material is being sent by email. New York: Free Press. compatibility: the degree to which a poten tial customer feels that a new product is consistent with present needs. Rogers. G.. and wide ranging geographic flexibil ity. is a d v e r t i s i n g that is sent Direct marketing is sometimes confused with d i r e c t m a i l . 8th edn. . because the honey moon period during which companies have a quasi monopoly position. with experiences in the social system. generation and sale/purchase of computer based mailing lists. company held information. . values. M. databases (see d a t a b a s e ).

Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion. Kotler et al. and Wong. 22. ch. rising d i s c r e t i o n a r y i n c o m e ... for instance. Discounts are offered to encourage customers to purchase where it is thought they may not otherwise do so. subdivided according to whether or not they are ‘‘new’’ or ‘‘existing.. Armstrong. (2001) note that direct marketing has undergone a dramatic transformation in light of technological developments used to comple ment (even replace) other approaches. Saunders. ch. and Kanuk. single person or single parent households. (2004). It is generally used with reference to technological innovation.106 directional matrix The growth of direct marketing has been stimulated by socioeconomic changes (e. to accelerate sales of outdated stock (e. Consumer Behavior. to reduce a customer’s p e r c e i v e d r i s k (e. for instance. consequently. higher m a r k e t s h a r e or greater per capita consumption from. P. development and external development through mergers and acquisitions. Bibliography Kotler. to re spond to competitive developments (e. and d i v e r s i f i c a t i o n . (1965). V. The usual reasons for offering discounts include: to encourage purchase in greater quan tity than normal (discount for volume). discontinuous innovation Dale Littler This can be viewed as being at the polar extreme of a continuum with c o n t i n u o u s i n n o v a t i o n at the other extreme.g.. G.. New York: McGraw-Hill. It can be seen as involving radical changes in technologies and. It does not draw the distinction between organic. 3rd European edn. it consists of two parameters: markets and technologies. As defined by Ansoff (1965). the introduction of products based on new technology into new markets. the increasing use of credit. and developing com puter technology and communications media. Harlow: Prentice-Hall. discontinued lines). while marketers are using online marketing to target. with the aim being to increase volume sales through.g. 1994). A m a r k e t i n g perspective would suggest that discontinuous innovations require significant changes in behavior and are thus likely to have slower rates of diffusion (see d i f f u s i o n p r o c e s s .. and working women with less shopping time).. which involves extending the geo graphic reach of existing products. for example. (2001).g. an aging population. Upper Saddle River. specific cus tomer groups. new uses for the product. market development. n e w p r o d u c t d e v e l o p m e n t . Dale Littler This summarizes the major growth strategies available to organizations. J. end of season sales. directional matrix egies. websites are being employed for direct marketing. I. NJ: PrenticeHall. 8th edn.. introductory discounts for new products). it may result in the development of new demand schedules. involving the introduction of products based on new technologies into existing markets. Discounting is widely practiced in organiza tional markets where price is more often a matter of negotiation than in consumer markets (Blois. Schiffman. For example. off peak electricity tariffs). tendering). H. to . a consumer convenience orientation. 292 4. Z. Although overly simplistic and general. L. See also corporate strategy Bibliography Ansoff. i n n o v a t i o n ). It is obvious that the last strategy is the most risky option. L. to encourage purchase at ‘‘unpopular’’ times (e.g. or internal. 6.’’ The quadrants are: market penetration (existing markets and technologies). G.g. price wars. Principles of Marketing. the framework may be useful for practitioners when formulating specific development strat discount Dominic Wilson Discount is the term used to refer to any reduc tion in price offered to a customer. pp.

membership discounts). J. to drive out competition with a view to achieving a mon opoly predatory price. discourse analysis has been applied to consumers’ under standing of fashion and a d v e r t i s i n g (Elliott et al.. discourse analysis Gillian C. 2 (April). illegally. discourse and power are held to be inter 107 penetrated since discourses both gain credence according to who authorizes them and put for ward visions of the world that produce particular patterns of social power. since in speaking of something we are producing a particular picture of that object. advertisements. 1995.. and. Amongst the distinctions they draw is that between a fine grained and linguistically based analysis that focuses upon individuality and a broader analysis that looks at how key themes are presented and maintained across a range of social texts. Foucault. Mills (1997). Approaches differ also with respect to the extent to which cultural discourses are seen as deterministic or as drawn upon in more fluid ways to produce an emergent under standing. for a fuller discussion see Mills. Discourse refers. Social constructionists are therefore concerned with the ways in which humans make sense of their world by. In many cases there is a particular emphasis upon the power structures that hold in those worlds. writings. 1979. 1997) and is applied to the system of statements that can be made with re spect to an object (or idea. then. These distinctions can be seen in the application of discourse analysis to marketing topics. The studies of consumers attach differing levels of importance to the con ventional use of long standing consumer narra tives in the construction of the self. Thompson and Haytko. Discourse analysis can be applied to any form of text and a variety of techniques can be applied.g. or person).g. 93 100. Its diversity is discussed by Burr (1995).discourse analysis provide incentives for another product (e. 2001) pro vides an example of a linguistically based analy sis that explores the personal meanings forged within a particular context. mapping the world through the categories that they produce. and so on) come to constitute the objects of which they speak. concept. and to the con struction of the self in retail managers’ narratives (Hopkinson. Social constructionism holds that humans act in the world as they interpret that world to be and therefore refutes the notion of ‘‘given’’ or ‘‘nat ural’’ categories that define the world (for fuller explanations see Burr. e. draws upon the ideas privileged in that context. A distinctive perspective that arises from dis course theory is the understanding of text as social practice. Although there is considerable diversity in the techniques employed. Hopkinson Discourse analysis is a qualitative and interpret ive approach to social research that is increas ingly being applied in the field of m a r k e t i n g . The narrative based research (Hopkinson. Amongst other applications. The key concern of discourse analysts is. 1997). then. and is both productive and reproductive. in effect. to how texts (speech. Discounts in business marketing management. they aim to understand the features of the world that drive those people’s actions. 1995). Industrial Marketing Management. 1998). 1995. 2001).’’ Fairclough (1989) demonstrates a robust analytic approach to critical discourse studies. and Alvesson and Karre man (2000). In arguing for ‘‘critical discourse an alysis. Potter (1997). so that discourse analysis is a potentially useful inter pretive approach amongst critical researchers of marketing (see Elliott’s 1996 discussion of dis course analysis in marketing and Denzin’s 2001 discussion of critical marketing and consumer research). to consumers’ construction of the self on the Inter net (Gould and Lerman. . to generate an understanding of the interpret ations of the world that are produced amongst the subjects or participants of their study. For this reason. 23. By understanding the world as other people see it. The notion of dis course draws particularly upon the work of Fou cault (see. (1994). Discourse is formed therefore in a particular social context.. Bibliography Blois. discourse analysts gener ally share a view of the social world as socially constructed and regard this as being accom plished through discourse. K. We also draw upon dominant and wider understandings and ideas associated with the objects of which we speak. Weick.

G. 15 43. discretionary income. (2000). or buyers of three different brands of coffee. Gould. ‘‘Postmodern’’ versus ‘‘long-standing’’ cultural narratives in consumer behavior: An empirical study of NetGirl on line. Marketing Intelli gence and Planning. or psychographic variables. Sensemaking in Organizations. perceptions. (1997).108 discretionary income Since the analyst’s concern is with what is taken to be true. Potter. have repercussions on suppliers of capital equipment. and Barlow. 18 (2). L. V. i. S. R.. (1995). Journal of Consumer Research. measured on a range of rating scales. is likely to vary from one market segment (see m a r k e t s e g m e n t a t i o n ) to an other. for each respondent. 32 (7). or the respondent’s opinions. K. but also. Method and Practice. In the situation where there are just two groups. See also disposable income discriminant analysis Michael Greatorex Discriminant analysis is used when there are observations from a sample of a population on many variables for cases which belong to two or more known groups. the plots will be chosen so that cases will be classified by the discriminant function according to whether they are above or below the critical value. M. A. Mills. London: Routledge. Denzin. London: Sage. (1997). S. the approach has been seen as relativist and has been associated with postmod ernism (see p o s t m o d e r n m a r k e t i n g ). 1125 50.. evalu ations..g. D. 324 30. Discourse. N. Discriminant scores can be calculated for each individual in the groups and a plot of these scores. Fairclough. In theory. N. Varieties of discourse: On the study of organizations through discourse analysis. Hopkinson.e. Changes in discretionary income not only affect those organizations selling directly to house holds. Discourse analysis: Exploring action. C.). or good or bad credit risks. ultimately. 24 (1). 14 (6). two non inter secting histograms. Qualitative Research: Theory. M. will show. that part of household net income which remains after fixed commit ments such as mortgage and loan repayments have been made. Journal of Consumer Research. Burr. 644 55. If there . Overt sexuality in advertising: A discourse analysis of gender responses. (2001). 18 (5). D. (1989). Thompson. Journal of Consumer Policy. socioeconomic. Elliott. and Haytko. (1998). and the vari ables could be typical m a r k e t i n g r e s e a r c h variables. M. Bibliography Alvesson. Influence in marketing channels: A sense-making investigation. The seventh moment: Qualitative inquiry and the practices of a more radical consumer research.. An Introduction to Social Constructionism. D. In David Silverman (ed. R. London: Routledge. discretionary income David Yorke An element in the e c o n o m i c e n v i r o n m e n t . Discipline and Punish. (2001). 53 (9). Discourse analysis as a way of analyzing naturally occurring talk. which in affluent countries accounts for a signifi cant proportion of total net (disposable) income. Usually. Human Relations. Harmondsworth: Penguin. The groups may be owners and non owners of a particular consumer durable.. all providers of goods and services are competing with one another for a share of the consumer’s discretionary income. Language and Power. Benfield. It represents a challenge for all organiza tions to be able to persuade buyers and customers to spend a greater proportion of their discretion ary income than hitherto on a particular product or service. (1996). K. it is hoped. demographic. Weick. Foucault. and Karreman. indicating to which group each case belongs. function and conflict in social texts. (1995). London: Sage. e. J. J. 28 (2). and Lerman. The purpose of discriminant analysis is to use these data about individuals whose group mem bership is known to facilitate the classification of individuals whose group membership is un known to one or another of the groups. (1995). A. the coefficients of the variables being chosen to best separate the two groups. 187 218. C. a linear discriminant function of the variables is formed. London: Longman. (1979). however. J. Psychology and Marketing. Jones. (1997). Euro pean Journal of Marketing. 65ff. etc. Speaking of fashion: Consumers’ use of fashion discourses and the appropriation of countervailing cultural meanings. Elliott. 423 44. B.

distributors see r e t a i l d i s t r i b u t i o n c h a n n e l s disintermediarization Dale Littler Disintermediarization refers to the process whereby marketers bypass traditional intermedi aries. The process has been stimulated by the development of the Internet whereby the r e a c h of. (1998). In addition. producers could be extended into people’s homes. total dis posable income (household income after deduc tion of direct taxation and national insurance contributions) is not available for competition among all suppliers. and the enhanced awareness of possible price advantages and greater conveni ence of direct purchasing. However. Also used to judge the adequacy of a discriminant function are meas ures such as Wilks’ lambda and the canonical correlation coefficient. The method can be extended to more than two groups when several discriminant functions will be estimated. the discriminant function should indicate whether or not the individual is a good credit risk.g. For example. and Wichern. Applied Multivariate Statistical Analysis. large coefficients iden tify variables that are important for discrimin ating between and describing the groups and therefore worthy of further attention by manage ment. Statistical packages. there is still a significant role for intermediaries since they undertake responsibilities that enable producers to focus on activities where they can add the most value.diversification 109 is overlap. However. W. even by the discriminant function whose fitting they contributed to.. Significance tests for coefficients are avail able.. some cases will be misclassified. based on the data for an individual on the variables in a discriminant function on good and bad credit risks. there are gradations in the degree of risk involved. The discriminant function can be built up in a stepwise fashion. A classification table of ‘‘hits and misses’’ is one way of judging the usefulness of the discriminant analysis. such as retailers. R. The Internet also gave rise to changes in some people’s buying behavior. NJ: Prentice-Hall. to sell directly to the final customer/purchaser. distribution see r e t a i l d i s t r i b u t i o n c h a n n e l s Bibliography Johnson. the St a t i s t i c a l Pa c k a g e f o r t h e So c i a l Sc i e n c e s (SPSS). that have discriminant an alysis routines are essential. A.g. with the greater avail diversification Dale Littler Diversification is regarded as the option involv ing the greatest risk in Ansoff’s (1965) d i r e c t i o n a l m a t r i x . The method can be used in an analytical way. e. 4th edn. It involves the organization introducing products based on new technologies into new markets. fuel for heating and energy) are likely to reduce the amount of total disposable income available for spending/ saving. depending on whether or not the diversification is related or . for example. Englewood Cliffs. Thus. See also retail distribution channels. ability of information it provided on marketers and rival products. many traditional retail ers have established major Internet presences as a means of augmenting their traditional formats. Local taxes have to be paid and ‘‘essential’’ purchases (e. retailing disposable income David Yorke Unlike d i s c r e t i o n a r y i n c o m e . D. A satisfactory discriminant function can then use measurements on the variables for a previ ously unclassified case to predict to which of the groups the case belongs.

(1965). Related diversification involves com monalities with the firm’s existing business. vol. . Porter. diversification involves the extension into new business areas which have no relationship with the company’s existing technologies.110 diversification unrelated (also referred to as concentric diversi fication). pp. skill. M. Companies may also engage in horizontal diversification whereby the company may develop new prod ucts aimed at its existing customers but which are unrelated to its existing technologies. so that there is potential synergy between the new and the existing businesses based on a common facility. markets. In Advances in Strategic Man agement. 1985). (1988). New York: McGraw-Hill. ch. These commonalities may be either tangible or intangible (Porter. 5. Bibliography Ansoff. I. 1988). asset. (1985). New York: Free Press. CT: JAI Press. Generic strategies: Toward a comprehensive framework. H. the latter involving tacit management skills. or conglomerate. Greenwich. Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion. 6. channel. or products. or opportunity (Mintzberg. Competitive Advantage: Creating and Sustaining Superior Performance. Mintzberg. Un related. E. 1 67. H. al though this does not accord with Ansoff’s defin ition of diversification.

Thus. (2002). P. Retail EFTPOS 90: Paper holds out against plastic. The evolution of retailer. 2002). International Journal of Retail and Dis tribution Management. A. the level of economic activity will govern the possible success of all organizations. EFTPOS has created the impetus for retailers to become financial service providers. The payment web page has the same 128 bit encryp tion as banks. J. or electronic funds transfer at point of sale. Most retailers offer the ‘‘cash back’’ facility as a customer service. J. By developing financial service relationships. 2000). and Colgate.E economic environment David Yorke The economic environment is one of the elem ents in the m a r k e t i n g e n v i r o n m e n t in which an organization is operating. 2000). 34 (8). 19 (1) 10 12. 1996. At any one time. Retail Marketing. Bibliography EFTPOS Andrew Newman and Steve Greenland EFTPOS. Retailers such as supermar ket and petrol chains have played a key role in helping the debit card to become a major pay ment mechanism. (1990). Since 1995 the use of plastic payment has brought about a fundamental shift in payment methods in the UK (Worthington. 1996). Transac tions are processed in real time in the same way as an EFTPOS machine at the petrol station or supermarket. the economic environment for different countries will vary widely. A national government. the ability to forecast changes from current base levels will be a major factor in the decision to invest or not. The online version of EFTPOS enables customers to make a credit card payment securely over the Internet. retailers are able to generate closer relationships with their customers (Alexander and Colgate. (1998). Alexander. refers to debit or ‘‘plastic’’ card payment at the point of sale by direct funds transfer from the customer’s account to the retailer’s account. V. so it is ideal for settling invoices of varying amounts. and Cullen. above which debit card transactions must be checked ‘‘online’’ against the cardholder’s account (Worthington. so this method of payment is very secure (Newman and Cullen. Retailing: Environ ment and Operations. M. (2000). Maidenhead: McGraw-Hill. Retail financial services: Transaction to relationship marketing. Worthington and Edwards. M. and Colgate. is responsible for creating and maintaining a favorable macroeconomic envir onment (see m a c r o e n v i r o n m e n t ). 225 36. and direct competi tors to banks. Thus. Penn. The method first evolved in the early to mid 1980s and has become a leading payment system for goods and services. 2nd edn. banker and customer relationships: A conceptual framework. (2002). It achieves this by the use of monetary and fiscal policies aimed at manipulating the levels of in flation and employment and. the levels of d i s p o s a b l e i n c o m e and d i s c r e t i o n a r y i n c o m e among various segments of the popu lation. . after taking account of inter national factors such as capital and currency movements. International Journal of Retail and Dis tribution. London: Thomson Learning. 938 53. Euro pean Journal of Marketing. Newman. hence. N. This facility allows users to enter the amount they wish to pay. N. P. Alexander. McGoldrick. EFTPOS terminals reduce fraud through the acceptance of lower floor limits. 26 (6).

and Thompson. some of which tend to be designed for non transactional purposes. M. J. The object of this type of exchange is to simplify and streamline the trans action communication (Van Weele. 18 (5). International Journal of Bank Marketing. EDI is . P. 7 22. The benefits of this have been found in speeding up trade communications and reducing labor costs. A common factor to all these channels. (2002). and Edwards. e.112 electronic commerce Worthington. marketers. The push toward the creation of retail websites. to suppliers and retail ers in real time. for example. London: Pearson Education. (2000). Smart cards and retailers who stands to benefit? International Journal of Retail and Distribution Management. items are paid for using conventional paper based bank transfers. 24 (9). electronic commerce Andrew Newman This term has been widely used to describe various forms of electronic business interactions between two or more parties. McGoldrick. between the retailer and the wholesaler and/or manufacturer. As most communication in the 2000s use the Internet Protocol (IP) address such integration is relatively straightforward. Online grocery shopping and entertainment purchases such as books and CDs typically form the bulk of consumer purchases. 2000). (1996). Speaker. Speaker. This means that generally the protocols or dialogues that computers use to talk to one another must be the same. McGoldrick (2002) draws the distinctions between B2B and B2C and other forms of e commerce such as government to business (G2B) and consumer to business (C2B). Digital interaction thus reduces the cost and time of the necessary communica tions between producers. However. There is strong evidence to suggest that the proliferation of email for busi ness and personal communication has helped to foster the use of paperless channels for transac tions of all kinds. the increased capacity of Internet service connections and related technology has encour aged retailers to deal electronically with suppliers and manufacturers for procurement and other services. 2002). electronic data interchange (EDI) Andrew Newman and Margaret Bruce Electronic data interchange (EDI) refers to com puter to computer exchange of standard busi ness documentation in machine processable form. The prime applications of EDI have been for transactions. and so increases the chances of c u s t o m e r s a t i s f a c t i o n . for example. Changes in payments markets. present and future: A comparison between Australia and the UK. (2000). In pre 1980 EDI systems this was more difficult to achieve due to the dissimilarity of company networks. however. Email has effectively revolu tionized communication systems by replacing a vast portion of the physical mail in the past few years. or other online systems. also stems from the actions of competitors and the need to compete on a like for like basis. London: Macmillan. and Thompson. payments may or may not take place online when. whether business to consumer (B2C) or business to business (B2B). and therefore an excellent method for businesses to communicate with customers (Smith. The system can convey accumulated data on consumer tastes and their preference for various merchandise. price. 27 34. and retail ers. EDI messages are highly structured so that informa tion generated by one organization on one com puter can be read by another computer in the same or a different organization. past. but it is also virtually costless. Smith. E shock 2000. For business users. (2000).g.. and after sales requirements. is that communication takes place electronically and usually through the Internet. M. Worthington. Not only has it reduced the time in delivering the m e s s a g e . 212 21. E commerce merges suppliers. In the automotive industry. orders and invoices. V. pp. R. E commerce UK... S. Retail Marketing. suppliers. Bibliography De Kare-Silver. Such activity usually involves some form of purchasing (e x c h a n g e ). and consumers in a fully integrated and seamless operation. S. This makes for a highly effi cient online system of ordering that benefits all partners in the exchange process (De Kare Silver. and its quality. London: McGraw-Hill. M. 2000). extranet.

the emergent strategy may be realized though not as intended. A real ized strategy can emerge in response to an evolving situation. possibly as a result of changes in the environment. (1994). 15 (2). divisions. (1985). C. and adjustments made by end users Dale Littler End users are those who ultimately consume or use the product or service. Of strategies. The cost savings and. and Waters. as strategy develops. emic see e t i c e m i c d i l e m m a emergent strategy Dale Littler In analyzing the process of strategy formation. Given the uncertain ties (see u n c e r t a i n t y ) that surround organ izational decision making. increased customer focus make this type of approach highly beneficial in sectors such as fashion and food retailing. sometimes serendipit ously. Mintzberg and Waters. As Mintzberg notes: ‘‘strat egies can form as well as be formulated. 1985) between deliberate and emergent strategies. who may have different per spectives and motives. The amal gamation with other functions. manufacturers. A. (2002). alterations in the personnel. H. California Management Review. is a strategy that is not carefully pre planned. sometimes through a process of discovery involving active research. H. Lockett. (1987). it may be rare for there to be pure deliberate strategies: all strat egies are likely to involve some blend of inten tion and adaptation. 359 550. G. R. a distinction has been made (e. They may or may not be the purchasers of products. through a process of formulation followed by implementation. J. children in connection with certain household purchasing decisions). 173 204..entrepreneurial strategy used by component suppliers.g. A. and suppliers leads to a fully integrated supply chain management approach. In many cases cross functional teams take responsibility for purchas ing rather than single departments. 30 (1). Understanding distribution channels: An interorganizational study of EDI adoption. Planning and Practice. there are added benefits to be derived from the relationships that evolve as a result of the close partnerships needed to facili tate the EDI dialogues. Bibliography Mintzberg. Moreover. and sometimes through feedback from actions taken which suggests in some cases the need for adjustments to original assumptions and desired consequences. Van Weele. Bibliography Holland. those participating in the process will become acquainted with new know ledge. above all. Purchasing and Supply Chain Man agement: Analysis. The former embraces strategies that are devised and implemented as intended. 113 those involved in the implementation in order to take account of local conditions not anticipated by the planners of the strategy.g.. Strategic Management Journal. See also users entrepreneurial strategy Dale Littler Entrepreneurial strategy is one of Mintzberg’s (1973) three s t r a t e g i c s t y l e s (see . In both organiza tional and consumer markets end users can have a significant influence on the purchasing deci sion (e.’’ In the case of a planned strategy.. and dealers to facilitate the trading processes involved in buying and selling components and cars. Five Ps for strategy. However. and Blackman. Planning for electronic interchange. Fall. deliberate and emergent. or in an unexpected form. Emer gent strategy. Strategic Management Journal.. it is realized in the absence of intentions. London: Thomson Learning. L. 13. Williams. I. Mintzberg. Journal of Business Logistics. or it can be brought about deliberately. as termed by Mintzberg (1987). (1992).

Littler and Leverick (1994) identified in their study of en trants into mobile communications markets. but not exclusively. been made of many earlier centuries also. government statistics. culture and behavior. Obviously. Bibliography Littler. H. the volatility of the environment (where analysis can be out of date even before it is finished). The level of effort and resources which any organization will invest in environmental analy sis will depend on many factors. the competitiveness of markets (why should organizations invest in analysis when there is little threat of losing customers?). B. Kotler (2003) has suggested that it may be helpful to group these variables into two interdependent but distinguishable categories: the m i c r o e n v i r o n m e n t and the m a c r o e n v i r o n m e n t . commissioned market research. in house surveys). as.. Indeed. the p o l i t i c a l e n v i r o n m e n t . census data.g. and it may therefore be appropriate to add a ‘‘competitive environment’’ to Kotler’s six categories. Englewood Cliffs. pub lished market analyses). Per haps the most notable limitation of this approach to environmental analysis is that it seems to give little priority to competitors per se. Analysis of the macro environment – sometimes referred to as the external marketing audit (see e x t e r n a l a u d i t ) – can usefully be considered under six headings: the d e m o g r a p h i c e n v i r o n m e n t .. Mintzberg. Strategy Safari. is one of the most important and difficult aspects of management and has traditionally been regarded as a marketing responsibility (see m a r k e t i n g a u d i t ).114 environmental analysis a d a p t i v e s t r a t e g y . 2 (Winter). NJ: PrenticeHall. and Leverick. Strategy making in three modes. important issues of ecology or c o n s u m e r i s m might seem less sig nificant when split up among six headings. D. This observation has. the number of variables in fluencing this marketing environment are many. culture a n d s o c i e t a l b e h a v i o r ). the n a t u r a l e n v i r o n m e n t . but it does seem particularly true of the late twentieth and early twenty first centuries. 44 53. (1998). (1998) have now proposed ten different schools relating to the formation of strategy. California Management Review. There can also be a danger of compartmentalization using this approach – for example. so environmental analysis attempts to identify the most influential factors and trends affecting the organization and its offerings. the e c o n o m i c e n v i r o n m e n t . (1973). and Lampel. Saunders (ed.. J. A. in the context of other demands and rewards on their time. the t e c h n o l o g i c a l e n v i r o n m e n t . p l a n n i n g s t y l e ).g. be more applicable than others in specific markets. some aspects will. of course. together comprising the marketing environment. Mintz berg suggests that it is likely to occur most in organizations that are under the personal control of one individual and are ‘‘located in a protected niche in the environment. Under standing this environment. (1994). are likely to have a degree of entrepreneurial behavior. 16. of course.. Mintzberg. F. Market planning in new technology sectors. and especially. It is often suggested that the environment is becoming increasingly complex and fast moving.’’ Such risk taking behavior is not restricted to small organizations. environmental analysis Dominic Wilson Organizations exist within a complex and dy namic environment which can be described as the m a r k e t i n g e n v i r o n m e n t . The Marketing Initiative. London: Prentice-Hall. Whereas all six of these aspects of the environment will be relevant to all markets. the cost of p r i m a r y d a t a (e. if only because the uncertainties (see u n c e r t a i n t y ) make calculation of the costs and bene fits extremely problematic. for example. In J. Mintzberg et al. those founded on advances in technology.). many decisions to enter new markets. H. The features of the entrepreneurial strategic style are likely to be bold decision making by visionary individuals who are risk takers. and this emphasizes the importance of environmental analysis while also highlighting the problems of analyzing such . and what priority managers give to environmental analysis. and its ensuing threats and opportunities. Ahlstrand. and the cultural environment (see c u l ture. including: the availability and r e l i a b i l i t y of secondary data (e.

J. via highly efficient . 11th edn. and openness to i n n o v a t i o n . in order to understand the marketing environment surrounding an organization. London: Heinemann. D. Journal of Marketing. Stra tegic Management Journal. Baker (ed. Sanderson. 57 (March/April). P. G. 477 95. European Journal of Marketing. 52 (April). new market entries) generating special focused scans as necessary. H. 113 (February). However. S. usually with the intention of identifying trends and developments in the en vironment that may require marketing strategies (see m a r k e t i n g s t r a t e g y ) or tactics to be adjusted.. (1995).). M. These problems have encour aged the development of different analytical techniques. Kotler. (1988). On closer examination. Strategic planning and environmental analysis. In M. Bibliography Day. these systems can only scan those aspects of the environment at which they are ‘‘directed’’ (through programming) by the systems designers and managers involved. ch. 139 92.EPOS volatile dynamics. S. R. Designing a business scanning system. 66 (6). G. Calori. Companion Encyclopedia of Marketing. and Turoff. 22. vola tility. of course. Multiple scenario development: Its conceptual and behavioral foundation. 1995) is essential. Englewood Cliffs. NJ: Prentice-Hall. Marketing Management: Analysis. 119 25. however. and unexpected developments (e. with some en vironmental aspects scanned continually (e. Porter. there are now many commercially available m a r k e t i n g i n f o r m a t i o n s y s t e m s (MkIS) and executive information systems (EIS) that claim to offer environmental scanning services. 14. Plan ning. there is no substitute for the human characteristics of alertness. 22. Baker (ed. 69 82. P. In M. which are essential in turning environmental ‘‘scanning’’ into environmental ‘‘understanding. 3rd edn. 214 27. 1 20. Management has to make decisions on what to scan and the processes to be used for undertaking the scanning. Schoemaker. environmental scanning 115 growing volume of data concerning environmen tal developments. technological developments). curi osity. For example. delphi methods (Linstone and Turoff. (1995). R. Assessing advantage: A framework for diagnosing competitive superiority. in terms of both scanning and analysis and manipulation. pp. M. P. 1995). Reading. 193 213. A. H.g. and Luffman. The complexity. The Delphi Method: Techniques and Application.. (1979).’’ Bibliography Dominic Wilson Environmental scanning is the process of moni toring and analyzing the m a r k e t i n g e n v i r o n m e n t . Brownlie. To insure that the appropriate information is suit ably integrated in timely analyses designed to inform m a r k e t i n g p l a n n i n g processes. (1989). D. The Marketing Book. a structured and systematic approach to this task (e. such as scenario development (see s c e n a r i o b u i l d i n g ) (Schoemaker. Brownlie. M. J. even with the most sophisticated scanning systems provid ing a stream of information. B. and so they risk perpetuating and legitimizing the very perceptual prejudices that they are meant to correct. What the hell is market oriented. The science of complexity: An alternative perspective for strategic change processes. and potential strategic significance of en vironmental developments are becoming more apparent to many organizations and there is in creasing attention to using information and com munication technologies to cope with the rapidly Brownlie. (1988).. E. concerning goods sold. d e m a n d ). Computer systems do. Stacey.. Shapiro. (2003). 18. 1975). 16 (6). (1988). R. Long Range Planning. (1993). and even the use of chaos theory (Stacey.g. and Wensley. 137 45. provide a valuable aid to coping with the sheer diversity and volume of environmental data. (1975). EPOS Andrew Newman and Steve Greenland EPOS or electronic point of sale systems record data. D. London: Routledge.g. Linstone. 1993). Harvard Business Review.). Strategic Management Journal. J. Environmental scanning. MA: Addison-Wesley. Implementation and Control. (1994).g. How competitive forces shape strategy. Harvard Business Review. Environmental analysis. others regularly (e. A.

However. barcode scanning technology in supermarket checkouts and the subsequent introduction of customer loyalty cards (see r e w a r d / l o y a l t y c a r d s ) has meant that re tailers have had the IT facilities to construct and analyze huge amounts of data. different response styles (extremity scoring and acquies cence bias). Hence. McGoldrick. equivalence Rudolph Sinkovics With international research. 1989). The role of supplier/manufacturer and retailer has thus altered and embraces the development of a much closer relationship (see e l e c t r o n i c d a t a i n t e r c h a n g e ). their scores can be com pared.116 equivalence electronic scanning equipment reading product barcodes at the retailer checkout. Englewood Cliffs. J. Rosenbloom. Maidenhead: McGraw-Hill. Retail Operations Man agement. E. Retail Marketing. They are confronted with prolifer ating competition and. In dealing with international markets (see i n t e r n a t i o n a l m a r k e t i n g ). Bibliography Harris. (1991). a lack of research infrastructure may be present. Su p p l i e r s and retailers have the benefit of very disparate perspectives and knowledge regarding the consumer. poor sampling of all relevant behaviors. Van de Vijver and Poortinga (1982) identify three types of biases and common causes. This has made it possible to improve the efficiency of their prod uct replenishment systems. This has naturally evolved into promotional offer and mailshots tied precisely to customer buying preferences. it must be insured that the data that are collected and subsequently subjected to rigorous cross national analysis have the same meaning or interpretation. thus helping to manage waste and stock outs in the food and clothing sectors. firms encounter markets that re quire a set of substantially different factors to be considered. and Walters. This is where the term ‘‘equivalence’’ or data comparability comes into play. and . Method bias may arise due to differential social desirability. Retailers have a broad under standing of their own customers. equivalence refers to a situ ation where virtually no bias. Their intro duction has radically improved distribution and merchandise management in the retail sector by providing detailed and accessible information concerning product movement through stores and purchasing behavior. Chicago: Dryden Press. whilst manu facturers enjoy specialist knowledge of their product groups across the full range of con sumers. whereas manufacturers/suppliers tend to be viewed as guardians of consumer needs and rights. In addition to this. Many ‘‘tie ins’’ have emerged such as discount c o u p o n s offering reductions in item specific areas. marketers encoun ter special problems and conditions which make their tasks inherently more sophisticated than in a domestic research environment. exists (Poortinga. This is a departure from the traditional role of retailers as mere distributors of products. unfamiliarity with the stimulus. dramatically reducing the paperwork associated with inventory control. and conform to the same level of accuracy. especially in developing countries. NJ: Prentice-Hall. The combining of such knowledge through cross functional relationships and reci procity creates a more synergistic arrangement. precision of measurement. Construct bias may arise from an incomplete overlap of defin itions of the constructs across cultures. Equivalence refers to the comparability of data at the measurement level. With this type of refinement in data gathering two basic strategies emerged: new ways of understanding and dealing with consumer prod uct categories. P. despite these idiosyncrasies in the international market research environ ment. and r e l i a b i l i t y . D. which might challenge the v a l i d i t y of cross cultural com parisons. a new type of retail intelli gence has emerged that draws on ‘‘real time’’ information about customer preferences. or incomplete coverage of the construct. (2002). B. Marketing Channels. and to analyze what products customers are placing in their trolleys and baskets. (1992). If cross national or cross cultural data that have been collected from various international market contexts are considered equivalent. and the sharing of research find ings to best serve consumers through these categories. To this end.

Conceptually (depicted in the lower section of the figure). The importance of generating data that are comparable from one country to another sug gests that equivalence needs to be carefully monitored at all stages in the research process (Craig and Douglas. and Schlegelmilch (1999).. Sinkovics. 1969). or differ ences in the appropriateness of the item content. they may not hold the same role or function in all countries studied (Berry. Finally. At the problem definition stage. data collection. which results from poor translation. A discussion of the various aspects of equivalence is provided by Salzberger. Salzberger et al. they identify item bias. data preparation. the first issue to consider is that concepts. they separate the cross cultural research process into four stages. or behaviors studied may not necessarily be func tionally equivalent. of Research Administration Timing Interaction Equivalence of Research Topics Functional Equivalence 117 Conceptual Equivalence Equivalence in Cross-Cultural Research Figure 1 Equivalence in cross-cultural research (Salzberger et al.e. The example of bicycles given by Craig and Douglas (2000) illustrates that while bicycles are predominantly used in the US for recreation. 1999) Category Equivalence . problem definition. that is. (1999) address the issue of equivalence from a conceptual and empirical perspective. in the Netherlands or China they pro vide a basic mode of transportation. i. the equiva lence of research topics represents the minimum requirement for cross cultural research. 2000). who illustrate their arguments graphic ally (see figure 1). In each stage. Conceptual equivalence is concerned with the use of theoretical concepts and their applicability Measurement Equivalence Configural Invariance Basic Factor Patterns Correspond Testing for and Establishing Measurement Equivalence Metric Invariance Factor Loadings Correspond Scalar Invariance Relationships of Latent and Manifest Variables Correspond Equivalence of Data in Cross-Cultural Research Data Analysis Comparability of Data Equivalence of Data Handling Response Translation Response Categories Data Preparation Data Collection Problem Definition Equivalence of Research Methods Data Collection Stimuli Equivalence of Research Units Definition Selection Equiv. objects. In examining equivalence of research topics. various equivalence issues have to be dealt with concep tually and resolved for successful implementa tion of cross cultural comparisons.equivalence differences in the physical conditions of admin istration and tester/interviewer effects.. 2002). and data analysis (see also Churchill and Iacobucci. inadequate formulation.

com/ger2002/download/index.-B. J. Steenkamp. for example. is likely to be different for Euro pean consumers from the definition in countries such as Korea. (1969). H. in some African countries. 78 90. For in stance. 25 (1). for example. Taylor Nelson Sofres (2003). D. www. and Iacobucci. 1999).118 ethical issues in cross cultural research. On cross-cultural comparability. Diagnosing measurement equivalence in cross-national research. whereas in Italy and southern European countries it is primarily enjoyed as a social drink or a reinvigorating drink after meals. (1982).’’ for example. Mason. varies significantly from one culture to another (Craig and Douglas. Steenkamp and Baum gartner. the reliability of different s a m p l i n g and survey administration procedures may vary from one country to another. R. Chichester: John Wiley. E. J. Vietnam. See also construct equivalence Bibliography Berry. fruit juices. Journal of International Business Studies. what is con sidered a soft drink. (1989). G. 2003). H. Only if the conceptual issues have been properly con sidered can data be considered equivalent and therefore be meaningfully compared. Churchill. 1998. Y. Mullen. International Marketing Research. (1998). and Douglas. that the data do not justify comparability. where Internet penetration rates are lower (Taylor Nelson Sofres. ethical issues see m a r k e t i n g e t h i c s etic see e t i c e m i c d i l e m m a . At the stage of data preparation. the equivalence of data can be further substantiated by statistical tests (depicted in the upper section of figure 1). S. (2000). namely. While in many western countries email or web based surveys are demonstrating reasonable response rates among corporate managers.. B. 737 56. Journal of Cross Cultural Psychology. International Journal of Psychology. Marketing Research: Methodological Foundations. 1999). This is unfortunate. F. Data equivalence in cross-cultural research: A comparison of classical test theory and latent trait theory-based approaches. 387 408. iced tea. (1995). 7 (2). International Journal of Psychology. the next step is to deal with equivalence aspects of data collection. and Baumgartner. and Schlegelmilch. such sam pling frames cannot be properly applied. This implies that responses are translated in an equivalent manner as well as response categories. P. Craig. In the US. Salzberger. (2002). as non equivalence should in itself be a highly valued research result with far reaching consequences for subsequent stud ies (Salzberger et al. 1995. 573 96. M. Journal of Consumer Research. Australasian Marketing Jour nal.tnsofres. Salzberger et al. coffee is con sumed with a variety of meals and to this end is similar to a soft drink. Equivalence of cross-cultural data: An overview of basic issues. R. The ul timate goal of quantitative cross cultural re search lies in the equivalence of data. (1999). mineral waters. The possible outcome of such analyses. Yet another type of equivalence to be considered at the prob lem definition stage relates to the category in which objects or other stimuli are placed. S. 2nd edn. B. H. Assessing measurement invariance in cross-national consumer research. R. Sinkovics. 2000). Y. 119 28. or China. Once the equivalence of research topics has been considered. 24. J. Poortinga.. The definition of ‘‘family values.. 4 (2). Next to conceptual considerations. might cause a reluctance among researchers to actively engage in rigorous testing of data equivalence. 26 (3).cfm (November 23). A. W. OH: South-Western. Many concepts are culture bound (see c u l t u r e ) and may there fore not be appropriate for research in other countries. Crosscultural generalization and universality. Van de Vijver. and powdered and liquid fruit concentrates. and Poortinga. T. 23 38. 13. care has to be taken that data are equally handled. R.. M. C. Interactive Global Ecom merce Report 2002. Various stages of invariance testing can be undertaken by means of structural equa tions modeling (see s t r u c t u r a l e q u a t i o n m o d e l s ) or latent trait theory based ap proaches (Mullen. In the beverage market. as well as forms of soft drinks such as canned or bottled sodas.

Palo Alto. Malpass. 355 78. and Davidson. 1 13. and Davidson. This problem is called the etic emic dilemma (Berry. J. H. 1985). This approach is criticized for being western centric as the re searcher. Galton’s problem. 15 (1). R.. Triandis. raises r e l i a b i l i t y and v a l i d i t y issues (Tri andis. Instead etic values are amended until they resemble emic values applicable to the culture under investigation. R. R. E. R. C. in correctly believes western cultural values are universally applicable. using only concepts employed within that culture (Davidson et al. C. Malpass.g. M. Triandis.. Malpass. J. See also construct equivalence. C. 119 28. For example. Journal of Inter national Business Studies. i. and Davidson (1971. The emic approach meas ures behavior within a particular culture. and Peterson. The imposed etic approach uses emic measures that are assumed to be etic. A. pp. typically from the western world. 11 (1). Dimensions of cultural variation as parameters of organizational theories. E.. L. 24. Berry (1969) argues that cultural observations should be made via an external source using either an emic or etic approach. H. A.. Empirical research in international marketing. J. G. Triandis. 1976). 1973) proposed two alternative methods for ad dressing the etic emic dilemma: imposed and derived etic. (1982). 40 (11). for example. Triandis. by im posing these etic values onto the research tool. a derived etic has been achieved. CA: Stanford University Press. International Journal of Psychology. Sometimes known as the . Davidson. de scribing how a cultural phenomenon can be assessed.evoked set etic-emic dilemma Andrew Lindridge The terms etic and emic are widely used meth odological themes in cross cultural research. pp. a belief in celebrating good fortune is a universal human behavior. H.). If this process is conducted correctly and the new emic values are relatively similar to the original etic values. 1969). Morales. 4 (2). A. The researcher.e. products and brands) that are considered by customers during the problem solving process. A. R. How the researcher measures differing cultural behaviors ultimately has implications for the nature of the research gathered. The decentralization of identity: Toward a revised concept of personal and social order. matched sampling Bibliography Albaum. Samp son. Berry. Jaccard. (1985). 1203 11. Annual Review of Psychology. Stanford. For example. and Diaz-Guerrero. (1969). 1984. Cross-cultural psychology.. The biological relationship between a parent and his/her offspring is a universal etic value but the nurturing relationship in these cultures differs respectively (emic value). Siegel (ed. Sampson.. (1984). then cross cultural behavioral com parisons can be made.. International Journal of Management and Organization. Triandis. W. 1982. An emic approach may prevent cross cultural research because its insular nature inhibits comparisons.. 12 (4). (1973). The etic approach ob serves behavior by imposing a set of universal values onto that c u l t u r e . Both these ap proaches are problematic. 139 69.. a cross cultural study on the family’s influence on the consumer decision making process may investigate differences in parental roles be tween Asian Indian and North American white 119 cultures. 1 84. a researcher may measure parent–child relation ships in the consumer decision making process with the statement: ‘‘Parents’ wishes should always take precedence in choosing a product. In B.. (1976). Psychology and culture. American Psychologist. This cultural value can therefore be measured cross culturally through a derived etic. H. (1971). 161 73. Cross-cultural model testing: Toward a solution of the etic-emic dilemma. evoked set Emma Banister The evoked set refers to the number of alter natives (e.. C. On cross-cultural comparability. CA: Annual Reviews. The derived etic approach accepts that the dilemma cannot be resolved. Biennial Review of Anthropology. International Journal of Psychology. which may not measure cultural differences. An etic ap proach uses generalizations to describe observed behavior differences.’’ The statement measures a value that both coun tries could relate to but which only Indians would be expected to agree with. Albaum and Peterson.

exchange Fiona Leverick While it is often seen as the central concept underpinning m a r k e t i n g . March. including: learning. exhibitions David Yorke Exhibitions or trade shows are an element in the marketing c o m m u n i c a t i o n s m i x . but only through organizations actively seeking to capitalize on experience curve effects by. It is suggested (Hedley. The experience curve underpins the BCG methodology for business p o r t f o l i o a n a l y s i s (see b c g m a t r i x ). for example. Bibliography Bonoma. 1976) that unit costs decline by 20 to 30 percent for each doubling of cumulative production. and Wernerfelt. It implies an em phasis on lowering costs in order to reduce prices to secure higher m a r k e t s h a r e (since this could be regarded as a measure of greater cumu lative experience) in order to be abreast. observed for example in the US aircraft industry in the 1930s. Wider definitions of the scope of exchange might not see payment as a necessary condition. by which workers become more efficient with the number of times they repeat a task (leading to the notion of the learning curve). identify pro spective customers. product redesign to lower costs of production. V. Get more out of your trade shows. Other measures such as ‘‘orders placed’’ may existing demand see d e m a n d experience curve Dale Littler The experience curve suggests that as a firm accumulates ‘‘experience. It is a composite of several factors. 1990). Harvard Business Review. and the general use of technological advances. Bibliography See also marketing communications Hauser. 61. 32 9. R. (1975). economies of scale. 39. be implemented after the exhibition or trade show. Journal of Marketing. investing in labor substituting tech nologies. At the simplest level. An evaluation cost model of consideration sets. B. The debate is paralleled by that on the nature and scope of marketing itself and is well summarized in Bagozzi (1975). there is some debate over exactly what constitutes exchange. and are integral to building relationships (see r e l a t i o n s h i p m a r k e t i n g ) with existing customers. R. Their success is often evaluated in terms of ‘‘number of inquiries received’’ at the event.’’ its real costs will de cline at a predictable rate. T. 4 (October). or indeed might not restrict the scope of ex change to two parties or to products and ser vices. Companies may even lower prices to reflect costs yet to be achieved on the experience curve in . (1990). a downward sloping experience curve is produced. Bibliography Bagozzi. and may be a reflection of other communi cation activities. if not ahead. 75 83.120 exchange consideration set. 393 408. By plotting unit costs against cumula tive production. the substitution of more efficient factors of production. (1983). Journal of Consumer Research. P. this set tends to be small rela tive to the total number of options that are avail able (Hauser and Wernerfelt. Marketing as exchange. They are used primarily for o r g a n i z a t i o n a l m a r k e t i n g and are usually industry specific. J. exchange might be seen as the action of voluntarily transferring ownership of a p r o d u c t or service to another in return for another object deemed to be equivalent in value. They are designed to promote supplier organiza tions and their products/services. of competitors on the experience curve.

They allow the researcher to control for specific extraneous variables and an efficient design will allow several effects to be measured using as small a number of observations as pos sible. A. this design too suffers from a lack of control of intervening variables. Bibliography Aaker. only a possible causal rela tionship inferred. Causation cannot be inferred unless there is evidence that (1) the change in the independent variable(s) occurs before or simultaneously with the change in the depend ent variable(s). There are many types of experimental design. involves changing the independent variable (the treat ment) and following this with measurement of the dependent variable. Porter. 135 45. The need to rule out other causal factors in order to infer that the changes in the experimen tal variables cause the changes in the dependent variables is the reason behind the control of other possible causal factors. (5) use of specific experimental designs that control extraneous variables. (2) the effects of other extraneous variables are measured or controlled. The ‘‘before after’’ design. which takes measurements of the dependent variable both before and after the treatment. Control is obtained by devices such as: (1) use of a control group that receives no treatment. a firm’s market share dominance. can be under mined by superior innovative technology. 2 11. The ‘‘before after with control group’’ design (with cases assigned to groups at random) can help to overcome the problem of intervening variables in that changes to many intervening variables will affect both groups. For instance. Long Range Planning. (3) matching. 177 9. D. and therefore its alleged greater experience. and (3) there is a strong association between the changes in independent and dependent variables in the way predicted by hypotheses. (4) use of a laboratory where conditions are con trollable. A fundamental approach to strategy development. New entrants may therefore be able to secure lower costs and thus offer lower prices than industry incumbents. (2) randomization. where test units are matched on background variables before being assigned to groups. even when these conditions are met. 6th edn. Harvard Business Review. Obvious weaknesses in clude the lack of a benchmark for comparison purposes and failure to control for the effect of extraneous variables. experimentation Michael Greatorex Experimentation is a type of primary m a r k e t i n g r e s e a r c h (see p r i m a r y r e s e a r c h ) in which the experimenter systematically ma nipulates the values of one or more variables (the independent variables). Statistical designs permit the effect of changes to more than one independent variable to be measured. However. the scientific process is such that.experimentation order to increase market share to a level when such costs can be obtained. M. (2001). pp. Strategic Market Management. A randomized block design is useful when there is one major – or obvious – extraneous variable in addition to the dependent variable . However. 9 (6). the ‘‘after only’’ design. E. The simplest. does allow effect of the treatment to be measured by the difference between the before and after measurement. and (6) meas uring and accounting for the effect of extraneous variables using statistical techniques such as multiple regression (see r e g r e s s i o n a n d c o r r e l a t i o n ) or analysis of covariance. latest ver sions of the technology. and so the effect of the treatment can be measured when the before after differences for the treatment group and the control group are compared. causation may not ne 121 cessarily be proven. New York: John Wiley. while later entrants to an industry can purchase plant and equipment that embody accumulated ex perience in the form of. (1976). the stra tegic implications of the experience curve can be questioned (see Porter. 57. 1979). Experimentation is often used to infer causal relationships. where test units are assigned to different experimental and control groups at random. price may not be a major determinant of market share in some markets (see n o n p r i c e f a c t o r s ). However. for example. (1979). B. Moreover. How competitive forces shape strategy. Hedley. while controlling the values of other variables. to measure the effect of the changes in the independent vari ables on one or more other variables (the de pendent variables).

and Hawkins. 5th edn. D. New York: John Wiley. Tull. then such a know ledge based system is an expert system. or to provide a backup decision support system perhaps to facilitate or check the stages in a decision making process. and gen eric marketing uses. In other words. Kumar. there is a lack of con trol. 7. 12. Copy testing of television (or press) commercials is an example of experimentation often carried out in the laboratory. an ‘‘expert’s’’ knowledge can be decentralized and made more widely available. Bibliography Aaker. field experiments in actual market conditions may be necessary. Examples of expert systems used in m a r k e t i n g include ADCAD (used for making a d v e r t i s i n g decisions) and SHA NEX (a system for understanding changes in product m a r k e t s h a r e ) (Duan and Burrell. More ‘‘radical’’ potential uses. Experiments can take place in the field or in the laboratory. (1993). D. However. The advantage of field experi ments is the high degree of realism that can be generated. Expert systems technology incorporates some ‘‘expertise. an expert system is a computer program that uses expert knowledge to solve problems in a specific domain. ch. New York: Macmillan. 1997). A factorial design is used to measure the effects of two or more independent variables. D. thus allowing the experimenter to control for two extraneous variables. especially over intervening variables such as the weather. Thus.. The units being tested are assigned to groups or blocks defined by the extraneous variable. G. A particular value of factorial designs is that they allow interaction effects to be measured and investigated. such as . Laboratory experiments allow the re searcher more control over not only the possible extraneous variables. V. Expert systems are advisory systems and can provide advice directly to the consumer.’’ some knowledge in a program to enable a relatively inexperienced individual to make accurate deci sions. Field research is harder to conceal from competitors. When knowledge and inference procedures are mod eled after human experts. ch. who have an opportunity of early discovery of possible new developments. the generalizability of the results of laboratory ex periments to the real world is reduced. A Greco Latin square allows the experimenter to control for a third non interacting extraneous variable. the creation of cus tomer profiles for d a t a b a s e marketing and staff training. for t e s t m a r k e t i n g of new products or for measuring the effects of a d v e r t i s i n g .. What is worse is that the researcher may not be aware of changes to these variables. but also the measurement of the dependent variables and the changes to the independent variables.122 expert opinion and treatment variable. and Day. so gen erating a new p r o d u c t . including – where relevant – multiple range tests. A Latin square design is similar to a randomized block design except that it enables the experimenter to specify blocks using two non interacting exter nal variables. because the experiment is con ducted in an artificial environment. S. A. competitors. the experiment is carried out on the test units and the results analyzed to see if the treatment has an effect and to see if the effect is different in the various blocks. Marketing Re search: Measurement and Method. I. Data obtained from such experimental designs can be analyzed using analysis of vari ance (ANOVA) methods. How ever.g. S. flight scheduling in the travel industry. (1995). e. It is easier to use elec tronic/mechanical devices to measure depend ent variables in the laboratory and the changes to the independent variables can be speeded up to reduce the time needed to conduct the experi ment.. Marketing Research. 6th edn. and the economy at large. Main applications in clude fire risk underwriting in financial services. Field research often turns out to be time consuming and costly. Unfortunately. expert opinion see i n t e r p e r s o n a l c o m m u n i c a t i o n s expert systems Margaret Bruce and Liz Barnes A computer program that uses knowledge and inferencing to solve problems can be regarded as a knowledge based system.

the management of marketing functions pertaining to firms’ over all international position. The characterization of exporting as ‘‘selling in foreign markets’’ is only of limited value. as one of the minimal stages of firms’ involvements with foreign markets. inter national marketing can be understood as a busi ness function quite independent of exporting. Expert systems. 12 (2). and the degree and complexity of their involvements in foreign markets. and Rita. export using an agent. retrenchment . Y. The 1970s and 1980s pro duced a number of models in Europe and the US. either for conceptual purposes or in terms of operational practices. posited stages of internationalization of the firm through the in creasing extension of its exporting activities and their sophistication. as exemplified in table 1. Moutinho (eds. Exporting may be seen. it could be argued that. P. which attracted con siderable scholarly attention. unsolicited foreign orders . were at one time small or at least substantially smaller inter national players. economies of scale . excess capacity . Exporting can then be seen to be an element of the growth path or learning curve of international business operations. the second with the stages of internationalization. implying that exporting is somewhat hit and miss or unfocused. whereas exporting entails some elements of international marketing. P. Moutinho. unique product or competence . small or shrinking home market . stimulation/incentives from government. risk diversification . There were two dimensions of interest. Bibliography Duan. With respect to the first dimension. and proactive and reactive factors. However. and Burrell. In the 1970s and 1980s a substantial number of academic studies examined exporting firms. The first was concerned with the motives that stimulated non exporters to become exporters. on the one hand. 149 62. Table 1 123 The point not to be overlooked is that a ma jority of all international firms. Witt and L. L. marketing competence Reactive factors . export via a sales subsidiary. pp. (1997). Some issues in developing expert marketing systems. management decision . In international marketing. forms or degrees of dependence on foreign business. no matter how globally known and dominant today. may come into everyday use at some future stage. Other models have at tempted to demonstrate a ‘‘natural’’ progression from passive or occasional exporting to a stage of making no distinction between home and foreign Motives for non exporters to become exporters Proactive factors Internal stimuli External stimuli . chambers of commerce . identified foreign business opportunities . with the center of interest being how they became exporters. exporting Nigel Holden It is not easy to make a clear cut distinction between exporting and i n t e r n a t i o n a l m a r k e t i n g . The second dimension. Journal of Business and Industrial Marketing. The Swedish scholars Johanson and Vahlne (1977) proposed a four stage model. the emphasis is on: firms’ strategy development.). Hemel Hempstead: Prentice-Hall. (1994). Tourism Marketing and Management Handbook. 2nd edn. the motives would be classified in terms of internal and ex ternal impulses. on the other. according to which firms: export sporadically. and manufacture in a foreign subsidiary. In S.exporting self service holiday booking systems. based on industry samples. in other words. perceived profitability . 554 8. therefore.

be mistaken to assume that the export manager is perforce less adroit than the international marketing manager. is not to support the foreign sales effort through undertaking market studies or assisting with export development plans. etc. The selling can be completely direct in the sense that. Evidence suggests that forecasts of demand are based on personal rela tionships (see r e l a t i o n s h i p m a r k e t i n g ) with customers that are particularly close. J. and opportunities for. it should be emphasized that their prime purpose. With respect to export departments. exporting is a form of foreign market entry (see i n t e r n a t i o n a l market entry and development strat e g i e s ). however.124 external audit markets. business approaches. Such activity can include: the issuing and processing of invoices. 23 32. the arranging of payments inward and outward in foreign currencies. even if the firm makes use of the services of an export house or a locally appointed agent or sets up an export department. but to process the paperwork associated with the physical transfer of products into foreign markets. See also SWOT analysis . In other words. in Europe. studies of internationalization have led to exten sive investigations of firms’ international net working (see n e t w o r k ) behavior. In relative terms. Bibliography Johanson.-E. The problem with these preoccupations with export motivations and stages of international ization is that they deflect attention from exporting as an everyday business activity. legal. gener ally. This has developed. with some justification. one of their main tasks is to forecast d e m a n d in given for eign markets and to prepare the company ac cordingly to meet it. and it consists of collecting and analyzing information on the different aspects (economic. It is in the exporters’ task that we find a clear distinc tion between exporting and international marketing. selling industrial refrigerators to Saudi Arabia may be equally demanding as de veloping a m a r k e t i n g s t r a t e g y for the same products in China. The export manager is unlikely to engage in the more sophisticated and expensive forms of i n t e r n a t i o n a l m a r k e t i n g r e s e a r c h . J. exporting is selling into foreign markets with a permanent and (more or less) exclusive representation by a stock holding market intermediary such as a distributor. 81 (Spring/Summer). As for the job of export managers. First of all. in the US. social. the prepar ation of company brochures in foreign lan guages. The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. and Vahlne. find them ‘‘too logical’’ and therefore not consistent with actual experience. to a keen interest in the managerial influences. the crucial differ ence residing in the scale of investment that the firm is willing to commit to foreign markets. external audit David Yorke This is one part of a m a r k e t i n g a u d i t (the other being i n t e r n a l a u d i t ). It would. with a view to identifying the threats to. The point to emphasize is that export managers represent different approaches to business de velopment in foreign markets. the direct investment in the foreign market is small. culture sensitive.) of the environment (see m a r k e t i n g e n v i r o n m e n t ) within which the organization is operating. on export development. But these characterizations have been criticized by subsequent scholars who. which seek to create coherent and systematic method ologies for identifying foreign customers and developing specific. tech nological. the essential characteristic of which is that it involves direct selling to foreign custom ers. (1977). Journal of International Business Studies. an organization. political. and the supervision of transportation arrangements taking account of special require ments concerning customs procedures and goods certification in the target market. including compe tencies.

6th edn. Factor analysis is empirical in that the computations are carried out on the data set. The number of factors and factor levels thus determines the number of treatment cells since all levels of each factor are combined in the design (e. low.g. D.. One example has 17 vari ables concerned with the usefulness of 17 risk relievers explained by three factors identified as clarifying. factor scores for each case are computed for further use. is concerned with the interrelationships within a set of variables and with reducing the variables required to represent a set of observations. Partici pants under each different treatment condition respond to identical measures of the dependent variable. (1993). a. The procedure involves the construction of a number of factors to explain the variation in the meas ured variables. a1 . New York: Macmillan.. The data reduction arises because the number of factors created is less than the number of variables. 422 4. moderate. Englewood Cliffs. a2 .. 4th edn. The effects of each different treatment on the dependent variable can then be assessed based on treatment cell means using statistical analysis of variance. theorized to causally influence a dependent vari able (e. and to examine the way these causes interact to influence the phenom enon being studied (termed interactions). high expect ations. NJ: Prentice-Hall. with treatment groups of equal size constituting a balanced factorial. Marketing Re search: Measurement and Method. S t r u c t u r a l e q u a t i o n m o d e l s have extended the ideas of factor analysis. A. cus tomer expectations.2  b1. Applied Multivariate Statistical Analysis. D. resulting in a different treatment cell for each different combination of variables or factors. Tull.. are ascribed two or more levels (e. . This is a type of experimental research design (see e x p e r i m e n t a t i o n ) for investigating causal relationships between m a r k e t i n g vari ables. and Hawkins.3 ¼ 2  3 ¼ 6 cells). and Wichern. Factor analysis is best carried out using a computer package such as the S t a t i s t i c a l Pa c k a g e f o r t h e S o c i a l S c i e n c e s (SPSS). b2 . I. product performance). S.g. 693 7. a1.2. W. the number of factors being determined by a stopping rule. b. It allows the marketer to investigate the effects of two or more different variables on a phenomenon of interest in a single study (termed main effects). Interaction is evident where the effect Bibliography Johnson. pp. If meaningful factors are obtained. to describe individuals or as variables in multiple regression (see r e g r e s s i o n a n d c o r r e l a t i o n ) or in c l u s t e r analysis. high perform ance). In such a design. b3 . Interaction between multiple causal variables reflects their joint influence on a dependent variable. b1 .g. simplifying.g. customer satisfaction). R.g.F factor analysis factorial research design Michael Greatorex Mark P. the focal independent variables or factors (e.. The factors may or may not be meaningfully interpreted to fit in with any the oretical ideas. a type of multivariate analysis (see m u l t i v a r i a t e m e t h o d s (a n a l y s i s )). and risk sharing factors. e. (1998). two or more causal or independ ent variables are simultaneously manipulated. Participants are randomly assigned to one of the resulting treatment groups until the sample quota is reached. In a typical factorial design (see figure 1). Healey Factor analysis. D. low.

126 factorial research design Factor 2 Product performance (b) Factor 1 Customer expectations (a) Low (b1) Moderate (b2) High (b3) Low (a1) Low expectations. a t t i t u d e s . where factorial designs incorporate several variables. where the effect of one variable is medi ated by another. allows a better approximation of natural conditions than a single factor design in which the influence of a lone variable is scrutinized.. The opposite effect was found under high involvement conditions. 1994). However. at different levels. the analysis of main effects can be achieved by averaging the effect of one variable across the different conditions of other study variables. 2002). Analyzing the causal influence of mul tiple variables in the same study. each manipulated at multiple levels. 1992). yet maintain equivalent statistical power. since interactive effects often capture more adequately the complexity of caus ation. Given the practical constraints of much m a r k e t i n g r e s e a r c h . The study of interactions is perhaps the major benefit of factorial designs. thus providing evidence of interaction between the two variables of involvement and brand con gruity. the resulting number of different condi tions or cells can quickly become unwieldy in terms of the total number of research partici pants required to fill all cells and complete the design. factorial designs are also advantageous because they re quire fewer participants to test multiple main effects than would be necessary when conduct ing separate experiments to test these individu ally. low performance (a2 ⫻ b1) High expectations. 1992). moderate performance. This is particu larly important when studying inherently complex market behavior: theoretical explan ations of marketplace phenomena are likely to be more comprehensive where they incorporate multiple conceptual determinants and their interactions (Iacobucci. For example. moderate performance (a1 ⫻ b2) High expectations. In a factorial design. See also statistical tests . where the two factor factorial is most common. (a1 ⫻ b2) Low expectations. The factorial design affords the researcher several notable advantages. In marketing research. low performance (a1 ⫻ b1) Low expectations. high performance. and Tokunga. Saufley. such as in t e s t marketing. (a1 ⫻ b3) High (a2) High expectations. providing a more realistic appreciation of causation (Keppel et al. in one study consumers in a low involvement state (see i n v o l v e m e n t ) evaluated a b r a n d e x t e n s i o n more positively when it was congruent with the parent brand than when it was incongruent (Maoz and Tybout. Although primarily employed in laboratory studies in controlled settings. the factorial design is typically used for basic or theory testing pur poses. and persuasion. including the study of decision making. both theoretical and practical. factorial designs are also used in field experiments. The other independent variables are disregarded so that only differences in the phenomenon of interest arising from dif ferent levels of the main effect variable are focused upon (see Keppel. high performance (a2 ⫻ b3) (Customer satisfaction is the hypothetical dependent variable) Figure 1 Example of a factorial research design of one causal variable on the phenomenon of interest varies under different levels of another variable.

learn feel buy model Bibliography Dickson. 9. single. P. and Staples. young. divorced. 2nd edn. P. adolescent. aspects of entertainment. The moderating role of involvement and differentiation in the evaluation of brand extensions. and Cramer. adolescent. travel. (6) others. the cycles are distorted because more women are postponing having children until later in their lives and family size has declined. buyers/custom ers have images of and feelings toward products and services prior to purchase. infant. and leisure activities. divorced without children. Bagozzi (ed. 1993. Stern. Examples include perfume. June. 3 (November). 2000). 9. from bachelor to retired solitary survivor. 355 63. divorced with children. Iacobucci. (3b) young. (2) young. (1994). Cambridge. Keppel. (4a) middle aged. Hove: Routledge. (5b) older. Freeman. married with children. ch. (1997). A. see Bristor and Fischer. adolescent. (4b) middle aged. D. P. (2001). Principles of Marketing Research. feminism David Marsden Feminism is the umbrella term for a number of different theories concerning the status and role of women in society. Maoz. h i e r a r c h y o f effects model. Marxist. 119 31. (4e) middle aged. Journal of Marketing Research. (3a) young. divorced without children. married without children. or the increasing number of childless and same sex couples. (4c) middle aged. and black feminism (for other theories. (1992). 2nd edn. adolescent. Life cycle concept in marketing research. (3c) young. MA: Blackwell. W. Analysis of experimental data. H. 12 22. Bibliography Murphy. and Tybout. A. H. They are united in the goal of eradicating all forms of exploitation and oppression directed against women – economic. divorced with children. C. Journal of Consumer Research. pp. Catterall and Maclaran. (2002). Marketing Management. (4f) middle aged. feel-buy-learn model David Yorke The feel buy learn (FBL) model in m a r k e t i n g suggests that in particular situations buyers/customers do not follow the traditionally conceived learn feel buy sequence of communi cations (see a i d a m o d e l . D. ch.). infant. married with children. and Gubar. W. M. for example. the main ones being: lib eral.feminism Bibliography Bryman. political. (4d) middle aged. A modernized family life cycle. Saufley. G. Introduction to Design and Analysis. 224 78. Quantitative Data Analysis: A Guide for Social Scientists. family life cycle Vincent Wayne Mitchell Wells and Gubar (1966) identified nine life cycle stages. young. 4 to 12 years old. unmarried. 4 to 12 years old.. 12 (2). In R. London: Dryden Press/Harcourt Brace College Publishers. The problems with their classification are that it takes no account of the number of single parent families within many countries. and Tokunga. 127 Wells. innovation adoption m o d e l ). E. radical. R. In the FBL situation. social. In addition. when it is not easy or possible to describe a product or service using words. On this basic point there are no . 1993. but learning (see c o n s u m e r l e a r n i n g ) about the product (service) attributes does not occur until after pur chase. E. instead pictures or images are used to invoke feelings in the potential buyers’/custom ers’ minds in the hope that such feelings will lead to a purchase. Journal of Consumer Psychology. as follows: (1) young. New York: W. Murphy and Staples (1979) devised a more modern family life structure. H. 569 71. married. and cultural. married without dependent children. pp. (1979). See also buy feel learn model. married without children.. (5a) older. G. (1966). divorced without dependent chil dren. W. This happens. A. widowed.

Hirschman (1993) has shown that many of the key words and con cepts associated with marketing (e. Revolutionary Marxist feminism. (1993). Hirschman. and Maclaran. Hall. Methodological issues in consumer research: Toward a feminist perspective. 518 37. At the other pole is radical feminism. Journal of Consumer Research. e. Representation: Cultural Representations and Sig nifying Practices. R. Bibliography Bristor. financial planning for marketing communications David Yorke Expenditure on m a r k e t i n g c o m m u n i c a t i o n s activities must be monitored. black. and how to eradi cate it. As Bristor and Fischer (1993: 520) explain. 1997). only 4 per cent are in senior management positions (Lane and Crane. Feminist literary criticism and the deconstruction of ads: A postmodern view of advertising and consumer responses. 537 55. both in total and for each target segment of buyers/ customers (see m a r k e t s e g m e n t a t i o n ). Feminist thought for consumer research. 1993). Hall (ed. the findings from a recent study found that whilst 22 percent of all sales managers in the US are women. e. 13 18. liberal feminists are con cerned with gender role stereotypes in a d v e r t i s i n g and the marketing professions. Hall. Ideology in consumer research.’’ Overall. particularly of the law. Although each theory tends to give a totally different explanation of the cause of women’s exploitation and oppression. (1993). and Crane. con sumers.g. an objective. Radical feminists have been pro active in campaigning against the selling and use of pornography in the media. feminist marketing theory seeks to offer insights and alternatives to current practice and marketing thought (Bristor and Fischer. 1994. Catterall. 1980 and 1990: A Marxist and feminist critique. rationality. 19 (4). contends that class is the cause of women’s exploitation and oppression and that this will only be truly eradi cated with the overthrow of capitalism. in contrast. which promotes separatism – the celebration of the unique identity and culture of women separate from men. Black feminism raises a basic problem with feminist theory as a whole in that there is no single concept of a woman. 556 67. A. and Fischer. M. Marketing Intelligence and Planning. in order to promote equal opportunities and the assimila tion of women into education and employment. a consid erable divergence of views exists as to the root cause of women’s exploitation and oppression and the best way to eradicate it. both in society at large and in the media (for studies on ethnic represen tation in the media. 121 32.g. wives. poor.. 19. (1997).). E. something that is innate to them. they are best considered in conjunction with one another because in all probability each one reflects a grain of truth. London: Sage. Woodruff.g. Van Zoonen. voters. Feminist Media Studies. 223 80. The spectacle of the ‘‘other. promoting legislation that prohibits various kinds of discrimination against women. which focuses on reform. technology. and controlled. However. London: Routledge. Finally. daughters. to increase the level . men are viewed as women haters.. The plan should contain. (1993). E. mothers. black feminism criticizes the whole white/middle class bias of the feminist move ment by emphasizing the colonial/imperialist origins of race and class. J. 2002). N. For example. level of a w a r e n e s s . see van Zoonen. (1996). London: Sage. S. white.. (2000).128 financial planning for marketing communications differences among feminists. lib eral feminists ‘‘advocate eliminating laws that establish different rights for men and women. 14 (2). lesbian. From this perspective. Revisiting gender role stereotyping in the sales profession. 40 (2). evaluated. number of product trials (see t r i a l ). 19 (4). an analysis of the current situation. Journal of Business Ethics. using one of the communi cation models. educated.’’ In terms of m a r k e t i n g . H. politically active or not politically active. At one pole is liberal feminism. Journal of Consumer Research. Using a Marxist feminist framework. (1994). (2002). P. B. as Woodruff (1996: 16) points out: ‘‘Women may be rich. Lane. Jour nal of Consumer Research. competition) reinforce sexist ideolo gies that seek to justify women’s inferior status in capitalist societies and the marketing profes sions. M.’’ In S. Such control can only be under taken against a plan. Stern. L. pp. Marketing and Fe minism: Current Issues and Research.

Outlets have become far more customer oriented with key r e t a i l m e r c h a n d i s i n g con cepts and principles being incorporated into modern branch designs. Rationalization and restructuring in the financial services sector. is an im portant medium for image communication. Riley. performance can be monitored against object ives. this has meant a much wider range of products and service providers to choose from and. (1994). free flowing interview with a small group of people.. and Knott. have without exception been conducting nationwide rational ization and refurbishment programs (Green land. The face of the high street bank has altered irrevocably to accommodate this new image. A. See also marketing financial services Bibliography Dawes. The modern finan cial service outlet is far more open plan. significantly. (1994). D. J. (1992). S. as well as the popularity 129 of store card ownership and other loyalty schemes (see r e w a r d / l o y a l t y c a r d s ).focus groups of trial from X percent to Y percent in six months. 1994). with reduced use of bandit screens and with place ment of staff in the banking hall area. Both during and after the period of time covered by the plan. and thus see r e t a i l i m a g e as a key to achieving c o m p e t i t i v e a d v a n t a g e . and Greenland. e x h i b i t i o n s .g. J. large glazed frontages. The branch. 21 8. some with network sizes in excess of 2. and Swailes. Since the late 1980s the major UK institutions. Retention sans frontie`res: Issues for financial service retailers. Concepts and techniques of retail marketing have been readily adopted by most types of financial institution that have direct interface with the consumer market. building societies and banks) are unable to differentiate by product alone. s a l e s p r o m o t i o n . McGoldrick. (1999). International Journal of Bank Marketing. e. This break into financial services by the food giants essentially created a further dimension of long term benefits for the customer in the form of a developed portfolio of financial services products. 1992). Food retailers are well placed to build long term relationships with cus tomers because of the regular customer inter action that takes place. Through the eyes of the customer: Research into the new look and functioning of bank and building society branches. the front line physical presence on the high street. J. and an allocation of financial resources over the chosen elements in the c o m m u n i c a t i o n s m i x .000 branches. P.. For con sumers. A significant move by supermarkets and some discount stores into financial services throughout the 1990s introduced a major new element of competition in the sector. and much more of a shop like appearance than traditional branches (see s t o r e d e s i g n ). focus groups Vincent Wayne Mitchell A focus group interview is an unstructured. Maidenhead: McGraw-Hill. Within this sector the services offered are increasingly being viewed as prod ucts and the branches are being viewed as retail environments in which the staff members are salespersons rather than ‘‘bankers. J.’’ prac ticing selling skills (Riley and Knott. 22 (6). 155th ESOMAR Seminar on Banking and Insurance. financial services marketing see m a r k e t i n g f i n a n c i a l s e r v i c e s financial services retailing Steve Greenland and Andrew Newman Financial services retailing refers to the distribu tion of financial services via branch distri bution networks. P. Greenland. a reduction across the sector in the cost of many traditional finan cial services products. .e. S. p e r s o n a l s e l l i n g . S. Retailing of Financial Services. 36 44. International Journal of Retail and Distribution Management. 17 (1). Traditional financial service institutions (i. Traditional buildings of impressive appearance have been for the most part phased out and exchanged for modern glass fronted stores.

for example. . in studying a t t i t u d e s and be havior. A friendship group consists of pairs or groups of friends or family members and is often used when researching children or teenagers. be cause there is less interaction between par ticipants. Also. in a d v e r t i s i n g and communica tions research. Commercial facilities often have videotape cameras in observation rooms behind one way mirrors and microphone systems connected to tape recorders and speakers to allow observation by others who are not in the room. The mood board has two main functions: as a reference point. An online focus group refers to a q u a l i t a t i v e r e s e a r c h effort in which a group of individuals provide unstructured comments by entering their remarks into a computer connected to the Internet. Two way focus group: This allows one target group to listen to and learn from a related group. the advertising agency (see a g e n c y ). petroleum engin eers talking about problems in the ‘‘oil patch.130 focus groups The participants may range from consumers talking about hair coloring. A reconvened group is one that is recruited to take part in at least two discussions. for example. Homogeneous groups seem to work best. One of the most fre quently used forms of stimuli is the mood board. posters. This allows researchers to ‘‘broadcast’’ focus groups that can be viewed online. Groups that are too large may not allow for adequate participation by each group member. or one of the participants’ homes. and as an enabling . Other variations of the standard procedure in clude: . The group session may take place at the research agency. The level of t r u s t and rapport grows. one or two members may intimidate the others. feelings. and experiences. group synergy and snowballing of ideas may be diminished. For example. with no download wait and no file to take up space on a viewer’s hard disk. focus groups are used in preliminary research to help in clarifying the research issues. However. . which is why focus groups are often used for concept screening and concept refine ment. marketing man agers can be in a different location. physicians viewing a focus group of patients discussing the treat ment they desired. The moderator’s job is to develop a rapport with the group and to promote interaction among its members. Streaming media consists of multimedia content such as audio or video that is made available in real time over the Internet or a corporate intranet. . . Variations on the standard group discussion format include the following: . in new product research and c o n c e p t t e s t i n g . . Client respondent group: Client personnel are part of the discussion group and offer clari fications that will make the group process more effective. or even video recordings of television or cinema adverts can be shown to focus groups and a response generated. Numerous topics can be discussed and many insights can be gained.’’ or children talking about toys. ?’’ The group recon venes for the second discussion to impart their thoughts. focus group respondents may be asked to snip words and pictures from maga zines that they see as representing the values a particular b r a n d is perceived to have. A sensitivity panel is a series of group discus sions using the same group of people and making use of the psychodynamic processes within the group. usually separated by about a week. The ideal size of the focus group is six to ten relatively similar people. collages can also be made up from audio and video tapes. to reflect upon the discussion. ‘‘can you live without . Traditional brainstorming and industrial group discussions are two other variations. . a hotel. Dueling moderator group: This has two mod erators who deliberately take opposite pos itions on the issues to be discussed. With such videoconferenced focus groups. In some circumstances. which is a collage created in a focus group set ting. Participants are briefed on a task that is to be completed in time for the next meeting. Online groups can be quick and cost effective. and in designing questionnaires for use in subsequent research (see q u e s t i o n n a i r e d e s i g n ). If the group is too small. . allowing disclosure and ‘‘sharing’’ to take place. Advertising material such as brochures.

are used every time a m a r k e t i n g decision is made. E. Marketing managers use medium term forecasts to aid decision making concerning p r i c i n g and the allocation of resources such as a d v e r t i s i n g budgets and salesforce personnel to different products and markets. With the well known decomposition method. forecasting Michael Greatorex and Jim Freeman Forecasts. 2. Bibliography Zikmund. Non causal forecasting methods. W. The naive method uses a single observation. cost leadership strategy Bibliography Porter. in turn. In addition. Because the number of groups is usually small and the selected samples not random. M. as the forecast of future values. focus strategy Dale Littler The focus strategy is one of Porter’s (1980) g e n e r i c s t r a t e g i e s and involves concen trating on one or more niches or segments (see m a r k e t s e g m e n t a t i o n ). Quantitative methods further subdivide into causal and non causal approaches. Moreover. than their rivals for the particular cus tomer cluster(s) they have targeted. How ever. marketers are often called upon to provide short term forecasts of sales to enable the pro duction and distribution departments to plan production. or have lower costs. in the case of a differentiation focus strategy (see d i f f e r e n t i a t i o n s t r a t e g y ). Forecasting Methods Forecasting techniques divide into qualitative and quantitative methods. G. Because they are concentrating on a more closely defined group of customers. more usually. . See also competitive strategy. OH: Thomson South-Western. will diminish profits. Mason. ch. disagreeing with fellow participants to whom they take a dislike. 8th edn. numerical methods. Companies adopting a focus strategy aim to secure a sustain able c o m p e t i t i v e a d v a n t a g e by being able to differentiate more effectively. inventories. Furthermore. usually the latest. Non causal methods take a time series of past observations of the variable to be forecast and extrapolate the series into the future using graphical or. they are able to develop more specifically defined offerings based on the target customers’ particular requirements. con versely. as against aiming at securing broad market appeal. marketers are required to provide forecasts of sales and revenues for the budgets that are the basis of management and control in every organization. a series is decomposed into its constituent parts. (1980). the costs of the focus strat egy make those pursuing it uncompetitive compared to those firms aiming at the broad market. Strategists need long term forecasts of changes in the environment and of d e m a n d for both current and potential products in different markets and segments (see m a r k e t s e g m e n t a t i o n ). Fur ther.forecasting device that gets respondents to loosen up and talk more freely. Exploring Marketing Research. The moderator can introduce biases. if such a niche strategy is 131 highly profitable. there is the risk that competitors may adopt an even narrower focus or that. implicit or explicit. (2003). New York: Free Press. Competitive Strategy: Techniques for Analyzing Industries and Competitors. the ability to show the video tape of the discussion to executives provides them with almost direct contact with customers. and interpreting and reporting the results of the discussions is sub jective. Advantages of focus groups include the stimulation from interaction within the group that allows each individual to refine and expand his/her views in light of contributions from other members of the group. gen eralizing the results to the population is not possible. and distribution. it will attract rivals which. Disadvantages include the possibility of respondents ‘‘lying’’ in order to conform to group pressures or.

exponential. as well as providing forecasts. sales of drainage pipes may precede sales of roofing tiles by a period equivalent to the difference between the laying of the foundations in a housing devel opment and the building of the roofs. thus making timely use of up to date data. logistic. While econometric models are used at the company level. Data with a trend require a slightly more complicated procedure. in par ticular into identifying the variables that affect the variable being forecast. to pro vide forecasts for the original series. A number of checks are carried out to test the applicability of the least squares method. and error. it has been helpful for a control procedure to be used with exponential smoothing. Various forms of relationship such as linear. while data that also contain a seasonal cycle can be handled by Winters’s method (see Bails and Pepper. Al though this may be a disadvantage of the regres sion method as far as forecasting is concerned. The model is then estimated and a series of diagnostic checks tests the adequacy of the model. 1993: ch. Gompertz. Causal forecasting methods. If a suitable regression equation is found. cycle. The classical decomposition method has been extended into an iterative form. multiple regression (see r e g r e s s i o n a n d c o r r e l a t i o n ). cross sectional data are used with the least squares method to estimate the relationship. such as Holt’s method. seasonality.e. Time series data or. Input–output methods are based mainly upon the transactions . Poten tial models are identified by examining the autocorrelation and partial autocorrelation func tions. together with an ability to take account of special events.. economet rics. Trend curve analysis attempts to fashion a relationship between the data series and time as the single explanatory variable. are ‘‘stationary’’). e.g. The constituent parts may be combined in additive or multiplicative fashions.132 forecasting namely: trend. polynomial. some times. are fitted using least squares or alternative procedures. Special estima tion techniques for econometric models are available. Forecasts are prepared by estimating these individual components. power. Causal modeling at tempts to identify the underlying determinants of demand. In multiple regression. the fact that the weights decline exponentially gives a simple formula that enables the computations to be made every time a new observation be comes available. Typical control procedures are based on cumulative sums of the errors in one period ahead forecasts or a tracking proced ure such as Trigg’s tracking signal. The methods include leading indicators. Thus. Simple exponential smoothing is used for data that fluctuate about a set 1evel (i. forecasting methods based on expo nential smoothing are more popular than the classical decomposition and the Census II methods. causal methods can pro vide insights into underlying processes.. The relationship of these variables with demand is investigated with a view to using the relationship to obtain forecasts. Historically. forecasts then follow on. 8). Simple exponential smoothing uses a weighted average of past observations. and input–output methods. However. Box and Jenkins (1976) developed a technique that explained the data series in terms of auto regressive and moving average processes. etc. they are best known for their use in modeling and forecasting at the national macroeconomic level. the insight into the underlying influences may be invaluable. Given an acceptable model. in the Census II soft ware currently available and in use today. once future trend values have been found by extrapolation. Econometric models build upon multiple regression methods and usually involve specifying several (sometimes many depending on the problem) simultaneous relationships be tween the variables of interest. forecasts of the dependent variable are forthcoming but are based on values of the independent variables which themselves may need forecasting. A leading indicator is a time series of data for another variable whose changes tend to lead changes in the variable of interest by a fixed period. which can then be recombined. The main advantage of exponential smoothing methods is the simplicity of the computations and the po tential flexibility and responsiveness of the methods. The main use of leading indicators (or diffusion indices) is to predict the overall level of the economy. the variation in a de pendent variable is explained by the correspond ing variation in a number of independent (or predictor) variables. There may be a reason for the relationship. logarith mic. where necessary.

and maximum values are estimated. 20 to 30 years). These may involve the subjective opinions of salespeople. for instance. and the ease and cost of use of different methods. the nature of the data. this should be a good basis for forecasting. especially for industrial markets. C. and m a r k e t i n g m i x decisions. and Pepper. most likely. E. NJ: Prentice-Hall. San Francisco: Holden Day. Surveys of buyers’ intentions and consumer confidence are considered to provide soft data that may be useful for predicting discretionary purchases such as consumer durables. Long range forecasts concerning technical innovations may be obtained from ‘‘experts’’ in the relevant field using. the franchisor .e. and Jenkins. A point fore cast is a specific amount and is almost bound to be wrong. The focus is on inter industry flows. For instance. Franchise contracts are usually long term (i. Combining Forecasts Forecasts of the same variable obtained by dif ferent methods are often combined. Potentially. G. 133 Selection of Forecasting Method The selection of an appropriate forecasting tech nique is fraught with difficulty.. Sometimes minimum. Additionally. However. P. Englewood Cliffs. Forecasts can be point forecasts or interval forecasts or probability forecasts. or subjective forecasters providing fore casts on sales for budgets. G. most likely. sales managers. The arrangement involves a b r a n d owner (franchisor) and an independent businessperson (the franchisee). other assessors are asked to pro vide pessimistic. depending as it does on forecasting horizon. In addition. forecasts obtained by exponential smoothing may be adjusted using the subjective estimates of a forecaster. the accuracy required. franchises see r e t a i l f r a n c h i s e s franchising Gillian C. often in great detail. Box. marketing man agers. (1993). G. The franchisee then makes ongoing payments that are usually calculated as a per centage of turnover. e. D.. Qualitative forecasting methods. Bibliography Bails. non causal time series methods such as exponential smoothing are particularly suitable for use by multiproduct organizations that need detailed and frequent short term forecasts for the planning of produc tion and inventories. An interval forecast provides a range of values within which the actual value may fall with a given level of confidence. L. M. or uses a probability distribution to de scribe the subjective assessment.g. A probability forecast attaches prob abilities to given outcomes. Time Series Analysis: Forecasting and Control. The contract specifies. (eds.) (1976). The franchisee receives the right to trade in the brand within a particular area and for a particular period. and optimistic forecasts. production. Business Fluctu ations: Forecasting Technique and Applications. 2nd edn. Hopkinson Franchising is a contractual business arrange ment used especially in r e t a i l d i s t r i b u t i o n c h a n n e l s . the manner in which the business is to be run and allows for the regulation of this by the franchisor. that the variable being forecast will lie in several possible inter vals. the delphi method. Ag gregating the forecasts of individual sales repre sentatives of sales of each product to each customer and potential customer (after adjust ment for biases in previous forecasts) is a common procedure. Practitioners need to employ an appropriate technique for the specific situation.franchising between industries as measured by government statisticians in input–output matrices. Qualitative methods rely on ‘‘soft’’ data based on the per ceptions and subjective judgment of individuals. the collection of data upon which input–output matrices are built is so slow that by the time the tables are published the information is out of date for most practical forecasting purposes. The franchisee invests in the business both by funding set up costs such as premises and through an initial joining fee. inventory control.

Hoffman and Preble. Strategic challenges include the introduction of new units within a territorial system. in the car industry where franchisees retail the branded product manufactured by the franchisor. and hotel industries. The problems associated with this account for the interest that has been shown in franchise c h a n n e l c o n f l i c t . Although the two may have a symbiotic relationship (Bradach. A more precise under standing of franchise use is gained by considering its fit with the specific market conditions and strategic goals of the franchisor (Carney and Gedajlovic. Price. Finally. 2001) and also relies on a picture of franchisees as small and lacking experience. J. Bibliography Bradach. e. Several theoretic approaches help to explain why franchising has been adopted as a busi ness model. Bradach. also contributes to efficient transacting in franchise situations.g. owns all profits or losses) resulting from the business after payments to the franchi sor (as outlined above) have been made. and Eccles. Franchise systems pose some particular managerial and strategic challenges. Although some support for these arguments can be found. 1998). 1998). The franchisee is the residual claim ant (that is. the franchisor seeks to ‘‘lead’’ an inter organizational network. and maintenance of a homogeneous operation. 276 303. As a contractual arrangement. or at least compliance. (1998). R. franchising is considered as a hybrid system of governance. This involves gaining agreement. Others (see. it is argued that franchising brings on board local managers with local knowledge and therefore reduces the search costs associated with gaining localized information. he/she will make sure it is run well (the agency cost argument). from inde pendent businesses. For franchisees. 15 (1). Generally. Several reasons may explain why a brand owner would choose to franchise instead of owning and directly operating the business units (Hopkinson and Hogarth Scott. . 1991. This intra channel but inter organiza tional competition is likely to become more prevalent as electronic technologies facilitate new and more direct distribution channels be tween brand owner and consumer. 42 (2). In creasingly. it has been argued that franchise systems offer a low risk route to busi ness ownership since the concept has been tested and the franchisor provides management sup port.. A level of regulation across independent businesses is deemed necessary to protect the value of the brand and hence the value of the franchisee in vestments. 1999). Busi ness format franchising involves the tighter speci fication of all aspects of the business by the franchisor and is thus suited to highly branded. each problem may also be addressed by ways other than franchising so that these seem to be only partial explanations. G. Adaptation may involve further franchisee in vestment and threaten homogeneity. ‘‘cloned’’ styles of business such as those found in the fast food. One reason may be the financing that fran chisees make available. Diverse forms of franchising exist but two categories are of particular importance. for example. 97 119. However. Williamson (1985) argues that a combination of elements of authority (the hier archical control mechanism) with elements of the market mechanism provides for an efficient system. Annual Review of Sociology. 1989) argue that t r u s t is associated with relationships and that this. authority and trust: From ideal types to plural forms. adapta tion of the system to changing environments.134 franchising provides management support and training. (1989). there fore. Using the plural form in the management of restaurant chains. Pro duct franchising occurs. Administrative Science Quarterly. Franchising may also be seen as an efficient way to operate a unit that is some distance from head office: if the franchisee has invested in the business. L. 1991). L. thus facilitating rapid growth so that franchising overcomes resource constraints. Bradach and Eccles. franchising occurs within a dual distribution system comprising both franchised and company owned units. franchise arrangements are entered into between very sizeable businesses (see Bradach. The contract is used to obtain an ap propriate mixed mechanism. Manageri ally. this argument underestimates the risk associated with a franchisee (see Stan worth et al. J. dual distribution may introduce direct competition between franchisor and fran chisees and therefore is associated with some tensions.. niche retailing.

household. Franchise relationship quality: Micro-economic explanations. free sample See also adoption process frequency David Yorke As part of their advertising programs. C. W.. European Journal of Marketing. Dale Littler The provision of a free sample. Free samples may be distributed to households. or given with existing products that are purchased. Williamson. J. New York: Free Press. and Willems. (1985). 2 (1). Enterprise and Innovation Management Studies. i. Free samples are obviously a means of reducing p e r c e i v e d r i s k and (generally) apply to fast moving consumer goods. Hopkinson. organiza tions have to decide which media (see m a s s m e d i a ) to use. E. R. the content and creativity of the m e s s a g e (see c r e a t i v e c o n t e n t ).. Hoffman. English. O. Strategic Management Journal. purchase) will be contingent on several factors including the competitive p o s i t i o n i n g of the b r a n d .g. M. The Economic Institutions of Capitalism. 135 See also advertising functional equivalence see c o n s t r u c t e q u i v a l e n c e . G. (1999). and Gedajlovic.. and Preble.. 827 43. J. or organization is exposed to the advertising message. E. and various customer behavior characteristics. and a major consideration here is the desired frequency. Purdy. 24 (2). Vertical integration in franchise systems: Agency theory and resource explanations. (1991). is a means of encouraging t r i a l . F. provided with magazines or news papers. D. Franchising: Selecting a strategy for rapid growth. 33 (9).e. 49 65. S. and Hogarth-Scott. The requisite fre quency to have the desired effect (e. 12 (8).functional equivalence Carney. Unravelling the evidence on franchise system survivability.. C. (2001). 74 85. Stanworth. (1991). J. the number of times within a specified period that an average person. particularly of a new p r o d u c t . 607 25. Long Range Plan ning.

. Galton’s problem recognizes how different cultures/societies develop and adopt similar behaviors and practices through a transfusion process (Sekaran. See also construct equivalence. Galton’s problem. For example. Sekaran. Sampling in cross-cultural research. Methodological and theoretical issues and advancements in cross-cultural research. Sample group independence is therefore violated. 14 (Fall). gatekeepers Dominic Wilson and Dale Littler Gatekeepers can have an important (if often unnoticed) informal influence on organizational purchasing (see o r g a n i z a t i o n a l b u y i n g b e h a v i o r .e. Britain’s economic and historical links with the US insure that neither country’s population could be considered to be truly independent from the other in a comparative study.G Galton’s problem Andrew Lindridge In sample group designs for cross cultural/soci etal research. i. the issue of sample group inde pendence arises. 25 (1 4). Ember and Otterbien (1991) argue that cross cultural sample group independence cannot be achieved. Gatekeepers may influence the flow of information into an organization and identifying and targeting the gatekeepers with m a r k e t i n g c o m m u n i c a t i o n s can have a major influence on the effectiveness of the m a r k e t i n g s t r a t e g y in organizational markets. 217 33. Whether sample group independence repre sents an issue to cross cultural/societal research depends upon the extent that the population being studied needs to be an isolated one. The term refers to key influencers who actively acquire and disseminate information from both external and internal sources. (1983). poten tially resulting in analysis that falsely infers causal relationships between a c u l t u r e /soci ety and its population (Ember and Otterbien. 61 73. M. 1991). al though they are not members of the decision making unit (see b u y i n g c e n t e r ) in a formal sense. K. The authors argue that societies’ connections with others should simply be acknowledged and identified regarding how they potentially influence cultural/societal behavior and values being studied. matched sampling Bibliography Ember. 1983). Ansoff (1965) presented the matrix of four ‘‘directional’’ strat egies (see d i r e c t i o n a l m a t r i x . (1991). Writers on strategy tend to have their own lists. particularly with regard to purchase decisions. generic strategies Dale Littler These are a menu of broad or general strategies which can be applied by different organizations in different contexts. Behavior Science Research. p u r c h a s i n g p r o c e s s ). U. as few societies are truly isolated. etic emic dilemma. They often are identified within the organization as a source of informed intelligence and their opin ions may be sought. g r o w t h . For example. Journal of International Business. and Otterbien. F.

. Most classifications are built by using data from the census of population such as employment type. M. For example. 1 67. Porter. they can only be presented in broad outline form since the spe cific features of the business. Generic strategies: Toward a comprehensive framework. As an example. 45 56. (1980). Greenwich. the Thriving category includes groups of Wealthy Achievers in Suburban Areas. family size.e. age. . Bibliography Ansoff.). Marketing myopia. as Levitt (1960) argued. T. identifying what is different about the business that can provide a c o m p e t i t i v e a d v a n t a g e . v e r t i c a l i n t e g r a t i o n . and Striving. Settling. There are those which are concerned with: locating the core business. property type. and f o c u s s t r a t e g y (see c o m p e t i t i v e s t r a t e g y ). geodemographics Vincent Wayne Mitchell Geodemographic groups of consumers (i. marital status. and thus provides a means of locating where these types of individuals are likely to reside. (1980). referred to as geodemographic classifica tions. Maidenhead: McGraw-Hill. (1960). vol. elaborating the core business. will define the content of the strategy and influence the process of i m p l e m e n t a t i o n . i. In William F. PIN (Pinpoint Identifica tion Neighborhoods). Michael Porter (1980) defined the widely known group of generic strat egies: c o s t l e a d e r s h i p s t r a t e g y . rather than from a narrow product or technology per spective. Rumelt. E. 3rd edn. Either the raw variables or the principal components are then subject to c l u s t e r a n a l y s i s to identify similar types of geographic areas.e.g. 38. etc. includ ing how value is added and the core competitive strategies it has adopted. Second. Glueck (ed. Sometimes a preliminary pro cess called principal component analysis is used on the raw variables to identify commonalities in the data. defining what are the boundaries of the business. and the context within which the organization operates.geodemographics v e c t o r m a t r i x ). i. Others have produced more extensive lists. In Advances in Strategic Man agement. Rising. Expanding. and Prosper ous Pensioners in Retirement Areas. and reconceiving the core business. Competitive Strategy: Techniques for Analyzing Industries and Competitors. see Journal of the Market Research So ciety. The notion of generic strategies can be criti cized along two fronts. Mosaic. These are further deseg regated into 17 groups and 54 types. CT: JAI Press. and Superpro files. Other variables can be used and some clas sifications have adopted this approach. d i f f e r e n t i a t i o n s t r a t e g y . H. New York: McGraw-Hill. Mintzberg (1988) developed what he argued is a comprehensive set of generic strategies. New York: Free Press.. are built on the premise that people who live in similar neighborhoods are likely to have similar purchasing and lifestyle habits. 4 (July/August). I. its essential processes. etc. such as through redefining the business in terms of broader needs. The evaluation of business strategy. Generic strat egies as such therefore can only at best offer an outline of the possible range of options. 1989. ACORN classifications have been divided into six major categories: Thriving.. Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion. First. identified by geographic and demographic vari ables). pp. H. (1988). so that the most appropri ate competitive strategies are likely to be those which are innovative or at least different in some way from those of other firms. dis tinguishing the core business. whereas the color and texture will have to be added for the company to be able to secure a differential advantage. such as through d i v e r s i f i c a t i o n . such as developing its product offering within the business and other strategies defined within the Ansoff matrix. Aspir ing. the competitive process involves rivalry between businesses seeking to secure some advantage from being different.) Some of the major classifications in the UK are: ACORN (A Classification Of Residential Neighborhoods). Business Policy and Strategic Management. e. 5.. extending the core business.. Mosaic. 137 Levitt. Finpin. (1965). Mintzberg. grouped into five clusters. 2. Afflu ent Grays in Rural Communities. (For details of the classifications and methods. and do not follow some accepted strategic recipe.e. Harvard Business Review. ch. R.

e.138 geodemographics One question that has been raised in the lit erature is. and the frequency and value of county court judgments. the level and value of share ownership. which involves geodemographically analyzing existing customers.g. Young Entrepreneurs. Finally. Euromosaic identifies ten major pan European types that are consistent across the following European countries: Great Britain. listening to music.. and life stage data con densed in an easy to use format. Germany. their ease of use and actionability. etc. If organiza tions have sufficient information on their customers. cars. They are now an essen tial part of retail site analysis and branch/store assessment. This has resulted in a classification of 36 Financial Mosaic types: for example. and their ability to describe the types of houses people live in which can help the marketer to understand his/her target segment. credit card.g. it is an individual level ACORN. age. a d a t a b a s e of over 1 million investors. products. These people are wealthy. a more accurate assessment of alternative branch locations and of market and sales targets can be undertaken. but the degree of discrimination varies according to market sector and there is no single best standard geodemographic product for all situ ations from those available. markets. does it really make sense to use one standard segmentation tool across all sorts of industry sectors. e. types of holiday. this can be used to create bespoke classifications for any product market. GLOBAL Mosaic is a single classification system encompassing the whole world. food. For example. Ad v e r t i s i n g and promotional messages can also be communicated to the target audience using d i r e c t m a i l and door to door leaflet campaigns. which can be geodemographically targeted.. Peo ple*UK is the first classification system of indi vidual people in the UK. Geodemographic systems do have several weaknesses. several products have been designed to overcome this problem. the proportion of mortgages and outright home owners. and Belgium. since media data sources such as the National Reader ship Survey and Target Group Index are geode mographically coded.g. They are useful in m e d i a p l a n n i n g . Finally. by knowing how many of a certain type of customer are within a branch/store catchment area. their ability to link with different data sets that have been geo demographically coded for a b o v e t h e l i n e and below the line marketing activities. ‘‘Monica’’ from CACI attempts to use the Chris . they are extensively used in customer profiling. It is a mix of geodemographics. the level of application for various financial ser vices. consisting of residential properties in large grounds. Two of the first market specific applications to be devised were Financial Mosaic and Finpin. e.. Sweden. TV audience rating data and regional press. but live in restrained luxury. classifi cations are not particularly good at targeting certain differences. Ireland. and organ izations? The answer appears to be that each general classification product does discriminate. and Captains of Industry are three types grouped under Capital Accumulators. The demand for. which were designed specifically to segment the market for financial services. at the household or postcode level. Investor ACORN incorporates data from the Investors’ Register.g. e.. Sources of data used for Fi nancial Mosaic include: the number of company directors. The extension of these more targeted classifications is to have a bespoke clas sification for each particular market..g. the Nether lands.. they do not rely on unidimensional classification variables.e. and Art ACORN combines demographic data with information from the box offices of arts venues throughout Great Britain. These are well established sub urban neighborhoods in large and medium sized cities. Wealthy Busi nessmen. a current account. i. life style (see l i f e s t y l e s ). An example of a Euromosaic type is Elite Suburbs. and supply of. The major advantages of geodemographics are: their multifaceted nature. Spain. However. tailored or bespoke segmentation classifications has risen recently. e. CCN has made major inroads into building classifications within many European countries. Lifestyles UK database can be linked to the full ACORN family classification system. First. hi fis. ACORN Lifestyles UK is a new database of 44 million individuals who are rated 0–100 according to their propensity to have a product or service. being linked to the postcode system and covering all con sumer addresses within the UK. because the census informa tion is released at an aggregated level of about 150 households (enumeration district).

347.’’ and ‘‘Home Makers. A global strategy tends to be seen as synonym ous with a standard strategy across international markets. 4 (January). Ethel and Arthur are names that have an older age profile than Simon and Amanda. arguing that the differences. 6th edn. These types range from so called ‘‘Bonviveurs’’ to ‘‘New Teachers.’’ refers to the assumption that the behav ior of all individuals will be the same within a given geodemographic type. APMAP. Such a strategic approach can be regarded as yielding distinct advantages through. there are many barriers to such a standard global strategy. Explaining geodemographics. as would appear to be increasingly the case in many industrial goods industries. gen erally in the firm’s domestic market.’’ Developed from the National Shopping Survey. a global strategy is appropriate where there are pressures for low costs and where there are not significant specific local requirements. the development of a core strategy or a distinct c o m p e t i t i v e a d v a n t a g e . it divides UK households into distinctive behav ioral types. second. Maidenhead: McGraw-Hill. As Hill (2001) notes. It may be an essential requirement to acknowledge . Marketing Research. and third. Yip (1989) sug gests that it emerges as part of a three stage process: first. resulting from the fact that the census is conducted only once every ten years in most countries including the UK. and they question the feasibility of a global standardized branding strategy. Persona from CCN is one of the first behavioral targeting systems.’’ Such data counter another of the weaknesses of traditional census based classifications in that they give more infor mation about people’s income. P.’’ with Persona. rather than at the enumeration dis trict. viewed as the i n t e r n a t i o n a l m a r k e t i n g of standard offerings (see o f f e r i n g ) (Levitt. known as the ‘‘ecological fallacy. Adaptability and variation in marketing strat egies (see m a r k e t i n g s t r a t e g y ) across geo graphic markets are likely to be the norm. since there are typically only 15 households per postcode. Since geodemo graphic classifications describe neighborhoods rather than people. which may be the major driver to the adoption of a global strategy. 31. 1983). assets. it is fallacious to assume that all the people within a given neighborhood will purchase in the same way. including differences in the physical envir onment and c u l t u r e . the extension of the firm’s geographic r e a c h of the core strategy. Sleight. Special issue on geodemographics. which will be adapted to match local features. far outweigh any strategy tian names of household dwellers to indicate their likely age band. 139 Chisnall. These non census data sources allow the classification to be applied to newly built areas. as several commentators have noted. More than half of the data contained within Mosaic is non census information and is updated regularly. In addition. which is not available from the census. such as the semi conductor industry.g.’’ ‘‘Crafts men. through the integration of these adapted strategies into a global strategy. This allows more precise targeting. ‘‘you are what you do. A second problem. and purchasing behavior. global strategy Dale Littler A global strategy can be considered as a coherent overarching strategy for the parts of the world in which an organization operates. However. (1995). from lan guage alone. g l o b a l i z a t i o n . P. No. segmentation vari ables Bibliography Journal of the Market Research Society (1989). This is an obvi ous simplification of the international develop ment of organizations. especially in consumer goods indus tries. e.. which may not involve this sequence of stages. A final problem with census based classifica tions is the age of the data on which they are based. (2001). If in geodemographic terms ‘‘you are where you live. January. although the Mosaic types themselves are only updated every two years. Mosaic is one system that has attempted to address both the age and the aggregated data problem by incorp orating many variables that are measured at the postcode. See also market segmentation. leisure activities. economies of scale. in particular. level. 48.

T. (1995). (1983). L. Boston: Harvard Business School Press. they need to encourage two way flows between subsidiaries and the center of the organization. D. So far as firms are concerned. This tendency has been most prominent in banking and financial services. and Schlieper. Boston: Irwin McGraw-Hill. As Bartlett and Ghoshal (1989) have argued. The globalization of markets. W. E. Levitt. there has been a sectoral widening of international production. 1995) that many markets may be converging under the influences of more widespread com munications. are both impacted by this process and also have helped to shape its development. 29 41. First. Harvard Business Review. 30 (Fall). Three aspects of this process are particularly note worthy. A. C. 22 37. J. and Hoff. Most firms have changed from being international to being more multi national or even global in their internal organiza tion (Leong and Tan. Littler. globalization Mohammed Yamin Globalization is best described as a process of deepening internationalization. Finally. companies should strive to capture these core competencies wherever they are situ ated. Thus. S. 61. the market d i v e r s i f i c a t i o n strategies of manufacturers and retailers. i n t e r n a t i o n a l j o i n t v e n t u r e s . (2001). utilizing not only international trade but also direct foreign investment. To do so. companies are com pelled to ‘‘exploit experience based cost econ omies and location economies’’ and ‘‘transfer core competencies within the firm’’ while at the same time ‘‘paying attention to local responsive ness. Customizing global markets. while during the 1960s the most rapid growth of international production took place in manufacturing. It has been suggested (e. Quelch. C. and the development of free trade areas. J. a d v e r t i s i n g . Littler and Schlie per. in order to survive. An international firm is one for whom its domestic market is of predominant importance and which views inter national business as a way of further exploiting assets and capabilities developed for the domes tic market. Other business related services such as a d v e r t i s i n g and accountancy have also experienced growing internationalization. Second. Managing Across Borders: The Transnational Solution. A global firm makes little distinc . Harvard Business Review. and sub contracting. firms and govern ments. internationalization has been an uninterrupted process of increasing significance and intensity since the 1950s. although there are still evident significant elements of local variation. See also international product adaptation.. inter national product standardization Bibliography Bartlett. Therefore. such as the European Union. The major actors in the global economy.140 globalization dissimilarities between countries and adjust marketing strategies to suit specific regional requirements.’’ They also note that in the modern multi national corporation the core competencies do not reside only in the ‘‘home’’ country but may be distributed throughout the organization. 3 (May/June). A multinational firm treats foreign markets as being equally important to the home market. 64 (May/June). there are such powerful competitive pressures that. and Ghoshal.g. These qualitative changes relate to the increasing process of intra firm integration of international business activities. Hill. Yip. A. The development of the Eurobrand. 92 102. it is important to note that inter national business activities have experienced qualitative as well as quantitative expansion. Global strategy in a world of nations? Sloan Management Review. m e s s a g e content) having greater or smaller degrees of homogen eity across markets. an increasing number of firms have been involved in international production. 2nd edn. 59 68. 1993). K. since then it has been the service sector that has ex perienced the most rapid growth in internation alization. S. Global Business. Leading firms from all major capitalist countries have followed the earlier example of their US and UK rivals and have become more and more international in their scope. Quelch and Hoff (1986) suggest that there is a spectrum of strategic possibil ities with different elements (such as p r o d u c t features. 12 (2). International Marketing Review. (1989). as well as other forms of inter national production such as l i c e n s i n g . (1986). G. (1989).

firms in almost all industries face direct competition from international rivals. firms experience (unexpected) competition whose origin is often from outside their domestic market. techno logical change is breaking down industry bound aries and. Rugman (2003) has argued forcefully that globalization is a ‘‘myth’’. Recent research has introduced a degree of skepticism as to the degree of globalization. and cultural life are forced to adapt to the ‘‘modern. but this is a slow and incremental process even in the age of the Internet. East Asia. However. In this way. Over the last 20 years trade and investment flows within each region have grown faster than between regions. Semi-globalization and international business strategy. For one thing. 138 52. (1993).) do diffuse to traditional soci eties. glob alization generates polarization (between modern and traditional societies) rather than homogeneity. In a somewhat similar vein. etc. 449 64. but it has the capability to go anywhere. however. 4th edn. 34. 24 (3). and Tan. The institutions of modernity (market economy. For example. Thus according to Yip (2003: 7) ‘‘a global company does not have to be everywhere. reality is at odds with this view. P. Zander (2002). 2003). C. Taking a broader societal perspective. secularism. a debate is emerging as to the nature or meaning of globalization. all firms are nevertheless impacted by the process of internationalization. This segment will be likely to regard the pace of modernization in their own countries as too slow and will seek to mi grate to the modern world. traditional postal businesses are in creasingly being impacted by electronic mail and other computer network services. in fact. human rights. (2003). Chamewat (2003) has elaborated the concept of semi globalization by showing that although most indicators of market integration have shown significant increase over recent years. New York: McGraw-Hill. This view implies a sense of neutrality in the process in that all countries are held to be mutually converging. minimal government. as a consequence. In business terms. International Business. it is far from the case that markets are fully integrated and many barriers to cross country integration remain. Managing across borders: An empirical test of the Bartlett and Ghoshal organizational typology. As an example. (2003). Journal of International Business Stud ies.globalization 141 tion between foreign and domestic markets. developments in transitional and emerging countries are more accurately described as a process of forced adap tation than a process of mutual convergence. deploy any assets and access any re sources and it maximizes profits on a global basis. has defined globalization as a process in which the traditional patterns of economic. The implication of this view of globalization is that the business environment is frequently affected by underlying political and cultural tensions and by a pervading sense of insecurity. C.’’ Although direct participation in inter national production is still confined to a relatively small number of firms. Journal of International Business Studies. S. Bibliography Chamewat. a segment of the population in traditional societies will have modern aspirations (an aspiration fueled by the ease of information flow and greater awareness of life opportunities in modern countries). the majority of firms in the fast food industry are very small with only local marketing horizons. thus leaving their own countries increasingly populated by people who reject ‘‘modern’’ values. the fiercest competition faced by such firms comes from global firms such as McDonald’s or Pizza Hut. social. Leong. For example. The common ‘‘orthodox’’ view is that globalization is a process of growing hom ogenization in which national differences are inexorably being diluted by technological and economic forces (Hill. For example. Further. . and North America). globalization relates to the com petitive r e a c h of the company. and few companies are truly global in the sense of having significant presence in all three regions. The limited success of the World Trade Organization (WTO) in removing protectionist policies is a relevant con sideration. in some respects. Hill.’’ ‘‘Modernity’’ in this context refers to the economic and societal system in ‘‘western’’ countries (now including Japan).’’ Thus most trade and investment flows are intra regional within each of the three key regions (the European Union. However. both aggregate and firm level data point to a picture that is much more accurately described as ‘‘regionaliza tion.

then a cumula tive frequency curve or ogive can be plotted. e. one group for each period. In V. Upper Saddle River. 409 17. in which the values of the variables for each period are repre sented by groups of bars placed next to each other. Pie diagrams allow relative sizes at any moment to be presented. if the variable is sales of wine. Yip. histograms. line charts often showing graphs over time. 9 (4). the total area of the circles would vary to represent the totals in the different situations. is taken a stage further with the presentation of the results of quantitative research in the form of pie dia grams. Quantitative analysis. e. It is the common time series graph with time measured on the horizontal axis and the variable(s) of interest measured on the vertical axis. This is the standard way of representing frequency dis tributions. Thus. When Mohammed goes to the mountain: Globalization. Total Global Strategy II.. e. and scatter diagrams. Alternatively. to a series of pie diagrams. provide facilities for summarizing data using automatically generated graphical repre sentation. When the variable is normally distributed. Forsgren. the histo gram may be a series of rectangles that give a very rough approximation to the population distribution. different colored lines or dashed and dotted lines can be used to identify the particular variables. the total sales in a market can be represented by the area of the circle with sections representing competitors’ sales.. Journal of International Management. graphical representation Michael Greatorex The results of m a r k e t i n g r e s e a r c h can be presented in graphical form as part of the reporting procedure. Regional strategy and the demise of globalization. Contemporary data analysis computer packages. New York: Pergamon Press. Critical Perspectives on International ization.g. and the bases of the rectangles are determined by the width of each class. (2002). even Excel. If several variables are to be represented over time. the bars are con verted to pictorial representations of the vari able. If the variable is measured on an interval scale that is split into a number of contiguous classes. (2003). Zander. One use of a bar chart is to depict the number of times each value occurs for a variable meas ured on a nominal scale. ogives. In pictograms.). NJ: Prentice-Hall. the numbers in the classes can be represented in a histogram by a series of adjacent vertical rect angles. the numbers of males and females in a sample. G. Havila.g. For instance. which for some variables is the smooth bell shaped curve known as the normal distribution. e. The line chart is useful for depicting results over many periods.142 graphical representation Rugman. Another simple ver sion of a bar chart shows measures of a variable over time as a series of vertical bars as an alter native to a line chart as a means of depicting a time series. Hakansson (eds. a horizontal bar could be replaced by a number of bottles in a row. U. When the data are based on a sample.. A. a stacked bar chart can be used. the distribution of heights in a sample of first year male college students. In this case. A pie diagram is simply a circle divided into sections with each section representing portions of a total. cathedrals of modernity and a new world order. the areas of which are proportional to the frequencies. thus permitting market shares (see m a r k e t s h a r e ) to be presented. It is possible to present a few pie diagrams side by side to show shares in different situations. starting with the summarization procedures of the construction of frequency distributions or calculation of measures such as totals or meas ures of average and variation.g..g. bar charts. the S t a t i s t i c a l Pa c k a g e f o r t h e S o c i a l S c i e n c e s (SPSS). The sales of each of several brands in a period can be represented in a bar chart by horizontal (or vertical) bars. M. at two differ ent times or in two different markets. if the several variables are components of a total. A bar chart has many variations. and H. the . The magni tude of a variable is represented by a bar on a graph. If the frequencies are cumulated to show the number of cases below (or greater than) a series of values of the variable. When more than one variable is presented. A stacked line chart showing a total and its components stacked on each other shows how relative sizes or shares change over time and is similar. (2003). yet preferable. a simple bar chart can be replaced by a grouped bar chart.

this identifies two major param eters for defining growth (see g e n e r i c s t r a t e g i e s ): markets and products. then prima facie there is little or no relationship between the variables (a low correlation coeffi cient will confirm this). Marketing Research: Methodo logical Foundations. or the development of new ones (see n e w p r o d u c t d e v e l o p m e n t ). G. If one variable can be identified as the dependent vari able. (1991). with the independent variable on the hori zontal (or x) axis. promotion. A. New York: McGraw-Hill. product de velopment. each of which are categorized as ‘‘new’’ or ‘‘existing’’ (Ansoff. Each pair of values is repre sented on the graph and a scatter of points builds up. then the analyst will be able to spot a possible relationship for further investigation using perhaps regression methods (see r e g r e s s i o n a n d c o r r e l a t i o n ). 6th edn. market development. New York: John Wiley & Sons Inc. A. it will be represented on the vertical (or y) axis. Market penetration involves increasing m a r k e t s h a r e and/or volume of existing products in existing markets by increasing the number of customers and/or the amount existing customers purchase. if there is a pattern to the points. a d v e r t i s i n g . Bibliography Aaker. Strategic Market Management. Ansoff. See also margin 143 group influences see i n t e r p e r s o n a l c o m m u n i c a t i o n s growth-share matrix see b c g m a t r i x growth vector matrix Dale Littler Traditionally. raw materials. ch.growth vector matrix less than cumulative frequency curve will be S shaped. (2001). The relationship between two variables can also be represented on a scatter diagram. ch. If the points are scattered all over the graph. Market development involves the targeting of new segments (see m a r k e t s e g m e n t a t i o n ) or expanding into new geographic markets using existing products. Product devel opment involves modifying existing products. The allocation of other costs (mostly fixed costs) is often heavily influenced by corporate accounting policy and so may not provide as good an indication of a prod uct’s individual profitability. or even develop new customers for the product. I. components. See also types of measure Bibliography Churchill. Such diversification may be related to what the company currently does in some way. 1965). (1965). and other m a r k e t i n g approaches may be employed to persuade existing customers to purchase more of the product. and d i v e r s i f i c a t i o n . Diversification is considered the most risky of the options since it involves the develop ment of both new markets and new products. Four strategies can be identified: market penetration.g. 12. for customers in existing markets.. D. Chicago: Dryden Press. Calculating the gross margin of a product or service is an important stage in assessing its unique c o n t r i b u t i o n and prof itability since gross margin includes the variable costs incurred in production. energy). 5th edn. 18.. Growth may also be secured through h o r i z o n tal integration. green issues see c o n s u m e r i s m gross margin Dominic Wilson Gross margin (usually expressed as a percentage of sales) is sales revenues minus the costs of production (e. Aaker (2001) adds v e r t i c a l i n t e g r a t i o n as a growth strategy. . Corporate Strategy. On the other hand. switch customers from rival prod ucts. or it may be completely unrelated. labor.

and thus influence repurchase/repatronage behavior. Generic guarantees. Many producers and retail ers offer such guarantees because competitors often do so..144 guarantees guarantees Mark P. They are also a means of reducing post purchase dissonance (see c o g n i t i v e d i s s o n a n c e ) and of influencing consumers’ product and service evaluations (e. . make an assurance that it is ‘‘Never know ingly undersold’’ and offer to ‘‘pay the difference’’ if purchasers can buy the identical product elsewhere.g. Healey Guarantees can be employed as a technique for reducing p e r c e i v e d r i s k and thus in creasing purchase intentions/likelihood. of quality). such as those offered by retailers such as the John Lewis Partner ship.

for example. the attribution hierarchy proposes that con sumers move from acting to feeling to thinking (Wells and Prensky. conviction. This is known as the elabor ation likelihood model and describes two routes that the marketer can use for persuading con sumers to respond to marketing messages (see m e s s a g e ). In this case con sumers will be ‘‘motivated to integrate the new information into existing knowledge . The price knowledge and search of supermarket shoppers. liking. preference. . The c o g n i t i v e s t a g e is denoted by awareness and knowledge. and Sawyer. 54. Where consumers are highly in volved with products and prepared to devote significant effort to processing information. Bibliography Dickson. This is likely to occur where there is considerable b r a n d l o y a l t y based on high c u s t o m e r s a t i s f a c t i o n with previous pur chases of the b r a n d . 1996: 482–4). Logical pro gression through the stages is not always possible – indeed. Inertia may also play an important role where there is little perceived difference between available offerings (see o f f e r i n g ) and there is no other incentive. 1996: 446). 42 53. then advertising messages can be used to invoke a central route to persuasion.H habitual buying behavior Dale Littler Purchasers will tend to engage in limited search and evaluation behavior where the purchase has little i n v o l v e m e n t for the buyer. to change behavior. Hogg and David Yorke This is a model of m a r k e t i n g c o m m u n i c a t i o n s developed by Lavidge and Steiner (1961) that proposes seven stages through which the buyer/customer passes from unawareness of a product or service to purchase: unawareness. In addition to the standard high involvement hierarchy (see i n v o l v e m e n t ). such as a considerably lower price or dissatis faction with a previous purchase of the brand or product. the a f f e c t i v e s t a g e by liking. and conviction. However. and creative messages are often used in order to influence consumer . and purchase. the experien tial/impulse hierarchy moves from feeling to acting to thinking. and the c o n a t i v e (or behav ioral) s t a g e by a purchase. Also of importance is the consumer’s level of involvement in relation to the information con tent and creative form (see c r e a t i v e c o n t e n t ) of the marketing communication such as a d v e r t i s i n g . . much depends on the product or ser vice being offered and the target group of re ceivers. R. the low involvement hierarchy proposes that consumers move from thinking to acting to feel ing. preference. knowledge. and the behavioral influence hierarchy moves from doing to thinking to feel ing (Mowen and Minor. G. if the product or service is linked with low involve ment. For some repeat purchases the buyer simplifies the deci sion making even further by making the pur chase on the basis of what he/she has done before. hierarchy of effects model Margaret K. then marketing messages will appeal to the peripheral persuasion route. a w a r e n e s s . and will use this integrated knowledge to develop new attitudes or strengthen existing attitudes’’ (Wells and Prensky. Measures taken before or after a form of communication is used will enable objective(s) to be set and the commu nication’s success to be analyzed. Jour nal of Marketing. P. A. (1990). 1998: 256–7).

ch. Plan ning. M. Solomon. Kotler. Consumer Behavior. and Minor. M. (1998). C. R. (1961). J. Despite this. D. Levy. New York: John Wiley. and Weitz. 46 50. and suburban locations. Marketing Management: Analysis. Englewood Cliffs. (1994). (2002). Retailing Management. A model for predictive measurements of advertising effectiveness. Newman. Boston: McGraw-Hill. Retailing: Environ ment and Operations. 1998).) This type of shopping is frequently termed strip or ribbon centers by some US retailers (see. A. C. The Retail Development Process. ch. International Journal of Retail and Distri bution Management. Solomon. R. 59 81. 7.146 hierarchy of needs a t t i t u d e s in the short term rather than trying to get consumers to process the information into their long term memory (Wells and Prensky. Stores of this type are designed to provide a complete shopping service for a major part of the consumer’s needs (Newman and Cullen. Having. 2002). 1996: 447). (1994). Mowen. 2 (1). (2003). P.. and MacInnis. C. B. and Minor. R. (1998). as opposed to a vertically integrative strategy. D. G. and Prensky. (1992). as consumers gravitated toward large out of town supermarkets and one stop shop ping. See also shopping centers Bibliography Guy. Implementation and Control. Schiller. 8.g. 5. and Askegaard. Consumer Behavior: A Framework.. Boston and New York: Houghton Mifflin. ch. NJ: Prentice-Hall. (Traditional shopping areas are described by Guy. suburban locations and the growth of shopping malls and planned shopping centers has fueled horizontal integration Dale Littler This is regarded as an integrative growth strat egy and involves acquiring or merging with com petitors within the same industry. J. R. D. (2002). October. learn feel buy model Bibliography Hoyer. feel buy learn model. 7. E. P.. J. city. Journal of Marketing. hierarchy of needs debate concerning the future vitality and viabil ity of high street retailing (e. 11th edn. 61. Upper Saddle River. (1996). 11. Upper Saddle River. 15. NJ: Prentice-Hall. Levy and Weitz. e. Schiller. G. A. NJ: Prentice-Hall. 2nd edn. Being. and insurance brokers. The changes described reflect various economic and social changes in the UK and elsewhere that affect the relative ability of the small retailer to deliver the retail services expected by modern consumers (Newman and Cullen. 1994). Howard. International Review of Retail.g. S. Lavidge.. Continued movement of major retailers to newly developed out of town. (2002). . ch. Wells. Consumer Behavior. Evaluating the success of out-of-town regional shopping centers. 2nd edn. Upper Saddle River. many long established high street shops disappeared to be replaced by estate agents. NJ: Prentice-Hall. 22 (6). M. London: Routledge. D. NJ: Prentice-Hall. Mowen. The 1990s was characterized by a resurgence of town center development and the gentrification of dilapidated districts. (2001). Consumer Behavior: A European Perspective. and Steiner. Consumer Behavior: Buying. 5th edn. (2001). Bamossy. W. 2nd edn. banks. 5th edn. J. See also buy feel learn model. 1994. London: Thomson Learning. Consumer Behavior. W. ch. which involves the acquisition of s u p p l i e r s (backward inte gration) or customers (forward integration). 2002: 18). M. A. Upper Saddle River. ch. see c o n s u m e r n e e d s a n d m o t i v e s historic demand high street retailing see d e m a n d Steve Greenland and Andrew Newman High street retailing refers to retail activity in the traditional shopping areas of town. Distribution and Consumer Research. M. Vitality and viability: Challenge to the town center. and Cullen. urban. 3rd edn. J.

the computer works out the probabil ity (often called the p value) of obtaining a more extreme value of the test statistic than the one obtained.. See also competitive strategy. the alternative hypothesis typically predicts differences be tween groups on the specified parameter. For instance. Maidenhead: McGraw-Hill. there is an other kind of error. as small as possible by using very low significance levels. increases when the chance of a Type I error is reduced. Thus. P. Although there are many different tests depending upon the circumstances. The null and alternative hypotheses are specified before sample data are examined. which is the chance of not rejecting a false hypothesis. differences between means and proportions. e. This enables ranges of values for the test statistic to be worked out. if this is less than the previously speci fied significance level. when a null hypothesis is rejected. The question is. A null hypothesis is developed concerning a character istic or parameter of the population. the difference between two means or two proportions. which is maturing or declining. Alternatively. when calculated. Where the null hypothesis typically assumes no difference in a parameter between two or more groups.hypothesis testing Horizontal integration may not necessarily be undertaken as a means of growth. An alternative hypothesis is de veloped in relation to the null hypothesis. If the test statistic. which. on the face of it. In practice. a mean. by removing capacity. The alternative hypothesis can be a simple hypoth esis. (2001). Marketing Research. A battery of significance tests is avail able to test hypotheses concerning population means. a Type II error. but the actual difference between the sample means may be very small and of no practical signifi cance whatever. However. 6th edn. falls in one range. called a Type I error. make sense to make the chances of this error. proportions. . s t a t i s t i c a l t e s t s ). that the parameter is equal to a differ ent specific value. it is rejected if those chances are low. it is not rejected. the level of significance. The null hypothesis is that the population parameter. it might also be employed to rationalize an industry. e. based on data from a probability sample (see s a m p l i n g . when the calculations are being done using computer packages. is fixed before the test statistic is calcu lated. a proportion. correlation coefficients. the philoso phy underlying the tests is the same.g. for a given sample size and test statistic.g. the difference between the means of two groups may be statis tically significant (because of large samples). vertical integration hypothesis testing Michael Greatorex Hypothesis testing or statistical significance testing is important in m a r k e t i n g r e s e a r c h . what is a high and what is a low chance? A probability level. etc. Increasing the size of the sample is one way of improving the sensitivity of a test. there is a small chance of rejecting a hypothesis that is true. Bibliography Chisnall. say 5 percent or 1 percent or 10 percent. is equal to a particular specified value. otherwise the null hypothesis is accepted.. the null hypothesis is not rejected when the chances of obtaining a particu lar value or a more extreme value of the test statistic are high. the null hypothesis is rejected. it is rejected. or more usually that the parameter is not equal to (or sometimes either greater than or less than) the value specified in the null hypothesis. This is the hypothesis that is tested and is assumed to be true for the purpose of the test. assuming the null hypothesis to be 147 true. if it falls in other ranges. It would. It is important to note that a statistically sig nificant difference between the means of two groups may or may not say something about the practical or commercial difference between the two groups. growth vector matrix. The test chooses between the two hypotheses using a test statistic whose sampling distribution is known. usually ex treme ranges.

impact David Yorke In the context of a d v e r t i s i n g and decisions relating to choice of media (see m a s s m e d i a ). customer service. Retail Marketing. or corporation is important as there are clear links between consumers’ self image and their choice of product or brand – consumers will tend to choose the product or brand that they regard as being a reflection of their own self image (Hines and Bruce. Consumer Behavior and Culture. employee. language style. 3rd edn. publications. for example. advertisements. Thousand Oaks. and the perceived benefits. and Bruce. Fashion Marketing. brand. M. Hines.. 5. McGoldrick (2002) notes the importance of image monitoring to the evaluation and forma tion of retail marketing strategies. p r o d u c t . G. organizations take account of the potential impact of advertisements. D. T. and Myers. CA: Sage. ch. Bibliography Aaker. Maidenhead: McGraw-Hill. 2002. 2nd edn. For retail chains. J. This includes the physical environment. 2004). which is the impression. e. names. London: Butterworth-Heinemann. This results in the corporate identity. by the corporate buyer of a fleet of cars. The impact is related to the c r e a t i v e c o n t e n t of the advertise ment and the media scheduling (see m e d i a s c h e d u l e ). b r a n d . (2002). A hospital’s image includes all aspects of patient care. image.’’ ‘‘the store where you can see your friends. and local resident. influential people who express their likes and dislikes. M.’’ and the ‘‘store with helpful personnel. Images held by consumers are formed from a combination of factual and emotional material and are governed by past experiences. A. (1987). De Mooij. for example celebrities.I image Margaret Bruce and Liz Barnes Image is the perception of a service. 2004). Englewood Cliffs. For example. station ery. an advertisement for kitchen appliances would have a higher impact in Good Housekeeping than in Sports Illustrated. and the overall impression of the hospital by those who encounter the organization in a variety of forms as patient. Advertising Man agement. implementation Dale Littler The implementation of strategy is regarded as the third part of a four stage process of s t r a . and so on. P. signs. a clear differentiation is required. de Mooij. NJ: Prentice-Hall. The image (or identity) of an organization is the sum of all the ways the organization chooses to present or define itself to the various publics. and personality projected by the organization (de Mooij. by a family man. (2002).’’ Creating the right image for a retailer. or organization by its publics. and by a single female buyer. Impact is the qualitative value of an exposure through a given medium. (2004).g. McGoldrick. a Ford Escort may be perceived in different ways by Ford dealers. the distinction in being perceived as ‘‘clean and white. He claims that retailers are increasingly aware that a poorly per ceived image can result in low store patronage and ultimately in store failure. uniforms.

strategy formation above all as a process of con ception. L. The organization has to insure that the requisite resources are in place to support the strategy.g.impulse purchasing t e g i c p l a n n i n g involving the stages of an alysis. which. how they decide what should be done (e. 1973. (1988). European Journal of Marketing. 24 42. V. according to Bonoma and Crittenden (1988). These may demand pragmatic responses which. plans are devised that act as blueprints for action. 171 95. Reingen. 182). Hutt. 1988). as Piercy (1990) argues. Piercy. P.’’ From a consumer . rather than as one of learning’’ (p. J.. Bibliography Bonoma. actions can be taken to put the business back on course as specified in the planned strategy. and Ronchetto. and control. to fit in with their own personal requirements). what they communicate verbally or otherwise. However. then. of course. Those involved with the implementation of the strategy in some way can influence the real ized strategy through how they interpret what should be done. T. remote from customers and the ebb and flow of the market. Those at the interface with the market. 29 (Winter). 2 (Winter). the m a r k e t i n g function (or functions if it is a multidivisional company) will have responsibil ity for insuring that the appropriate aspects of the m a r k e t i n g m i x are carried out to make sure that the c o r p o r a t e s t r a t e g y is effect ively implemented. 52 (January). H. and the process of developing strategy may be intim ately interwoven with the action of implementa tion. Mintzberg. while. has tended to receive the greater academic emphasis. In larger organizations based on. Mintzberg. Those at the interface with the customer have a particularly important role in strategy imple mentation in service industries. planning. Appropriate feedback mechanisms should be in place to detect deviations from plans so that. Because of the uncertainties (see u n c e r t a i n t y ). Action. Effective implementa tion may. and Crittenden. V. the plan for mulators cannot possibly anticipate all of the issues and changes that arise. 16. for example. can affect the emerging strategy (see e m e r g e n t s t r a t e g y ). Journal of Marketing. (1973). implementation. and augment what may have been proposed in any original plans in response to newly emergent information. Tracing emergent processes in marketing strategy formation. for those who interact with customers and other important stakeholders. Sloan Management Review. The design school: Reconsidering the basic premises of strategic management. and other developments. (1990). H. Hutt. Marketing concepts and actions: Implementing marketing-led strategic change. Strategy making in three modes. and changes in the context within which they are operating. where possible. Organ izations may revise their strategy and how it is implemented in light of the feedback from cus tomers and others. Managing marketing implementation. a functional structure. (1988). competitors’ reactions. and Ronchetto. (1990). 7 14. will not have a detailed grasp of. 24 (2). in turn. and. H. California Management Review. but taking the decision to buy ‘‘on the spur of the moment. The process assumes that after analysis. Reingen. Mintzberg (1990) criticized the view of what he termed the ‘‘design school. N. adjust. be an iterative process which involves the major protagonists and which takes cognizance of the different power relationships in the organization. is regarded as divorced from the formulation of strategy. impulse purchasing Andrew Newman Impulse purchasing refers to the act of buying an item of merchandise without prior consideration or premeditation. M. for example..’’ which portrays formulation and application as separate stages: ‘‘Our critique of the Design School revolves around one central theme: its promotion of thought independent of action. D. will be faced with issues on a day to day basis that the planners. 44 53. 4 19. 3 (March/April).. the conse 149 quences of past actions. Strategic Management Journal. The view of strategy development often pre sented depicts the devisers of plans as separate from those who implement them. R. it might be expected that the imple mentation of strategy would itself be significant in shaping the way in which it emerges. it would be realistic to assume that organizations need to have the flexibility to adapt. 11. Strategy in some cases may be seen as emerging (Mintzberg.

W. personal. Rook. W. P. d i r e c t m a i l and t e l e m a r k e t i n g . M. 8. Evalu ation of the cost effectiveness of the stimulus is relatively easy in terms of either the number of positive responses. and Askegaard. m a g a z i n e s . ‘‘The buying process: Effects of and on consumer mood states. D. S.g. inbound communications David Yorke Communications in d i r e c t m a r k e t i n g may be either inbound or outbound (see o u t b o u n d c o m m u n i c a t i o n s ). 286. NJ: Prentice-Hall. which may invite a re sponse from the receiver in person. Direct Marketing Management. or t r a d e j o u r n a l s . 2002). Journal of Consumer Research. J. .. The buying impulse. J. indirect communications David Yorke Ma r k e t i n g c o m m u n i c a t i o n s may be either direct. e. e. D. particularly in the household and personal care product categories. (1986). Here the accent is on impulse pur chasing of a wide range of pick up items. face to face. Store in teriors can be lit with strategically placed light ing that highlights racks of goods and tempts customers with attractive offers. Former research in environmental psychology (Snodgrass and Russell. Bibliography Gardner.. e. this type of purchasing involves generally little or no information gathering during the search stage of the c o n s u m e r d e c i s i o n m a k i n g p r o c e s s .g. thereby impacting on the amount of money spent. (1985). Such behavior has therefore sig nificant implications for retailers and the layout of stores. and especially at the point of purchase. Upper Saddle River.150 inbound communications behavior perspective (see c o n s u m e r b u y e r b e h a v i o r ). G. 209 22. (2002). Journal of Environmental Psychology. and Berger. D. in writing. R. University of Southern California. Rook and Gardner. Retailing: Environ ment and Operations.g. 14 (September). Newman. Bamossy. many at very low prices. if possible. 22 (December). 1986) sug gests that some settings provide an important sense of emotional security. P. Gardner (1987). t e l e v i s i o n or r a d i o advertisements or ad vertisements in n e w s p a p e r s . For example. In Ronald P. The latter are initiated by the supplier organization directly to the buyer or customer. (1987). 2002: 286). In general. which consumers pick up ‘‘on impulse’’ (Newman and Cullen. customer. p. M. requests for informa tion.g.’’ Journal of Consumer Research. (1995). Normative influences on impulsive buying behavior. and Cullen. London: Thomson Learning. Rook. M. A. Mood factors and impulsive buying behavior. (1989). Rook. 12. consumers’ moods may be heightened or lowered by the impact of the physical (retail) setting. the value of sales generated. W. and Russell. J. regulate human emotional states. Journal of Consumer Research. where the lure of the surroundings and merchandise on display can imbue consumers with the desire to consume (see s t o r e d e s i g n ). NJ: Prentice-Hall. Journal of Con sumer Research. Solomon. Hill and Meryl P. Discount retailers in par ticular strategically target customers who buy on impulse. L. 1985. P. and there fore provides immediate gratification and sense of satisfaction. or. Bibliography Roberts. Inbound communication occurs when a potential buyer or customer is stimulated to reply to a form of indirect com munication that appears in the media. 189 99. The implications of this are that the physical setting can. Often this is because the consumer experiences a sudden urge that he/she cannot resist (Solomon. in some circumstances. A. 14 (September).. retailers carefully position mer chandise in stores to maximize the chance of customer purchase.. leading to im pulse purchasing (see a t m o s p h e r i c s ). Planning. Snodgrass. D. or in writing with the targeted buyer. M. e. 1988) and m a r k e t i n g (Gardner. verbal.. P. J.. 305 2. 2nd edn. Englewood Cliffs. 281 300. Consumer Behavior: A European Perspective. Mood states and consumer behavior: A critical review. R. Working paper. Stra tegic placing of accessories in close proximity to clothing and similar merchandise gives rise to associated sales. (2002). by telephone. 189 99. mood and place-liking. or through electronic mail. and Askegaard. Bamossy. (1988). and Gardner. and Fisher.

magazines. s a l e s p r o m o t i o n . armed forces. It referred implicitly to organiza tions engaged in industry (especially ‘‘smoke stack’’ industries). or process as against the creation of something new. which undermined existing forms and modes of doing things. t e l e v i s i o n . and unions. This is an imprecise categorization but might include individuals who are affected by a pur chasing decision without being directly in volved. technique. especially be tween commercial organizations such as banks. products. 151 ficult for personnel to steal components from a factory (e. During the 1980s it became accepted that the term was inadequate because it failed to reflect the full diversity of marketing activities between organizations. charities. publishers. structure. the importance of being alert to external innovations has been em phasized in the strategic management literature. Some firms are bankrupted and business confidence lost. not only to respond to and preempt such exter nal changes. schools. and retailers. The upswing of a major economic cycle (the Kondratieff 50 to 60 year cycle) has been associated with investment in a major innovation by pioneering entrepreneurs. orches tras. and the responses of entrepreneurs to them. only to be revived by the next innovation. service.g. though nowadays the term o r g a n i z a t i o n a l m a r k e t i n g is preferred by many authorities because it recog nizes that the principles and practice of marketing between organizations are not con fined to ‘‘businesses’’ but also extend to a vast range of organizations such as hospitals. theft of car radios from car factor ies). influencers Dominic Wilson Influencers are actual or potential members of the decision making unit (see b u y i n g c e n t e r ) and are those individuals who may be influential in the p u r c h a s i n g p r o c e s s without neces sarily being u s e r s . Given the significant changes that can occur in the environment (see e n v i r o n m e n t a l a n a l y s i s ) of an organization.g. prisons... such innovations are likely to be radical or discontinuous (see d i s c o n t i n u o u s i n n o v a t i o n ). distributors. security staff might suggest additional features (such as temporary electronic tagging) that would make it more dif innovation Dale Littler Innovation is distinct from invention in that it involves the adoption of a new idea. or indirect where it is intended that the target will receive a communications m e s s a g e through an appropriate impersonal chan nel. These are later followed by a host of imitators who temporarily glut the market so that price declines and profits collapse. newspapers. and processes (see c o n t i n u o u s i n n o v a t i o n ). r a d i o .innovation or consumer. whereas the majority of innovations are continuous or incremental adjustments to existing procedures. . He depicted this as a process of ‘‘creative de struction’’ caused by the introduction of innov ations. For example. p u b l i c i t y . or s p e c i f i e r s . governments. See also organizational buying behavior information systems see m a r k e t i n g i n f o r m a t i o n s y s t e m s industrial marketing Dominic Wilson This is the term originally coined in the 1960s to describe the process of m a r k e t i n g between organizations. The term b u s i n e s s t o b u s i n e s s m a r k e t i n g was then coined as an alternative. Indirect communication channels comprise the m a s s m e d i a (e. Companies need to be prepared to be innovative. However. d e c i d e r s . but also to establish a strategic agenda of their own. or packaging. structures. product. Schumpeter (1939) highlighted what he regarded as innov ation’s central role in economic development. trade jour n a l s ).

innovators are identified as the first 2. to purchase/adoption. 269 88. An innovation does not have to be absolutely new (‘‘new to the world’’) to be regarded as an ‘‘innovation. ‘‘more controlled. Foxall (1995) found that both adapters. i n t e r e s t .5 percent of those who adopt an innov ation. t r i a l . The degree of i n v o l v e m e n t with the product class may also be an important factor. flexible. (1995). Progression through the stages may or may not be logical and will depend on factors such as: the product or service being offered. and the buyers – their needs. innovation-adoption model David Yorke The innovation adoption model was developed by Rogers (1995). Cognitive styles of consumer initiators. In m a r k e t i n g . interest and evaluation to the a f f e c t i v e s t a g e . an innovation may be a new product/service per se (see n e w p r o d u c t d e v e l o p m e n t ). J. and so on. E. less dogmatic. E. See also adoption process. affected by five major features of the innovation: relative advantage. R. but here again adapters and innovators are present. ‘‘In terms of Kirton’s adaption innovation theory. 1995).’’ Bibliography Foxall. Level of involve ment is also found to be important.’’ but can be new only to the market or other context into which it has been introduced. New York: Free Press. consistent. G. 4th edn. Awareness relates to the c o g n i t i v e s t a g e of the process. be product category specific. steady. and less risk averse. R. A. undisciplined and sensation seeking than Adapters’’ (ibid. M. Business Cycles. M. sensitive. 15 (5). E. realistic. more outward looking. and Goldsmith. are among early pur chasers of a range of products. which is a measure of cognitive style. according to Rogers (1995). observability. New York: Routledge. (1994). through a w a r e n e s s . perceptions of risk (see p e r c e i v e d r i s k ). but it may also embrace a raft of other changes – new p a c k a g i n g . media habits.’’ who ‘‘tend to be more extrovert. . G. new modes of communication with customers – that can provide a c o m p e t i t i v e a d v a n t a g e if they are valued by cus tomers and provide a sufficient degree of differentiation from competitors. complexity. (1939). Personal involvement with the product field also emerged as a powerful explicator of ‘innovative’ consumer behavior’’ (Foxall.152 innovation-adoption model The diffusion of an innovation (see d i f f u s i o n p r o c e s s ) is. using the standard distribution curve. Using the Kirton adaption innovation (KAI) inventory. diffusion process. divisibility. 1995: 285). so called consumer innov ators might exhibit either adaptive or innovative cognitive styles. at least to some extent. efficient and orderly than Innovators’’ (Foxall and Goldsmith 1994: 136). prudent. Schumpeter. Technovation. systematic. and compatibility. Diffusion of Innovations. Diffusion of Innovations. and trial and adoption to the c o n a t i v e (or behavioral) stage. p e r s o n a l i t y . 133 45. reli able. socioeconomic position. 4th edn. In Rogers’s categorization of adopters on the basis of innovativeness. New York: McGraw-Hill. In summary. marketing communications Bibliography Rogers. assertive. R. ex pedient. Foxall. Consumer Psychology for Marketing. stage in the p r o d u c t l i f e c y c l e . new distri bution channels. (1995). from a state of unawareness. and ‘‘innovators. present product ownership. so that innovators may. who postulated a number of stages through which a targeted buyer or cus tomer passes. Bibliography Rogers. New York: Free Press. pp. more radical.). more tolerant of ambiguity. innovators Dale Littler Innovators are those who first adopt (see d i f f u s i o n p r o c e s s ) an i n n o v a t i o n . Foxall suggests that a more appropriate term for those who first adopt an innovation is ‘‘market initiator. (1995). In consumer markets they are seen as being venturesome (Rogers.

Its growth can be traced directly to emergent aca demic interest. like so many 153 m a r k e t i n g developments. spearheaded by work at the Medill School of Journalism. This definition implies that IMC has moved beyond m a r k e t i n g c o m m u n i c a t i o n s as tactical output. New York: Free Press. . and resource alloca tion. and evaluate coordinated. and to agencies who service their needs. . Yet IMC has a multiplicity of definitions and a multiplicity of understandings. it has been driven by several factors: . ad agencies are now integrated agencies. . Since that time. where each promotion mix element had its own foci and its own dynamics.. is not integrated (see above definition of IMC). commencing in the early 1990s. . IMC itself. But. The apparent adoption of IMC by major companies around the world.g. Topic Summary IMC extends well beyond the promotional mix. hence different applications. They are each exposed to dif ferent market dynamics. who were themselves driven by or ganizational exigency. e. Such a process is not just a matter of labeling. two related questions will be addressed: 1 What is IMC? 2 Can IMC be interpreted (understood) differ ently by academics and by practitioners? What is IMC? IMC is a product of the late twentieth century. Market dynamics. customers. The stages theory of IMC as well as the reluctance of many com panies to progress along a developmental path have been discussed elsewhere (see Kitchen. Kitchen Integrated marketing communications (IMC) ‘‘is a strategic business process used to plan. Hence. ‘‘promotion’’ had been internally driven by a philosophy of separatism.integrated marketing communications Rogers. Diffusion of Innovations. as wit nessed by articles in the trade literature. previously. Different definitions mean different interpret ations.. . 2004: 65). d i r e c t m a r k e t i n g . to marketing commu nications as strategic partner. conceptually and in terms of application. and other targeted. the development was embraced and supported by ‘‘gurus’’ in the generic marketing discip line (e. . measurable. In this short summary. Its birth can be traced to practitioner (a d v e r t i s i n g . the main practitioner magazine for the American Marketing Association). The fact that from its earliest beginnings. The need to overcome the ‘‘silo mentality’’ associated with promotion mix singularity. Integrated ap proaches make sense to businesses. 4th edn. i n n o v a t i o n . relevant external and internal audiences’’ (Schultz and Kitchen. E. the top selling textbook in marketing is by Professor Philip Kotler. its growth has been meteoric. and p u b l i c r e l a t i o n s ) activities in the late 1980s. there is potential and actual variability in terms of appli cations. . The widespread adoption of IMC by adver tising agencies (see a g e n c y ) around the world. Can IMC b e Interpreted (Understood) Differently by Academics and by Practitioners? The answer to this question is in the affirmative. (1995). The need to have ‘‘promotion’’ appear to be consumer oriented and consumer driven. Thus. M. Continued academic inputs in the trade and academic literature (see.g. Thus. execute. develop. persuasive brand communication programs over time with consumers. Northwestern University. Businesses are also diverse. Arriving at IMC as a strategic business process implies business de velopment. instrument equivalence see c o n s t r u c t e q u i v a l e n c e integrated marketing communications Philip J. prospects. also from Northwestern University). the series of articles and papers in Marketing News. led by Professor Don Schultz.

IMC is here to stay. half hearted approach to marketing and communications that is charac terized in two words: ‘‘inside out. P. Kitchen (ed. customer.. (2000). The text is designed to ‘‘prime’’ students to further studies in this emergent field of academic and practitioner endeavor. D. interaction approach Judy Zolkiewski The interaction model was first introduced in 1982 by the IMP Group. they adopt a simplistic. In P. all that is required for them to implement IMC is a rather straightforward bundling together of pro motional mix elements so that all messages speak. It means relearning how to communicate. 2004). J. Schultz. P. P. Communicating Globally: An Integrated Marketing Approach. Secondly. Integrated Marketing Communications: A Primer. as well as some earlier thinking in m a r k e t i n g and purchasing. Thus. (ed. Marketing Mind Prints. Basingstoke: Palgrave Macmillan. which most businesses do not. The group was involved in a joint research project. which saw the buyer/seller relationship as being central to the whole tenet of i n d u s t r i a l m a r k e t i n g . Johanson. that is an investment.e. based in international markets. The group was made up of like minded researchers from a number of European countries and included Ha˚kansson. P. and there was not a homogeneous market. Ford (1997) outlines the motivation behind the development of the interaction ap proach. Instead.. though the authors stretch beyond this in terms of critical comments and theoretical foundations. nor to ally marketing more closely with financial criteria. and de Pelsmacker. led to the realization that an interactive process was involved rather one of action and reaction. P. which included studies that had a distribution system perspective and studies that realized the importance of inter company relations. Invisible forces: How consumer reactions make the difference. Kitchen. Marketing Mind Prints. Furthering that understanding requires study and learning. they can be de scribed as relationships rather than as individual transactions. communications ob jectives. the fact that buyers were not passive. It means taking marketing itself seriously (see Kitchen. and it means communication has to change from inside out to outside in). understanding and inter pretation of IMC lead directly to application. to implement IMC at stage 1 means no real attempt has to take place to understand consumer.) (2004). there was the need for an emphasis on understanding and analyzing the relationship. Finally. Basingstoke: Palgrave Macmillan. J. No investment has to be made to build and maintain databases (see d a t a b a s e ) or to apply information technology rigorously. . or look alike. Basingstoke: Palgrave Macmillan. and resources. No attempt is made to measure marketing communications return on invest ment. London: International Thomson. J. Yet. a cost. (1999). Marketing Communications: Prin ciples and Practice. and Kitchen. sound. The theoretical framework of the interaction approach has its roots in inter organizational theory and new institutional economic theory. Valla. (2004). i. Firstly. and management or executive time. Cun ningham. J.). 5. J. Kitchen. i.’’ That is. It is indeed defined and practiced in various ways.154 interaction approach 2004). J. It marked an interesting and important development in the field of indus trial marketing: no longer was the m a r k e t i n g m i x considered as central in this area.e. (2004). In the latest text (Kit chen and de Pelsmacker. and Ford. Turnbull. 2004). transactions were not isolated events. time. Kucschken. See also communications mix. The reason for the apparent reluctance to move up a beneficial development path is simple – it costs money. and prospect dynamics (after all. London: Routledge. at least to receivers. ch. which in turn provides the basis for understanding the management of such rela tionships (from a buyer’s or seller’s perspective). Applying increased knowledge re quires financial and technological resources. communications research Bibliography Goldenberg. E. Kitchen. nor was the selling firm considered to be the only active partner in a relationship. the realization that much of the prevailing literature did not adequately describe what really happens in business markets. IMC is located in one stage. there was the recognition that many business interactions are long term and enduring.

structure. where technology. The individuals involved: The reaction of these individuals to the individual episodes impacts on how the relationship develops – this facilitates individual and organizational learning (Ha˚kansson. . as the relation ship develops.. 1982). They also recognize two levels of interaction: the organizational level. organiza tional. Finance (money): The economic importance of the relationship. These factors include the com plexity of the patterns of interaction that take place in industrial markets.g. structure of the organization. e. e. Organizational experience: Does the organ ization have experience of similar relation ships? Such experience can help in coping with the environment of the interaction. . 3 The environment in which the interaction occurs. . Episodes involve exchange between two parties and Ha˚kansson et al. which develops as a result of the individual episodes (Ha˚kansson. Information: Technical. They analyze the interaction by considering four elements: 1 The process. The Interacting Parties The IMP Group recognize that it is not simply the elements of the interaction that influence the process of interaction.g.interaction approach 155 The approach also emphasizes a number of other factors that need careful consideration when investigating industrial markets and that did not appear to have been considered in depth previously. Social interaction: This can reduce uncer tainty and is particularly important when the distance between the parties is high – it is one of the important factors in developing mutual t r u s t . and social. with both parties having clear expectations of the role of the other. in the case of capital goods (Ha˚kansson. Technology: Tying or linking technology be tween two parties is often seen as being a critical factor in the development of relation ships. where the aims and experience of the indi viduals involved are important (Ha˚kansson. . 2 The participants in that process.. financial. such as placing an order or obtaining information. Organizational size. and manage ment strategy are important. it can also present a powerful strategic tool and should be carefully considered in decisions about m a r k e t i n g strategy. They observe that the characteristics of the organizations (and the peo ple that represent them) are also important. Ha˚kansson (1982) believes that the individual episodes (especially social) are the building blocks for long term relationships. and strategy: Size and power of the parties provide the starting point for any interaction. the observation that links between buyers and sellers can often become institutionalized and close links can exist between companies that only buy/sell in frequently. The Interaction Process There are two distinct constituents of the inter action process: the short term episodes. Also. . it is often common to find that adaptations are taking place. which both affects and is affected by the interaction. They suggest that although adaptation may take place unconsciously. 1982). The IMP Group believe that the marketing and purchasing of industrial goods can be seen as an interactive process involving two parties inside a specific environment. 1982). and the individual level. how closely does it fit the buyer’s requirements. 4 The atmosphere. They identify the following features: . Is one party particularly dominant? Can it domin ate the relationship? . . etc. As relation ships develop they can become institutionalized. Products or services: The characteristics of the product or service are important here – how much u n c e r t a i n t y is involved. product changes may be introduced to meet a customer’s requirements or modifications may be made to the way deliveries or payments are made. identify four differ ent elements that can be exchanged: . and the longer term relationship. 1982).

Payne. Implications for Management . (1991). who discussed the need for relationship management and the results of adapting offer ings (see o f f e r i n g ) to individual customers’ needs. closeness/distance.. In this context customer portfolio man agement (see c u s t o m e r p o r t f o l i o s ) and areas such as key account management (see k e y a c c o u n t ) become important. Oxford: ButterworthHeinemann. Blois (1988) also raises this criticism of the approach and suggests that there is a need to understand the overall economic climate that prevailed during the indi vidual studies to gain real insight into the work ings of the relationships. San Diego. CA: Academic Press. Such an en vironment encompasses factors such as: . issues such as joint design. They interact with one another to provide dif ferent atmospheres in different circumstances. and Ha˚kansson (1982) suggests evaluating the atmosphere on two dimensions: economic and control. who reminded us that close relationships are not necessarily good. the wider environ ment also needs to be considered. not least in its role as one of the antecedents of the r e l a t i o n s h i p m a r k e t i n g paradigm (Christopher. Christopher. The Interaction Environment The interaction approach recognizes that the interaction between two organizations cannot be considered in isolation. or the impact of the euro come into effect (Ha˚kansson. J. K. They point out that relationships do not always have a positive bal ance of outcomes and may become burdensome. The social system: The characteristics of the wider environment surrounding the rela tionship. M. (1985). G. Consideration of the complexity of relationships was also highlighted by Ha˚kansson and Snehota (1995). . Do influences such as source of origin factors. N. and Ballantyne. power/dependence. An interaction approach to organizational buying behavior. which in turn is influenced by a group of variables internal to that relationship. These variables have also attracted much research attention. Bibliography Blois. . . Internationalization: How international is the market? . Position in the manufacturing channel: Is the company at the bottom of the chain or in the middle? This impacts upon how relation ships are related to one another. (1988). and Ballan tyne. . C. and new product or service development (see n e w p r o d u c t d e v e l o p m e n t ) are central issues for managers in the context of their strategic customer relationships. technology de velopment.156 interaction approach Atmosphere The atmosphere of a relationship is described by Ha˚kansson (1982) as a product of the relation ship. Addition ally. Campbell. exchange rate fluctuations. Payne. cooperation/conflict. This recognition of the complexity of the rela tionships in which a firm is involved has con tinued to provide a research focus and much of the more recent work of the group focuses on networks of relationships (see n e t w o r k ). Reprinted in David Ford (ed. Market structure: What are the other rela tionships in the same market? Is the market concentrated? What are the alternatives? etc. Oxford: Templeton College Management Research Papers. . Understanding Business Markets. expectations. Relationship Marketing. 1991). These variables include: ments of the buyer and seller. 1982)? Campbell (1985) points out that the concept of ‘‘environment’’ proposed in the interaction ap proach can be problematic because it is an aggre gated environment and does not really give explicit consideration to the individual environ The development of the interaction approach has had significant implications for the manage ment of industrial marketing and purchasing situations.. A. D. Dynamism: Is the relationship close? Are there costs associated with relying on this relationship? .) (1990). Buyer Seller Relationships in Industrial Marketing (MRP 88/9). . Other management implications have been identified by Turnbull and Valla (1986).

Competitive Strategy: Techniques for Analyzing Industries and Competitors. London: Thomson Learning. i. and Peter Naude´ (eds. 3rd edn. and investment in people becomes integral to the service–profit chain (see Heskett. Chichester: John Wiley.) (1986). All these methods of identi fying internal strengths and problems risk. Business Marketing: An Interaction and Network Perspective. or minimized (if they are unnecessary). Thus. difficult. (eds. 68. D. There are many ways to approach this audit.). M. The burden of relationships or who’s next. and Snehota. interaction model see i n t e r a c t i o n a p p r o a c h interactive acculturation model see a c c u l t u r a t i o n m o d e l s interest David Yorke Interest is a measure of a customer’s state of mind in relation to a p r o d u c t or service. Understanding Business Markets: Interaction. (1990). one method recommends the identifica tion of ‘‘strengths’’ and ‘‘weaknesses’’ (see s w o t a n a l y s i s ). International Marketing and Purchasing of Industrial Goods. (1980). H. internal marketing Barbara R.) (1995). Harvard Business Review. but all methods involve.internal marketing Ford. with the implication that operations that add little ‘‘value’’ to the organization’s output should be improved. Mo¨ller. David Yorke. while another method would be to identify ‘‘core’’ activities and ‘‘peripheral’’ activities (Prahalad and Hamel. H. K. Lewis internal audit Dominic Wilson An internal audit is one part of the m a r k e t i n g a u d i t (the other being e x t e r n a l a u d i t ) The role of an organization’s personnel in s e r v i c e q u a l i t y has come increasingly to the forefront.. New York: Free Press.e. but cancelation could have important implications for the per ception of an organization’s commitment to its stakeholders. 2nd edn. IMP 11th International Conference Proceedings. Understanding Business Marketing and Purchasing. Present. T. (ed. W. Strategies for International Industrial Marketing. Ha˚kansson. Porter (1980) suggests that internal activities can be analyzed in terms of a ‘‘value added’’ (see v a l u e c h a i n ). Ha˚kansson. E. in essence.-P. Prahalad. and weaknesses of an organiza tion. and Wilson. (ed. 1997): . as with most elements at the affective stage. London: Dryden Press. Past. the allocation of all internal operations and assets into various categories labeled judgmentally according to whether they are perceived as organizational advantages or disadvantages. London: Croom Helm. D. Thus. the development of a positive attitude as a prerequisite to purchasing the product or service (see a i d a m o d e l . Relationships and Networks. Future. Ford. G. losing sight of the col lective synergies arising from the operations of the organization as a whole. (ed. or subcon tracted (if they lie outside the organization’s core competence). I. Boston: Kluwer Academic. In Peter Turnbull. C.) (2002). K. 1990).) (1997). i n n o v a t i o n a d o p t i o n m o d e l ).) (1982). (1995). Sasser. 3 (May/June). Manchester: Manchester Federal School of Business and Management. an activity such as an annual Christmas party or a weekly newsletter to customers may not seem to add significant value to the organization’s offerings (see o f f e r i n g ). Turnbull. through disaggregation. The core competence of the corporation. 157 and involves examination of the internal oper ations. strengths. D. (eds. and Schlesinger. Interaction. and Hamel. 79 91. It is a part of the a f f e c t i v e s t a g e in a number of models of m a r k e t i n g c o m m u n i c a t i o n s . Bibliography Porter. and Valla. Measures of evaluation are. Relationships and Networks. J. P.

team work skills. These include relationships between customer contact and backroom staff. and attitudes with respect to working conditions. customer conscious.. Berry. Key characteristics for employees to perform effect ively may relate to: process and technical skills. avoidance of role conflict. and profit sharing . which views employees as internal customers and jobs as internal products (Berry. wants. supervisory con trol systems. In other words. who have responsi bility for developing enlightened personnel pol icies to include recruitment. awareness of employees’ role in assessing and meeting cus tomer needs. holidays. rewards. and Parasuraman. Successful personnel policies include recruit ment and selection of the ‘‘right’’ people. selection. interpersonal and communication skills.. and the extent of relationships with customers and with other em ployees. and em pathy with the external customers. Knowing that man agement has confidence in employees helps create positive attitudes in the workplace and good relationships between employees. In addition to product/technical knowledge and relationship management. employee–job fit. vary as a func tion of the amount of contact (visible and non visible) with customers. employees must be willing and able to deliver desired levels of service and so avoid Gap 3. flexibility and adaptability. 3 Tactical: To sell service campaigns and m a r k e t i n g efforts to employees – the first marketplace of the company – via staff training programs. Empowerment should lead to better job performance and improved morale. and decreased ab senteeism. share options. the skills and equip ment/technology required.158 internal marketing internal service quality ! employee satisfaction ! employee retention ! external service qual ity ! customer satisfaction ! customer reten tion ! profit Much of the attention given to personnel relates to the concept of internal marketing. 1990). and be tween employees and customers. technol ogy–job fit. In addition. personal skills and interpersonal communication skill develop ment allows organizations to empower employ ees to respond to customers’ needs and problems (e. satisfying the needs of internal customers upgrades the capability to satisfy the needs of external cus tomers. Training needs will. company. and also appraisal. Bowen and Lawler. and care oriented personnel. Training programs cover: product. between operations and non operations staff.g. 1988. typically motivating factors. (1988) indicate that successful training programs lead to: teamwork. 1992. and a com pany needs to sell the jobs to employees before selling its service(s) to external customers (Sas ser and Arbeit. Zeithaml et al. at all levels and between levels (Lewis and Entwistle. 2 Strategic: To create an internal environment that supports customer consciousness and sales mindedness among personnel. see s e r v i c e r e c o v e r y ). It is a form of job enrichment. 1980). should be subject to market research and segmentation (see m a r k e t s e g m e n t a t i o n ). and avoidance of role ambiguity. and be tween staff and management at all levels and locations. however. pensions. Gro¨nroos (1981. benefits. Rewards Berry (1981) suggested that employee rewards.g. and recog nition. and the economic impact of every one working together to support company goals. 1985) referred to three objectives of internal marketing: 1 Overall: To achieve motivated. and company pol icies. perceived control. evidenced by increased commitment to jobs and reflected in attitudes toward customers. In general. see s e r v i c e q u a l i t y g a p s ). People are as different as employees as they are as customers and may be segmented in a number of ways. and training. increased productivity. creche and nursery facilities. with respect to flexible working hours that lead to increased job satisfac tion. and systems knowledge. Critical to this are s e r v i c e e n c o u n t e r s within organizations. that contrib ute to the service delivered to external custom ers. referred to as the service performance gap (Zeithaml. e. ‘‘cafeteria benefits’’ could be appropriate with respect to health in surance. Organizations can carry out research among employees to identify their needs. Internal marketing is primarily the province of human resource managers. 1976).

. 61 5. and Carson. D. (1999). age. (1980). L. Gro¨nroos. Jr.). and perform ance evaluation together with performance re lated pay. W. Donnelly and W.) to choose their benefits. They iden tified some limitations of the popular concept of internal marketing and offered a broader con ception to include: marketing oriented service employee management. Sasser. (2000). (1995). (2001).. Sloan Management Review. D. In B. L. A. L. internal marketing as a social process. who considered how it might be de veloped to take greater account of the social and non economic needs and interests of people working in an organized enterprise. and may involve career development. and Lewis. E. 12. (1976). Services Marketing in a Changing En vironment. In J. Vandermerwe. how and when. Chichester: John Wiley. J. Spring. Managing the service encounter: Focus on the employee. Heskett. 33 40. 24 9. ch. New York: McGraw-Hill. and Entwistle. D. New York: Free Press. 3rd edn. Journal of Marketing. Bowen. (1981). A. 35 48. L. M. Selling jobs in the service sector. Internal Marketing. c u s t o m e r s a t i s f a c t i o n . The notion is that employees use ‘‘credits’’ (as a function of salary. models of internal marketing. K. L. etc. 19. 159 Gilmore. and Arbeit. Bowen. what. customer loyalty. but also with marketing managers and operations management. T. 41 52.. J. Oxford: Blackwell Publishing. Varey. The first refers to the physical movement of goods from the place of manufacture to a location in or close to points of purchase. 14. C. Chicago: American Marketing Association. (1992). and Parasuraman.). Zeithaml. B.. A. the organization as an internal market. Managing human resources for quality management. Empowerment: Why. and Bitner. G. pp. L. 1 (3). Maidenhead: McGraw-Hill. Understanding Service Management. Managing and marketing to internal customers. Finally. i. Gro¨nroos. A. C. J. ch. pp. Inter national Journal of Service Industry Management. E. Services marketing is different. B. M. 73 84. and empowerment. Customer service awards may be financial or not. Oxford: Butterworth-Heinemann. (1999). Gro¨nroos. Bibliography Ahmed. Successful internal marketing requires human resource managers to develop relationships not only with employees. 176 202. A. A location in a point of . Lewis. A. 30. S. The Service Profit Chain. and Lewis. European Journal of Marketing. In T. J.). 236 8. Internal marketing: Theory and practice. Chichester: John Wiley. and Lawler. Berry. service. W. and Schlesinger. L. Palmer.). The concept of internal marketing has further been researched by Varey and Lewis (1999. the individual person in an internal market. E. ch. M. 3 (1). and V. Internal marketing: An integral part of marketing theory. L. B. Business Horizons. Lovelock. (1985). 41 7. (2003). R. H. and will lead to an appropriate service culture to support relationships with external customers. Marketing of Services. Services Marketing: A European Perspective. Berry. 52 (April). 2nd edn. Empowering service workers. fringe benefits to embrace the heterogeneity of the labor force. Glynn and J. A. 14. pp. V. Internal Marketing: Tools and Concepts for Customer Focused Management.. C. Zeithaml (eds. 295 321. Principles of Services Marketing. G. R. Bloch.. R. 2000). (2003). Managing Quality. A broadened concept of internal marketing. L.. In W. Service Management and Marketing. George (eds. (2002). The employee as customer. recognition. Busi channel management schemes. 3rd edn. the term distribution has two distinct yet interconnected meanings. 4th edn. ch. Sloan Management Review. appraisal. E. (1997). Recent attention of service companies is focused on issues of supervision. L. Upah. G. (1990). Varey. L.e. (1988).). J. (1995). A. and Rafiq. Services Marketing: Integrating Customer Focus Across the Firm. Journal of Retail Banking. D. Chicago: American Marketing Association. L. 31 9. S. Upper Saddle River. and Lawler. P. and Lewis. (2000) (eds. Sasser. Summer. and Brown. 33 (9/10). C. P. R. 11. international channel management Rudolph Sinkovics In m a r k e t i n g . NJ: Prentice-Hall. Berry.. E. 926 45. and links with service quality. Barnes (eds. Wilkinson. Dale (ed. A. Zeithaml. London: Routledge. R. (1981). a relational perspective on communica tion. W. Communication and control processes in the delivery of service quality. 3 (May/June). and rewards schemes for excellent employees. pp. and profitability. V. Ahmed and Rafiq (2002) discuss the development and evolution of the internal marketing concept. B.

I. The literature also identifies cultural chal lenges between the distant parties and suggests a relational approach that combines transactional and moderate behavioral control measures for effective inter organizational relationships (Heide. The precise choice of these channel partners is influenced by factors such as the nature of the product or service. However. J. TX: Dryden Press. O. Inter nationally operating firms need to address five strategic decisions in the selection and imple mentation of channel management schemes (Terpstra and Sarathy. Interorganizational governance in marketing channels. its strategic remit. The effect of output controls. Fort Worth. spare parts to industry in a given region.g. Dutta. otherwise there is a natural tendency for opportunism and non conformism on the part of the channel part ner. retail distribution channels Bibliography Bello. or franchisees (see f r a n c h i s i n g ). 1 24. 71 85. (1992). The media and practitioners often refer to an international joint venture as anything from a business collab oration or alliance (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ) on a contractual basis to an equity entity that is owned and controlled by two or more partners from different countries. 58 (1). and flexibility on export channel performance. Bergen. and Sarathy. 1992) suggests that exporters need to enforce appropriate controls. (1994). 61 (1). process controls. V. C.. Journal of Marketing. Terpstra. international joint ventures Charles C. D. dis tributors. 22 38. Journal of Marketing. 1994. and Walker. its knowledge and experi ence of given markets. once a con tractual agreement is signed. M.. and Walker. to manage the rela tionship successfully. See also channels of distribution. Jr. Agency relationships in marketing: A review of the implications and applications of agency and related theories. 1997). the degree of day to day control that the marketing firm wishes to exer cise from the outside. and its i n t e r n a t i o n a l m a r k e t i n g policy. representatives who may be externally appointed (e. Bello and Gilliland. Distribution in this sense is called l o g i s t i c s or physical distribution management. D. or gov ernment owned companies. 2000): 1 Should the firm extend its domestic distri bution approach to foreign markets or adapt its distribution strategy to each national market? 2 Should the firm use direct or indirect chan nels in foreign markets? 3 Should the firm use selective or widespread distribution? 4 How can the firm manage the channel? 5 How can the firm keep its distribution strat egy up to date? One problem in international channel manage ment is the geopolitical separation of (exporting) firm and channel intermediaries (agents or dis tributors). Distribution arrangements for international markets are varied. B. an export house). This will be discussed further here. The persons or organizations involved in the distribution process include agents. The exporter relies on intermediaries for its local knowledge and access to local cus tomers. Joint venture partners may be privately owned companies. S. The . a location near a point of purchase might be a storage facility supplying. The second meaning refers to channel manage ment.160 international joint ventures purchase might be a supermarket. C. (2000). 8th edn. Heide. Dutta. International Marketing. 56 (3).. the intermediary – while a crucial facilitator of the exporter’s market entry and consecutive market development activities – may potentially exploit the exporting firm’s de pendence unilaterally. Cui An international joint venture (IJV) refers to a cooperative operation formed by two or more independent entities from different countries to achieve common or complementary object ives. and Gilliland. For the exporter this means that it is crucial to select the best channel partner for its requirements and. government agencies.. Journal of Marketing. A marketing channel can be seen as a con catenation of individuals and organizations in volved in the process of making goods or services available for use or consumption. (1997). Agency theory (Bergen. say. R. locally estab lished sales offices.

In business joint ventures specific legal definition varies across countries. Buckley. jointly controlled assets. C.. P. J. The international joint venture is character ized by jointly controlled operations. 1995). L. equity) of a par ticular enterprise or investment project by more than one partner organization or economic group. (1997).). strategic behavior. 20. Many nations have encouraged the use of IJVs as a means for local companies to acquire technology. D. See also international market entry and develop ment strategies Bibliography Boersma. 32 (4). and Lu. 343 57. 2003). an international joint ven ture is identified as either a contractual joint venture or an equity joint venture. and profits. Geringer. Shenkar. 1989). F. Trust in international joint venture relationships. Ball. and Coyne. (2002). Child. (2002). A. hence issues involved in cooperation and control are often the major concern. and Ghauri. covering many sectors. Ownership and control in Sino-foreign joint ventures. C. cross cultural differences and lon gevity (Hennart and Zeng. risks. Boersma.. W. and n e t w o r k in the global market. cooperation. P. plant and equipment. gaining access to indigenous management talent. and Ghauri. 1994). Since the 1990s scholars have focused on wider issues with new orientations. 161 In the 1970s and 1980s. 2002). 56 (12). management expertise. and jointly controlled entities. and so on. P. Beamish and J. Journal of International Business Studies. (1989). 181 225.. J. and Hebert. Control and performance of international joint ventures. the impact of source country factors on equity ownership (Pan. reducing the production cost. Ball. Y. M. the longevity of IJVs based on organizational learning theory. N.. An equity joint venture includes the sharing of assets. Jour nal of Business Research. (1991). L. The IJV is a popular mode of market entry and expansion. 1991. Yan. Geringer. and trust (Currall and Inkpen. the interaction of transaction cost and strategic option. and performance (Luo. pp. Buck ley. J. M. .. C. choosing the wrong part ner. (2003). J. misfit of communications and managerial styles. 249 63. which is markedly higher than other alternative forms of market entry and operation. taking advantage of the local network for market expansion. R&D Management. and organiza tional behavior (Kogut. M. and/or technology and other forms of assets. C. 2002). and Lu. 33 (3). A contractual joint venture refers to a partnership in which two or more partner organizations share the cost of an investment. industries. In recent years an increasing number of global corporations and small firms have become involved in IJVs. and Nyaw. 235 54. fail ure in building t r u s t and handling conflict. Y. Killing (eds. 1997. 2002. 2001). including how parent companies control IJVs through ownership structure and the integration of an IJV into parent company activities (Child. the relationship involving contract. San Francisco: New Lexington Press. Luo. Cui. Equity joint ventures take the form of a limited liability company.. partners’ working relationship and managerial fit (Cui. forming an IJV when it may not have been the best form to be used.. and Inkpen. Journal of International Business Studies. Reasons for IJVs’ instability include mismatch of objectives. The equity contrib uted by the partners may take the form of money. J. the risks. studies on IJVs were mainly based on approaches of transaction cost economics.e. Currall. and knowledge of local legislation and market condi tions (Young et al. and Hebert. agency costs and parent firm performance. Yan. It is known that the failure rate of IJVs is above 30 percent. Yan and Gray. strategic choice of IJVs. In P. the relationship between control and performance (Geringer and Hebert. Working effectively in strategic alliances through managerial fit between partners: Some evidence from Sino-British joint ventures and the implications for R&D professionals. 479 95. Cooperative Strategies: Asian Pacific Perspectives. 2002). inadequate market research and feasibility analysis. Measuring performance of international joint ventures. relationship management (Madhok. its cooperative and interde pendent nature makes the IJV fragile and vul nerable to failure. and product groups. and the long term profits. 2002). Journal of Inter national Business Studies. S. Firms use IJV as a market entry form to achieve strategic purposes such as penetrating the international market. A multilevel approach to trust in joint ventures. and partici pation in the ownership (i. However. misunderstanding of managerial roles. 22 (2). 1988). 1031 42. and Coyne..

.-F. are listed. Y. Scandinavian Journal of Management. (1994). 87 102. Management International Review. international market entry decisions are complex and dynamic. Pan. Further factors deter mining the appropriate entry choice include time. and Zeng. O. Cross-cultural cooperative behavior in joint ventures in LDCs..-K. A. Anderson and Gatignon (1986). figure 1 depicts the principal methods of market entry and development graphically. and Beamish. in that the shorter expres sion focuses attention only on methods of entry. Academy of Management Journal. M. flexibility. Cross-cultural differences and joint venture longevity. and acquisitions/wholly owned subsidiaries. and performance in international joint ventures. barriers to entry. Market entry and development strategies greatly differ in advantages and drawbacks and since the trade offs are difficult to evaluate. Hemel Hempstead: Harvester Wheatsheaf/Prentice-Hall. A dual parent perspective on control and performance in international joint ventures: Lessons from a developing economy. Shenkar. Cooperative Strategies in International Business. 37. Madhok. 23. 1478 1517. e. It is possible to make a distinction between strategies that involve m a r k e t i n g only and those that involve marketing and pro duction. Young. Journal of International Business Studies. Contract. Julian. (1995). however. The effect of firm and marketplace characteristics on international joint venture (IJV) marketing performance. international market entry and development strategies Rudolph Sinkovics International market entry decisions are often treated as if they were binary. (2002). 169 85. Jeannet and Hennessey. international j o i n t v e n t u r e s . entailing a continuum of varying levels of involvement in foreign target countries. Heath... 41 58. P. R. Strategic Management Journal. H. 11 (1). l i censing. risk. of which so called strategic alliances (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ) are a prime example. In Farok J. 1989). management control. C. Contractor and Peter Lorange (eds. (2002). and degree of autonomy and trans fer of resources (see. building on transactions cost analysis. Luo. C. and Nyaw. J.162 international market entry and development strategies Hennart. 33 (4). Opportunism and trust in joint venture relationships: An exploratory study and a model. This classification also comprises man agement contracts and turnkey contracts. whereas the reality of i n t e r n a t i o n a l m a r k e t i n g is that the method of entry is a prelude to market penetration: the process of business development and consolidation within a foreign market over time. In reality. 57 74. Luo. 30 (Special issue). 2004).). cooperation.g. Y. (1990). 375 84. the selection of methods of market entry or combination of methods is directly con nected to both the overall business strategy for the market in question and the scale of invest ment allocated to achieve the s t r a t e g i c objectives. pp. J. A. various classifications have been developed. C. Hamill. B. They depend on the quality and . A. and Davies. (2002). (2001). S. 14 (1). franchising. B. have concluded that the most appropriate entry mode is a function of the trade off between control and the cost of resource commitment. Terpstra and Sarathy. (1989). Journal of Inter national Business Studies. Thus. (1988).. the use of the term ‘‘market entry and development strategies’’ has advantages over the term ‘‘market entry’’ (Young et al. M. J. 2000. Yan.. Wheeler. Y. Lane. These in clude indirect and direct e x p o r t i n g . Kogut. 903 19. Market entry decisions are among the most important that internationally operating firms must make. MA: D. In other words. Equity ownership in international joint ventures: The impact of source country factors. Journal of International Business Studies. and O’Cass. 33 (2). 32 (1). comprising simple ‘‘entry/non entry’’ options.. International Market Entry and Development: Strategies and Management. Sometimes also cooperation agreements. Bargaining power. Lexington. (2002). A study of the life cycle of joint ventures. and performance in United States China joint ventures. Another way of thinking about market entry and development strategies is to classify alterna tives into direct and indirect methods (see table 1). and Gray. Building on the control/resource commitment trade off. Asia Pacific Journal of Marketing and Logistics. financial commitment. 699 716.

Joint ventures . decisions on market entry and development involve channel manage ment issues (see i n t e r n a t i o n a l c h a n n e l m a n a g e m e n t ) or m a r k e t i n g c o m m u n i c a t i o n s including a d v e r t i s i n g . 1997) Table 1 Market entry and development strategies Indirect entry Direct entry Marketing only strategy (home production) . Import houses . Public trading agencies .international market entry and development strategies 163 Acquisition/ wholly owned subsidiaries high Joint Ventures Franchising • Control • Capital Investment • Presence in foreign market Licensing Direct Exporting Indirect Exporting Production abroad Home production low low Resource deployment (home or host-country focus) high Figure 1 Market entry alternatives (adapted from Mu¨ller-Stewens and Lechner. Export departments . Furthermore. and definition of objectives. . Direct foreign investment . Acquisitions Exporting Direct mail (from outside) Export management companies Export trading companies accuracy of information inputs obtained through international marketing research. they have a direct bearing on the evolution of the main m a r k e t i n g s t r a t e g y for the selected foreign market. Franchising . subsequent resource commit ments. Marketing and production abroad . Licensing . . Any one particu lar method or combination of methods comes with operational implications: control issues (are key decisions affecting operations in the market taken by a firm’s local representatives or by an independent center such as a firm’s international headquarters?). Production or management contracts . . Miscalcu lations arising from wrong decisions can result in unforeseen and therefore unwelcome costs in the . initial resource commitment. Foreign sales representatives or branch offices . Wholesale or retail purchasing groups . In the case of consumer products.

For the interest of national economies. 6th edn. Their framework integrates multiple theoretical work from the international product life cycle (IPLC) theory (see p r o d u c t l i f e c y c l e ). 231 52. Journal of International Marketing. This requires the firm to deliver goods and services and com municate information with customers of differ ent industrial and commercial experience from different cultural backgrounds. and Lechner. and customer behaviors in different national and cultural markets. Modes of foreign entry: A transaction cost analysis and propositions. local business n e t w o r k and logic. International Marketing. (1986). A refreshing perspective on internationaliza tion and market entry is offered by Malhotra. l i c e n s i n g . (2000). international marketing activities provide the opportunity to mobilize resources beyond national borders. J. E. 2000). international marketing pro vides the firm with effective marketing processes and operational tools for facilitating corpor ate growth. the market imperfection theory. and sociocultural factors. Handbuch Internatio nales Management. The value of international marketing can be seen at two levels.).. D. who present a uni fied theoretical framework that explains the internationalization process. C. Young. (2004). and Hennessey. 1 26. J.-P. J.164 international marketing form of product modifications. As a result of differences in national environments. international marketing Charles C. R. strategic behavior theory. International Market Entry and Development: Strategies and Management. and timing strategies. multidomestic. TX: Dryden Press. the eclectic theory. Unternehmensindividuelle und Gastlandbezogene Einfluafaktoren der Markteintrittsformen. transaction cost economics. Malhotra. J. and glocal marketing (Svensson. organizational and management systems. redeployment or reselection of market intermediaries. Global Marketing Strategies. accumulate foreign ex change reserves. and Ulgado (2004). International marketing operations in volve different types (or a combination) of activ ities and management systems such as export (see e x p o r t i n g ).. exchange rate dy namics. There is no universally agreed definition of inter national marketing. F. Boston: Houghton Mifflin. In Klaus Macharzina and Michael-Jo¨rg Oesterle (eds. R. 8th edn... entry modes. improve national productivity. inter national marketing entails familiarity with foreign market environments. N. Other terms are also found in the literature. and direct investment through equity joint ventures or wholly owned subsidiaries. 17 (3). Internationalization and entry modes: A multitheoretical framework and research propositions. Hemel Hempstead: Harvester Wheatsheaf/Prentice-Hall. Fort Worth. Cui International marketing is generally known as m a r k e t i n g activities across borders. and the network theory and in cludes large and small as well as manufacturing and service firms. and sustaining . wants. strat egies and approaches. G. (1997). promote information and technology advance ment. inter national marketing can be understood as the firm’s marketing management process for iden tifying and satisfying needs. transnational. Bibliography Anderson. and Gatignon. the international ization theory. and Sarathy. or price increases. 2002). Agarwal. 11 (4). Wiesbaden: Gabler. S. and Davies. inter national marketing is characterized by the complexity and diversity in its marketing operations (Craig and Douglas. and Ulgado. multiregio nal. M. H. pp. (2004). K. Nevertheless. 1 31. Hamill. Jeannet. Wheeler. and enhance general quality of life. Mu¨ller-Stewens. strengthening competitive edge. improving financial performance. f r a n c h i s i n g . Agarwal.. contractual arrange ment or joint ventures (see i n t e r n a t i o n a l j o i n t v e n t u r e s ). strategic alliances (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ). (1989). including multinational. Journal of International Business Studies. and various geopolitical. economic. multilocal. V. the resource advan tage theory of competition. In contrast to domestic marketing. C. H. Terpstra. Continuous efforts are being made toward an unambiguous and consist ent term. Marketing activities taking place in more than one country are often described as international marketing or global marketing. For individual firms. and values of customers in multinational and multicultural markets for profit and growth.

International Business Review. 574 83. cultural. b u y e r b e h a v i o r t h e o r i e s ) in inter national markets and foreign countries. The firm’s in creasing involvement in the global market and an emphasis on catering for customers within the context of the firm’s market environment in the 1980s played a role in the development of international marketing as a discipline (Bradley. The History of Marketing Thought. Hence. The literatures of management. Advances in international marketing theory and practice. 7 Interaction approach (see i n t e r a c t i o n a p p r o a c h ). International Marketing Research. (1987). Chichester: John Wiley. A classification and assessment of research streams in international marketing. R. anthropol ogy. Katsikeas. 15. 1987). (1988). 2003). which examine similarities and differences among market systems and practices in different countries. and alli ances among international companies. 4 (3). it is important to appreciate that sociocultural factors have a tremendous influence on marketing marketing culture corporate i m a g e and p o s i t i o n i n g in the world market. S. a stream that views the world market and customer tastes as increasingly converging and investigates the impact of such change on firm strategies. Beyond global marketing and the globalization of marketing activities. product and p r i c i n g policies. 12. C. (1995). T. S. which investigate the impact of economic. C. As a growing body of knowledge and an estab lished discipline. 5 International marketing research (see i n t e r n a t i o n a l m a r k e t i n g r e s e a r c h ). involving the e x c h a n g e of goods and services. Bradley. 1995): 1 Environmental studies of international marketing. Journal of Business Re search. (2000). OH: Publishing Horizons. 1987). 1988). cooperative ventures. 165 which involves the methodology of conduct ing research in the international context. 3 International marketing management. 6 Buyer behavior studies. 205 19. which focus on managerial issues of export and entry strategies. and sociology are replete with definitions . Although the discipline was criticized for not being ready to form many theories by the late 1980s (Bradley. International Business Review. Nature and significance of international marketing: A review. Bibliography Bartels. It was only in the late 1950s and early 1960s that scholars started to pay attention to the dif ferences between domestic and foreign market environments (Bartels. which research on the behavioral and attitu dinal changes experienced by firms in the process of internationalization. 4 Internationalization process perspectives. 1995). and Douglas. P. since the 1990s it has evolved into an integrated and systematic field of study and has achieved a certain degree of scientific status (Li and Cavusgil. Management Deci sion. marketing is a cultural as well as economic phe nomenon. m a r k e t s e g m e n t a t i o n . political. 2 Comparative studies of market systems. Particularly in the context of i n t e r n a t i o n a l m a r k e t i n g . as evi denced by the efforts to apply vigorous research methods in the field and the resultant exponential growth of literature (Katsikeas. S. (2003). 8 Market globalization perspectives (see g l o b a l i z a t i o n ). we must acquire knowledge of diverse cultural environments in order to successfully integrate cultural dynamics in marketing decision making. international marketing culture Rudolph Sinkovics Although m a r k e t i n g is primarily seen as an economic activity. and legal factors on international marketing activities. Craig. 251 77. 135 40. and channel distribution and service. G. S. (2002). international marketing con tains an increasing number of theories that deal with complex issues in cross border and cross cultural marketing activities and provide marketing tools for firms and practitioners en gaged in the international marketing process. F. investment decisions. and Cavusgil. 2nd edn. 40 (6). Svensson. M. which explore buyer behavior (see b u y e r b e h a v i o r m o d e l s . Columbus. which examines relationships of networks. T. Studies of the phenomena of international marketing are seen in eight broad categories of research streams (Li and Cavusgil. Li.

1995). looked at this way.166 international marketing culture of ‘‘culture’’ and numerous scholars have analyt ically approached cultural factors and their im plications for management. emphasizing how these elements act as a con straint on international marketing activity in a general way (e. 1 14. 2002. in this sense. (2001).g. . The Silent Language. 75 89. Trompenaars and Hampden Turner’s Riding the Waves of Culture (1998) dispels the idea that there is only one way to manage and encourages us to under stand our own culture in the workplace before managing or doing business with other national cultures. Theodosiou and Leonidou. 2000. 12 (1).’’ This definition im plies that culture underpins values and. Review of a 40-year debate in international advertising: Practitioner and academician perspectives to the standardization/adaptation issue. 1988) and with direct relevance to international business and management (Hofstede. International Marketing Review. Culture. and values are building blocks of culture. within reason. who is the target of so called ‘‘Euromarketing’’ (Schuh. aesthetic codes. International Business Review. Sol berg. N. In a significant study of the impact of cultural difference on manage ment performance and behavior. that culture is learned and not innate. 1994). the treatment of culture both as an internation ally variegated phenomenon and in relation to specific economic cultural constructs (i. Journal of International Business Studies. Such factors include business ethics and negotiation behavior (extending into conflict resolution) (Ghauri and Fang. The business of international business is culture. manifesting itself in material culture. (1983). Cultural issues have further contributed to the ‘‘perennial’’ debate over theories of customization versus standard ization (Agrawal. Hofstede.. Newbury Park. 1996. belief systems such as religions. Culture’s Consequences: International Differences in Work Related Values. Garden City. CA: Sage. by ex tension. 36 (3). M. and Blakeley. 2001). and Fang. . They reveal seven key dimensions of business behavior and how these combine to create four basic ‘‘types’’ of corporate culture. 1999). uncertainty avoidance). language barriers) or on understanding the business mentality and asso ciated behaviors in particular markets. White lock. avoid marketing blunders (Ricks.e. In operational terms. includes systems of values. is an implicit form of social life. However. 14 (2). 26 48. Hall. In international marketing studies. The cultural relativity of organizational practices and theories. Hofstede (1983. Hofstede. (1984). 1984) contributed by offering four analytically derived cultural typologies (power distance. predictable. 2003) and the European variation thereof. later extended to account for Confucian dynamism (Hofstede and Bond. (1994). masculinity/feminin ity. G. and present their product offerings (see o f f e r i n g ) to markets in cul ture sensitive ways. the key distinction be tween domestic marketing and international marketing is that the latter deals with the diver sity of cultural differences and the impact of these differences on company planning and per formance. m a r k e t s ) has frequently been found wanting. P. T. Language is both an implicit and explicit manifestation. Such in sights enable marketers to acquire so called cultural awareness. Cultural issues have also been systematically investigated in relation to m a r k e t i n g m i x factors and to embrace factors that are strongly influenced by cultural background and exert a powerful influence over the quality and outcome of international business encounters. 1995. NY: Anchor Press/Doubleday. both a personal possession and a social influence (Hall. (1959). 303 25. and that culture influ ences group behavior and attitudes in distinctive ways that are. . Hofstede. E. . Negotiating with the Chinese: A socio-cultural analysis. Ghauri. Virtually all writers of international marketing texts devote a chapter to cultural elements of the international environment (see i n t e r n a t i o n a l m a r k e t i n g e n v i r o n m e n t ). 1995). 1959). (1995). Hofstede (1984) defined culture as ‘‘the collective pro gramming of the mind which distinguishes one human group from another. T. G. Journal of World Business. Cul ture. culture can also be an ex plicit phenomenon. Roberts. See also culture Bibliography Agrawal. beliefs and attitudes that are particular to one group and not to others. and conviction systems such as ideolo gies. the ‘‘Euro consumer’’ (Kale. 3 (1). In a similar vein. Leonidou.. G. in dividualism/collectivism.

and Bond. protectionism is more entrenched as it is increasingly exercised by regional blocks rather than by individual countries. generally speak ing. Inter national marketing belongs somewhere between these two marketing environment Hofstede. essentially. be viewed in two quite different ways: interdependence or integration. Grouping Euroconsumers: A culturebased clustering approach. Pro tectionism.. A. Oxford: Blackwell. (1996). Product standardization or adaptation: The Japanese approach. 16 (4). 4 21. The same forces have also reduced radically the costs of organizing and managing economic ac tivity across space. C. This linkage can. L. The tensions within the EU itself also reveal the relevance of political forces. Organizational Dynamics. 3rd edn. International Business Review. A. and Leonidou. and Blakeley. is still a powerful force and the success of the World Trade Organiza tion (WTO) in removing non tariff barriers to trade has been limited. G. 141 71. J. H. money. C. (1988). The important observation to be made regarding the marketing environ ment is that it is simultaneously complex. Journal of International Marketing. and dynamic. This observation is particularly pertinent so far as i n t e r n a t i o n a l m a r k e t i n g is concerned. Kale. Journal of International Marketing. D. Ricks. (1999). 12 (2). The reality of the Eurobrand: An empirical analysis. One can also mean ingfully talk of the globalization of competition (Prahalad and Hamel. which is largely a manifestation of economic nationalism. Globalization is held to be a force that is either dissolving na tional differences or transcending these differ ences. The perennial issue of adaptation or standardization of international marketing communication: Organizational contingencies and performance. 1988) or the globalization of business. 35 48. Schuh. The Confucius connection: From cultural roots to economic growth. by eco nomic and particularly technological forces re ducing the costs of. Riding the Waves of Culture: Understanding Cultural Diversity in Business. Theodosiou. and international marketing en vironments can be viewed in some sense as the linkage between different national environ ments. (2002). . What meaning can we attach to the notion of an international marketing environment? It is clearly not a seamless whole spanning many or 167 all countries. whereas the notion of g l o b a l i z a t i o n that is popular within international business and management studies (including m a r k e t i n g ) implies an integration view. 53 71. For example. 10 (3). M. Whitelock. and (of course) knowledge of all sorts. J. M. Solberg. H. Globalization is driven. 35 (2). F. Another is Badar acco’s (1991) view regarding the globalization of knowledge and technology. A. Global standardization as a success formula for marketing in Central Eastern Europe? Journal of World Business. and barriers to. In fact. Leonidou. Blunders in International Business. and Hampden-Turner.. competitive. Trompenaars. resource mobility including the mobility of people. 1993). implicitly adopt the interdependence view. By contrast. Journal of Marketing Practice: Applied Marketing Science. it is not just a collection of different national environments as this would make international marketing almost redundant as a separate field of study. 1 21. (2000). 3 (3). Standardization versus adaptation of international marketing strategy: An integrative assessment of the empirical research. and beyond identifying broad and usually ill defined forces or currents. London: Nicholas Brealey. the dispute between France and the US relating to the former’s re strictions on service imports was enmeshed in the dispute between the European Union (EU) and the US. for example. political forces. On the other hand. Journal of International Marketing. 77 95. (1998). (1995). in principle. S. it is unlikely that anyone can fully comprehend or understand the environment. are acting as a break on globalization. 2000). C. Roberts. Traditional trade theories. (2003). 2nd edn. (1995). 2 (4). where this refers to growing integra tion of business activities in different countries within the multinational corporation (Bartlett and Ghoshall. L. C. C. Levitt’s (1983) view of the globalization of markets is one good example. there can be little in the way of a common environmental diagnosis (MacCrimmon. 3 (3). 133 48. international marketing environment Mohammed Yamin The m a r k e t i n g e n v i r o n m e n t is com monly defined as the set of actors and forces that influence the success of a company’s marketing program.

(1988). 14.168 international marketing organization There is continuing resistance to further inte gration and some European countries show great reluctance to trade off national for regional sov ereignty. The globalization of markets. (1983). Cul tural influences are clearly deeply rooted and very durable. Inter national Marketing Review. 493 507. evidenced by their purchase of stand ardized products and global brands. The basic issue regarding international marketing organization revolves around central ization versus decentralization. Levitt. Baden-Fuller. London: McGraw-Hill. For example. London: Routledge. infor mation.g. Even ardent advocates of globalization as the basis of marketing strategies (see m a r k e t i n g s t r a t e g y ) cannot overlook the significant di versities that still divide national markets. a washing machine) designed to perform well in the arid climates of Greece or Spain will give an equally satisfactory service in Denmark or Sweden (Baden Fuller and Stop ford. J. Do firm strategies exist? Stra tegic Management Journal. Research has shown that consumers in different countries and cultures (see c u l t u r e ) show different degrees of i n v o l v e m e n t with a number of standardized global products (Zaichowsky and Sood. and Hamel. 29 50. Sood. 20 34. de cisions regarding the feasibility and desirability of standardizing the marketing approach for sev eral countries should be informed by a careful analysis of the relevant markets. on account of their instability or hostility to foreign business) and which coun tries could potentially be targeted. J. it is obvious that differences in climate. e n v i r o n m e n t a l a n a l y s i s should. it is unlikely that a product (e. C. therefore. But the ‘‘real’’ marketing tasks relate to designing a m a r k e t i n g m i x for countries that are selected for entry or expansion programs. 1989. S.g. 1991). A multi-country approach for multinational communication. (2000). (1989). topog raphy. 41 53. because i m p l e m e n t a t i o n must be carried out by partner institutions located in different countries. C. Creating global strategic capability. and decision making. provide clarity regarding reporting. In N. Irrespective of how the linkages between different national marketing environments are construed. C. and clearly require a thorough understanding of the specific conditions of these countries. Globalization frustrated: The case of white goods. (1993). and marketers should be highly skeptical of ‘‘evidence’’ of growing convergence. (1991). Furthermore. A global look at consumer involvement and use of products.. concern itself with the international level as well as the national or local levels. Strategic Manage ment Journal. This is particularly important in the i n t e r n a t i o n a l m a r k e t i n g context. international marketing organization Rudolph Sinkovics Any m a r k e t i n g p l a n n i n g will be in danger unless the company is organized to implement these plans. Sood. Zaichowsky. Bartlett. 1993). and other physical conditions will always be with us and will remain a significant influence on buyer behavior (see c o n s u m e r b u y e r b e h a v i o r ). and Sood. Harvard Business Review. They determine who does what. Some firms . (1993). J. Thus.). G. the apparent homo geneity in customer preferences across countries. More generally. 6 (1). 22 (May/June).. The slogan that marketers ‘‘should think globally and act locally’’ is meant to emphasize the fact that international marketers face a hier archy of environments. Prahalad. the environment of a particular country remains highly relevant to success or failure in that market. and Ghoshall. Organizational structures can be seen as a central element of strategy formulation and execution. Strat egies in Global Competition. The Knowledge Link: How Firms Compete Through Strategic Alliances. J. 113 31. See also international marketing culture Bibliography Badaracco. K. J. Transnational Man agement. Hood and J. T. (1991). MacCrimmon. Vahne (eds. 5 (4). may in fact mask significant behavioral or attitudinal differ ences of relevance to international marketers. Journal of International Con sumer Marketing. and Stopford. Boston: Harvard Business School Press. and also set up the rewards that motivate performance and deter mine the degree to which activities can be integrated. 12. International analysis should be used to indicate which countries may be avoided (e.

homogeneous product lines. each of which is based on alternative principles of divisionalization. production. doing business in specific geographically connected groups of markets requires considerable area knowledge. finance. when product ex pertise is not a variable (e.e. The functional structure is most suitable for firms with narrow. etc. However. The establishment of a separate international marketing division is potentially problematic in that it creates an artificial distinc tion between domestic and international activ ities. the major task for international marketing organiza tion is to balance the opposing needs for central ization and local responsiveness (Bartlett and Ghoshal. and automotive equipment. and fully aware of customer needs in all markets. pharmaceuticals. which is a specialist structure responsible for handling all aspects of a company’s activities with foreign markets. handle all documenta tion pertaining to the supply of products to foreign customers. one of whose skills may be knowledge of a for eign language. the Middle East. local country requirements and government pressures may require greater local responsiveness. the international division will be called upon to: be responsible for foreign currency operations. In deciding on a suitable organization struc ture.’’ In this arrangement top executives in marketing. since each product cannot afford to maintain its own complete international staff. inter national opportunities are likely to be missed (Terpstra and Sarathy. The fourth divisional structure is known as ‘‘functional structure.. Although it insures the best use of the firm’s regional expertise. deal with foreign govern ments as well as its own. and Prahalad. 1987. Further. The second principle of organization is the product division structure. As nations within a region integrate economically (and politically).. knowledgeable. How ever. particularly if regional organizations are not co ordinating their activities via informal informa tion exchange and cross country teams. 2000). Duplication of product and functional specialists and also inefficiencies may result. Thus. in oil and gas industries). such as those in consumer non durables. it means less than optimal allocation of product and functional ex pertise. and work with key business partners such as exhibition contractors (see e x h i b i t i o n s ) and advertising agencies (see a g e n c y ). the division is staffed by area specialists. which a peripatetic product manager can never acquire because of ‘‘short sightedness’’ in rela tion to his own (distant) home country. The regional organization form is used primarily by companies that are highly oriented to marketing with relatively stable tech nology. In addition to overseeing relation ships with all its international markets and inter mediary partners. 1981). These activities can be very diverse. the argument in favor of this organizational form is that international marketing is so specialized that it warrants this separation. Area knowledge is commonly found to be weak with product divisions. the European Union (EU). companies traditionally choose between four alternative forms. companies divide their worldwide markets into distinct territories such as North America (i. the product structured approach tends to limit the achievement of company wide coordin ation in international markets. South America. For others. Doz. the functional structure is a good choice if regional variations in operations .international marketing organization need strong coordination at headquarters to pro vide and supervise the implementation of their international strategy. Here. Also. in that the firm can add new product divisions if it enters other or unrelated business areas. the US and Canada). enjoy global responsibilities. Their product managers are highly specialized. Bartlett. Despite its popularity. These product groups have global respon sibilities for marketing.g. In this case. the division is based on a p r o d u c t or a suite of related prod ucts. When the domestic market is more important to a product division. The product division is popular with firms with sev eral unrelated products/product lines or with firms offering technical products requiring strong after sales support and service. A third organizational principle is structuring by geography. the regional organization has drawbacks. it makes sense to treat them as a unit. Also. and so on. The growth of regional groupings favors a re gional approach to international marketing or ganization. the product division approach has several 169 potential limitations. In this struc ture. Divisional structures share the advantage of flexibility. The first principle is the international division.

a principle of the matrix system is that the majority of interactions involve lower level management and that adequate resources – human. International Marketing. communication systems. S. 7 17. one does not frequently encounter a company that adopts one of the organizational structures in the pure form as described here. Transnational Management: Text. 2000). cross functional teams. 8th edn. this can lead to factionalism and time consuming haggling over resource alloca tions. and technical – support these interactions. Aftermath of the matrix mania. L. 1984). to counter balance inherent rigidities in the formal structure of the organization. (1984). C. S. The matrix arrangement has a certain elegance. A. (2000). 4th edn. C. The need for specialization is balanced with the need to integrate functions and competencies across organizational boundaries. V.. TX: Dryden Press. Global competitive pressures and host country demands: Managing tensions in MNCs. there are drawbacks. The matrix often amplifies these differ ences in perspectives and interests by forcing all issues through the dual chains of command. As a result. function). California Management Review. international marketing research Michael Greatorex International marketing research is intended to aid m a r k e t i n g decisions involving more than one country. Y. financial.. R. Ghoshal. Companies frequently have diffi culty combining operational effectiveness with managerial efficiency.. 48 54. or smaller companies inter ested in new export markets. Matrix organizations have a dual rather than a single chain of command. production. Organ izational designers. and Ghoshal. Bibliography Bartlett. aim to establish structures that are flexible and can be modified according to changing requirements. etc. world boards. and Daniels. R. while representing a pragmatic at tempt to add flexibility to relationships between headquarters and local representation. and Birkinshaw. They there fore moved toward a more complex organiza tional form that allowed two dimensions to have more or less equal weight in the organiza tional structure and decision making. 63. Boston: McGrawHill. The matrix also involves lateral (dual) decision making and a chain of command that fosters conflict management and a balance of power. (1987). when senior managers are drawn into exchanges. D. Fort Worth. so that even a minor difference can become the subject of heated disagreement and debate. Bartlett. and Prahalad. and Sarathy. This reasoning gives rise to an organizational development in recent decades in the form of the matrix organ ization. Columbia Journal of World Business. Managing across borders: New strategic requirements. A.) into the structure.. Companies became frustrated with the shortcomings of unidimensional organizational structures (product. and Readings in Cross Border Management. therefore. and so forth. and Birkinshaw. Suitable international marketing organiza tions serve as a means of achieving customer closeness and must prove amenable for fulfilling key tasks of international m a r k e t i n g m a n a g e m e n t . J.. However. 28 (4). breakdowns in communication occur between distant markets and the strategic center of the company. large multinational companies active in several countries. they incorporate informal elements and coordination mechanisms (e. (1981). C. International marketing research may involve routine yearly . the functional form of international marketing organization is rare. How ever. C. 23 (3). Ghoshal. Since these conditions are not often met. area. It is therefore organizationally straight forward for local managers to deal directly with headquarter staff responsible for marketing. Overall. research and development. Pitts. In a study of 93 multinationals it was found that unitary reporting structures still prevailed as dual reporting was perceived as too problematic (Pitts and Daniels.170 international marketing research are not great. K. B. The research can involve global products. Hence. (2004). B. company language. A. Cases. Dual reporting leads to conflict and confusion (Bartlett. Bartlett.g. Product and geography are the two di mensions that receive equal emphasis in the matrix organization (Terpstra and Sarathy. Sloan Management Review. 19 (2). A. J. Terpstra. 2004). managers have two bosses. For example. Doz. Further more. thus lessening the need for regional expertise.

and Shavitt. legal. D. or decisions concerning the introduction of a product successful in one country into another country. N. Response rates depend upon cultural factors such as differing attitudes toward privacy. It may be difficult to recruit trained personnel with knowledge of both qualitative research methods and the c u l t u r e and language of the country under study. Applied Marketing Research. or why a product’s success varies from country to country. and different attitudes toward some products such as food. This is particularly true of the governmental. L. and alcohol. and sources outside the domestic country will be needed. and Hennessey.-P. Thus.g. On the other hand. different sources frequently give different values for the same variables. A transla tion needs to be checked by such means as back translation. K. country A’s figure for its imports from country B will differ from country B’s figure for its exports to country A. (1999). whereby the translated question naire is translated back to the original language by another translator and comparison of the original questionnaire and the back translated version is carried out. and cultural environments. 9 (2). Boston: Houghton Mifflin Company. Wokingham: Addison-Wesley. Journal of Consumer Psychology. and Evans. Again. Sampling problems in clude difficulties in population definition and the lack of suitable sampling frames. . Low levels of telephone penetra tion or poor postal systems and low literacy levels may make telephone surveys or postal surveys impractical in developing countries. items in a scale designed to measure a particular concept and devised in one country may not be appropriate to another country. Malhotra. 6. questions about car parking and out of town shopping centers may be inappropriate in countries where there are few cars. marketing research forecasting of sales of different products in many established markets. The level of accuracy may be expected to be better in de veloped countries than in developing countries. 14. Global Marketing Strategies. marketing research Bibliography Jeannet. D. the international marketing research process is complicated by extra problems. personal hygiene. Questionnaire problems begin with language problems. Some words may have different meanings in different countries using the same language. 59 66. J. Al though the same methods are used as in domes tic marketing research. Qu a l i t a t i v e r e s e a r c h becomes import ant in international marketing research as it is more likely that ignorance of foreign markets means that more exploratory research is needed. 4th edn. Moutinho. ch. respectively. This immediately multiplies the amount of search for relevant secondary data.. The level of information will vary with the infor mational environment. which make it difficult to relate any sample results to a population. Marketing Research: An Applied Approach. M. The potential for prob lems with secondary data is greater with inter national research than for domestic research. (2004). Direct translation of a questionnaire from one language to another by a bilingual translator is frequently used. personal interviewing may be more economic in lower wage countries. Piloting each language questionnaire in the country in which it is to be used is another check. H. and secondary research (see s e c o n d a r y d a t a ) will have to be carried out on these environments. The m a r k e t i n g e n v i r o n m e n t varies from country to country. (2000). greater reluctance in some communities to com municate with strangers. Language varies from country to country and in some countries several languages are spoken in different areas. ch. Maheswaran. See also international marketing. Data on national income based on tax returns will be affected by differing tax regimes and attitudes toward tax evasion. 3rd edn. allowing errors to be iden tified which can then be rectified. Other question naire problems occur when questions and scales appropriate to one country are inappropriate to other countries. Englewood Cliffs. e. NJ: PrenticeHall. definitions vary from country to country. Issues and new directions in global consumer psychology. indeed. S. High transport costs in some countries may 171 mean personal interviews are confined to urban areas. Survey research offers two types of problems relating to s a m p l i n g and q u e s t i o n n a i r e d e s i g n . (1992).

functions. headquarters will have ‘‘ap proving’’ and ‘‘directing’’ roles.’’ In practice. particularly of subsidiaries in large and important markets. the key structure question concerns the appropriate balance be tween centralization at headquarters and the degree of local autonomy exercised by the sub sidiaries. The burden of their argument is the suggestion that structure is not simply an . largely. deci sions regarding acquisitions. This is because effective monitoring and super vision is very expensive and needs information generated or filtered by subsidiaries. Firms with a standardization strategy will have a tighter degree of supervision over various m a r k e t i n g m i x activities by the subsidiary. international product stand a r d i z a t i o n ). Finally. Subsidiary managers. Subsidiaries have minimal input into strategy formulation. and pursue the goals of. The roles of subsidiaries are ‘‘residual’’ in the sense that these roles are specified in terms of the decisions that headquarters do not wish to be heavily involved in.172 international organizational structure international organizational structure Mohammed Yamin The treatment of the structural issues within i n t e r n a t i o n a l m a r k e t i n g is highly influ enced by the dominant paradigm in organiza tional theory. structure is essentially con cerned with the question. 1991) is the matrix organization: this is a dual authority structure in which subsidiary managers are sim ultaneously accountable to regional and product managers (see i n t e r n a t i o n a l m a r k e t i n g o r g a n i z a t i o n ). may in fact be able to largely ignore corporate level strategies. In terms of the role typology utilized by Queltch and Hoff (1986). This. For international marketers. on what strategy the firm is pursuing. Effect ive control of subsidiaries is probably more feas ible through an informal or organic socialization process whereby subsidiary managers identify with and adopt the corporate ‘‘mission’’ as their own. ‘‘What is to be done?. Thus. the most forceful statement of which is to be found in Chandler (1962). depends on the overall m a r k e t i n g s t r a t e g y being pur sued. an organizational structure creates a coordin ation or integration mechanism. This may be easier to achieve if ex patriates are employed in key managerial pos itions within the subsidiary. The theoretical underpinning for the trad itional view of the strategy/structure relation ship has been criticized by Hedlund and Rolander (1990). An alternative (but one which is now out of favor. The integration approach makes no distinction between domestic and foreign marketing. 1989). For example. or ‘‘downsizing’’ of particular units or subsidiaries are also usually the preroga tives of headquarters. the organization. decisions relating to the selling off. It also sets up an incentive structure of positive and negative rewards to motivate different groups within the firm to identify with. a firm with an adaptation strategy will leave a greater degree of autonomy for subsidiar ies and the center will confine itself to ‘‘persuad ing’’ and ‘‘coordinating. Headquarters also decide whether international marketing activities are organized on a ‘‘separation’’ or an ‘‘integration’’ basis. here the firm adopts a global structure organized around products. liquidation. Achrol. is concerned with the question. This holds that the structure of a firm reflects its strategy. There is a linear process of causation from environment to strat egy to structure: a successful firm develops strat egies that ‘‘fit’’ its environment and sets up an organizational structure that insures their effect ive implementation. The former treats foreign markets separ ately from the ‘‘home’’ market and all aspects of foreign marketing become the direct responsibil ity of the international division. which revolves around marketing standardization versus adaptation (see i n t e r n a t i o n a l p r o d u c t a d a p t a tion. On the other hand. and the formation of alliances (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ) are made at the center alone. organizational struc ture defines in broad terms the prerogative and roles of different people or units within the firm. Strategy. in turn (see s t r a t e g i c m a r k e t i n g ). In this paradigm.’’ the answer to which is to be sought in environmental imperatives. mergers. or areas. Subsidiaries also have little input to decisions relating to organizational ‘‘architecture’’ or organizational ‘‘surgery’’ (Goold and Campbell. ‘‘Who does what?’’ The answer to this question is contingent. Likewise. in turn. the autonomy enjoyed by subsidiaries is often greater than would be suggested by the range of formal roles assigned to them by the center.

becomes even more difficult in inter national markets. Journal of Marketing. where managers are dealing with multiple currencies. and Rolander. Strategies and Styles. such as the nature and extent of d e m a n d . Corporate learning requires a structure that is tolerant of exploration and experimenta tion by different units. Subramaniam and Venkatraman. and so on. The complex set of factors that influence pricing decisions. Harvard Business Review. Rugman and T. and G. therefore. Recent years have witnessed a rapid expansion of research on the strategic role of subsidiaries within multinational companies that has high lighted their key role in the global competitive ness of multinational companies (Birkinshaw. and Sommers Luchs. M. there is evidence that unless the parent unit or the headquarters has specific ‘‘parenting’’ capabilities. 173 Birkinshaw. (1989). it is possible to gain access to a wider range of ideas. strategy depends on structure. (1986). 55. 1996). and Campbell. Doz. A. M. In fact. Oxford: Oxford University Press. The ‘‘brain’’ functions of the organization cannot. Ashridge Management Center. (1962). skills. communication tech nologies such as the Internet lead to more trans parency. as most markets reach saturation. Managing the Multibusiness Company: Strategic Issues for Diversified Groups. and Hoff. structure is not only concerned with ‘‘who does what’’ but also acts rather like the ‘‘nervous’’ or ‘‘sensing’’ system of the firm. E. and longer distribution channels (Cavusgil. Queltch. Boston: MIT Press. Managing the Global Firm. Strategic Management Journal. Goold. Hedlund and Rolander (1990) argue that the environment–strategy– structure paradigm ignores the dynamic aspects of strategy that relate to the firm’s learning cap ability. Bartlett. C. Hedlund (eds. Managers need to carefully balance and weigh off ambiguous considerations between the diverging forces calling for either price standardization or adaptation. A. Oxford Handbook on International Business. and Ghoshal. and product life cycles (see p r o d u c t l i f e c y c l e ) become shorter. (1996). A potential advantage of multi nationality is precisely that by operating in a number of diverse market environments (see m a r k e t i n g e n v i r o n m e n t ). additional cost consid erations. Although managers will readily be willing to exploit price differentials for their firm’s benefit. 2001). A. Bartlett and Ghoshal (1989) discuss the drawbacks to the structural setup within which the subsidiaries have implementa tion roles only. Boston: Harvard Business School Press. In fact. Managing Across Borders: The Transnational Solution. (1991). Hedlund. D. In other words. Customizing global marketing. 359 78. Brewer (eds. In this view. (1989). Bartlett and Ghoshal (1989) have advocated a ‘‘transnational’’ structure in which subsidiaries. London: Routledge. 77 93. Given that pricing is part of the m a r k e t i n g m i x . B. Bibliography Achrol. international pricing policy Rudolph Sinkovics Pr i c i n g decisions are generally considered to be rather difficult to make. R. A. J. Determinants of transnational new product development: Testing the influence of transferring and deploying tacit knowledge. competitors’ activities. Subramaniam. its control of subunits is just as likely to destroy as to create value for the corporation as a whole (Goold and Sommers Luchs. Strategy and Structure. (1990). Action in heterarchies: New approaches to managing the MNC. (2001).international pricing policy instrument for i m p l e m e n t a t i o n but that it influences how the firm ‘‘sees’’ the environment and what range of opportunities is perceived to be within its grasp. retail price maintenance disappears. Strategy and management in MNE subsidiaries. G. costs of production and m a r k e t i n g . pricing decisions must be tightly integrated with other aspects of the marketing mix. Goold. 1996). and capabilities. have a similar standing to head quarters and participate in strategy formulation. 26 (May/ June). firms will find it in creasingly difficult to establish and maintain . In C. N. Chandler. 4 (October). M.). 22. (2001). reside solely at the center. In a similar vein. Evolution of marketing organization: New forms for turbulent environments.). 2001. Bartlett. London: Routledge. In A. However. and Venkatraman. J. this potential is unlikely to be achieved if the roles of subsidiaries are con fined to carrying out centrally determined strat egy. S. Y. particularly those located in more dynamic markets.

global competition re quires coordinated competitive strategies (see c o m p e t i t i v e s t r a t e g y ) across market boundaries. the impact of this factor is confined to situations where shipping speed and quality are of great importance. manufacturing. and environ mental factors. and marketing. and stage of the product life cycle (Theodosiou and Katsikeas. 2000. where foreign exchange rates. or dis tinct product attributes that necessitate certain quality/service and delivery levels will influence price setting in an international context. international pricing decisions will be centralized because the increasing g l o b a l i z a t i o n of markets requires greater uniformity of prices across markets. Further more. economic condi tions. different distribution channels. 1996). 1988): 1 the rigid cost plus pricing approach. product specific factors. which impact on pricing decisions for inter national markets (Terpstra and Sarathy. inflation rates. 2001). first and foremost. Companies active in international markets have basically three different options in how to set prices for foreign markets (Cavusgil. marketing and servicing. it has been suggested that foreign price setting will be a function of the company’s cost structure: the level of fixed costs of product development. However. it seeks to recover only variable and international marketing and promo tion costs in export ventures. Although this strategy allows a higher degree of freedom to adjust for local conditions. Dimensions comprise firm level factors. a number of analytic and managerial dimensions have been suggested. If the company is producing on a large scale and has experience cost effects and/ or scale economies. the size of the order. consumers: their ability to buy (income levels) and willing ness to buy. Trans port is probably the most evident factor that impacts on prices. depending on the customer. with falling trans portation prices. This approach is considerably more flexible than cost plus pricing and allows the company to sell at very competi tive prices with the potential of market share gains (see m a r k e t s h a r e ). and local com petition also need to be considered. Jeannet and Hennessey. the availability of substitutes. subsidies. 2 the approach of flexible cost plus pricing. . the pri mary goal is still to maintain profit margins and therefore it too is an essentially static element of the marketing mix (Cavusgil. or the strength of local competition. and pricing is closely related to pro duction volume planning as well as global branding (Cavusgil. 2004). or the setting up of barriers of trade (quotas. 1996).174 international pricing policy price differences across markets (Sto¨ttinger. local government may intervene in transactions. however. The dy namic incremental pricing strategy is based on the idea that fixed costs emerge regardless of whether the company is internationally success ful or not. discounts (see d i s c o u n t ) may be applied to the final price. these will impact on inter national pricing strategies. tight price controls. tariffs. the life cycle of the product. At the product level. and regulations may signal both short term and long term con siderations for price setting. Against this background. and 3 dynamic incremental pricing. This is why the flexible cost plus pricing approach sometimes receives favorable treatment. the use of histor ical accounting costs for price calculation com pletely ignores demand and competitive conditions in target markets. Where possible. however. market specific costs of product adaptation. For example. Market specific factors that impact on foreign price setting are. price controls. 2001). The strategy sets list prices (see l i s t p r i c e ) in the same way as the more rigid system but allows for price vari ations under special circumstances. This method is advantageous because it is relatively easy to arrive at a price quote. either as active buyers of the prod ucts or services or by pressurizing for counter trade agreements. These latter factors can also be considered part of environ mental factors. plus shipping and profit increment. The extent to which multinational companies standardize their international pricing strategies depends on the level of similarity between home and host countries in terms of customer charac teristics. market specific factors. Cost plus pricing requires adding up all the costs involved in getting the product to its destination. non tariff barriers). legal environment. At the firm level. Therefore.

J. Colum bia Journal of World Business. Parallel imports take advantage of price differences be tween markets by reimporting branded products from low price into high price markets. Bibliography Cavusgil. and t r a n s f e r p r i c i n g . 8th edn. and products for which buyer behavior is culturally determined tend to be more adapted than products for which con sumer choice is dependent on functional per formance (e. (2004). (2001). Harvard Business Review. food products compared to electrical goods). 9 (1). Terpstra. executive compensation. Journal of International Marketing. political. See also international product standardization Bibliography Hill. T. Global Mar keting Strategies. 1984). Unraveling the mystique of export pricing. R. C. t r a n s f e r p r i c i n g is one of the thorniest problems global companies have to deal with when they venture beyond their home country borders. 31 (4). For example. safety or anti pulsion/emission regulation may be par ticularly restrictive and may make it impossible for the firm to offer a standardized product. The prices at which units of the same company sell to each other have a far reaching effect on the company’s success be cause they influence subsidiary performance. and Katsikeas. selling products in international markets at prices below those in the home coun try or even below cost of production.-P. 6th edn. Sto¨ttinger. product adaptation Other contentious pricing issues involve dumping. Cavusgil. 1989). and Sarathy. (2000). (1996). 92 101. legal. The observed pattern of standardization seems to confirm Jain’s analyses.. research indicates that the major ity of adaptations are not mandatory. V. 66 78. M. and Hennessey. in some countries. B. A major motivation for this pricing option is that it provides companies with a mechanism for side stepping higher tax rates in some countries.. Company managers who transfer goods and services across their company borders have to respond to questions on how to price such intra corporate transactions. and Still. For example. Factors influencing the degree of international pricing strategy standardization of multinational corporations. 31 (3). 40 63. Strategic export pricing: A long and winding road. These factors fall into five categories: the nature of the t a r g e t m a r k e t . voltage levels and power sockets of electrical equipment need to conform to local requirements. (2001). Boston: Houghton Mifflin. environmental factors. In fact.g. Business Horizons. (1984). S. H. 54 63. Mandatory adaptations are those that are dictated by the physical. T. Journal of International Marketing. parallel importing. Adapting products to LDC tastes. 9 (3). Jain (1989) provides a rigorous examination of factors that affect the balance between program standardization and adaptation and offers a number of specific hypotheses relating to their impact on the degree of standardization. D. the nature of the product itself. where trademarked products are dis tributed through channels unauthorized by the owner of the trademark. A distinction is usually made between ‘‘mandatory’’ and ‘‘discretion ary’’ adaptation (Hill and Still. 175 international product adaptation Mohammed Yamin Marketing adaptation is the opposite of stand ardization and conveys the idea that marketers may tailor their marketing program to the specific conditions of the different countries in which they operate. 1996). the market position of the firm in different countries. International Marketing. the nature of the product is a strong predictor of standardization.e. J. . Parallel imports are to blame for the development of gray markets. Fort Worth. or economic factors in a country. i. Pricing for global markets. Walters and Toyne. more than 70 percent of adapta tions made are discretionary (Hill and Still. R. Theodosiou. (1988). and organizational factors. 1 18. March/April. according to one estimate. standardiza tion is more common for industrial as compared to consumer products. and tax obligations (Cavusgil. 1984. Jeannet. TX: Dryden Press. S. The problem is also known as ‘‘intra company pricing’’ and refers to the pricing of goods and services bought and sold by operating units or divisions of a single company. S. Organizations like the World Trade Organization (WTO) or the Or ganization for Economic Cooperation and De velopment (OECD) have therefore issued guidelines about how to treat these problematic situations.

Product modification and standardization in international markets: Strategic options and facilitating policies. An uninterrupted production run from one center will allow the firm to move rapidly up the learning curve. however. at any rate) considered to be prohibitively expensive owing to the existence of economies of scale and other technological and economic con straints suggesting that most people (with the exception of the very rich) must tolerate some degree of standardization or uniformity in what they purchase and consume. 37 44. Competition comes not only from other globally oriented companies with standardized marketing strategies (see m a r k e t i n g s t r a t e g y ) but also from a var iety of nationally based companies capable of . The main attraction of standardization is clearly the scale economies that may result from it. and given marketing’s commitment to c u s t o m e r s a t i s f a c t i o n . thus. whether domestically or internationally. The basis for economies of scope is a number of interconnected technical develop ments known as ‘‘flexible’’ manufacturing systems. 1991). Target marketing. Program standardization is. In the particular context of mature industries (such as white goods) where basic technological and organizational capabilities have been dif fused internationally. with program standardization. not only in production but also in R&D and product development. In i n t e r n a t i o n a l m a r k e t i n g . The fact that customers have different preferences. ‘‘mass’’ marketing simply ignores diversity or the desire for variety (‘‘you can have any color as long as it’s black’’).. international product standardization Mohammed Yamin There is an inevitable tension between standard ization and adaptation within m a r k e t i n g . however. 70 9. as the potential for economic benefits from standardizing across countries could be very sub stantial. Empirical evidence. Economies of scope arise if it is cheaper to produce a number of different products or product varieties together in one plant than it is to produce each in a separate plant. Operating on a large scale will also provide sourcing efficiencies. implies a pressure toward adaptation or even the customization of the o f f e r i n g to individuals or small groups. P. Columbia Journal of World Business. does not provide much support for Levitt’s assertions (Doglus and Wind. customization has been (until very re cently. purchasing large amounts of raw materials and other inputs gives a multinational the power to bargain with s u p p l i e r s . thus reducing per unit cost very rapidly. Baden Fuller and Stopford. The evolution of marketing from ‘‘mass’’ to ‘‘target’’ marketing (see t a r g e t m a r k e t ) reflects this tension. B. Journal of Marketing. e. (1989). Process standardiza tion. starts by assuming pervasive diversity and searches for groups or segments (see m a r k e t s e g m e n t a t i o n ) that may have similar prefer ences for a particular offering. by con trast. (1989). 53 (January). while the diversities may be very great as a result of significant differences in c u l t u r e and other environmental conditions between countries (see i n t e r n a t i o n a l m a r k e t i n g e n v i r o n m e n t ). refers to the uniformity in the approach chosen by a multinational firm in analyzing market potential and the formulation of m a r k e t i n g p l a n n i n g for different coun tries. However.g. concerned with the degree to which different elements in the m a r k e t i n g m i x are treated in the same or a similar manner by a firm that operates internationally. on the other hand. and possibly in a d v e r t i s i n g and promotional expenditure. The leading multi national firms face a greater variety of com petitive challenges.176 international product standardization Jain. However. the ten sion between standardization and adaptation is particularly important for the international mar keter. Standardization versus adaptation: Some research hypotheses. Levitt (1983) puts particular emphasis on tech nology and scale factors in advocating standard ization. The vast majority of the literature is con cerned. Doglus and Wind have pointed out that economies of scope and flexible manu facturing increasingly make it feasible to make adaptation without incurring increasing costs or diseconomies of scale. 3 (Winter). Walters. and Toyne. 29. S. com plete program standardization means offering the same product or product line at identical prices through identical distribution systems and promotional policies to customers in differ ent countries. standardization strategies face significant difficulties. 1987.

They found no significant difference in performance between firms that stressed standardization and those that did not. rather paradoxic ally. 19 30. manifested either through a legally binding contract or through a more infor mal agreement to cooperate. The latter strategy is capable of gener ating better customer outcomes and satisfaction (Yamin and Altusinik. Y. but also m a r k e t i n g and organizational skills). At the other end of the spectrum is a merger or union between two organizations. R. Journal of Marketing. 56 (April). the performance issue had not received any research attention. performance. Yamin. To generalize. C. Until the early 1980s. 22 (May/June). Thus. it is not permanent. 604 19. S. S. 493 507. In such economies. f r a n c h i s i n g . and Stopford. There is now a vast literature dealing with the determinants. and i n t e r n a t i o n a l j o i n t v e n t u r e s .international strategic alliances fashioning marketing strategies suited to their own national markets. (1987). 1 17. This is purely price mediated and involves no commit ment or promise regarding the future behavior of either party. 12. T. unlike a merger. Particular forms of alliances can be very varied and include l i c e n s i n g . The myth of globalization. motives. The recent waves of alliances are com monly between developed economy firms and are focused on global competitiveness rather than on circumventing government imposed barriers to market entry. (1992). The influence of global market standardization on performance. M. (2003). collab orative processes. Samiee and Roth’s (1992) work is probably the first system atic investigation of the link between standard ization and performance. More generally. Columbia Journal of World Business. Levitt. these alliances were focused on market entry (see i n t e r n a t i o n a l m a r k e t e n t r y a n d d e v e l o p m e n t s t r a t e g i e s ) into particular markets and were commonly between firms from developed economy markets and firms or government agencies in less developed or cen trally planned economies. A comparison of satisfaction outcomes associated with adapted and non-adapted products. 22 (4). Doglus. (1983). and in this sense were essentially tactical. until recently. Relationships between firms can be conceived of in terms of a spectrum at one end of which is ‘‘arm’s length’’ exchange. Strategic Manage ment Journal. Harvard Business Review. little is known regarding the impact of standardization on corporate performance and. and Wind. 2003). 20 (6). J. Thus. Bibliography Baden-Fuller. subcontracting. Recent years have witnessed the rapid growth of various types of interfirm alliances that are motivated very differently (Hergert and Morris. K. in spite of much debate be tween the advocates of standardization and adaptation. Any new skills or knowledge generated in the process were typically local market specific and of relatively little value to the rest of the organization. Samiee. and outcomes of strategic alliances (a representative sample of this literature is collected in Contractor and . with increasing g l o b a l i z a t i o n – in terms of greater mobility of technological and organizational skills – competition for customers may increasingly become locally (nationally) focused. 2002). In fact. (1991). and Altusinik. 92 102. the option of direct investment was often ruled out or was made unattractive by government restrictions regarding foreign ownership and control. and Roth. Globalization frustrated: The case of white goods. 177 Alliances occupy the mid range between arm’s length exchange and merger. The duration of the relationship in an alliance is indeterminate but. international strategic alliances Mohammed Yamin An alliance is any contractual or cooperative relationship between two organizations for a spe cific purpose. Interfirm alliances have a long history in international business. these ‘‘traditional’’ alli ances were a means of exploiting the western or Japanese firms’ existing capabilities (most often technological know how. an alliance involves some degree of long term commitment between the parties. the growth of strategic alliances is strongly linked to a global environment characterized by an increas ingly liberal market environment (see i n t e r national marketing environment) whereby government restrictions on inter national business activities are rapidly receding. The globalization of markets. partner selection. International Marketing Review.

They argue that alliances are not about extending core knowledge or competence but allow partners to combine complementary knowledge to produce products and services that neither could do individually as they lack critical specializations. Hamel (1991) made a forceful argument for knowledge acquisition as opposed to knowledge accessing as the key for gaining from alliances. The creation and expansion of core competence is more efficiently carried out in ternally within individual companies. . understanding the drivers of effective know ledge acquisition in alliances is at least a signifi cant step along the way to understanding alliance performance/outcomes more generally. given the knowledge intensive environments that most firms face. P. 1998). 1999).g. where the boundaries of knowledge ‘‘pieces’’ are fairly clearly and discretely identi fiable. there may still be a rationale for alliances as a vehicle for knowledge acquisition. ‘‘alli ances are an ideal platform for learning’’ irre spective of whether learning is always an explicit motive for alliance formation or not. 1. Firstly. it could be argued that Grant and Baden Fuller operate with an overly ‘‘modular’’ concept of knowledge. 1996. Most subsequent studies appear to have followed Hamel’s lead implicitly and have regarded knowledge acquisition as strategically more important than knowledge accessing. Interesting examples they give include the alliance between Daimler Benz and Swatch to design the ‘‘Smart car’’ and Luciano Pavarotti’s collaboration with the Spice Girls. Bibliography Contractor. Partner know ledge acquisition effectiveness is mainly a func tion of absorptive capacity. 2001). 1998).178 international strategic alliances Lorange. Pett and Clay. The alliance literature has focused on three aspects of knowledge acquisition (Inkpen. vol. In neither case was one of the parties attempting to acquire the core knowledge or skill of its partner. Cooperative Strategies in International Business. rela tional dimensions such as t r u s t and openness. (eds. Furthermore. Thirdly. it is at least arguable that organ izational learning inevitably (and increasingly) has a relational or collaborative dimension. 2002). 2000).’’ This relates to gaining knowledge/experience useful to future partner selection. One aspect of strategic alliances that has attracted particular attention is the issue of knowledge acquisition and organizational learning associated with interfirm collabor ations.’’ Accessibility of knowledge is a function of inherent knowledge attributes (tacitness and ambiguity make partner knowledge less accessible. An influential line of subsequent work has attempted to model know ledge internalization and we now have a fuller understanding of the knowledge acquisition pro cess within alliances. there is learning about ‘‘alliancing.. Thus. In a recent paper. and. alliance structuring. Simonin. Two broad factors have been emphasized in this context: ‘‘accessibility of alliance knowledge’’ and ‘‘partner knowledge acquisition effectiveness. firms may seek access to a partner’s knowledge and skills without ne cessarily wishing to ‘‘internalize’’ this knowledge (meaning to integrate this knowledge within their own operational and managerial systems). and alliance management through the various phases of its evolution (e. and the compatibility of organizational norms and routines. as Inkpen (2000) has observed. Gulti. F.) (2002). Broadly. and structural dimensions such as the degree of market or competitive overlap. which is itself affected by the similarity of the knowledge basis. Secondly. Amsterdam: Pergamon. firms pick up knowledge from a partner that they could employ outside the alli ance – it is the ‘‘private’’ benefit from the alliance (Khanna. However. In more general cases where knowledge bases are less modular and hence the boundaries of core knowledge bases are more fuzzy. the existence of prior relationships. Doz. it remains the focus of much subsequent research. This is in fact what Hamel had in mind by ‘‘internalization’’ of partner knowledge. and Lorange. In any case. and Nohira. Grant and Baden Fuller (2004) depart from this consensus and argue that know ledge accessing provides a more robust explan ation of many alliance trends than knowledge acquiring. The focus on knowledge acquisition is highly apposite since learning and knowledge acquisition are increasingly regarded as central to strategy formation and to competitive per formance (Teece. as was pointed out above. Grant and Baden Fuller argue that alliances are more about effi cient exploitation of existing partner core know ledge bases.

This is resulting in. the Internet provides as add itional channel of distribution for reaching targeted markets.g. it can be expected that Internet based retailing will increase. Bibliography Hutt. D. greater price transparency. Special issue. (2002). M.. 1. and in this way generate advertisements and links that appeal specifically to the customers’ interpreted requirements. (1996). R. 37 (7). and Clay. Kotler. J. sales by this means are steadily increasing with the greater ownership of per sonal computers and the m a r k e t i n g policies of some marketers that will only sell direct over the Internet (e. Cooperative Strategies in Inter national Business. Strategic Management Journal. A. D. and Nohira. Egg Internet bank) or that are promoting this mode of d i r e c t s e l l i n g as a convenient alternative to trad itional r e t a i l i n g . D. It is possible to monitor web browsers’ viewing behavior. Amsterdam: Pergamon. Stra tegic Management Journal. Inkpen. This enables the distributor to customize orders to the availability of inventory. Competition for competence and interpartner learning within international strategic alliances.. Business Process Management Journal. the time involved in comple tion. (1999). V. Contractor and P. Established ‘‘bricks and mortar’’ retailers are adding credibility to Inter net based retailing by developing it as an add itional channel. B. Lorange (eds. 61 85.. Armstrong. Y. foods through the warehouses. (2001). N. has been increasing markedly. Trends in international collaborative agreements. vol. for example through search engines. Hutt and Speh (2004) suggest that most extra nets linking business marketing firms to dis tributors allow the distributor to examine inventory levels at the manufacturer’s ware house. 22. Some see the Internet as a relatively easy way of collecting m a r k e t i n g r e s e a r c h data. 1. J. Strategic Management Journal. 3rd European edn. e. T. 19. (2001). L. T. The evolution of cooperation in strategic alliances: Initial conditions or learning processes. The dynamics of learning alliances: Competition. (2000). 55 79. Business Marketing Management. 7. Khanna. M. The E-Marketing Mix. Pett. Marketing Review. Hamel. (2004). 20. and the fatigue generated by the large number of unsolicited email communications sent. 193 210. and Morris. it is obvious that the Internet is becoming a major method. for instance. As in consumer markets. and Wong. W. thereby considerably empowering them by making it possible to compare and evaluate the features and prices of different products at relatively low cost. Ambiguity and the process of knowledge transfer in strategic alliances.. . 349 64. ch. Internet marketing Dale Littler The Internet presents an additional powerful channel of distribution of information and sales in both consumer and organizational markets. Mason. 249 74. and Speh. As consumers gain confidence through experience.. (1998). markets for knowhow and intangible assets. organizational m a r k e t i n g ). and the use of online surveys.g. if not the method of first choice. corporation and relative scope. for example. In F.. Grant. and Baden-Fuller. Learning through joint ventures: A framework of knowledge acquisition. R.Internet marketing Doz. (1991). Hergert.. OH: South-WesternThomson. business to business Internet marketing facilitates significant increases in efficiency through the automation of much back office paperwork. there is likely to be increasing resistance because of the number being despatched. A process model of global strategic alliance formation. 17. A knowledge accessing theory of strategic alliances. (2000). Strategic Manage ment Journal. Capturing value from knowledge assets: The new economy. Teece. (1998). Harlow: Prentice-Hall. G. (2004). Simonin. T. Although business to consumer Internet based sales have not as yet achieved the original opti mistic forecasts. In general. Journal of Man agement Studies. 41 (1). G. 83 103. Saunders. C. However. D. 8th edn. Journal of Man agement Studies. California Management Review. 179 In organizational markets (see b u s i n e s s t o business marketing. The linking of informa tion systems enables intermediaries to monitor more effectively their inventory levels and the flow of. 12. C. Robins. for many customers to search for information on products and services. Easy Jet. P. Gulti. 55 84. 40 (3).). 595 624. Principles of Marketing. 1019 43.

in fluenced by a number of groups that may be categorized as primary (e. it has not been possible to iden tify opinion leaders across product categories. Interpersonal communications provide a two way communi .g.g. or soccer stars who are emulated by small boys (and others). However. sometimes referred to as w o r d o f m o u t h c o m m u n i c a t i o n s . and perceptions of risk. for example. or stimulate it by. Lewis Interpersonal communications are the basis of informal channels of m a r k e t i n g c o m m u n i c a t i o n s . Group influence is an important aspect of social influence. church affili ation. and s a l e s p r o m o t i o n activities.. and norms..g. and consumers use both types depending on the product. opinion leaders. and suggested that ref erence group influence can be strong or weak for product and/or b r a n d . group influence including reference groups. personality. Refer ence groups are groups with which consumers identify and they are used as reference points in determining judgments. They set standards which are the source of per sonal behavior norms. in particular in his/her formative years. and it may be visual as well as verbal.. For example.g. Consumers are. Personal influence is the change in a t t i t u d e s and/or behavior as a result of interper sonal communications. Some.. For example. To understand inter personal communications requires consideration of personal influence.g. and norms.g. beliefs. There are pressures on consumers to conform to group beliefs. work associates) or secondary..e. and opinion leaders. products/services or marketing organizations. Interpersonal communications are comple mentary to mass media communications. when con sumers/buyers pass on information to each other about. values.180 interpersonal communications interpersonal communications Barbara R. e. the pur chase of a car and the model chosen are both subject to such influence. beliefs. and there is evidence in the c o n s u m e r b u y e r b e h a v i o r literature that this does occur. Further. leisure and sporting clubs). friends. King and Summers. i. visibility. Examples of aspirant groups are personalities whose lifestyles are character ized by luxury products/consumption. neighbors. with respect to d e m o g r a p h i c s . or media habits (e. They may be membership or aspirant groups. p e r s o n a l s e l l i n g .g. in their advertising they may simulate personal influence with user stereotypes. doctors for health issues and close friends for the purchase of consumer durables. e. product experience. Companies try to affect the extent of personal influence in their a d v e r t i s i n g and promotion. as typified in the purchase of football strips and apparel. encouraging people to talk about a product. stage in the decision making process (see c o n s u m e r d e c i s i o n m a k i n g p r o c e s s ). All groups have values. family. complexity. Bearden and Etzel (1982) studied reference group influence and the conspicuousness of a product and its brands. political parties.. e. and consumer variables (e. unlike that of the m a s s m e d i a .. p e r s o n a l i t y ). The occurrence of personal influence depends on product variables (e. Katz and Lazerfeld (1955) believe that people are most influenced by those they are in contact with in everyday life.g. where there has been some deliberate choice in belonging and there is a more formal structure and rules (e. In the realm of interpersonal communica tions.. Personal influence can be initiated by a potential consumer seeking advice and information. whereas for satellite television reference group influence prevails with respect to product ownership but not for ‘‘brand’’ choice. life stage. by people most like themselves. testimonials. It is a two way influence. A specific type of group influence of interest to marketers is reference group influence.. not all individuals wield equal influence. 1979). Research has not been able to clearly identify opinion leader traits. and expect individual members to share these and conform to them and behave in appropriate ways. or after purchase as a provider of information and opinions.g. are more influential and others may turn to them for information and advice. stage in the d i f f u s i o n p r o c e s s ). 1972). and behavior. opinion leadership is primarily product specific (e.. one of the distinguishing char acteristics of western c u l t u r e is the declining influence of the family. l i f e s t y l e s . and group activities. degree of p e r c e i v e d r i s k . therefore. The family is the most important source of group influence on an individual. Myers and Robertson.

Bamossy. 3 28. L. where inertia (see h a b i t u a l b u y i n g b e h a v i o r ) will be the dominant feature. (2000). 9 (February). (1982). interviews see d e p t h i n t e r v i e w s . usually communi cating evaluations and opinions rather than fac tual information. and Aske gaard (2002) regard involvement as providing the motivation to process information. Z. Schiffman. 1985). Bibliography Bibliography involvement Bearden. 7 (February). IL: Free Press. and Littler. they may also be providing unrealistic or inaccurate information and are. (1979). assume several forms: . ch. Olkkonen. J. ego involvement: the importance of the prod uct to the consumer’s s e l f c o n c e p t .. NJ: PrenticeHall. O. 38 (6). Engel. Within organizations g a t e k e e p e r s act as a powerful source of intelligence.’’ 181 Marsden. T. O. Positioning alternative perspectives of consumer behavior. P. 8th edn. S.involvement cation process. 6th edn. Boston: Irwin. H. the pleasure value of the product category. P. J. Myers. 14. the sign value of the product category (rela tionship to self concept). where for example the product will have great significance to the consumer. TX: Dryden Press. Best. . Personal Influence. and Robertson. The interpretive paradigm draws heavily on hu manistic and phenomenological perspectives and is concerned with understanding individual consumer behavior from within the consumer’s frame of reference or ‘‘meaning frameworks. Healey Interpretive research embraces research para digms that emphasize interpretation and con struction/construal of meaning at a micro level. D.. and Alajoutsijarvi. Consumer Behavior. and Miniard. survey research Dale Littler Involvement refers to ‘‘a person’s perceived rele vance of the object based on their inherent needs. and Etzel. In o r g a n i z a t i o n a l m a r k e t i n g inter personal communications also have a major sig nificance because of personal interactions in. message response involvement: the consumer’s interest in processing m a r k e t i n g c o m m u n i c a t i o n s . Journal of Consumer Research. 43 50. Hawkins. R.. (2004). Overlap of opinion leaders across consumer product categories. and Kanuk. R.. G. (1955). (1998). Upper Saddle River. and Coney. Glencoe. for example.. A. and Summers. King. to extreme at the other end. Journal of Marketing Research. The role of communication in business relationships and networks. (1972). and . F. and are harder to selectively ignore or tune out. D. The degree of involvement with a prod uct category will affect the effort made in. product involvement: the consumer’s degree of interest in purchasing the product. f o c u s g r o u p s . I. M. Consumer Behavior: Implications for Marketing Strat egy. 41 6. Laurent and Kapferer (1985) proposed an involvement profile having the following com ponents: . However. Management Decision. networks (see n e t w o r k ) and confer ences. K. W. (1995). interpretive research Mark P. There can be seen to be a spectrum of involvement. 9. Involvement may. Dimensions of opinion leadership. Fort Worth. J.. J. and Lazerfeld. Journal of Marketing Management. Consumer Behavior. L. D. J. are usually seen as more trust worthy than the mass media. K. Tikkanen. R. 183 94. values and interests’’ (Zaichkowsky. C. (1995). searching for information and evaluat ing alternatives. Solomon. from none at one end. W. H. Journal of Marketing Research. indeed. E. Reference group influence on product and brand purchase decisions. Blackwell. D. 92 (September). for example. . 8th edn. however. F. Katz. W. Zaichkowsky (1985) developed a scale to meas ure product involvement. . 403 9.

Journal of Consumer Research. 4 Zaichkowsky. Bibliography Laurent. Involvement can be related to one or more of these components. Some consumers may find a product has a low sign value. 2nd edn. G. 341 52. the probability of making an inappropriate purchase. . M. L. Consumer Behavior: A European Perspective. J. Measuring consumer involvement profiles. Bamossy. G. for example.182 involvement . Journal of Marketing Re search. This approach highlights the diversity of the involvement construct and can also facilitate segmentation (see m a r k e t s e g m e n t a t i o n ). and Kapferer. J. (2002). thereby enab ling marketers to orient their strategies to take account of the different motives of various con sumer groups. R. Measuring the involvement construct in marketing. the perceived importance of the potential negative consequences of an inappropriate purchase.-N. and . 22. and Askegaard. 12 (December).. ch.. 41 53. (1985). Solomon. London: Prentice-Hall. S. while it could be high for others. (1985).

the knock on implications of failure in an account (e. faulty oil filters can immobilize vast ma chines)..g. ‘‘Intel inside’’). in the seniority of the account managers and the flexi bility allowed in negotiations. e.. .g.. from pilot projects). the anticipated flow of repeat business (e.K key account Dominic Wilson ‘‘Account’’ here refers to a particular stream of transactions between a customer and a supplier with respect to a specified set of offerings (a particular pairing of a customer and a supplier can have more than one account). or the reputation of a particular customer (e. The importance of ‘‘key accounts’’ should be reflected in the sensitivity with which such accounts are managed.g.g. by appointment to the queen) or supplier (e. e. or in mutual bench marking. they may be termed ‘‘key accounts’’ because of their im plications for either or all parties.’’ such as: the volume or value of the exchanges involved. or in quality improvement measures.. Many different factors can make an account ‘‘key.. As some ac counts are more important than others. Other customer/supplier accounts may be particularly important because of indirect factors.g.g.. a customer may be involved with a supplier in collaborative product development.


It is assumed that customers are aware of what they need. i. they are moving through stages of unawareness to a w a r e n e s s . and secondly. See also buy feel learn model.g.g. Legal systems vary from country to country.L latent demand Dale Littler Traditionally. and liking. In turn. i.. through a range of computer generated images or service process) by potential customers/users and their reactions analyzed. both national and international (see i n t e r n a t i o n a l m a r k e t i n g e n v i r o n m e n t ). and understanding an advertisement or being the recipient of other marketing communications. the legal condi tions in which marketing activities may be undertaken. but may also develop positive feelings about it. this may stimulate the potential customers/consumers to buy the product or ser vice and to develop loyalty toward it in the longer term.e.. The principal features of any legal system as an elem ent in the marketing environment relate first to the rights of the supplier. e. since many m a r k e t i n g r e s e a r c h methodologies are not oriented toward uncovering such latent requirements. at least. innov a t i o n a d o p t i o n m o d e l ) in m a r k e t i n g c o m m u n i c a t i o n s propose that buyers/cus tomers/consumers first learn about a product or service by seeing. in the purchase of a car. Problems may arise when an organization seeks . learn-feel-buy model David Yorke The learn feel buy models (see a i d a m o d e l . i n t e r e s t .. This sequence is most appropriate when the buyer/customer has high i n v o l v e m e n t with a product category with high differ entiation.. some being controlled wholly by gov ernment. latent demand exists where there are no products or services to meet the require ments of customers. not been able to articulate. Often organizations may have to employ subtle research methods that lead to the development and presentation of different in novative product and service concepts that in some way can be ‘‘experienced’’ (e. The fact that there are what might be termed unaware wants raises significant issues for innovators. others containing both statute law and common law (case law based on judicial prece dent). They not only learn what benefits the product or service may give.e.e. reading. feel buy learn model learning see c o n s u m e r l e a r n i n g legal system David Yorke The legal system is a powerful force in the m a r k e t i n g e n v i r o n m e n t surrounding any organization.. judges may modify previous direc tions to meet changing circumstances. it is obvious that d e m a n d can be generated by en tirely new products that in effect stimulate cus tomers into wanting what previously they had. hierarchy of effects model. to the rights of the customer (see c o n s u m e r p r o t e c t i o n ). However. i.

1993. Simonet. Innovating firms are frequently challenged with the strategic decision whether to license their new technology. ver sion of the technology. possibly better. Arora and Fosfuri. know how. 1996). Hwang. and Sarkar. manufacturing/distribution pro cess. low involvement/low control approach to internationalization. if competitors are able to rapidly imitate the new technology anyway. inter national licensing also occurs in industries that are not necessarily technology intensive. as elements in different legal systems may preclude the use of a standardized marketing plan (see m a r k e t i n g p l a n n i n g ). Licensors run the risk of losing their proprietary information while increasing their vulnerability to opportun . Empirical re search reveals that licensors’ degree of influence over independent licensees will vary according to the compensation structure of the agreement (Aulakh. which suggests that licensing is a strategy for technology transfer. and Aulakh. licensing is seen as a faster. while retaining flexibil ity. Cavus gil. prod uct designs. otherwise competitors may quickly develop their own. licensing can be seen as a partnership that helps firms to leverage their resources and assets to the inter national business level.186 licensing to internationalize its operations. and involves more complex arrangements than. or publishing. for an agreed period of time. In the context of international market entry and market expansion (see i n t e r national market entry and develop m e n t s t r a t e g i e s ). patents. Herein. licensing is most frequently deployed in technology intensive industries such as the pharmaceutical industry or the chemical industry (Atuahene Gima. a per unit royalty fee. A common type of licensing arrangement would permit the licensee to manu facture and market the licensor’s product. 1998) and the specific contractual agreement will set the terms and conditions under which the foreign licensor empowers the licensee to exploit the former’s assets. since it does not neces sarily entail equity participation (Aulakh. how ever. Due to continuing market g l o b a l i z a t i o n and competitive pressures. licensing Rudolph Sinkovics Licensing is a contractual arrangement whereby the licensor (selling firm) allows some elements to be used for a fee by the licensee (buying firm). 1998). and Kim. proactive com ponent of a firm’s global product strategy (Kotabe. Licensing can also be seen as a governance mechanism for collaborating with foreign business partners.g. Despite the import ance of licensing in technology sectors. nor mally as an exclusive right. and Sarkar. reducing costs. certain risks are associated with it. Most importantly. 1998). intellectual property. e.. These risks are similar to those of alliances (see i n t e r n a t i o n a l s t r a t e g i c a l l i a n c e s ). such as foods. licensees may extract tacit and pro prietary knowledge from the licensor and exploit this knowledge unilaterally after the termination of the licensing contract. by licensing its technology the innovating firm may insure that its version of the technology becomes the dominant design in the industry (Hill. trademarks. and ‘‘control over operations and strategy is granted to the licensee in exchange for a lump sum payment. establishment of c o m p e t i t i v e a d v a n t a g e . Licensors are attracted to licensing be cause it allows them to deploy production re sources in a foreign market without committing financial resources and/or labor to it. Sahay. or anything that is deemed appropriate to generate positional advantages in the market. and improving the licensor’s access to foreign markets (see Cavusgil. Licensing is a low involvement/low commit ment approach to international markets. and a commitment to abide by any terms set out in the licensing contract’’ (Hill. recent trends in technology licensing indicate that it is increasingly used as a conscious. sports. While existing theory on internationalization tends to identify technology licensing as a step toward an alternative to wholly owned subsidiaries. Elements that can be subjected to licensing are product technology. 2000. Cavusgil. On the other hand. 2002). trademarks. 1990: 118). 1992). Most international licensing agreements take place between firms from industrialized coun tries. Similarly. companies are increasingly choosing partner ships as a way to interact within the dynamic international environment.

includ ing the extent of single person and empty nest households.. R. P. 1 17. unpatented technology. Learning and protection of proprietary assets in strategic alliances: Building relational capital. incomes and occupation. Although no definitive standards exist for license agreements.. P. P. 1998. and Baker. J. Hogg and Barbara R. 1983. Executive insights: International partnering a systematic framework for collaborating with foreign business partners. size and composition of households/families. T. S. Organization Science: A Journal of the Institute of Man agement Sciences. Compensation in international licensing agreements. (1996). H. 2 (4). the licensed rights take the form of patents. or copyrights. Hill. upon which satisfaction and performance of licensing agreements hinge. Hill. A. and Aulakh. licensors need to insure that they are not ‘‘generating their future competition in their own backyard’’ and develop mechanisms to pro tect themselves from exploitation. licensing may not necessarily help to maximize licensors’ profits and certain elements of a li cense agreement may be difficult to enforce. An eclectic theory of the choice of international entry mode. K.. 11 (2). 217 37. (1992). cooperation. Consequently. know how. Gulati. Strategic Management Jour nal. 21 (3). P. (1998). The dynamics of learning alliances: Competition. The licensing agreement specifies the rights that are granted. Licensing agreements in the pharmaceutical industry. Beamish. Other risks involved in licensing are related to negative branding/reputation effects. B. Consumer behavior researchers and marketers are interested in trends in con sumer d e m o g r a p h i c s with respect to: birth rates and age profiles. W. Cavusgil. 29 (2). Beamish. Journal of Marketing. the consideration payable. M. and Sarkar. guide lines. 71 87. 19 (3). These all impact on con sumer needs (see c o n s u m e r n e e d s a n d .lifestyles 187 ism that results from the open exchange of infor mation (Khanna. and Perlmutter. Strategies for exploiting technological innovations: When and when not to license. (2002). L. H. S. N. 409 19.. 117 28. Furthermore. Kale. 9A96G008. W. Simonet. Rich ard Ivey School of Business Case. 428 41. Atuahene-Gima. Aulakh. 555 72. levels of employment including participation of women in the labor force. Gulati. W. 1996). International Journal of Medical Marketing. Ontario: Technology Search International. C. the licensing agreement is an essential contractual element between licen sor and licensee. T. and Fosfuri. A way to achieve this might be to limit the licensee’s market and insist on technology feedback or flowback clauses in the licensing agreement. marriage and divorce rates. Singh.. forms. Kale. life cycles see l i f e s t y l e s Margaret K. Strategic Management Journal. (1993). P. Stitt. (1998). Cavusgil. C. and Nohria. (1996). L. Searching for Technology and Making the Deal in Ontario. 2000). (1990). Journal of International Business Studies. A. S. D. 193 210. 91 107. and the duration of the terms. R. (1998). and type and location of residence. regis tered trademarks. (2000). and relative scope. and Perlmutter. Sahay. 73 88. registered industrial designs. International licensing of technology: An empirical study of the differences between licensee and non-licensee firms. C. Kotabe. 3 (3). Strategic Management Journal. (1983). number and spacing of children. trade secrets. Note on international licensing. Bibliography lifestyles Arora. Emerging role of technology licensing in the development of global product strategy: Conceptual framework and research propositions. S. Hwang... Lewis Consideration of consumer lifestyles incorpor ates an awareness of demographic variables and life cycles. 31 (4). Journal of International Marketing. S. Usually.. H. and Nohria. The Licensing and Joint Venture Guide: Determining Your Need. Khanna. Wholly owned subsidiary versus technology licensing in the worldwide chemical industry. 60 (1).. A. Journal of International Business Studies. Journal of Inter national Marketing. To this end. M. 329 41.. (2000). and Kim. and checklists are available for de veloping these (Stitt and Baker. 1 (2). T. 6 (1). should the licensee not be able or willing to maintain the licensor’s desired quality standards or engage in undesired management practices. Singh.

Price. and culture. a t t i t u d e s . then remaining relatively high. 2002: 181–3. The term p s y c h o g r a p h i c s is often used interchangeably with lifestyle. Murphy and Staples. postponement of mar riage.. c u l t u r e . ch. Opinions are in terms of their view of themselves and the world around them. marital status. e.. e. job. media habits. He identified three spending patterns: firstly. Another class of lifestyle is ACORN typing (see CACI. ch. One example of lifestyle is the VALS frame work (see Solomon.188 lifestyles m o t i v e s ). (1995). social issues. Wells and Tigert. J. It is the result of interactive processes between social and per sonal variables surrounding individuals in child hood and throughout life. P. 1979. sustainers.. in the community. and rising divorce rates. From these data. London. Wilkes (1995) argues for seeing these as household rather than family life cycles. business. education. The traditional life cycle stages (see f a m i l y l i f e c y c l e ) were from bachelor stage to newly married. ‘‘I am me. and Miniard. . and Zinkhan. on vacation.g. leisure activities. 2002: 514). From this. and inner directed. the more effectively they can communi cate and market to them. economic position. Engel. F. These are further divided into nine value lifestyle groups: achievers. to provide a full and compre hensive picture of socioeconomic status. and car ownership. 13. W. CACI Information Services. attitudes. Bamossy. which is based on some 30–40 demographic and attitu dinal characteristics. and empty nest 1. 1982) in response to demographic trends such as smaller family sizes. 2. L. Con sumers. ‘‘generally in creasing expenditure across stages until the last one or two stages’’. and postcode information.. full nest 1.g. and behavior. education. Boston: McGraw-Hill Irwin. and Askegaard. TX: Dryden Press. and the basic premise of lifestyle research is that the more marketers know and understand about cus tomers. societally conscious. Solomon.. Lifestyle encompasses a person’s pattern of living in the world as expressed in terms of activities. and consequential financial situation and need for goods and ser vices. (2004). fash ion. It embodies patterns that develop and emerge from the dynamics of living in a society. occupation. 11.g. which influences and is reflected by consumption behavior. sex. belongers. CACI (1993). ‘‘generally de creasing expenditures across the life cycle’’ (Wilkes. 1995: 27). and solitary survivor retired (see Wells and Gubar. 3. politics. G. several modernized family life cycles have been put forward (e. These variables are con sidered together with demographics.. home ownership. Gilly and Enis. secondly. emulators. e. Blackwell. ACORN types are developed to profile consumers in terms of their attitudes and behavior with re spect to the purchase of products and services. survivors. 2. and opinions (see AIOs ) (see. Further. used as an indicator of s o c i a l c l a s s . and falling sharply at the older married and/or older single stages’’. However. economics. outer directed.g. This incorporates g e o d e m o g r a p h i c data from the most recent census. The term life cycle refers to the progression of stages through which individuals and families proceed during their lives. R. 1971). interests. community. D.. Fort Worth. 2nd edn. and media.. Consumer lifestyle refers to a consumer’s pat tern of living. on special activities. reference groups (see i n t e r p e r s o n a l c o m m u n i c a t i o n s ). family. home. on hobbies. but may also include p e r s o n a l i t y variables. and behavior and are often discussed in relation to life cycle and life styles. 1966). at home. on sport and entertainment. and thirdly. in clubs. 1993). ‘‘a generalized inverted U pattern. and inte grated – with associated impact on customer needs.’’ experimentals. solitary survivor in labor force. It provides a three dimensional view of customers. Bibliography Arnould. Consumer Behavior. economic influences pro vide constraints and opportunities in the devel opment of lifestyle. 8th edn. recreation. Interests refer to what they place importance on in their immediate surroundings: family. with spending rising sharply as households shift from young single to young married. three broad groups of consumers are identified (in the US population): need driven. including age. and financial position. E. Activities refer to how people spend their time: at work.

7. and transportation costs. ch. Being. M.) (1974). chs. E. 8th edn. and Kanuk. and Della Bitta. ch. J. D. and Coney. (2001). and controls the efficient. and Prensky. D. C. and Askegaard. D. How to reach the young consumer. Journal of Consumer Research (June). 6. E. L. W. Schiffman. J. (1971). 27 35.. D. (1975). 5th edn. (1982). G. Consumer Behavior. L. Solomon. interests and opinions. (1996). (1979). 38 (January). W. ch. ch. D. 12 (May). Upper Saddle River. J. (1974). (2001). and Staples. 2nd edn. transitions and product expenditures. Logistics plans. Consumer Behavior: Implications for Marketing Strat egy. such as food. and Gubar. 11. I. A. (2002). A. New York: McGraw-Hill. R. M. 2nd edn. Journal of Marketing. Wells. Upper Saddle River. 5th edn... (ed. Loudon. New York: John Wiley. complex. G. and technologically advanced operations that create significant competitive advantages (see c o m p e t i t i v e a d v a n t a g e ) for retailers. 6.. for cus tomized orders). W. (2004). and that resources are distributed at lowest possible cost.g. and Minor. In some sectors. W. 17. NJ: Prentice-Hall. L. Consumer Behavior. M. G. and Enis. 2002). 12 22. Upper Saddle River. Having. R. NJ: Prentice-Hall. 196 213.logistics Gilly. NJ: Pearson Educational International. Hoyer. and MacInnis. Mowen. 14. 4th edn. Mowen. MI: Association for Consumer Research. Recycling the family life cycle: A proposal for redefinition. (2002). NJ: Prentice-Hall. Lifestyle and Psychographics. D. 77 86. P. The concept and application of life style segmentation. implements. ch. W. 6th edn.. 3. List prices are often quoted in product catalogues together with stipulated dis count levels for specified volumes – a practice referred to by some writers as administered pricing. ch. Consumer Behavior: Buying. and Tigert. A modernized family life cycle. In A. C. Logistics management is responsible for the flow of goods from the site of manufacture to the final consumer. Effi ciency of allocation is of great importance to insure that there is no over or undersupply. 16. Household life-cycle stages. linguistic equivalence see c o n s t r u c t e q u i v a l e n c e 189 list price Dominic Wilson In organizational markets price is often the result of negotiations based on a notional list price. (1974). Advances in Consumer Research. J. Wilkes. M. D. Solomon.). for volume purchases) or augmented (e. Bamossy. M. 7.g. D. Upper Saddle River. This requires consideration of stockholding. Hawkins. 271 6. vol. Ann Arbor. Chicago: American Marketing Association. S. (1993). services. R. Activities. which is then either discounted (e.. G. Murphy. 52 (March/April). (1998). J. Mitchell (ed. Boston: Irwin. A. the efficient and timely movement of products is more critical due to finite delivery times. and the allocation of finan cial and human resources to accomplish this function. ch. Wells. and Minor. Wells. thus avoiding wastage. 13. (1995). 27 43. K. Modern retail logistics systems are highly de veloped. (1995). D. Schiele. Journal of Advertising Research. NJ: Prentice-Hall. M. timely. Consumer Behavior: A Framework. Boston and New York: Houghton Mifflin. Wells. Plummer. Wells. Journal of Marketing Research. Upper Saddle River. Best. D. Fashion sector logistics is characterized by efficient consumer response (ECR) operations that insure the latest clothing . J. W. 33 7. R. logistics Andrew Newman The term logistics has origins in the military and in this context refers to the art of movement and supply of troops. (1966). 355 63. Psychographics: A critical review. W. 22. p a c k a g i n g . Harvard Business Review. Consumer Behavior. B. C. effective flow and storage of goods. Consumer Behavior: A European Perspective. D. pp. Journal of Consumer Research. Consumer Behavior. Journal of Marketing Research (November). Consumer Behavior. J. and related information from the point of origin to the point of consumption in order to meet custom ers’ requirements (Newman and Cullen. In r e t a i l i n g this management function is concerned with the process of physical distribution (see c h a n n e l s o f d i s t r i b u t i o n ) of merchandise and its stockholding. 9. L. W. Life cycle in marketing research.

Farnborough: Gower. P. and Fiorito. Siddiqui. J. (2002). S. 31 (2). Siddiqui. (2003).190 logistics style is in the store when the customer expects it to be. The length of time it takes for merchan dise to move through the supply chain from the state of raw fiber to garments purchased can reduce stock outs and unwanted merchandise on the shelves (Birtwistle.. . London: Thomson Learning. Planning and Con trol: A Corporate Approach. Quick response: Perceptions of UK fashion retailers. and Cullen. 2003). M. S.. Christopher. 118 28. (1977). and Fiorito. G. N. A. Distribution. Retailing: Environ ment and Operations. Newman. International Journal of Retail and Distribution Manage ment. Bibliography Birtwistle.

Lewis The environment of an organization (see m a r k e t i n g e n v i r o n m e n t ) is generally regarded as consisting of a m i c r o e n v i r o n m e n t and a macro environment that is com posed of several major elements over which the organization has little. others are associated with . NJ: Prentice-Hall. and d’Amico.g. Boston: Houghton Mifflin.. Caterer and Hotel Keeper). Effective Marketing: Creating and Keeping Customers. macro marketing is the aggregate of marketing activities within an economy. through major technological innovation and attempts at influencing the policy making and legislative processes. p. Lewis Barbara R. magazines David Yorke Magazines are publications that are purchased and read by people as part of their lifestyle (see l i f e s t y l e s ). e. M. (2004).. P. O. and social activ ities. if any. M. An organization’s environ mental analysts can be very selective with respect to those aspects of the macro environ ment on which they focus and in their interpret ation of them. 21. Kotler. 11th edn. and so the effi ciency of the system for moving goods from producers to consumers may substantially affect a society’s wellbeing. 1. W. W. Paul. Principles and Practices of Marketing.. The Times Higher Education Supplement). influence. In this sense. although it is clear that they can be active in certain areas. and employment. gardening. ch. Simkin. sporting. leisure. ch. The major forces in the macro environment tend to be viewed as social. rather than the marketing activities of a single firm. London: McGraw-Hill.g. Thus.. 5th edn. D. economic.. (1995). ch. 4th edn.g. and so are bought by organizations as well as individuals. Marketing Strategy and Management. cooking. political. legal. S. Marketing Concepts and Strategies. Marketing Management: Analysis. education (e. Some magazines are industry specific and may be referred to as t r a d e j o u r n a l s (e.. Englewood Cliffs. Oxford: Macmillan Business. Magazine content may relate to aspects of home life. MN: West Publishing. Bibliography Baker. or the marketing system within a soci ety. M. 4th European edn. Macro marketing embraces marketing’s role in society and can be defined as ‘‘the delivery of a standard of living to society. (2000). Implementation and Control. 5. do it yourself. 2. (2003). C. Pride. J. It is generally assumed that organizations will identify the major trends and possible future developments in these various components of the macro environment and the possible threats to their existing business and the oppor tunities for further developments (see s w o t a n a l y s i s ).M macro environment macro marketing Barbara R. (2001). See also marketing Bibliography Zikmund. and technological. Dibb. economic. G. St.’’ The aggregation of all organizations’ marketing activities includes transportation and distribution. Jobber. organizations are often depicted as being reactive. and Ferrell. L. Plan ning.

Good Housekeeping).. 57 (4). Men’s Health. neighbors. recreational experience. (1994). the key benefits of the mail order process surround the speedy distribution of goods from the retailer’s premises to the agent’s home. decision reassurance. M. Cosmopolitan). . Mail order has traditionally been directed at the less mobile lower social classes (see s o c i a l c l a s s ). mail order has been an area of expansion for many of the conven tional high street retail chains. Bibliography Greenland. P. London: Thomson Learning. . with the attraction of easily obtainable credit terms. One drawback of magazine ad vertising is the relatively long lead time for copy dates. J. A. or acquaintances (Newman and Cul len. Goods are selected from the catalogue assortment and orders mailed or tele phoned through to the retailer or a local agent..g. Angling Times) or much broader (e. aim at lifestyle groups (e. Retailing: Environ ment and Operations. Accounting Age). flexibility through regional editions. Critical issues and trends for the future of mail order. to sell on the merchandise to their per sonal customer base. which has im plications for m e d i a p l a n n i n g (see a d v e r t i s i n g ). 59 85. Investors’ Chronicle. hassle free convenience.192 mail order professional business groups (e. . Greenland and McGoldrick (1991) identify over 40 different motives associated with cata logue or mail order shopping. and can provide broad national coverage with. the advent and proliferation of digital television channels are likely to influence the future of mail order shopping. merger and acquisition activity. Petsky. and possibly with a mass circulation (e. key issues impacting on the future of this retail distribution channel include the i m a g e of d i r e c t m a r k e t i n g . Fur ther. where access to shops is restricted. 1994). such as Next. and an interactive marketplace (Petsky.. and McGoldrick. J. Mail order retailing experienced considerable structural change in the 1990s as agency oriented operations reorganized around new direct brands (see b r a n d ) and catalogues to capture the growing interest in home shop ping.g. Thus. This growth has helped to revitalize the mail order sector and im prove the frequently dowdy and downmarket image associated with this retail distribution channel (see r e t a i l d i s t r i b u t i o n c h a n n e l s ). magazine readers may be profiled with respect to their demographic char acteristics (see d e m o g r a p h i c s ).g. 2002). 1 (1).g. and do not need to travel to the store. The mail order agent replaces the conventional store functions by acting as sales person and merchandiser. Consequently. promotions. be specific (e. therefore. alternative media. These may be friends. P. The mail order sector is a growth area.g. Radio Times). For example. The readership of magazines may. . some times.. From mail order to home shopping: Revitalizing the nonstore channel. Direct Marketing. and Cullen. .. and at consumers living in more remote areas. Newman. (1991). S. transaction efficiency. Magazines typically provide full color adver tising at a reasonable cost. Agents are recruited from existing customers and act as sales people. . with Next Directory first launched in 1988. J. How ever. (2002). the key dimen sions being: . 29 32. added value with credit. Journal of Marketing Channels. and free gifts. Many well known high street retail ers including Marks and Spencer have success fully developed catalogues that appeal to upmarket consumers and many others across the spectrum. have a relatively long life and multiple readership. mail order Steve Greenland and Andrew Newman Mail order is most readily associated with cata logue shopping. More recently. Customers may purchase merchandise from the comfort of their armchairs. risk reduction. there is proven success of magazines’ editorial offers and sales promotions (see s a l e s p r o m o t i o n ).

loss of reputation. before undertaking internal production of goods or services.. release of expert staff. This is . which may be better undertaken by external specialists with econ omies of scale and specialized investments and expertise (Anderson and Weitz. 70. 6 (November/ December). Marginal pricing might be used during a temporary fall in d e m a n d (e. Make-or-buy decisions. cul tural.. Marginal pricing might also be used to secure what is expected to be a favored position with respect to future sales (as with introductory offers)..’’ less at tention has been directed in the marketing lit erature toward the nature of m a r k e t s . The sum of costs and margins for each stage of the value chain is reflected in the even tual price to the end user (discount notwith standing). Bibliography Anderson. Sloan Management Review. (1992). reduced customer loyalty.. and Gross. Strategic sourcing: To make or not to make. B. market Fiona Leverick margin Dominic Wilson Margin refers to the profit earned by a product or service at different stages of the v a l u e The term ‘‘market’’ is clearly an important con cept in the field of m a r k e t i n g . In house supplier arrangements appear to offer potential advantages of manage ment control. 207 14. 22 (August). 1986). (1986). Harvard Business Review. of flexible pro duction management. 27 (Spring). E. A. during an eco nomic recession or a price war) to keep assets ‘‘ticking over’’ pending the return of more normal trading conditions. this is an unusual and uneconomic level for prices and one that could not be sustained for long. yet while much debate has taken place on what constitutes an appropriate definition of ‘‘marketing. make/buy decision Dominic Wilson An important alternative to purchasing goods or services is to supply them from internal sources. accounting. Indus trial Marketing Management. delivery. ‘‘Margin’’ is a broad term and is more usually discussed under the slightly more specific variants of g r o s s m a r g i n and n e t margin. Farmer. Venkatesan. D. But there can also be significant problems of cost control. which can lead to even less attractive conse quences such as deterioration of skills. D. Make or buy decisions can also apply to internal ser vices such as m a r k e t i n g . 193 c h a i n and is usually expressed as a percentage. This issue has many strategic and operational impli cations beyond the relatively simple aspect of cost control. and erosion of brands (see b r a n d ). R. planning. and Weitz. of cost manipulation (e. historic. 98 107.g. (1993). of acquitting minimum national content requirements where the alter native is international sourcing. research. in t r a n s f e r p r i c i n g ). and of using what might otherwise be underutilized assets. B. Ford. Cotton..g. Clearly. and d e s i g n . The alternative is to reduce radically (or even suspend) operations. marginal pricing Dominic Wilson Marginal pricing is a term used to refer to those occasions when price is calculated to cover only the variable costs of production and/or distribu tion and little or no c o n t r i b u t i o n is required toward fixed costs and profit margins. Margins can be added at each stage of the pro duction and distribution process (where these stages are treated as profit centers) in accordance with the competitive pressures prevailing at each stage. and service where the commercial pressures of market forces are (or are perceived to have been) ‘‘suspended. qual ity. Make-or-buy decisions and their implications.’’ Decisions in this area are frequently concerned with political. 3 19. and strategic issues rather than with the more routine purchasing concerns. it is important to consider whether external purchasing might provide a more efficient or preferable alternative. Equally.

products.’’ which can be served in many ways. with only a minority of the sample offering definitions in terms of groups of consumers. Elsewhere. Others fur ther assert that ‘‘the market. Such definitions recognize that competing s u p p l i e r s may define a market in different ways. the concept of a ‘‘market’’ might refer to only a single customer (see Gro¨nroos. and technology (how the customer function is being satisfied). given that many analytical techniques rely on concepts such as m a r k e t s h a r e and m a r k e t s e g m e n t a t i o n (Curran and Goodfellow. Bottom up. 1966). Another dimension of market definition is apparent in the literature on b u s i n e s s t o b u s i n e s s m a r k e t i n g . Yet perspectives offered elsewhere suggest a some what more complex understanding of markets. the term ‘‘market’’ has been used extensively to describe aggregate demand for a specific product (the ‘‘automobile’’ market) or in a specific physical area (the ‘‘European market’’). The latter is often referred to as the substitutability criterion. Here. 1990). Strategic management literature offers a number of further perspectives.g. is a volatile concept. However. for further discussion). ‘‘market’’ is most commonly used to refer to the existing or target group of customers for a particular product or service. a recognition shared by Day (1981). or strategic. it may refer to all those customers that have a particular need and who are willing and/or have the ability to satisfy it (Kotler. for example. see d e m o g r a p h i c s ). In contemporary marketing. defin itions reflect the needs of strategists to under stand the capacity and competitive potential of the business and specify markets in terms of organizational competitive capabilities and re source transferability. and radically from sector to sector. however. top down and bottom up. 1989. two products being contained in the same market where the cross elasticity of d e m a n d between the two is greater than a preassigned number (x). 2003): ‘‘In dividuals who. Jenkins. or organizational capabilities. in the past. then. customer function (what ‘‘need’’ is being satisfied). proposes a three dimensional concept of markets. or to refer to products that are regarded as close substitutes. then. For example. where boundaries are arbitrary . definitions reflect the narrower tactical concern of marketing managers and define markets in terms of patterns of customer re quirements. where it is recognized that the importance of individual customers is often considerable and the relevance of aggregate markets therefore lessened. Abell (1980). have purchased a given class of product’’ (Sissors. Top down. as may individuals at different levels within the same organization. Le Cerf. Markets have also been viewed in broader ‘‘need’’ terms (the ‘‘transportation’’ market) and demo graphic terms (the ‘‘female’’ market. It is accepted by some authors at least. the term has been developed in the field of economics to refer variously to any network of dealings between buyers and sellers of a particular p r o d u c t . who identifies two differ ent perspectives for defining markets. and Cole (1994) elicited defin itions of the term ‘‘market’’ from a sample of marketing managers and found that the majority tended to define markets in terms of products or channels (e. one of markets as units of analysis with clearly defined boundaries. A ‘‘market’’ is consequently defined by the per formance of given functions in given customer groups and includes all the substitutable tech nologies to perform these functions. Since then. that the understanding of markets is likely to vary to a greater or lesser extent from marketer to marketer even within a particular organiza tion. or any combination of these variables. or oper ational. The original use of the term ‘‘market’’ re ferred to a physical location where buyers and sellers came together in order to exchange products and services..194 market increasingly being recognized as an omission. significantly from organization to organ ization with similar offerings (see o f f e r i n g ). with the dimensions being customer group (who is being served with respect to factors such as demographics. The prevalent view is. ‘‘the food retail market’’).’’ whether defined in terms of existing or potential customers. user industry. or buyer behavior). usage situations. and ‘‘needs. A number of authors have also identified a disparity between the way markets are defined in the marketing literature and in practice. there is little agreement in the field as to the criterion by which x might be specified.

Day. Thus. (1994). market orientation Dale Littler Market orientation in general suggests that or ganizations are outward looking. (1990). European Journal of Marketing. S. 11th edn. 1994). E. 3 (July). involved in providing the appropriate o f f e r i n g . (1980). customer groups with somewhat differing requirements. corporate. Le Cerf. therefore. and the r e a l i z a b l e d e m a n d . Theoretical and practical issues in the definition of market boundaries.. C.). Kotler.). D. J. G. P. Marketing Management: Analysis. which is the total possible demand for the prod uct or service based on the amount the maximum number of customers are willing and able to purchase. Such managers can be expected to foster and maintain customer relationships (see r e l a t i o n s h i p m a r k e t i n g ) with key customers. 1990).. J. 2. Englewood Cliffs. Jenkins. European Journal of Marketing. Defining marketing: A marketoriented approach. A market manager structure is likely to be a feature of organizational markets where companies are marketing to several. London: Kogan Page. Such an approach contrasts with the p r o d u c t m a n a g e r structure. Advances in Consumer Marketing. market demand Dale Littler and Fiona Leverick The term market demand most usually refers to the total demand for a p r o d u c t or service over a specific period of time in a specified geographic area in a specified m a r k e t i n g e n v i r o n m e n t and for a specified m a r k e t i n g effort. Plan ning. 24 (1). de velop a problem solving capability and provide a ‘‘solutions’’ package. the actual demand achieved.. What is a market? Journal of Marketing. Sissors. T. managers may be appointed for major or key customers. 16 28. It is used in relation to either individual products or services or product or service categories. per haps diverse. 23 (1). M. increasingly in organizational markets. and. 30. H. NJ: Prentice-Hall. and where perspectives shift with changing individual. and user views of product offerings and changes in the nature and availability of these offerings (see Curran and Goodfellow. which will comprise possibly several markets (maritime. M. Englewood Cliffs. Defining the Business: The Starting Point of Strategic Planning. 17 21. 1990. G. 52 60. F. a manufacturer of paint will sell not only to consumer markets. collect intelli gence on competitors and orientation and seldom clear cut. In M. They may have profit responsibility. They will. dissemination of the intelligence across departments and organization wide . (2003). both internally and from external parties. How managers define consumer markets. (1989). Strategic Management Journal. etc. Kohli and Jaworski (1990) argue that market orientation ‘‘is the organization wide generation of market intel ligence pertaining to current and future cus tomer needs. (1966). See also demand Market managers are responsible for the m a r k e t i n g activities for particular m a r k e t s or clusters of customers. Jenkins and S. Strategic market analysis and definition: An internal approach. Knox (eds. where definitions are multidimensional. 195 market exchange see e x c h a n g e market manager Dale Littler Bibliography Abell. In some instances. and disseminate this information throughout the or ganization (Narver and Slater. 281 99. but also to professional decorators as well as indus trial users. Demand may be viewed as potential demand. NJ: Prentice-Hall . have to act as a focus for coordinating all the different activities. J. and Goodfellow. and Cole. Curran. Gro¨nroos. (1981). process plant. develop an understanding of their requirements. Jenkins et al. Implementation and Control.

3. ch. or known. Journal of Management Studies. The Coca Cola company’s early marketing of only one drink. Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion. then an undiffer entiated or total market approach can be adopted by a company using a single m a r k e t i n g m i x to satisfy consumers. d e m o g r a p h i c s . It is generally regarded as aiming at increasing the firm’s m a r k e t s h a r e within its existing markets. Kohli. 54 (April). and Slater. 1 (January). it represents the business’s coordinated efforts ‘‘to create su perior value for the buyers’’ (p. is an example of this approach. (1990). The effect of a market orientation on business profitability. 41 60. market potential Dale Littler This is the total d e m a n d possible for a product class (see p r o d u c t ) such as cigarettes. (1990). A. This can be achieved in at least one of three ways: increasing pur chases by existing customers. Bibliography Cadogan. and Diamantopoulos. F. and converting non users to pur chasers of the firm’s offerings. C. intelligence dissemination. (1965). 6). and they reconceptualize the concept of market orientation as comprising intelligence gener ation. of only one size. B. It can be calculated by estimating all the possible users multiplied by the amount each individual (organization) is likely to use. New York: McGraw-Hill. 20 35. automo biles. Journal of Strategic Marketing. (1995). Bibliography Ansoff. (2001). The market potential may change over time because of the effects of changes in consumer tastes and preferences. Cadogan and Diamantopoulos (1995) conclude that there is much in common between the perspectives of Narver and Slater and Kohli and Jaworski. an organization attempts to subdivide the market into clusters of customers with simi lar requirements and tailor its marketing mix to each cluster. 38. 55). J. Narver and Slater. and Jaworski. 6. Narver. 1 (March). it con sists of viewing a heterogeneous market (one characterized by divergent demand) as a number of smaller homogeneous markets. Narver and Slater (1990) suggest that interfunctional coordination is an important ingredient: based on the cus tomer and competitor information. Journal of Marketing. 1 18. Market orienta tion has been regarded as having a significant positive effect on organizational performance (see Harris. research propositions. market segment see m a r k e t s e g m e n t a t i o n market segmentation Vincent Wayne Mitchell Smith (1956) first defined market segmentation in the following terms: ‘‘a rational and more precise adjustment of product and marketing effort to consumer or user requirements. and technology. J. A. market penetration Dale Littler This is one of the strategies identified in Ansoff’s (1965) directional policy matrix (see g r o w t h v e c t o r m a t r i x ). Harris. C. Journal of Marketing. and respon siveness activities characterized by a customer and competitor orientation and guided by a co ordinating mechanism (p. H. Here. 54 (October). J. and managerial implications. Market orientation: The construct. L.196 market penetration responsiveness to it’’ (p. Market orientation and performance: Objective and subjective empirical evidence from UK companies. K. If the market has heterogeneous needs. and digital cameras. winning over the consumers of competitors’ offerings (see o f f e r i n g ). 2001). 21). that all consumers in a market have similar needs and wants. Kohli and Jaworski and the market orientation construct: Integration and internationalization. 17 43. I. then a t a r g e t m a r k e t approach can be adopted. S. This approach involves add .’’ If it is as sumed.

Good market segmentation can result in nu merous advantages. tailor made clothes and shoes. e. In this descriptive phase are included all the ‘‘normal’’ segmenta tion variables discussed by numerous authors. In these relatively few cases. produ cers still design their products for individual consumers.g. which can be easily measured. The choice of descriptor vari able is not easy. 197 and partly because of the often questionable link between the selected base(s) for the segmenta tion and the descriptor. In completely heterogeneous markets. were fourth and fifth. in practice.. promotional. and the poten tial for increased profit and return on investment. the shoe market is best characterized by identi fying customer needs of protection. rather than by the age. but must be something that is closely related to the customer’s needs. marketers must know how these needs vary by segment in order to design products to meet them. e. and sensitivity to various marketing tactics. Nowadays. etc.g. which leads to in creased c u s t o m e r s a t i s f a c t i o n and implementation of the m a r k e t i n g c o n cept. even in traditional mass markets.. in order to decide whether or not groups of buyers seek different product benefits and hence will value different product features. style. However... 3 identifying new marketing opportunities from segments that have not been hitherto exploited. then the segments so de scribed are examined to see if they show differ ent behavioral responses. and in ventory costs. in some consumer markets. or s o c i a l c l a s s of the market. durability. For example. One survey found that the similarity of needs within segments and the feasibility of marketing action were the two most important criteria used to form segments.g. the only way to satisfy everyone is by offering tailor made or bespoke products. where each customer’s requirements are different. segmentation may not follow the logical two step approach. this is more prevalent in organiza tional markets (see o r g a n i z a t i o n a l m a r k e t i n g ). media usage. are identified first. If the benefit segments do not vary significantly on any of these descriptor variables. Sometimes a product is designed for a particular segment of consumers whose collective need also happens to be accurately characterized by a description of their group association. s e g m e n t a t i o n v a r i a b l e s ). then examining their influence on behav ior. might be examples. It should be noted that the idea of market segmentation can be used by profit making and not for profit organizations alike (see n o t f o r p r o f i t m a r k e t i n g . b e n e f i t s e g m e n t a t i o n . size. 4 increased c o m p e t i t i v e a d v a n t a g e by viewing a market in different ways from . etc. e. with the use of modern and flexible manufacturing technology. shop ping behaviors. can be criticized for moving the marketer’s attention away from customer requirements and toward implementation issues. including: 1 a closer matching of a company’s products with customers’ segmentation itional costs for product modifications and associated administrative. Stability of the segment over time was third most important. This approach of looking for measurable and identifiable vari ables. The Process of Market Segmentation The first step is usually some form of needs assessment. This type of customized marketing is becoming increasingly possible. which can lead to improved communication with customers. 1993). Often descriptor or profile variables. partly because of the enormous number of possible variables that could be used. (The starting point is not restricted to benefit segmentation. the two approaches do overlap. sex. which allows shorter runs of products to be profitable. price. A number of authors do not take needs as the starting point for segmentation and argue that. while the differ ence of needs between segments. The second step is to describe how the benefit segments differ in their buying loyalties.) Since markets are defined in terms of d e m a n d or customer needs/requirements. the Brownies or football sup porters’ clubs.. they will be very difficult to reach and target with tailored marketing mixes. 2 checking the basic assumptions and under standing about customers in the market. various clubs and organizations. The simpli city of assigning customers to segments was least important (Abratt.

efforts to overly segment markets into too small niches may be viewed cynically by the targeted individual and negatively affect consumer response to marketing efforts. not all authors agree that market segmen tation is necessarily a profitable strategy. Some argue that the only way to build a large. 1979).g. when heavy users make up such a large propor tion of the sales volume that they are the only relevant target. Bonoma and Shapiro (1984) highlight two major cost factors associated with segmentation. g e o demographics. counter segmentation should be considered (Resnik. In practice.. A further limitation is the in ability to predict the nature and number of market segments that confront a new product in advance of the product being introduced. In markets where consumers are willing to accept lower prices in exchange for less tailored products and where there is a high potential for product and marketing economies by eliminating or fusing market segments. Bonoma and Shapiro advocate the practical strategy of using the least expensive tools first so long as the segments are responsive to these changes. narrowly segmenting a market to target may actually prevent a product from developing brand loyalty. because companies that do not understand how the market is divided up risk competing head on against larger organizations with superior resources. Target marketers have been widely criticized for unethical or stereotypical activities. The least expensive tactic is tailoring communications. The first is the number of segments approached: the more a market is segmented. 5 better c o m p e t i t i v e s t r a t e g y . however. and 6 enabling two different pieces of research containing separate data to be combined by means of a common classification. especially when the market is so small that marketing to a portion of it is not profitable. . d e m o g r a p h i c s . efforts toward personalization and individu alization of markets can lead to a prolifer ation of products. it can allow a company to domin ate a segment – which is not often possible in the total market.198 market segmentation one’s competitors. and environmental oppor tunities and threats. Abratt (1993) found that product changes and s a l e s p r o m o t i o n cam paigns were the marketing actions most often used by companies to target different segments. which becomes overly burdensome and costly to manage. The question of profitability can be one of the principal limitations of market segmentation. In add ition. from this it is impossible to tell whether the segments that develop existed prior to being exposed to the product and advertisements. e. but one of the most commonly used sets includes . However. this can be more expensive for the company and may reduce how well the company capitalizes on its first mover advantages. However. Second is that some elements of the marketing mix are more expensive to change than others. One way to overcome this problem is to give written descrip tions of concepts to consumers and ask them to indicate the concept’s applicability to their situ ation and the benefits that could be derived therefrom. com petitors’ actions. . Specialized prices are harder to administer and can have a substan tial impact on profits. Target Segment Selection Many authors have written about the criteria used to assess the usefulness of segmentations. Conventional practice is to conduct an attitude and usage study in the test market area (see t e s t m a r k e t i n g ) once the product has been introduced. A final limitation is that segments may not be stable in the longer term. If the product has to be altered after introduction to meet the needs of different segments. By far the most expensive change to implement is product change. Turney. or when one brand dominates the market and draws its appeal from all segments of the market. and l i f e s t y l e s . because of changing consumer values. etc. it also keeps organizations alert to changes in market conditions. sustainable brand loyal customer base is to build broad brand popularity. and Mason. the more costly it is. a number of disadvantages to target marketing have also been identified: . while different a d v e r t i s i n g appeals and prices were used less often. Changing the s a l e s f o r c e and distribution systems were used least often.

257 68. Lifestyle Market Segmentation. 3 8. market share Fiona Leverick This is the ratio of a company’s sales of a p r o d u c t or service (either by number of units or by value) during a specific time period in a specific market to the total sales of that type of product or service over the same period. compatibility of market with companies. (2004). innovation in how the market is attacked. 405 12.. (1978). Substantiality is the degree to which segments are large and/or profitable enough for the organization to pursue. 79 84. Mitchman. (1979). Measurability is the degree to which size and purchasing power of segments can be measured. and actionability (Kotler and Armstrong. P.. New York: Praeger. Mitchman (1991) adds meaningful to the list. These were followed by the size of the market. 79 84. 2 (2). and expected market growth. The importance of market share has frequently been noted. (1993). Industrial Marketing Management. Piercy. compatibility with the m i s s i o n s t a t e m e n t . and they study the ‘‘fit’’ be tween segment requirements and company strengths.. See also organizational segmentation Bibliography Abratt. Some practical considerations in market segmentation. that organizational compatibility does not become the governing criterion for seg ment selection. (1956). which relates to the simi larity of needs within the segments. Green. Strategic and operational market segmentation: A managerial analysis. Turney. 2 (2). some authors have advocated the use of Porter’s five forces framework as criteria for determining a segment’s structural attractive ness (see c o m p e t i t i v e s t r a t e g y ). B. Kotler. B. Principles of Marketing. R. i. W. It is import ant. G. (1993). and Mason. Accessi bility is the extent to which segments can be effectively reached and served. Journal of Marketing Research. J. Journal of Marketing Research. however. the r e l i a b i l i t y of the data from which the segments were derived and the temporal stability of result ant segments. B.’’ Harvard Business Review. Strategic marketing segmentation models may be better judged by such criteria as the ability to create and sustain competitive differentiation and advantage. A survey of marketing practice found that the ability to reach buyers in the market and the competitive position of their firm in the market were the two 199 most highly rated criteria used by practitioners to select target segments. objectives/resources. S. Finally. 15 (August). A. P. F. namely. B. 20. share the criteria of measurability. 13. J. with. (1977). Product differentiation and market segmentation as marketing strategies. L. R. Marketers turn to ‘‘countersegmentation. V. providing a coherent focus for thinking in the organization. profit ability.. Young. Issues and advances in segmentation research. 15 (August). NJ: Prentice-Hall. Upper Saddle River. (1991). Market segmentation practices of industrial marketers. Smith. Y.. and Feigin. A. Resnik. Journal of Marketing. Industrial Marketing Management. Wind (1978) considers other factors. 61 73. B. for example.e. and Morgan. and actionability is the degree to which an effective marketing program can be formulated for attracting and serving the segments. and consistency with corporate values and culture. 10th edn. Bonoma. then the segmentation is less likely to be successful. since organizations should be able and prepared to adapt to segments identified rather than to target only those which are com patible with existing organizational strengths and weaknesses (see s w o t a n a l y s i s ). P. (1978). P. T. Business Horizons. accessibility. A new approach to market segmentation. Piercy and Morgan (1993) suggest that little explicit concern has been shown about the dif ference between strategic and operational aspects of segmentation. 21 (July). 57 (September/October). (1984). 317 37. a connection . when there is low intrasegment variability. N. and Shapiro. 100 6. Wind. E. 2004). N. Industrial Marketing Management. substantiality. and Armstrong. If the proposed segments do not fit in with the company’s long run objectives or the company does not possess the relevant skills and resources to meet the needs of the segments. It has been pointed out that calculations of market share are likely to vary considerably according to how the total m a r k e t is defined. Evaluating market segmentation approaches.

however. goods and services to create exchanges that satisfy individual and or ganizational objectives’’). (1985). and Sultan. Crosier (1988). which views it as the management process that identifies. and Aaker. 1988. It has been argued that obtaining a high market share can be important in gaining experience (see e x p e r i e n c e c u r v e ) and thus in lowering costs to remain abreast of competition or even secure a c o m p e t i t i v e a d v a n t a g e (see c o s t l e a d e r s h i p s t r a t e g y ). an ticipates. M. 1985) have suggested that the direct impact of market share on profitability. Ex c h a n g e is seen by many authors as the central concept underlying marketing. especially the growth of chain stores (pre 1900). R. 97 106. Gale.g. Is market share all that it’s cracked up to be? Journal of Marketing. between 1930 and 1950.g. where marketing’s responsibility was to sell what the organization produced. 1990). Finally. The first of these is most commonly termed the ‘‘production’’ era (Keith. 1960). Gale.. however. pointing to a number of varied and vigorous marketing efforts by manufacturers during these periods.. dis pute the existence of either the production or the sales eras (see. (1975). 49 (Fall). pricing. for example. The con cept has no single universally agreed definition and perspectives on the nature of marketing have shifted considerably over time. 1960) and is con sidered to have taken place between 1870 and 1930. e. A number of attempts have been made to categorize definitions of marketing. 1970). 1962. R. e. Jacobson and Aaker express concern that efforts to maintain or increase market share by companies can be myopic. advertising agencies (by 1900. department stores (1850). More recent examples of the various defin itions of ‘‘marketing’’ include those of the UK’s Chartered Institute of Marketing. . The development of ‘‘marketing’’ is often seen in terms of at least three ‘‘eras’’ (see. A. B. Jacobson and Aaker. and the American Marketing Association. placing them into three broad groups. Bartels..200 marketing between market share and profitability identi fied in a project undertaken by the Marketing Science Institute on the Pr o f i t Im p a c t o f Ma r k e t i n g St r a t e g i e s (Buzzell. The shift from the production era to the sales era has been attributed to increased competition in many industrial sectors (Keith. Halbert (1965) has suggested that this is due to marketing having no recognized central theoretical basis such as exists for many other disciplines. Bibliography Buzzell. and note that one of the premises of niche marketing (see m a r k e t s e g m e n t a t i o n ) is that the smaller share competitors can also achieve high returns. G. 11 22. reviewed over 50 defin itions. which reviewed 25 def initions in 1985 and arrived at its own contribu tion (‘‘marketing is the process of planning and executing the conception. at the University of Wisconsin. 1 (January/February). the ‘‘marketing’’ era signified a widespread adoption of the ‘‘customer orientation’’ gener ally held to be part of the modern m a r k e t i n g c o n c e p t . A number of authors. is substantially less than is commonly assumed. is increas ingly questioned since it can lead to a focus on price as a major competitive weapon when there are clearly other factors (see n o n p r i c e f a c t o r s ) that affect demand.g. R.. marketing Fiona Leverick Marketing was apparently taught as a business subject as far back as 1902. e. Harvard Business Review. D. when the primary focus of marketing was limited to overcoming constraints on supply rather than paying attention to sales methods or customer requirements.. 1951. 1975). with a consequent focus on sales techniques. the natural sciences in particular. see a g e n c y ). while not unimportant. Other research ers (see. and satisfies customer requirements effectively and at a profit. Market share: A key to profitability. Such a perspective. T. although the first textbooks on the subject were not written until several years later (Converse. promotion and distribution of ideas. Fullerton. expensive. and Sultan. Webster. 53. Jacobson. and supermarkets focus ing on self service and low prices (by 1930 in the US and by 1945 in Europe). The production era was apparently followed by the ‘‘sales’’ era. and detri mental to long term profitability. 1988). D. Gilbert and Bailey.

The first of these might be seen as emanating from the field of n o t f o r p r o f i t m a r k e t i n g . and O’Shaughnessy. However. and this was felt by many researchers to be an unconvincing argument in favor of a third category of definitions (see m a r k e t i n g o r i e n t a t i o n ). The second group consisted of defin itions that viewed marketing as a concept or philosophy of business. churches. 1990) (see s o c i a l r e s p o n s i b i l i t y ). European Journal of Marketing. it does counsel businesses to be fair to consumers. Kotler and Levy re ferred to such not for profit marketing as s o c i e t a l m a r k e t i n g . al though. Perceptions of the societal marketing concept. Dickinson. Herbst. 1971). they tend to build on the familiar (Kaldor. and Sacks. there might be some disagreement among marketing academics as to the content of such a body of theory. Societal marketing does not generally deny that the basic goal of a business enterprise is to insure its long term profitability and sur vival. Dawson. 23. both of which revolve primarily around customer relationships (see r e l a t i o n s h i p m a r k e t i n g ). A fourth challenge comes from authors like Gro¨nroos (1989) who suggest that existing definitions do not capture the essence of b u s i n e s s t o b u s i n e s s m a r k e t i n g or s e r v i c e s m a r k e t i n g . A second challenge developed from the area of societal marketing. however. 1969. A number of challenges to the definitions of the scope of marketing outlined by Crosier have emerged. 1974. national interest groups. which has been described by some authors as the ‘‘fourth era’’ of the develop ment of marketing (Bell and Emory. delivering and finally consuming it’’ (Levitt. so that the objectives of both parties are met. where Kotler and Levy’s (1969) article extended the scope of marketing to cover activities undertaken for primary aims other than that of profit. with a recognizable body of theory in relation to the study of the issues and processes described above. or. marketing could be defined as an academic discipline. (1989). It is often seen as a response to both the c o n s u m e r i s m movement and wider criticisms of the ills of marketing. 1986. marketing with the idea of satisfying the needs of the consumer by means of the product and the whole cluster of things associated with creating. as Halbert (1965) suggests. such as ‘‘the primary management function which organizes and directs the aggregate of business activities involved in converting customer pur chase power for a specific product or service into effective demand for a specific product or service and in moving the product or service to the final consumer or user so as to achieve company set profit or other objectives’’ (Rodger. 201 Abratt and Sacks. Gro¨nroos offers an alternative definition of marketing aims as ‘‘to establish. McGee and Spiro. or charities. without considering the long term societal or environ mental impact of marketing activities. the activities related to i n t e r n a l m a r k e t i n g . indeed. 1989). ‘‘selling is preoccupied with the seller’s need to convert his product into cash. 625 33. Societal marketing criticizes traditional marketing definitions for their emphasis on material consumption and short term consumer gratification. 1960). given that when consumers are asked to verbalize their needs. develop and commercialize long term customer relation The first group consisted of definitions that conceived of marketing as a process (see m a r k e t i n g p r o c e s s ) connecting a producer with its market via a marketing channel. Elliot. R. politicians. 1990. 1980). Hayes and Abernathy. including those of organiza tions such as educational establishments. a term that has more recently come to develop a somewhat different meaning. A third challenge has stemmed from those who consider that definitions involving a focus on customer ‘‘needs’’ discourage major product innovations (see p r o d u c t i n n o v a t i o n ) in favor of low risk product changes. Bibliography Abratt. only one example of such a definition was provided by Crosier. D.’’ Finally. Cro sier’s third category of definitions emphasized marketing as an orientation present to some degree in both consumer and producer: the phenomenon that makes the process and the concept possible. 1971. for example. 1971. . and to avoid marketing practices that have negative consequences for society (see Bartels. enabling them to make fully informed and intelligent purchase deci sions.

Jr. European Journal of Marketing. Bell. 108 25. or that fresh investments be considered. Dickinson. where strengths and weaknesses (the ‘‘SW’’ of SWOT) equate to the internal audit. 31. Hayes. McGee. offerings. 24. G. IL: Irwin. Influences on development of marketing thought.. Merrill. T. E. The marketing audit comes of age. 31. Business Horizons. 2 (Winter). European Jour nal of Marketing. Levitt. Gregor. M. (1971). R. H. 6 13. E. 35 8. J. 24. The identity crisis in marketing. Homewood. New York: McGraw-Hill. and Rodgers. Bartels. wholesalers . and O’Shaughnessy. K. Halbert. (1971). 29 38. 19 25. Business Horizons. 37 42. The marketing audit is generally conducted in two interrelated parts: the i n t e r n a l a u d i t (examining the internal operations and assets of the organization) and the e x t e r n a l a u d i t (examining the environment surrounding the organization). Elliot. The faltering marketing concept. Managing our way to economic decline. S. Basic Marketing. 1900 1923. M. (1969). E. 52. 35. The Practice of Marketing. 73 6. London: Associated Business Programmes. R. R. A. A. (1974). (1988). and Abernathy. IL: Irwin. Quarterly Review of Marketing. The rediscovery of the marketing concept. W. 1 (January). N. This process is similar to the s w o t a n a l y s i s recommended for strategic m a r k e t i n g p l a n n i n g . (1980). 57 (July/August). K. Wilson. Changing Perspectives in Marketing. 18 (Winter). (1988). Fullerton. E. J. Imbricative marketing. Bibliography Kotler. Dawson. Gilbert. 1 (January). Journal of Marketing. Rodger. Urbana: University of Illinois Press. and Emory. What exactly is marketing? In M. (1969). Broadening the concept of marketing. (1990). 25 43. P. The Meaning and Sources of Marketing Theory. Converse. European Journal of Marketing. The marketing revolution. marketing channels see c h a n n e l s o f d i s t r i b u t i o n . (1986). 4 (October). A. 11th edn. IL: Irwin. and Levy. 20. in recommendations that products be adapted to meet new customer requirements. P. (1990). (1965). The human concept: The new philosophy for business. W. R. The development of marketing: A compendium of historical applications. London: Heinemann. Journal of Marketing. P. Columbus. The marketing concept: Necessary but sufficient? An environmental view. Maidenhead: McGraw-Hill. R. K. Webster. Marketing Audit Checklists. Thomas and N. 152 60. 340 5. pp. R. Development of marketing theory: Fifty years of progress. pp. R. McCarthy. A. 67 77. (1982). L. D. 37 (July/August). r e t a i l distribution channels. conducted from the perspective of the m a r k e t i n g function. J. Bartels (ed. and Bailey. 1018 23. 16 27. o f f e r i n g ). Homewood. Gro¨nroos. The Development of Marketing Thought.). 45 56. R. Runyon. C. (1988). W. Waite (eds. 38.. R. L. and Spiro. (1962). Marketing concept and customer orientation. How modern is modern marketing? Marketing’s evolution and the myth of the ‘‘production’’ era. 35. (1970). 15. This could result. 108 25. 12. Harvard Business Review. Journal of Marketing. (1993). Marketing myopia. Herbst. The Marketing Digest. 2 (April). The marketing concept in perspective. 1 31. 329 39. Wales (ed. (1971). Journal of Marketing. or that old markets be exited. Journal of Marketing. marketing audit Dominic Wilson A marketing audit is an analysis. The aim of the audit is to examine systematically an organization’s op erations. Defining marketing: A marketoriented approach. R. markets. Crosier. M. (1960).. (1990). (1989). In H. (1960). Keith.).). W.. In R. while opportunities and threats (the ‘‘OT’’ of SWOT) correspond to the exter nal audit. for example. W. L. Homewood. Business Horizons. pp.. (1982). W. J. F. (1951). E. Marketing Theory and Metatheory. J. and environment so as to find ways to improve m a r k e t i n g p e r f o r m a n c e .202 marketing audit Bartels. Harvard Business Review. G. 33. of the environment surrounding an organization and its offerings (see e n v i r o n m e n t a l a n a l y s i s . Marketing in a Competitive Econ omy. C. 820 30. OH: C. D. Bartels. 10 15. and Perreault. Sloan Management Review. 23. Kaldor. Kotler. Jour nal of Marketing. (1977).

. for example. i. factors over which the communicator has no control. These include: . namely: a d v e r t i s i n g . to create a w a r e n e s s . Non paid and personal: social channels. attention. product experiences. by which a m e s s a g e is de livered from one party in the communications exchange to another. . t e l e marketing. 203 or impersonal where there is not. and retention (see consumer perceptions. ... e. and so can easily be avoided or tuned out. both personal and impersonal. a manufacturer may communicate with its intermediaries. referred to as n o i s e (i. Lewis Organizations are involved in a range of marketing communications exchanges. etc. but they are aware of consumers’ selective processes (of exposure. Further. . or are purchased infre quently.. and each group can pro vide communication feedback to every other group. families. dis tortion. preference. word of mouth communications. Schramm (1971) was one of the first to discuss the marketing communications process. and the stage in the p r o d u c t l i f e c y c l e . customers (existing and potential). and their socio economic profiles. e.g. i. whether they are personal. . p e r s o n a l i t y . where there is some direct contact between the sender and the receiver. Impersonal communications are less in sistent than personal channels. especially through the m a r k e t i n g r e s e a r c h activities of organizations. not least of which are messages being sent to target groups simultaneously). or purchase. Paid and personal: personal selling. designing the message. d i r e c t m a i l . and the knowledge of others. and second. allocating the communications budget and deciding on the promotional mix. Effective communication/promotion involves a number of activities. packaging. which will vary between consumer and organizational markets. and intervening variables. selecting the communication channels. and when buyers seek information. An alternative consider ation of the mix is a classification into two broad dimensions: first. which will be influenced by funds available. This classification allows for the com munication to be initiated by consumers as well as supplier organizations (see t w o s t e p f l o w m o d e l ).. etc. . direct marketing. conviction. .e. This is summarized in Kotler (2003). have social significance.e. the nature of the market. Personal communications tend to be more im portant when products are expensive. . perception. individuals. This mod el answers the following questions: (1) who (2) says what (3) in what channel (4) to whom (5) with what effect? All communications in volve ‘‘senders’’ and ‘‘receivers. and recall). i. p u b l i c r e l a t i o n s and p u b l i c i t y . i n t e r personal communications. public relations. determining the c o m m u n i c a t i o n s o b j e c t i v e s . sales pro motion. Kotler (2003) refers to the five major tools of the marketing communications mix available to an organization. percep tions of risk (see p e r c e i v e d r i s k ). which may interfere with the process. Marketing communications comprise a mix of techniques or tools known as the c o m m u n i c a t i o n s m i x (sometimes referred to as the promotional mix). risky. Customers engage in w o r d o f m o u t h c o m m u n i c a t i o n s with other cus tomers and consumers. and businesses. .e. Paid and impersonal: advertising. whether or not the communi cations are paid for. and various communications marketing communications Barbara R. the ways in which messages are carried/ delivered to an audience. they are sub ject to the consumer psychological processes of selective attention. Marketing communi cators require that the message sent is the one that is received. and stages in the buying process... Examples include: . identifying the target audience and its characteristics.g.’’ the ‘‘senders’’ being concerned with messages and channels.e. and p e r s o n a l s e l l i n g .. Its intermediar ies communicate with their customers and vari ous publics. groups. knowledge. selective ex p o s u r e ). sales promotion. Non paid and impersonal: publicity. liking.

(1971). London: Heinemann. 2003). product management. Kotler. con trol is viewed as the final phase of the four stage strategy process (see s t r a t e g i c p l a n n i n g ). the implications can . pp. The third is a profit orientation. Implementation and Control. P. 1990). This had led some authors to produce a more ‘‘modern’’ statement of the marketing concept based on the three elements of c u s t o m e r s a t i s f a c t i o n . marketing control Dale Littler It is clear that effective strategic marketing management (see s t r a t e g i c m a r k e t i n g . with attention directed primarily toward profit. R. F. NJ: Prentice-Hall. Bibliography Kotler. This is the essence of marketing control. 625 33. e. There has been some concern that the marketing concept as defined above is not broad enough to cover the more recent develop ments in the scope of marketing. articulable ‘‘needs’’ of con sumers. The marketing concept in perspective. measuring the communications results. What exactly is marketing? In M. a long term orientation. and Spiro. Englewood Cliffs. in order to deflect criti cisms of the marketing concept as focused only on the current.’’ wants. and . Waite (eds. Roberts (eds. 16 27. marketing concept Fiona Leverick The marketing concept has been seen variously as a statement of the philosophy of marketing. and be havior is the focal point of all marketing action. (1989). developments in the area of s o c i e t a l m a r k e t i n g have led to a number of restate ments of the marketing concept to include a focus on consumers’ and society’s long term interests (see s o c i a l r e s p o n s i b i l i t y ). If deviations are identified. (1990). 11th edn. and a d v e r t i s i n g . European Journal of Marketing. Urbana: University of Illinois Press. The first of these is a so called ‘‘customer orientation. n o t f o r p r o f i t m a r k e t i n g ). D. and commu nity welfare (Abratt and Sacks. 23. Plan ning. and Sacks. L.). In particular.g. sales.. Some have noted a fourth component. Kotler. NJ: Prentice-Hall. Thomas and N. In the case of marketing strategy. P.). K. Marketing Management: Analysis. W. (2003). Plan ning. There are at least two major areas where marketing control will be applied: to the m a r k e t i n g s t r a t e g y and to the marketing budget. 340 5. or a broad umbrella governing business activity. The Process and Effects of Mass Communications. Marketing Management: Analysis. The Marketing Digest. (2003). (1988). Crosier. 1989). with the entire organization sharing the cus tomer orientation by emphasizing the integra tion of the marketing function with areas such as research. defin itions of which as a concept or philosophy of business comprise one of the three types of def initions of marketing identified by Crosier (1988) (see m a r k e t i n g ). K.. It is viewed by many as synonymous with ‘‘marketing’’ itself. as opposed to sales volumes. Business Horizons. W. E. Schramm and D. aimed at generating profits (see. The marketing concept is generally held to have three major components (see McGee and Spiro. J. company profits. Schramm. McGee. Reflecting these three areas. m a r k e t i n g m a n a g e m e n t ) suggests estab lishing predetermined targets against which actual performance can be assessed. the marketing con cept can be viewed as a customer orientation. Perceptions of the societal marketing concept. R. Implementation and Control. The second is a focus on what is usually termed either coordinated activities or integrated effort. although clearly a profit focus is not appropriate for all organiza tions (e. In W. managing the marketing communications program. an approach to doing business. How communications works.204 marketing concept . supported by an integrated marketing approach. and is primarily concerned with insuring that the strategy is developing according to plan so that the established objectives will be realized. Englewood Cliffs. 11th edn.g.’’ whereby an under standing of customer ‘‘needs. 31. Bibliography Abratt.

The aim is to help the decision maker not only by allowing access to past and current 205 data..e. A global information system is an organized collection of computer hardware. the system should allow the use of the subjective assessments of the user rather than ignore those factors). but also by providing answers to ‘‘what if . pp. For example. Among the variables managers may monitor are: sales/profits and sales/profit vari ances. . United Parcel Service (UPS) can track the status of any shipment around the world. it should be complete on key issues (e. and personnel designed to capture. fax machines. Oxford: Butterworth-Heinemann. . Using satellite communications. Bibliography Ward. the potential users are involved in the design of the system. K. i. relevant marketing models and software. made possible by the use of computerized data capture and processing systems). s a l e s f o r c e management (see s a l e s m a n a g e m e n t ). it is an improvement on m a r k e t i n g i n f o r m a t i o n s y s t e m s . the strategy may have to be abandoned where the deviations are such as to make it commercially unviable. data. In M. compare their costs and efficiencies against the ‘‘best practice’’ else where. as well as the efficiency of key marketing activities such as a d v e r t i s i n g and sales. databases. update. decision support systems be analyzed and appropriate action taken.. Assessments are likely to be undertaken regu larly (in some cases daily. high speed microcomputers. . software. and other technological advances in interactive media. store. Baker (ed. and expenses to sales ratios. ware house location. . (1999). It may be necessary to adjust expectations or even the strategy where the outcomes differ significantly from expectations and cannot be reconciled with the original strategy. Budgetary control involves monitoring the extent to which the various cost and revenue streams match with those defined in the budget. One of the problems is getting marketing deci sion makers to use decision support systems. and immediately display information about worldwide busi ness activities. global information systems are changing the nature of business. m a r k e t s h a r e . electronic data interchanges (see e l e c t r o n i c d a t a i n t e r c h a n g e ). CD ROM data storage. Firms also need to evaluate periodically the profitability of products. and customers and order sizes. and the marketing decision maker. on important factors where hard objective data are not available.g. marketing decision support systems Michael Greatorex and Vincent Wayne Mitchell A marketing decision support system is an infor mation system that allows marketing decision makers to interact directly with both databases and models (see d a t a b a s e ). it is important to watch more qualitative indicators such as customer a t t i t u d e s (say. J. To be effective. it should be understood by the managers using it. Examples of marketing deci sions that have been aided by decision support systems include media scheduling (see m e d i a s c h e d u l e ). As such. In some instances. ?’’ questions through the incorporation of marketing models deemed appropriate by the decision maker. and . it should be flexible and give sensible answers. analyze. The Marketing Book. . it should be evolutionary in the sense that it is capable of being extended at a later date. it should be perceived as useful by these users. Controlling marketing. c h a n n e l s o f d i s t r i b u t i o n .). and competitive bidding. . 455 79. 4th edn. a marketing decision support system should have the following characteristics: . A decision support system consists of the computer hardware and communication interface. it should be easy for the manager to interact with and use without the need for an inter mediate computer expert. store location. In addition. fiber optics. through tracking studies) and com plaints. Firms may employ benchmarking. at any moment. . This will be helped if: .

the decision makers specify the decisions where they would like support (probably frequently occurring decisions). First. eco nomic. or competitors. (2003). d a t a b a s e marketing).. 1993. K. deonto logical marketing ethics is grounded in notions of duty.. covering every topic from p r i c i n g and promotion to b r a n d man agement and i n t e r n a t i o n a l m a r k e t i n g . Marketing Research: An Applied Orientation. and 3 the formulation of normative prescriptions (i.206 marketing environment . 1998. honesty (Chonko...g. In contrast. 2 the critical analysis of these moral issues using various ethical theories and frame works.g.g. (For a comprehensive overview of the main marketing moral issues.. financial mismanagement and accounting fraud (e. Very briefly. probably in the first instance by helping with simple problems. 1996). which is made up of wider societal forces (such as legal. 1999. technological. Bibliography Malhotra. Enron). The distinction is often made be tween the m i c r o e n v i r o n m e n t . ‘‘Utilitarianism judges the ethical quality of a decision by its consequences.g. successful use of the system can be demon strated.g. and the m a c r o e n v i r o n m e n t . or political) that affect all of the actors in the micro environ ment. . 1995). Fitzgerald and Corey.. An action is morally right if it produces the greatest good for the greatest number of people affected by the action. the portrayal of women in advertising (e. the marketing models/theories and data bases being used have the decision makers’ approval. See also marketing management marketing ethics David Marsden Marketing ethics is that branch of knowledge dealing with: 1 the identification and description of the moral issues and controversies surrounding marketing.g.g. deontology focuses on the actions/means of a decision and stresses that some moral principles are binding and obliga tory regardless of the end results and conse quences of an action. market inter mediaries. As Schlegelmilch (1998) makes clear. which is made up of actors in the company’s immediate environment such as s u p p l i e r s . see Laczniak and Murphy. promise keeping. e. rules. Harlow: Pearson Education. environmentalism (e. 2nd European edn. D. and privacy issues (e. the utilitarian perspective focuses attention on ends/consequences of a decision or action. codes. Singhapakdi and Vitell. green marketing).e. marketing ac tivities directed primarily at children (e. sexist stereotypes). customers. . cigarette companies).. Some of the most controversial issues in recent years have included.) There are three classical ethical theories that have traditionally been employed to analyze the moral issues surrounding marketing: utilitarian ism. demographic. and virtue ethics. deontology. marketing environment Fiona Leverick The marketing environment is made up of the actors and forces that directly or indirectly influ ence the organization’s marketing operations and performance. standards) for judging what is right/good and wrong/bad marketing conduct and behavior. pensions scandals. The company has direct contact with the components of the micro environment and is therefore more likely to be able to influence them.. for example. and Birks. a d v e r t i s i n g in schools). and on the basis of the strengths and weaknesses of these theories. Each theory offers a different set of principles by which to judge marketing behavior and conduct. N. even if they are good (Nantel and Weeks. the moral issues surrounding marketing are varied and multiple. and . corporate liability (e. which is typically assessed through a cost/benefit analysis of the consequences for each of the main stakeholders affected by a decision. F. In particular. cultural.’’ What matters here is the net balance of good and bad.

(1995). eight step decision making framework: 1 2 3 4 5 6 7 gather the facts. (1994). . Complexity of products. and Murphy. 9 19. Bibliography Chonko. Schlegelmilch. P. In many countries. and justice. consider character and integrity. J. 18 (1). Sorell. London: Thomson. which draw on deeply held attitudinal (see a t t i t u d e s ) and behavioral beliefs. L. many products such as pensions are bound by a set of rules. virtue ethics focuses on the integrity of the moral actor as being more important than either the moral act or end consequence. Singhapakdi. by itself. 30 (5). Trevino. . Instead. K. Journal of Macromarketing. the misselling of pensions in the UK has led to a number of leading suppliers being fined by industry regulators. Trevino and Nelson (1995) offer an integrated. usually over time. Nantel. S. L. For example. To meet this end. 1. . B. which makes them very difficult for buyers to comprehend without expert advice. (1996). there are detailed rules in most countries about what product claims can be made in promotions. J. R. The nature of the relationship between supplier and consumer is based on a complex series of interactions. and Vitell. identify obligations. provides perfect guidance on every issue. NJ: Prentice-Hall. 207 marketing exchange see e x c h a n g e marketing financial services Trevor Watkins Financial services marketing is a special case of the marketing of services (see s e r v i c e c h a r a c t e r i s t i c s ). CA: Sage. Many financial services are based on long term investment with an unpredict able return and even basic bank accounts carry a range of add on costs. their motivations. The key features of financial services marketing are: . A. In terms of deciding which theory and set of principles to adopt when considering moral issues in financial services Finally. intentions and integrity as defined by their community. c o n s u m e r p r o t e c t i o n legislation is used to try to protect con sumers from unethical marketing techniques (see m a r k e t i n g e t h i c s ). Under standing buyer behavior (see b u y e r b e h a v i o r t h e o r i e s ) as a basis for effective marketing is therefore difficult for suppliers and the provi sion of high quality customer service (see s e r v i c e q u a l i t y ) is a key preoccupation in what has become a very competitive market environ ment (see m a r k e t i n g e n v i r o n m e n t ). Managing Business Ethics. and finally 8 check your gut. 104 14. Because of regula tion. Moral reflections in marketing. Ethical Decision Making in Marketing. Regulation of m a r k e t i n g c o m m u n i c a t i o n s . Oxford: Butterworth-Heinemann. but there are many examples of financial scandals where suppliers have taken advantage of a lack of customer understanding in an unscrupulous way. Journal of Business Ethics. J. temperance. T. who advocated the universal virtues of courage. G. Fitzgerald. (1993). (1998). A. B. a tripartite approach is ad vocated since all three theories suggest import ant factors to keep in mind in making ethical decisions. ‘‘Ethics is embedded in the moral character of a person. define ethical issues. 18 (2). International marketing ethics.’’ This perspective derives from the ideas of the fifth century b c Greek philosopher Aristotle. W. New York: John Wiley. As Sorell and Hendry (1994) explain. identify affected parties. Business Ethics. (1995). To protect consumers from mislead ing claims. Thousand Oaks. J. (1999). and Weeks. identify the consequences. Upper Saddle River. (1998). Laczniak. A. Marketing Ethics: An Inter national Perspective. Ethical Marketing Decisions. and Corey. think creatively about potential actions. K. R. Marketing ethics: Is there more to it than the utilitarian approach? European Journal of Marketing. The complexity of the price (see p r i c i n g ) variable. P. most commentators argue against taking a unilateral approach since no one theory. and Hendry. E. and Nelson.

Harlow: Pearson Education. As with other sectors. and the Internet. They are sold.. M. 2nd edn. The growth in the use of marketing information systems has been facili tated by improvements in computer hardware and software. such as the appearance of retail premises. Oxford: Butterworth-Heinemann. Chisnall. . Two way information flows: As provision takes place over time. (1995). (2000). which make it a special case of the marketing of services. To avoid an undue reliance on price based competition. is a cornerstone of marketing strategies in the sector. Financial Services Marketing. C. and Greenland. which make them visible. . Buttle. Inseparable: They are processes or experi ences and involve cooperation between the supplier and the customer. then produced and are hence inseparable from the supplier. P. Perishable: If a time based product such as life insurance is not bought. Intangible: They possess no physical pres ence although there are many symbols. Thus. Increasingly. .) (1995). (1984).) (1996). store. Many countries have reduced levels of protec tion for their suppliers. . and contemporary marketing in formation systems are very much computer driven. M. when it is required. Harrison. and . F. leading to growing levels of internationalization of supply and the growth of global marketing. traditional methods of distribution based on face to face meetings in branch offices are being replaced by cheaper methods of distribution based on post. Englewood Cliffs. P. the experience of use will vary rather than being entirely similar in all cases. Maidenhead: McGraw-Hill. Consumer Behavior. 3rd edn. Heterogeneous: Because of the high level of personal i n v o l v e m e n t of both the sup plier and consumer. The key task is to specify what information each individual de cision maker requires. the marketing of financial services is a complex process based on a number of idiosyn crasies. (1994). and Wright. Relationship Marketing: Theory and Practice. Bibliography Burton. Thus. suppliers need to have processes in place to insure consistent qual ity of provision. Retailing of Financial Services. The information is presented in a form re quested by the decision maker. Services Marketing: Text. Financial services are: . Changes in distribution patterns. T. with the customer being responsible for meeting obligations to inform the sup plier of relevant data. customer ser vice strategies feature a range of contact media rather than the previous norm of face to face contact. London: Paul Chapman. marketing information systems Michael Greatorex A marketing information system is designed to generate. Maidenhead: McGraw-Hill. telephone.208 marketing information systems . H. The information includes that required both on a regular and on an ad hoc basis. J. Marketing Financial Services.. T. A set of financial promises which the supplier undertakes for the customer: These carry fidu ciary responsibilities including the need to operate within current regulations. many retail suppliers are heavily focused on customer service quality as their key competitive weapon. Watkins. and the infor mation needed to make those decisions. The underlying data may be collected internally or externally. D. Marketing information systems are designed around individual decision makers. especially in business to business markets (see b u s i n e s s t o b u s i n e s s m a r k e t i n g ) where multinationals require their financial service needs to be met on a global scale. C. it perishes and can never be replaced for that time period. NJ: Prentice-Hall. the deci sions they are required to make. Cases and Readings. and distribute informa tion to appropriate marketing decision makers on a regular basis. (1994). S. London: Routledge. analyze. Financial Services and the Consumer. . Building long term customer relation ships (see r e l a t i o n s h i p m a r k e t i n g ). there is a need for information to flow between the parties and for this process to be managed by the sup plier. Ennew. McGoldrick. Lovelock. leading to higher levels of customer retention and hence profitability. J. (eds. (ed.

reviewed 17 market ing textbooks and found implementation to be a generally neglected area of marketing manage ment. marketing man agers are required to make decisions on target markets (see t a r g e t m a r k e t ). planning. with most emphasis directed toward an alysis. and formulating measures for i m p l e m e n t a t i o n and control (see m a r k e t i n g p l a n n i n g ). Finally. The specific activities involved in marketing management will depend to a great extent on the type of m a r k e t s the business is operating in. and control. cost/sales ratios. because of the ability to include marketing modeling in marketing decision support systems. The conventional view of marketing management found in most stand ard marketing textbooks is of a process whereby the marketing manager uses marketing resources to perform a highly defined and ‘‘logical’’ series of activities and responsibilities (see Baker. The end result is a series of customized reports that go to the appropriate decision makers. setting marketing objectives. or. which are more versatile in the way the decision maker is able to interact with the d a t a b a s e and which. techniques such as customer p o r t f o l i o a n a l y s i s or customer profitability an alysis. Planning is most commonly seen as a system atic process of assessing opportunities and resources (see s w o t a n a l y s i s ). for instance. standard marketing textbooks fre quently divide marketing management activities into the four areas of analysis. . management in what format. A.. . more commonly in the case of business to business marketing. permit the decision maker to ask ‘‘what if . Marketing information systems are being superseded by m a r k e t i n g d e c i s i o n s u p p o r t s y s t e m s . Analysis refers to the 209 gathering and preparation of information about the markets the organization is currently operating in or which it plans to enter. R. m a r k e t p o s i t i o n i n g . planning. planning. marketing management Fiona Leverick The term ‘‘marketing management’’ is generally used to refer to the management activities undertaken in the practice of m a r k e t i n g in organizations. Dibb et al. implementing and controlling marketing activ ities to facilitate and expedite exchanges effect ively and efficiently’’ (p. (1997). physical distribu tion. Marketing Research. and control might be seen as a continuous marketing man agement process in which during planning. Expected performance standards against which results are judged would commonly be specified as part of the marketing plan. imple mentation. in marketing to consumers and marketing to other businesses may differ significantly (see b u s i ness to business marketing. The execution of this process defines the marketing manager’s areas of responsibility and the nature of his/her work. con s u m e r m a r k e t i n g ). the m a r k e t i n g c o n t r o l process involves the measurement of results and evalu ating progress according to standards of per formance such as m a r k e t s h a r e .. Bibliography Parasuraman. Implementation refers to the activities neces sary to translate the marketing plan into action. (2004). The activities involved. 2003). Boston: Houghton Mifflin. D. analysis. Kotler. At a general level. 24). however. and control. developing a m a r k e t i n g s t r a t e g y . ?’’ questions rather than merely retrieve data. It might include organizing marketing resources and developing the internal structure of the marketing unit. implementation. Bonoma (1985). p r i c i n g . Dibb et al. coordinating marketing activities. organizing. Indeed. for instance.. and effectively communicating within the unit. distribution channels (see c h a n n e l s o f d i s t r i b u t i o n ). 1996. and promotion. Such an alysis is often seen as being undertaken by studying both the organization’s current m a r k e t i n g e n v i r o n m e n t and identifying future trends. In this way. motivating marketing personnel. a d v e r t i s i n g /sales ratios. . Grewal. and Krishman. see marketing manage ment as the process of ‘‘planning. however. communication. The result of these activities is often contained in a marketing plan. in terms of identifying and evaluating present and emergent customer ‘‘needs’’ and potential opportunities for business expansion. product and service develop ment (see n e w p r o d u c t d e v e l o p m e n t ).

Kotter..). O. S. W. Kotler (2003) has. spending time with others. or employees (see i n t e r n a l m a r k e t i n g ). qualities seen as especially relevant in the area of marketing as opposed to. London: Houghton Mifflin. Marketing Management: Analysis. who suggest that such a normative model of marketing management bears little re lation to what practicing marketing managers actually do. (1996). This ‘‘textbook’’ view of marketing manage ment embedded in the work of. maintaining relation ships. The General Managers. who have both looked at the nature of managerial work. vision. Simkin. estab lishing values and norms. the view of the marketing management process driven by ‘‘ra tional’’ marketing planning has been questioned by authors such as Brownlie (1991) and King (1985). Bibliography Baker. J. 1991 for a sum mary of criticisms). Implementation and Control. been criticized on a number of counts (see Brownlie. P. Englewood Cliffs. business to business marketing. vol 1. The Marketing Edge: Making Strategies Work. Pride. and using rewards to secure support and desired behavior were more common in successful organizations than were planning and analysis activities. Baker (ed. H. Basingstoke: Macmillan. Bonoma. J.. A more accurate portrayal of marketing man agement might also reflect the increasingly wider focus of marketing itself. New York: Harper and Row.210 marketing mix guidelines for implementation are set and expected results specified for the control pro cess. Perspec tives on Marketing Management. McCarthy and Perreault (2004) have defined the marketing mix as the controllable variables that an organization can coordinate to satisfy its t a r g e t m a r k e t . 1964). References are fre quently made on this point to the work of authors such as Kotter (1982) and Mintzberg (1973). . 11th edn. T. Dibb. Mintzberg (1973) found that managers spend a great proportion of their time in oral communication and face to face contact rather than in formulating written plans. however. In M. being based instead on what text book writers think marketing managers ought to do. D. Whereas marketing management may be re duced to a sole focus on analysis and planning in junior brand management jobs in fast moving consumer goods sectors. and feedback from the control process is used in the development of new plans. J. followed 15 general managers for a month and found that activities such as building networks. 11 20. According to Brownlie. In particular. Kotler. (2003). Putting the management into marketing management. marketing mix Fiona Leverick The term ‘‘marketing mix’’ was first used by Professor Neil Borden of Harvard Business School to describe a list of the important elem ents or ingredients that make up marketing pro grams. M. C. for instance. establishing multiple objectives. and experience. Chichester: John Wiley. (1985). working through meetings and dialogues. making a focus purely on analytical techniques inappropriate. Kotter. 6th edn. Marketing: Concepts and Strategies. L. New York: Free Press. NJ: Prentice-Hall. executing marketing activities. (1991). publics. Plan ning. (1997). Mintzberg. New York: Free Press. Has marketing failed or was it never really tried? Journal of Marketing Management. S. to include the activities undertaken in s e r v i c e s m a r k e t i n g . The Nature of Managerial Work.. 1. say. King. for example. the idea having been suggested to him by Culliton’s (1948) description of a business ex ecutive as a ‘‘mixer of ingredients’’ (Borden. and Ferrell. developing agendas. such as stakehold ers. (1982). Brownlie. V. it is questioned whether this is representative across other sectors and levels of responsibility. and n o t f o r p r o f i t m a r k e t i n g . much marketing management literature overlooks the part played by individual managerial judgment. and also marketing activities directed toward parties in the organization’s marketing environment other than those individuals and organizations who purchase goods and services. finance or production. (1973). M. T. 3rd European edn. given that the data on which marketing decisions are made are often unreliable and consumers often behave ‘‘ir rationally’’ or unexpectedly. More recently. Marketing: An Introductory Text. (1985).

Jr. display. Contemporarily. The p r o d u c t m a n a g e r system developed as individual products became increasingly im portant. 15th edn. and place. sales. The marketing activity can be structured according to functions. Journal of Advertising Research. prod ucts. Marketing may also be organized in terms of geographic regions. McCarthy. Within countries. The Management of Marketing Costs. M. Donnelly and J. Under the general marketing manage ment structure. companies operating in several countries may have managers for different groups of coun tries. this has been widely criticized as simplistic and mislead ing. the sales department may have been responsible not only for managing the sales activity. Harvard Business Review. especially in the areas of b u s i n e s s t o business marketing. and customer types. Harvard University. geographic areas. personal selling. often referred to as brand or prod uct managers. services market i n g . W. it emerged as a distinct corpor ate activity responsible for at least managing in a more coordinated fashion different activities that were seen to have some bearing on the develop ment of the product and. c h a n n e l s o f d i s t r i bution. on the relationship with the customer. each of whom may have responsi bility for particular products and/or market areas. J. Chicago: American Marketing Association. J. marketing organization Dale Littler In the early stages. W. are given responsibility for coordinating all the marketing activities. Harvard Business Review. sales. containing mer chandising/p r o d u c t p l a n n i n g . organization The essence of the concept is the idea of a set of controllable marketing variables or a ‘‘tool kit’’ (Shapiro. physical handling. branding (see b r a n d ). while d e s i g n and product development (see n e w p r o d u c t d e v e l o p m e n t ) may have been the responsibility of research and development. but also for a d v e r t i s i n g and rudimentary market research. Shapiro. (1985). Kotler. Individ ual managers. 28 34. in organizations with com plex p r o d u c t p o r t f o l i o s that may also op erate in several markets. Division of Research. As the importance of marketing became increas ingly recognized. 64. However. Thus. Culliton. Some diversity of opinion exists as to the components of the marketing mix. A naive division may be between overseas and domestic operations. sometimes with represen tation at board level. Asia Pacific. D. (2004). fact finding and analysis. H. New York: Irwin McGraw-Hill/ Irwin. and Perreault. 63 (September/October). 1985). South America. However. e. Megamarketing. Europe. marketing is widely acknowledged as a core or ganizational activity. See also marketing management Bibliography Booms. 2 (March/April). and Booms and Bit ner (1981) participants. In J. Borden. promotion. In the functional form. such as the south west or the north east. Rejuvenating the marketing mix.. H. many of the activities now associated with m a r k e t i n g would have been 211 undertaken by a number of different functions. How ever.. Marketing of Ser vices. 2 7. E. product. 117 24. there is clearly a need for marketing responsibility to be shared among sev eral managers. or even specific countries. Marketing strategies and organization structures for service firms.). p r i c i n g may have been shared by accounting. to McCarthy’s 4Ps. that report to a marketing manager or director. Basic Marketing. advertis i n g . Graduate School of Business Administration. 47 51. servicing. and market research. (1964). N. P. and production. more generally. pp. and Bitner. B. and n o t f o r p r o f i t m a r k e t i n g . B. P. such as m a r k e t i n g r e s e a r c h . often in an uncoordinated manner. ‘‘assistant’’ marketing managers were appointed to manage various aspects of the increasingly complex product portfolio. promotion. (1981).g. physical evidence. More recently Kotler (1986) has added politics and p u b l i c r e l a t i o n s . The best known marketing mix is McCarthy’s 4Ps. such . price. p a c k a g i n g . Borden’s own list is probably the longest. George (eds. (1986). there may also be managers for particular areas. and process. marketing is organ ized in terms of distinct specialisms. R. and product de velopment. p r i c i n g . (1948). The concept of the marketing mix.

There may. (1974). marketing activities and the product o f f e r i n g are seen as guided primarily by customer ‘‘needs’’. while marketing may be part of the matrix struc ture of an organization insuring that marketing contributes to every major activity. Such a structure would appear to support r e l a t i o n ship marketing. For example. It may be a service activity providing marketing advice both to the board and to individual business or operating units. it is argued that marketing should be embedded in the culture of an organization and that it should be recognized that all those whose activ ities in any way have some impact on the cus tomers should be seen as. marketing research. for example. in. of specific major prod ucts or brands. i n n o v a t i o n activity is focused primar ily on locating new opportunities. Bibliography Hanan. products or technologies. Increasingly. Hanan (1974) has termed this approach ‘‘market centering’’ and argues that it provides the company with a distinct c o m p e t i t i v e a d v a n t a g e because of the detailed knowledge of the customer or market that. marketing orientation Fiona Leverick A marketing orientation is usually seen as the company orientation necessary in order that the m a r k e t i n g c o n c e p t may be put into prac tice. All decision makers can have access to customer information. marketing may have functional managers supporting product and market managers. Marketing may have representation at board level and may be expected to be an active par ticipant in the development of overall organiza tional strategy. in effect. M. inventory levels are set with customer requirements and costs in mind (rather than at the convenience of the supplier). the focus of a d v e r t i s i n g is to promote the needs satisfy ing benefits of the product or service. is to help customers to buy . Harvard Business Review. advising managers who are responsible for particular re lationships on various facets of marketing. These approaches to marketing organization are not mutually exclusive. much of which may be outsourced to specialist agencies. part time marketers. Individual business units or divisions may have individual marketing activities or departments. November/December. in theory. in some cases. coordinated with the efforts of the rest of the firm. the role of the s a l e s f o r c e . this being particularly appropriate where the firm markets to diverse customer groups with significantly differing require ments. It is often contrasted with the ‘‘production orientation’’ and ‘‘sales orientation’’ associated respectively with the ‘‘production era’’ and ‘‘sales era’’ of the development of marketing thought (see m a r k e t i n g ). responsibility for profit. and product development as well as. It could be argued that this might herald the end of the era of marketing as an important functional activity. which can be dissemin ated throughout the organization using compu terized information systems (see m a r k e t i n g i n f o r m a t i o n s y s t e m s ). the m a r k e t m a n a g e r should acquire. the role of market re search is seen as to determine customer ‘‘needs’’ and how well the company is satisfying them. For example. be managers responsible for geographic regions. Some suggest that marketing in the future may at best be a minimal service activity.212 marketing orientation as a d v e r t i s i n g . Recognize your company around its markets. A number of writers have gone into more detail on the precise nature of a ‘‘marketing orientation’’ in relation to the various activities associated with m a r k e t i n g m a n a g e m e n t . p a c k a g i n g is designed for customer convenience and as a selling tool (over and above simply the protection of the product). Individual managers may be responsible for all the marketing effort for customer groups or markets and even for individual customers where the level of d e m a n d merits this. p r o f i t (as opposed to sales volume) is the critical objective of marketing activity. Alternatively. and the marketing activity may be a combination of two or more of these forms. according to McCarthy and Perreault (2004). marketing may be organized according to the customers or markets it serves. in addition.

1988). and m a r k e t s h a r e . strategic and tactical decisions are made inter functionally and interdivisionally. 1991) involv ing: the gathering of information on the com pany’s internal operations and its external environment. E. c u s t o m e r s a t i s f a c t i o n . marketing performance Dale Littler Ma r k e t i n g p l a n n i n g may involve the def inition of targets or performance indicators. For example. and Perreault. The plan can be viewed as a blueprint for future action. B.’’ is often depicted as consisting of a number of stages (Leppard and McDonald. 213 marketing planning Dale Littler Marketing. ‘‘motivation and control’’. and revenues. J. 15th edn. (1990). 15. the p r i c i n g strategy and policies. Measures commonly employed include product sales. Bibliography Chartered Institute of Marketing/University of Bradford Management Center (1995). Shapiro. and divisions and functions make well coordinated decisions and execute them with a sense of commitment. 119 25. there has been emphasis on m a r k e t o r i e n t a t i o n . The company may also monitor the ability to meet customer specifications. monitoring. and ‘‘balancing the tyranny of accountants’’ by raising sights above short term budgeting. In recent years. P. marketing deficiencies were found in a sample of UK manufacturers involved in b u s i n e s s t o b u s i n e s s m a r k e t i n g (Chartered Institute of Marketing/University of Bradford Manage ment Center. Oxford: Chartered Institute of Marketing Report. 66 (November/December). Witcher. Quarterly Review of Marketing. m a r k e t i n g p e r f o r m a n c e ). tender success rates. and such like. Somewhat more succinctly. (1988). Basic Marketing. Manufacturing: The Marketing Solution. opportunities. which some would argue is a term that more appropriately represents the focus on markets and developments therein. and m a r k e t s h a r e . thereby highlighting any need for revisiting the overall goals and direction of the business. 185). The plan might contain specific objectives in terms of: sales. like other functions and the organ ization as a whole. costs. delivery times. (2004). ‘‘forcing managers to ask the right questions’’ by focusing ‘‘on understanding the needs of customers. and various other elements of . and insuring that the com pany can communicate a genuine competitve advantage’’ (p. 1995). and so on. R. the formulation of strategies aimed at achieving these objectives. the efficiencies of various operations. the devising of programs setting out the timing of activities. McCarthy. and so on. These perform ance indicators form the basis for exercising marketing control. costs. the definition of responsibilities and the means of monitoring performance. 2 (Winter). and threats (see s w o t a n a l y s i s ). 1 6. fre quently prefaced with the term ‘‘strategic. What the hell is market-oriented? Harvard Business Review. the identification of the planning only if the product fits their needs. the setting of the marketing objectives in light of the first three stages. Doyle (2000) argues that there are four functions of strategic market planning: ‘‘facilitating the change process’’ through the analysis of the business’s current and likely future performance in order to assess how well the company as a whole has been in generating shareholder value. New York: McGraw-Hill/Irwin. weaknesses. J. The plan should insure that the organization has in place the rudiments for im plementing. profits. evaluating the competition and anticipating their likely strategies. Total marketing: Total quality and the marketing concept. Shapiro (1988) notes three key features of a marketing orienta tion: information on all important buying influ ences permeates every corporate function. The process of marketing planning. the communi cations strategy. may have a plan that sets out the objectives and the means of achieving them. the definition of the as sumptions regarding the company and its envir onment. stock levels. and controlling the strategy (Bonoma and Crittenden. It has been argued that UK companies in particular have found it difficult to develop a marketing orientation. It will also set out targets against which performance can be monitored (see m a r k e t i n g c o n t r o l . B.

devising. Implementation and Control. inter alia. for example. However. B. Englewood Cliffs. (1988). designing the marketing strategies (see m a r k e t i n g s t r a t e g y ). Kotler. H. Chichester: John Wiley. The marketing process is often seen as embracing the analysis of market opportunities. 2 (Winter). and Crittenden. Leppard. it is reasonable to assume that corpor ate planning embraces all of the different activ ities of the organization. Two levels of understanding of the marketing process are common in the marketing literature. Mintzberg. In the marketing literature the distinction be tween corporate. V. Sloan Management Review. Strategy making in three modes. and McDonald. K. Such marketing plans may be undertaken. E. and which op erate in stable. 2003). J. It could be argued that marketing planning would apply particularly to large firms. undertaking research into and selecting target markets (see t a r g e t m a r k e t ). 89 139. Greenley. the marketing process is often seen as synonymous with ‘‘marketing’’ itself. Given the u n c e r t a i n t y surrounding many of the assumptions upon which the origin ally formulated plan may be founded. Thomas and N. Marketing Management: Analysis. 73 (July). (1986). (2000). 16. at the level of the product or at the level of the strategic business unit (see s t r a t e g i c b u s i n e s s u n i t s ). the marketing process is seen as inseparable from structured. T. implementing. pp. H. Managing marketing implementation. Maidenhead: McGraw-Hill.g. London: Heinemann. 1973). M. 44 53. L. Value Based Marketing. whereas marketing planning should be regarded as focusing on the means by which marketing can play its part in facilitating the attainment of corporate object ives. J. the activities involved being essentially the same. W. Waite (eds. Journal of Marketing Management. 16 27. Kotler.). (strategic) marketing planning is operational. The Strategic and Operational Planning of Marketing. Doyle. Crosier. In this sense. normative approaches to m a r k e t i n g m a n a g e m e n t . 7 14. pp. (1991). and monitoring marketing programs (see. 11th edn. 29 (Winter). V. (1973). The Marketing Digest. What exactly is marketing? In M. The extent to which the activities involved in the marketing process are specified varies from author to author. strategic. A second level of understanding of the marketing process is concerned with the whole marketing system and describes a wider social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society (see m a c r o m a r k e t i n g ). which have the resources to direct the extensive analy sis that such planning demands. environments (see Mintzberg. E. California Management Review. Plan ning. Bibliography Bibliography Bonoma. NJ: Prentice-Hall. The first refers to the organizational process concerned with directing goods and services from producer to consumer. and marketing plan ning has become blurred: all are often depicted as involving a similar methodology. P. e. P. and therefore relatively predictable. customer and public to the mar keter through information – information used to . (2003). In this way. G.. a stance which appears compatible with that adopted by Greenley (1986). with process related definitions of marketing forming one of the three categories of definition identified by Cro sier (1988) (see m a r k e t i n g ). planning. (1988).214 marketing process the traditional m a r k e t i n g m i x necessary for the organization to meet its strategic objectives. Indeed. then. Marketing planning and corporate culture: A conceptual framework which examines management attitudes in the context of marketing planning. and the rapid rate of change facing many organizations. the need for revisiting established plans and being sensitive to the need for flexibility may be the hallmarks of effective strategic marketing planning. 213 36. marketing process Fiona Leverick marketing research Michael Greatorex Marketing research is ‘‘the function which links the consumer.

perhaps.’’ Environmental data 215 indicate what is. the question arises as to why. analyzes the results. Internal secondary data are available from within the organization from records such as sales records kept for accounting purposes. and dissemination of information for the purpose of assisting man agement in decision making related to the iden tification and solution of problems and opportunities in marketing’’ (Malhotra. give to their first two stages. Experience has shown that environ mental data need not be as precise. and the resolution of the decision making process. defines marketing research as ‘‘the systematic and objective identi fication. especially in the environment. the evaluation of the alternative solu tions. therefore. depending on the stage in the deci sion making process and the type of data re quired. (1988) suggest a five stage marketing decision making process: identify the decision problem. Marketing research specifies the information required to address these issues. not apparent on the surface and yet exist or are likely to arise in the future. If a manager feels that.? Marketing research involves both secondary and p r i m a r y d a t a . general management information systems. O’Dell et al. as actionable data. and communicates the findings and their implications’’ (American Marketing Association. and improve understanding of marketing as a process. while actionable data are per tinent to what should be done.’’ The final three stages. relatively. formulate alternative solu tions. Problem identification is undertaken to help identify problems which research identify and define marketing opportunities and problems. etc. Problem solving research includes segmentation (see m a r k e t s e g m e n t a t i o n ) and m a r k e t i n g m i x research – what will be the effects of a price change. establish criteria. sales. and they suggest the need at these stages is for ‘‘environmental data and informa tion. change in s a l e s p r o m o t i o n or a d v e r t i s i n g . sales analysis. Marketing research. but usually they are gathered separately. increasingly. 1999: 10). trade associations. etc. monitor marketing perform ance. etc. Thus. and business trends. b r a n d or com pany i m a g e . from either external or internal sources. Environmental data become available and are used prior to and during the formulation of alternative solutions. are not as expected. Appropriate solu tions can be suggested and evaluated when the cause of the problem is known. short range forecasting. as the source of decision problems. based on historical or budgeted levels. and marketing research organizations and are access ible from printed publications and. profits. Sometimes environmental and actionable data are collected jointly in a single information gathering effort. analysis. problem solving research is undertaken to arrive at a solution. refine and evaluate marketing actions. quoted in Baines and Chansarker. evaluate the alternative solutions. Information concerning the environment may enable changes to be detected or predicted and linked to current or likely marketing problems. Examples of problem identification research include research into m a r k e t p o t e n t i a l . the identification of the decision problem and the formulation of alterna tive solutions. . change in service levels to retailers. s e c o n d a r y d a t a . who emphasizes the need for infor mation for decision making. Malhotra (1999) suggests two types of marketing research: problem identification re search and problem solving research. is closely linked with decision making by marketing man agers. The answer to this question often lies in environmental (in its widest marketing meaning) change. Different methods may be appropriate. Actionable data are data sought after the alterna tive solutions have been formulated and for the specific purpose of evaluating the alternatives. collection. generate. are called decision making and the authors suggest that the need here is for ‘‘action able data and information. long range forecasting (see f o r e c a s t i n g ). Malhotra. the establishment of criteria. Secondary data are data collected for a purpose other than the problem under consideration. may be satisfactory as environmental data. m a r k e t s h a r e . They see change. designs the method for collecting information. new p a c k a g i n g . manages and implements the data collection pro cess. and resolve the decision. When a problem has been identified. while a well designed experiment may be called for to provide action able data. 2002: 4). for example. Problem solving is the name O’Dell et al. market characteristics. External secondary data come from governments.

at retail store checkouts or in con sumer scanner panels or. f o c u s g r o u p s . While much primary research is ad hoc or one off. marketing strategy embraces the cus tomer targets or segments (see m a r k e t s e g m e n t a t i o n ) and the means. NJ: PrenticeHall. Two types of data are identified. in terms of the m a r k e t i n g m i x elements. A marketing infor mation system is one designed to generate. which incorporate databases (see d a t a b a s e ). Techniques include observations (see o b s e r v a t i o n ). to be employed for these. potentially.. regards marketing strategy as being an indication of how each element of the marketing mix will be used to achieve the marketing objectives. A. e. must therefore be a prime mover in strategy formulation. (1988). P. because of its unique position at the interface between the organization and the environment.. Cincinnati. 3rd edn.. N. O’Dell. Some. of respondents using techniques such as d e p t h i n t e r v i e w s . form for each manager. Marketing Decision Making: Analytical Framework and Cases. marketing modeling. while many activities (finance. R. and experiments (see e x p e r i m e n t a t i o n ). W. surveys (see s u r v e y r e s e a r c h ) using structured questionnaires. store. The easy communication allows improved interaction with databases. . manufacturing. . which sometimes are used in exploratory research but which are usually associated with the decision making stage. on the grounds that strat egy is concerned with the match between the organization and its environment. Doyle (2000) believes that marketing strategy embraces the decisions regarding customer targets and how the organization will develop customer preference. (2002). Bibliography Baines. ana lyze. The increasing use of electronic capture of data. sometimes with the same sample or panel. Introducing Marketing Research. etc. marketing strategy Dale Littler In essence. for example. and distribute information to appropriate marketing decision makers on a regular basis. and that marketing.g. However. Quantitative techniques look to pro vide quantitative data. Further developments have led to m a r k e t i n g d e c i s i o n s u p p o r t s y s t e m s . and facilities for the user to communicate easily with the data and models. Foxall (1981). Chichester: John Wiley. sometimes with different samples. and Chansarker.. OH: South-Western Publishing.216 marketing strategy from computer databases by way of CD ROM or computer networks. Quantitative techniques also seek to enable results from a sample to be generalized to a population. Englewood Cliffs. such as Kotler (2003). the other functional activities. Trent. in two way in home communications associated with cable systems. ?’’ questions and so raise analysis to a different level. and the inclusion of models and databases allows the user to ask ‘‘what if . Marketing Research: An Applied Approach. and Kehoe. an increasing amount is continuous involving the repeated use of the same design or questionnaire. However. must also take into account wider environ mental considerations. even if customized. J. The information that marketing research pro vides becomes part of an organization’s marketing information system (see m a r k e t i n g i n f o r m a t i o n s y s t e m s ). research and development) all contribute to the develop . Malhotra. opinions. H. 4th edn. K. Ruppel. B. W. argue that corporate or marketing should heavily influ ence business strategy. Primary data are data collected specifically for the problem under consideration. (1999). and p r o j e c t i v e t e c h n i q u e s . marketing information systems are limited to supplying past and cur rent data in a prescribed. qualitative and quantitative data. is capable of providing a continu ous flow of data that enables the tracking of key measures that are useful to marketing decision makers. needs. It seems reason able that marketing should be regarded as having a perspective critical to strategic manage ment because it is primarily concerned with operationalizing the m a r k e t i n g c o n c e p t . Qualitative data mainly provide insights into the problem by looking at the underlying motives. l o g i s t i c s . C. such as those concerned with technological develop ment.

Chichester: John Wiley. P. Strategic Marketing Management.. reseller markets (wholesalers and retailers) who buy finished goods and services and resell them. Varadarajan. Greenley (1993) suggests that marketing strat egy has five elements: market p o s i t i o n i n g and segmentation. e. G. market pioneer ing. Bibliography Abell. p r o d u c t p o s i t i o n i n g . i. and m a r k e t s h a r e . (1993). R.. i. (2003).. to include individuals and households who buy or acquire goods and services for personal consumption/use. for final con sumption without further transactions. Marketing strategy: An assessment of the state of the field and outlook. or organ izational markets. reenter. strategic alliances. Varadarajan and Jayachandran (1999) summarized some of the research themes in marketing strategy as: competitive behavior. the selec tion of the marketing mix. they must also have the ability to purchase the product. involving decisions on the number and type of products for each segment. take a more limited view of marketing strategy. Organizational markets comprise: producer or industrial markets. Plan ning. G. health. Implementation and Control. S. Markets may be categorized as consumer markets.e. First. F. Kotler. 120 43. P. An understanding of marketing strategy. 27 (2). i. (1999). i n n o v a t i o n . (2000). and government markets at local and na tional level where goods and services are bought to provide citizen services or. Foxall. and also have the authority to make purchase decisions. Lewis A market comprises all the individuals and or ganizations who are actual or potential custom ers for a product or service.e. it is oriented toward imple menting the overarching strategy of the organ ization. education. (1978). which may embrace all the other types of markets. 22 5. Greenley. European Journal of Marketing.g. Englewood Cliffs. involving the selection of seg ments for each product market. market entry – how to enter. (1981). those in the market for a product or service must need the product. Finally. Maidenhead: McGraw-Hill. m a r k e t o r i e n t a t i o n . (1986).g. Strategic windows. P. R. pp. Marketing Management: Analysis. Greenley. e. Journal of the Academy of Marketing Science. 23 (8). such as hospitals and schools. position. 217 markets Barbara R. product quality. i. and Jayachandran. arguing that it is operational. individuals or organizations buying goods and services for the purpose of manufacturing prod ucts. and the timing of strategy and i m p l e m e n t a t i o n given that.. The marketing strategy is likely to be modified according to different stages of the p r o d u c t l i f e c y c l e . which can include credit purchase. defense. Value Based Marketing. 45 58. It is likely that marketing strategy is shaped by and also shapes overall c o r p o r a t e strategy. Maslow’s hierarchy of needs see c o n s u m e r n e e d s a n d m o t i v e s mass media Dale Littler Mass media are impersonal channels by which the communicator can communicate directly . D. Doyle. to carry out government functions. In addition. one can consider international markets. those under 18 years do not have authority in the UK to pur chase alcohol. Journal of Marketing. and welfare. E. there are only limited periods during which the fit between key requirements of a market and the particular competencies of a firm competing in that market is at an optimum. Institutional markets. such as Greenley (1986). 42 (3). more broadly. or reposition products in each segment. The Strategic and Operational Planning of Marketing. may be in the private as well as the government sector. 89 139. Others. London: Croom Helm.e. they must be willing to use their buying power. Markets have several requirements... NJ: Prentice-Hall. as Abell (1978) argues. buying power.e. 11th edn. G. and those in a market are involved in market e x c h a n g e with com panies and others providing goods and services.mass media ment and achievement of wider corporate goals.

The design and conduct of experiments and quasi-experiments in field settings. satellite. contradicted this. 1980) (see c o n s t r u c t e q u i v a l e n c e . Dunnette and R.. Pearlin and Kohn (1966). The major mass media are cinema. Data drawn from matched samples can therefore be claimed to be more likely due to cultural/societal differences than differences between the sample groups. who argues that ‘‘identical sampling procedures as a condi tion of comparability show little confidence in samples as a tool of inference and constitute a misplaced trust in some of its concrete features. however. and terrestrial digital specialist television channels facilitates the targeting of specific clusters of consumers. for example. D. however. sex. 1975. and they cannot be adapted to suit specific moods or relevant wants. Campbell. and Tybout. and the researcher’s criterion. p o s t e r s . J. because by definition these channels tend to have a wide appeal. effects orientated studies.’’ Thorelli. the countries being com pared.. while s e l e c t i v e e x p o s u r e . Although the communicator has a high degree of control over the content of the m e s s a g e . B. although the readership of. marketing communi cations s o c i a l c l a s s . Increas ingly. A. The design. and Calder. however. 307 11. McNally . Bibliography matched sampling Andrew Lindridge Campbell’s (1964) observation that an important cross cultural/societal methodological problem was falsely attributing behavioral differences to cultural/societal causes raises important issues regarding sample group selection. attempting to assess social class positions in Italy and the US. the proliferation of cable. D.’’ The solution appears to rely upon pursuing matched samples but identifying and recogniz ing their limitations from a cross cultural/soci etal perspective. Phillips. preferred ‘‘prestige’’ to ‘‘education’’ and ‘‘income. t e l e v i s i o n . the internal v a l i d i t y of the research is greatly enhanced. achieved through category. The use of domestic video recorders en ables consumers to be more discerning in their consumption of television a d v e r t i s i n g mes sages. and m a g a z i n e s . See also communications mix. Cook. Technological de velopments. and Engledow (1975). conduct and application of consumer research: Theory vs. Determining matched samples. achieving category equivalence (Cook and Campbell. selective perception (see c o n s u m e r p e r c e p t i o n s ). Chicago: American Marketing Association. Phillips. although previous or existing relationships between the groups should be noted (see Ga l t o n ’s p r o b l e m ). They can often be seen to involve the imposition of a message on an audience. L. W. (1980). and Campbell. r a d i o . is criticized by Scheuch (1968: 190). It may not be possible to aim communications at narrowly defined targets through mass media channels.218 matched sampling with the target audience. Becker. pp. In M. n e w s p a p e r s . Calder. facilitate greater inter activity between the consumer and the commu nicator. (1975). The use of matched samples. Although this limits findings to similarly constituted populations. Van Raaij (1978) suggests that cross cultural/societal sample groups should be consistent and matched in terms of age. T. e q u i v a l e n c e ). (1964). rural–urban residence. and Tybout. preferring ‘‘education’’ and ‘‘income’’ in their cross cul tural/societal comparison of consumers. such as advertising via the Internet and digital broadcasting. Proceed ings of the Educators’ Conference. many magazines and the viewers of certain television programs and cinema films can be specialized. may prove difficult depending on each country’s self categorization criteria. Sample group selection criteria should therefore aim to devise a criterion that is suitable to both cultures. mass media channels are relatively inflexible in that in gen eral the message cannot be adapted to suit the particular requirements of the audience. Distinguishing Differences of Percep tions from Failures of Communication in Cross Cultural Studies: Epistemology in Anthropology. M. and s e l e c t i v e r e t e n t i o n can be powerful filtering processes affecting the effectiveness of mass media communications. New York: Harper and Row. For example.

.g.. interval scaled data. Consequently. Consequently. e. Becker. Handbook of Industrial and Organizational Psych ology. 466 79.g. However.). ‘‘never. states. H. Measurement is the standardized process of assigning symbols – such as numbers – to certain characteristics of objects (persons.g. Related to measurement is the process of scaling.. 5. use ‘‘0’’ to represent ‘‘never. M. and quantify responses using numbers (e.’’ ‘‘1’’ to represent ‘‘occasionally. the sound assessment of phenomena such as. also referred to as ‘‘scales of measurement’’: nominal scaled data.. Scheuch. S.’’ while interval scaled and ratio scaled data build the group of ‘‘metric or quantitative data.e. Quantified response data generally falls into one of four measurement levels. B. Nominal scales. K. The cross-cultural use of sample surveys: Problems of comparability. The assignment of numbers is advantageous.’’ A clear understanding and purposeful use of measurement scales is important. J. American Sociological Review. E. we can ask. 223 326. ratio . measurement and scaling Rudolph Sinkovics The majority of questions in m a r k e t i n g r e s e a r c h are designed to measure theoretical concepts (i. according to the amount of their actual viewing behavior (e. The Information Seekers: An International Study of Consumer Information and Advertising Image. Thorelli. Interval scales have all the properties of ordinal scales and the differences between scale values can be meaningfully inter preted (e. MA: Ballinger. Paris: Mouton. or simply the median is appropriate.measurement and scaling (eds.. reputation (see c o r p o r a t e r e p u t a t i o n ). b r a n d l o y a l t y . pp. 31 (4).’’ etc. 693 701.’’ ‘‘female’’ for gender or ‘‘PDA. four step scale. Nominal and ordinal scaled data can be subsumed in the broad group of ‘‘non metric or qualitative data. Pepsi Cola is preferred to Coca Cola and Virgin Cola). Addition. ordinal scaled data.g. Chicago: Northwestern University Press. because it helps to summarize responses from samples fairly efficiently and economically.’’ ‘‘MP3 player.g. (1975). Cambridge. Further more.’’ ‘‘Walkman’’ for port able digital devices) that help to identify groups. and Day.e. W. or a t t i t u d e s . subtraction. mode as appropriate measure of central ten dency) are technically possible but conceptually inappropriate. calculating rank orders. ‘‘male. Social class. (1966). pp. and Kohn. quantiles. which is usually employed in survey type methodology (see s u r v e y r e s e a r c h ) 219 and involves the provision of alternative re sponse categories. occupation and parental views: A cross-national study. purchase intentions (see c o n s u m e r d e c i s i o n m a k i n g p r o c e s s ). 1999). which are only indirectly observable. Aaker. Scaling is the creation of a continuum on which objects (i. for instance. even more appealing for marketing research is the applica tion of metric scales. Van Raaij. Rokkan (ed. Advances in Con sumer Research. Finally. because linked to the scale choice are certain alternatives regarding interpretation and analysis of the data.). constructs) or phenomena. are simply labels or classifications of qualitative charac teristics (e. quantified responses in the form of numbers can be easily manipulated by a variety of statistical techniques (Kumar. Pearlin. respondents to the survey) are located. where the comparability of measures and scales used is at stake (see e q u i v a l e n c e ). F. (1968). and ratio scaled data.’’ ‘‘occasionally.g.. according to the amount of the measured characteristic that these objects possess. R. 176 209.. is vital for marketing researchers and marketing decision making.’’ ‘‘some times. Comparative Research Across Cultures and Nations. In a questionnaire about viewing preferences of BBC sitcoms.. Cross-cultural research methodology as a case of construct validity. Despite this appeal. ‘‘How often do you watch The Office?’’ We can provide respondents with an opportunity to locate themselves on a scale. and Engledow. and – most importantly – the calculation of mean scores is therefore appropriate for interval scales. In S. (1978). the assignment of numbers to responses from surveys is not an easy task and is particularly daunting in an inter national context.). or events) according to pre specified rules. L.. Ordinal scales are more powerful than nominal scales in that their elements are ordered or ranked (e. fahrenheit and centigrade scale). Mathematical transformations or statistical an alysis beyond descriptive analysis (frequencies.’’ ‘‘often’’)..

. New York: John Wiley. target markets (see t a r g e t m a r k e t ) and c o m m u n i c a t i o n s o b j e c t i v e s . whereas a less concentrated advertising schedule may be followed for a well established and suc cessful b r a n d . See also advertising Bibliography Rust. which depends on the product/service. with respect to tourism services). D. Aaker. Lexington. . all math ematical calculations can be employed. However. S. continuous. A media plan sets out the media vehicles to be used (specific n e w s p a p e r s . Numbers are equal but some numbers are more ‘‘equal’’ than others.220 measurement equivalence scales (e.g. (1999). MA: Lexington Books. Mail and Internet Surveys: The Tailored Design Method. and continuity of advertisements. (2000). V.) and the times and dates when the advertise ments will appear. and Day. and forgetting rates. organizations should have decided on their A media schedule is an operational activity which results from m e d i a p l a n n i n g . f r e q u e n c y . G. with allowances for lagged effects and advertising carry over. Media se lection may be affected by such factors as the desired r e a c h . and i m p a c t . Seasonal products may be ad vertised near and during their peak sales periods (although advertising can often create unseason able d e m a n d ). For example. Micro scheduling is concerned with allocation over a shorter period of time.. metric data in the form of interval scales can readily be accomplished when careful q u e s t i o n n a i r e d e s i g n is taking place (Dillman. the stage in its life cycle (see p r o d u c t l i f e c y c l e ). t e l e v i s i o n channels. Advertising Media Models: A Practical Guide. Essentials of Marketing Research. purchase frequency. Products with short life cycles may be advertised intensively. measurement equivalence see c o n s t r u c t e q u i v a l e n c e media see m a s s m e d i a media planning David Yorke Media planning is concerned with the selection of the most appropriate media to deliver m a r k e t i n g c o m m u n i c a t i o n s messages to target audiences. media schedule David Yorke Bibliography Dillman. A. D. Kumar. multivariate m e t h o d s (a n a l y s i s )). seasonality of pur chase. namely. New York: John Wiley. concentrated.. m a g a z i n e s . f r e q u e n c y . competitive ac tivity. etc. A. The ways numbers are treated differs substantially and this has considerable implications regarding the use of univariate and multivariate techniques (see univariate analysis. a new product will tend to be advertised frequently in a short time period in order to create a w a r e n e s s and knowledge. Overall. weight.g. Before making media plans. R.. designed to achieve particular objectives with respect to r e a c h . height. Macro scheduling relates to choices between schedules over a year or a season (e. organiza tions aim to be cost effective in their choice of media and so choices will be closely related to the relative costs of the available media. i m p a c t . and c o m m u n i c a t i o n s o b j e c t i v e s . age) possess all the properties of interval scales and – given the equality of intervals and an absolute zero point – the ratios of numbers on these scales have meaningful interpretations. and possible ad vertising timing patterns. The schedule relates to the timing of a d v e r t i s i n g expenditures. T. (1986). 2000). Therefore. or intermittent. In marketing and business research it is often diffi cult to collect ratio level data. which in turn re lates to the rate at which new buyers appear in the market.

as well as a progressive.Minitab In making media scheduling decisions. The Marketing Book. A. message Margaret Bruce and Liz Barnes Message is central to the communication between the sender (the organization) and the receiver (the various publics) and captures the values that an organization wishes to convey to its various publics. and electronically via multi media systems. then the publics may be confused and communication can be made 221 more difficult. 22 8. and the media (see m a s s m e d i a ). such as t e l e v i s i o n advertisements. the product’s quality and durability. S. or ganizations are inevitably also concerned with the individual media costs of reaching target audiences (see c o s t p e r t h o u s a n d ) and. Bibliography Aaker. (1991). NJ: Prentice-Hall. and sexual image. If the messages coming from an organization fail to match expectations. 17. which. Perrier had faced a simi lar situation when a potentially harmful ingredi ent was discovered in its bottled water and the product was withdrawn from the market. The message can be conveyed in various forms (or media). However. ch. Winter. micro environment Dale Littler The environment of an organization is generally viewed as comprising two components: the m a c r o e n v i r o n m e n t and the micro envir onment. J. the company had to regain the public’s trust in the product. In M. and Ferrell. and so on (see c o m m u n i c a t i o n s m i x ). Levi advertisements. appropriate internationally in the English speak ing offshore industry and did not have negative connotations in other languages. billboards (see p o s t e r s ). the prod uct was withdrawn but at significant cost. to achieve a cost effective mixture of reach and frequency of message exposure. Oxford: Butterworth-Heinemann. 4th edn. European edn. 3rd edn. O. printed leaflets. The Rockwater story. (2000).. The major aspects of the micro environment are: competitors. in cluding a fall in m a r k e t s h a r e of Persil products.. G. Design Management Journal. Regardless of the form used to convey the message and reach different publics. Advertising Man agement. Bibliography Crosier. For example.’’ of their heritage and personality. and Myers. Messages emanating from organiza tions – products. The choice of the company name ‘‘Rockwater.). certain organizational values will be pre sented and perceptions and opinions of the or ganization formed by the publics it reaches. for example. Internet. W. (1987). D. unlike the former. Promotion. J. brands.’’ for example. Marketing: Concepts and Strategies. and corporate identity – are expressions of their ‘‘corporate voice. was made because ‘‘it implied strength and stability. after numerous washes it was claimed that the innovative ingre dient had a deleterious effect on certain fabrics. S. c h a n n e l s o f d i s t r i b u t i o n . It was substantial. L. Lever had then to build up the public’s belief and trust that its existing products were effective and safe. (1999). Simkin. Dibb. C. if not control. reinforce the com pany’s heritage and its American birthright. Englewood Cliffs. Baker (ed. consists of elements or activities with which the organiza tion interacts directly and over which it can therefore exert influence. Again. hence. Lee. After a few months in the marketplace. c u s t o m e r s . corporate identities. 11. youthful. K.. Minitab Michael Greatorex Minitab is a computer software package used to analyze data. including data obtained in . s u p p l i e r s . Pride. It sounded mature and authoritative and gave the impression that it had always been there’’ (Lee. and serve to differ entiate and support their p o s i t i o n i n g in the marketplace. ch. 1991). Boston: Houghton Mifflin. Lever’s ‘‘Persil Power’’ washing liquid was launched as a safe and effective product.

Oxford: Butterworth-Heinemann. thereby giving a focus for the efforts of all in the organization. B. to ar ticulate the vision (see v i s i o n s t a t e m e n t ) of where the firm will be in the future. The Strategic and Operational Planning of Marketing. although it may in fact be formulated at any time. and the technology to be employed. Drucker. E. Dickson. Englewood Cliffs. Bibliography Abell. and the competitive competencies that will be employed’’ (Dickson. (1997). However. Marketing Management. NJ: PrenticeHall. 1997: 123).) (1992). 2nd edn. Practices. D. Maidenhead: McGraw-Hill. mission statement Dale Littler The mission statement is generally presented as the first stage in the s t r a t e g i c p l a n n i n g process. mission statements may often be general and bland. and its ethics’’). G. The com ponents of the package concern data input. P. (1986). data modification. Greenley (1986) suggests that the mission statement has several aims.’’ In general. and communication with other packages. A. for example. Campbell. They may be changed to respond to oppor tunities or they may be employed as a ploy to distract competitors while. to define the business domain. (1980). em ployees. to express the philosophy that will guide the business. K.’’ etc. New York: Dryden Press. its relations to employees and other stakeholders. hypothesis testing. the mission statement might be expected to provide answers to the questions posed by Drucker (1973): What is our business? Who is the customer? What is value to the cus tomer? What will be our business? What should our business be? It is believed that the mission statement should be aspirational and provide a shared sense of purpose. R.). standards and behaviors (‘‘the policies and behavior pat terns that guide how the company operates’’). (1988). often with different require ments. and values (‘‘the beliefs that underpin the organization’s management style. rather than what it intends to do. and multivariate analysis (see m u l t i v a r i a t e m e t h o d s (a n a l y s i s ) ). perhaps for fear of providing competitors with information about future strat egies and because they need to appeal to differ ent constituencies. before the decade is out. Defining the Business: The Starting Point of Strategic Planning. strat egy (‘‘the commercial rationale. i. The range of statistical procedures that can be specified is very large and includes all types of descriptive statistics. It may also include ‘‘the principal technologies to be mastered. Management: Tasks. employees. the customer groups and needs.222 mission statement m a r k e t i n g r e s e a r c h surveys. New York: Harper and Row. bivari a t e a n a l y s i s . Bibliography Miller. Kennedy: ‘‘achieving the goal.’’ which embraces the business domain in which the firm is aiming to compete and the competitive advantages that it aims to exploit). the mission statement should reflect what the organ ization is striving to do and provide a broad indication of how it intends to fulfill its goal. . and Tawadey. (eds. ch. Boston: PWS-Kent.. ch. univariate analysis. Mission and Business Philosophy. 1.e. It has various audiences. To be effective the mission statement has to be widely communi cated to. P. presentation of results. a strat egy is being developed and emerges. Greenley. and s u p p l i e r s . including customers. shareholders. depicted as consisting of a number of stages. which has four elem ents: purpose (‘‘why the company exists’’). ch. Many contain similar aspirations (‘‘to be the world leader. They may also reflect what the company has been or is doing. The importance of a mission statement in business may have been drawn from the goal statement given to NASA by President John F. including: to provide the purpose for the organization. and to motivate employees by providing them with a clear sense of purpose and direction. Overall. (1973). 3. Responsibilities. R. data analysis. The general consensus is that it outlines the p o s i t i o n i n g it wishes to achieve in specified businesses. Campbell and Tawadey (1992) devised the Ashridge mission model. of landing a man on the moon and returning him safely to earth. inter alia. Minitab Handbook for Business and Economics. 7.

. interval. style. hence helping with the d e s i g n of new prod ucts. and so on right down to the least similar. and s t r a i g h t r e b u y .g. even though originally the data were merely an ordered metric scale. The brands on offer in a market are listed in pairs and the respondent has to say which pair is the most similar.g. Its main uses in marketing are in attribute mapping. be tween brands).) and preferences (e. etc.. quality). The category of modified rebuy refers to those occasions when there are significant differences in the terms of the pur chasing contract under review (e.g. Faris. Different types of measurement scales include ratio. and Wind (1967) suggest a division of organizational buying into three cat egories: n e w t a s k .. p a c k a g i n g . The ideal point has another inter pretation as an indicator of the importance of the dimensions identified. changes in price. is used in the com monest type of multidimensional scaling. predict which brand is likely to be purchased. and categorical scales. safety. hence. changed specifications or delivery arrange ments). developing improved products). increased price. See also organizational buying behavior Bibliography Robinson. they have to be named by the researcher from the grouping of the brands and further knowledge of the brands’ attributes. mood see a f f e c t multidimensional scaling Michael Greatorex Multidimensional scaling is a generic name given to a number of procedures related to atti tude (see a t t i t u d e s ) and i m a g e research. country of origin.g. The significance of these differences might reflect changes in the customer’s requirements (e. size.g. Thus.. Y. P. or in a supplier’s offerings (e. new product features). and will generally require a significant renegotiation of the contract.. while other brands will be apart. It may take only two dimensions to map the brands. one technique of multidimensional scaling requires all pairs of brands to be ranked in order of similarity. when it is easy to represent the maps graphically. or in the customer’s competitive pos ition (e. Gaps in the offerings (see o f f e r i n g ) to customers may be spotted. and Wind. The ideal point can be discovered. This information is fed into a computer. modified rebuy. T.g. W. all possible intervals be tween positions on the scale are ranked. for cars the attributes could be performance. price. 223 Brands are perceived by customers in terms of attributes. of similarities between brands. likely to be competing).. Industrial Buying and Creative Marketing. though not usually a change of supplier. brands can be repre sented on maps and some brands will be close together (hence. entering new markets. The dimensions identify the attri butes used by the respondent to evaluate and compare the brands. Two types of variables form the starting blocks for much multidimensional scaling: perceptions (of attributes. taken with the product map. delivery arrange ments. Dimensions used in the maps indicate the attributes used by respondents to characterize the brands. e. It may be possible to discover for individual buyers their ideal pos itions on these maps and.. several two dimensional graphs are prepared. technical specifications. and finding ideal b r a n d points. the next most similar. Different brands may be per ceived in different ways.multidimensional scaling modified rebuy Dominic Wilson Robinson. The di mensions are not named. p r o d u c t p o s i t i o n i n g . and a metric measure of the similarities (or differences) between brands is obtained. Boston: Allyn and Bacon. d e s i g n . attribute maps are prepared showing the relative positions of the brands. When three or more dimensions are to be used. C. In an ordered metric scale. ordinal.. The latter two scales are known as non metric scales for obvious reasons. Another scale. Faris. etc. known as an ordered metric scale. based upon the respondent being able to rank the brands in . (1967).

and Hawkins. this is followed by obtaining a map to represent each cluster. elements. PROC CALIS. E. F.. posing as shoppers. mystery shopping multivariate methods (analysis) Michael Greatorex Multivariate methods of data analysis involve the consideration of relationships between more than two variables and. 4th edn. albeit inter linked. Applied Multivariate Statistical Analysis. c l u s t e r a n a l y s i s . 426 34. clustering takes place first. each of which is a ‘‘moment of truth’’ for the customer (a central reason for mystery shoppers using the ‘‘sample size of one’’ – you only get one chance to make a good first impression!). Anderson. Tull. and Wichern. D. asking the sort of questions an actual customer might ask. New York: Macmillan. New York: Macmillan. or EQS. Ideal points for individuals in the cluster can be mapped in relationship to the positions of the brands on the map. Johnson. and in order to understand what lies behind outputs. pp.. P. Usually. Multivariate methods require the use of computer based statistical analysis packages such as the St a t i s t i c a l Pa c k a g e f o r t h e So c i a l Sc i e n c e s (SPSS) and Mi n i t a b . p r i n c i p a l c o m p o n e n t a n a l y s i s and f a c t o r a n a l y s i s . such as customer s e r v i c e d e l i v e r y . Marketing Re search: Measurement and Method. The best known methods are multiple regres sion (see r e g r e s s i o n a n d c o r r e l a t i o n ). The dimensions that are thrown up may differ from map to map. and Tatham. Carmone. It is difficult to aggregate maps over individuals. D. Multidimensional Scaling: Concepts and Applications. which seeks to find the relationship between a dependent variable and several independent variables. d i s c r i m i n a n t a n a l y s i s . 686 97. R. The process has many discrete. Marketing Re search: Measurement and Method. J. Boston: Allyn and Bacon. (1998). 6th edn. NJ: Prentice-Hall. either for an average individual in each cluster or based on averaging similarities data from each cluster. The maps. (1998).224 multivariate methods (analysis) order of preference either overall or on each of several attribute scales according to the program used. and Hawkins. 2nd edn. R. which are looking for interrelationships within a set of variables. A. are trained to observe closely all the aspects of customer service during a typical shopping trip. J. F. Johnson. D. L. and Smith. Bibliography Bibliography Green. which is used to obtain perceptual maps of how customers perceive brands. Multivariate Data Analysis. which can be used to obtain indirect evaluations of the utilities of product attributes. extend u n i v a r i a t e a n a l y s i s and b i v a r i a t e a n a l y s i s of data. m u l t i d i m e n s i o n a l s c a l i n g . pp. used to estimate the parameters of these models can be seen as superseding in a holistic way some of the multivariate methods men tioned above. D. which seeks the best combinations of variables to discriminate Vincent Wayne Mitchell In mystery shopping market research interview ers. s t r u c t u r a l e q u a t i o n m o d e l s (or latent variable path models) bring together the many parts of the m a r k e t i n g r e s e a r c h effort. R. NJ: Prentice-Hall. New York: Macmillan.. A. it is necessary to look at inputs and processes. either in a client’s own outlets or those of competitors. So why do businesses use mystery shopping instead of c u s t o m e r s a t i s f a c t i o n re search? Customer satisfaction is an output. Hair. Upper Saddle River. 1. as such. D. Applied Multivariate Statistical Analysis. (1993). I. Upper Saddle River. W. between groups of respondents. D. E. S. 4th edn. which is a range of grouping techniques. based on similarities data. How . this is unfortunate as it makes it hard to use the knowledge gained about ideal points to discover clusters of respondents with close ideal points.. (1987). and c o n j o i n t a n a l y s i s . The researcher goes through the shopping experience. and Wichern. (1989). (1993). W. I. 6th edn. such as LISREL. Tull. S. ch. S. and the software. are produced for each individual. M. R.

is prone to subject ive interpretation and comparatively little is known about its accuracy – the r e l i a b i l i t y 225 and v a l i d i t y of the technique (Morrison. (1995). the quantitative measures used. A. Despite its attraction as being unobtrusive. as well as professional ethics (see m a r k e t i n g e t h i c s ). and issues of privacy. Coleman. mystery shopping. 4 (October). and Preston. mystery shopping has attracted some criticism largely on account of the sample sizes. C. Bibliography Morrison.. L. Coleman.mystery shopping ever. like q u a l i t a t i v e r e s e a r c h . 37. and Preston. C.. Journal of the Market Re search Society. Mystery customer research: Cognitive processes affecting accuracy. . J. M. 1995).

and Parker. and increasing measures to protect the natural environment. R. Fisher. (1988). 17. Dion. 43 8. see c o n s u m e r n e e d s a n d m o t i v e s Bibliography negotiation Dominic Wilson It has been argued that customer/supplier nego tiations have traditionally tended to be part of a ‘‘zero sum game’’ and that an advantage for one side (e. London: Pitman. P. J. they would otherwise have negotiated further or even de clined. B. Sales Technique and Management. D. Communication Problem Solving. Chichester: John Wiley. but on understanding the position of all parties involved – a principle that lies at the heart of marketing more generally. The funda mental principle remains that effective negoti ation depends not just on skill and techniques. M. See also environmental analysis needs ations are sought in which both supplier and customer gain from negotiation. a discount) was ‘‘won’’ through a disadvantage for the other (Dion and Banting. and Jobber. G.g. R. Lancaster. (1988). J. Aldershot: Gower. (1991). This is. and Cousins. of course. this image seems to have had a powerful influence on the sales nego tiation literature. Chichester: John Wiley. and Brown. J. different circumstances and per sonnel will require different negotiating styles. Beyond Negotiation. (1990).N natural environment Dominic Wilson The natural environment is one of the elements of the m a r k e t i n g e n v i r o n m e n t . (1985). McCall. and this has always been the case. and Banting. P. Lidstone. This aspect is concerned with ecological issues such as trends in the availability of raw materials and energy. an oversimplified view of the complex field of customer/supplier nego tiations and there would have been many excep tions to this exaggeratedly aggressive picture of negotiation. much of which has focused on techniques for manipulating customers into sales agreements which. An example of this mutually beneficial approach is the idea of long term customer/supplier partnerships. by definition. A more sophisticated view of marketing nego tiation now prevails whereby ‘‘win win’’ situ Carlisle. 1988). 6. Boston: Houghton Mifflin. pp. (1990). net margin Dominic Wilson Net margin (generally expressed as a percentage) refers to the excess of sales revenues over cumu lative costs. Industrial supplier buyer negotiations. ch. Getting Together: Build ing a Relationship that Gets to Yes. J. Manual of Sales Negotiation.. A. Industrial Marketing Manage ment. 1 (February). 89 115. where commitment and t r u s t on both sides replace the traditional image of suspicion and hostility. In reality. S. after subtracting fixed costs but . Nevertheless. I.

while those relationships are continually changing (perhaps because of competitive activity or part ners in the relationship attempting to develop. with transactions tending to take place within the framework of long term relationships. 227 Networks are both stable and changing. They also note that a firm collects a number of invis ible assets from its external before taking account of any extraordinary. ex ceptional. a resource constellation can be seen.. such as knowledge. 1989. Ford. They suggest that by looking at the resource ties between the different actors in a network. reputation.e. i. with actors performing activities and/ or controlling resources.) They point out that relationships are not just a means of access to resources. knowledge. where the focus of marketing managers is on the m a r k e t i n g m i x . 2002). which they believe provides the basis for a study of stability and development in industry and of the actors involved in the process. Thus. Building upon the i n t e r a c t i o n a p p r o a c h . change. 1992. 1995. etc. we need to. Ford. are one mechanism for describing a network. they also involve the combination of those resources. Ha˚kansson and Snehota. recognize network positions and effects on simple dyadic relationships. Ha˚kansson and Johanson (1992) pro posed a model of industrial networks. Ha˚kans son and Snehota (1995) suggest that it is neces sary to understand how the relationship between two companies impacts upon the way they utilize resources – how are their resources tied together. emphasis has moved away from a study of single buying units in an organization. Connected activity links. 1988). activity chains. toward a realization that both sides of the buyer/seller interaction need to be considered when trying to understand the dynamics of a market (Ha˚kansson. . or even disrupt the relation ship) (Johanson and Mattsson. The study of simple dyadic relationships has de veloped into studies of an array or portfolio of relationships. In the context of business relationships net work theory is commonly described as either the industrial network paradigm (Easton and Ha˚kansson. 1982. 1996) or ARA (actor resource activ ity) theory (Ha˚kansson and Johanson. process plant. and status. the activities being the processes by which activities are changed and resources being the means used by actors to perform activities. o r g a n i z a t i o n a l m a r k e t i n g ). 1992. maintain. Mo¨ller and Wilson. 2002). Ha˚kans son and Snehota (1989) also suggest that the relationships which an organization has are one of the most valuable (if not the most valuable) resources that an organization possesses. Ha˚kansson and Johanson also note that the development of a network is influ enced both by its power structure (related to direct and indirect control of resources) and by its interest structure (a combination of the con flicting and common interests of the actors).. 1995. It should also be noted that both formal and informal cooperation strategies exist within networks and that large numbers of informal cooperation strategies are often in place (Ha˚kansson and Johanson. It is now readily acknowledged that businesses do not exist in isolation from the other businesses in the same field and that a complex network of relationships and interde pendencies exists in a market (Ha˚kansson and Snehota. at the very least. which can be both a valuable asset and a con straining factor. to understand the reality of marketing and pur chasing. See also margin network Judy Zolkiewski In business to business (organizational) markets (see b u s i n e s s t o b u s i n e s s m a r k e t i n g . Axelsson and Easton. The model comprises three classes of variables: actors. Once the activity links have been understood. Actor bonds are also an import ant element in the network and are studied from the perspective of social networks (especially from an organizational sociology perspective). Here a network is viewed as a set of interactive relationships between firms (actors) surrounding the ex change of a set of goods and/or services. or non product related issues. resources and activities. 1995). they are both tan gible and intangible. and which resources are involved? (Resources include personnel. Central to this approach has been the recognition of the importance of networks of relationships. 1988). other equip ment.

which is outside the scope of this discussion. Industrial Networks: A New View of Reality. e. Bengtsson and Kock. Corporate strategy models and networks: Diverging perspectives. Nonetheless.g. market. For instance. the term ‘‘network’’ should not be confused with network marketing. he suggests that by viewing the network creatively. it is essential to recognize that there are different types of network. Easton (eds. They believe that. e. Croft and Woodruffe. He believes that networks are an alternative emerging perspective. There is an ongoing debate about the utility of the network concept in strategic management. Secondly. and is totally competitive. and the macro position refers to an actor’s relations with the whole network (or a specific net within it). The relationship between strategy models (e. and inter organizational theory. how they can be managed..228 network Ha˚kansson and Snehota (1995) suggest that bonds develop between the organizations (actors) involved in a relationship and that these bonds affect the way that the parties in volved view themselves. In terms of strategy. e. and cite the international retailer IKEA as an example of this.. The notion of the tension between competition and cooper ation within networks is providing a rich stream of research (see. They also impact upon the perceived identities of the individual actors. in which emphasis is placed upon how organiza tions are embedded in their environment. Porter. (1992). 1979) and the perspective given by the study of networks has been considered by Axelsson (1992). such as sociology.g. suggesting that most managers take adversarial standpoints and still view firms as discrete entities.g. Campbell and Wilson (1996) reflect on the difficulty of this. the dichotomy between hierarchy and market (Williamson.g. which is closely related to pyramid selling or multilevel marketing schemes (see. institutional economics. and that different man agement skills will be needed for each. Axelsson (1992) makes two important points. this includes a vociferous debate about whether or not networks can be managed and. B. but they are not simply a sum of those individual personal relationships. Johanson and Mattsson (1988) identify both a micro and a macro position within the overall concept of network position. In B. being seen as a ‘‘partner’’ to a powerful or technologically advanced firm has an impact on how other organizations view the actors involved. Firstly. It is recognized that the bonds between organizations involve the bonds be tween the individuals in those organizations. He suggests that there is a dominant perspective in the literature in which the environment dominates. if so. Another contentious issue is whether or not networks can be managed. Nor should it be confused with the discussion about govern ance systems. 1996). It should also be noted that the study of networks is not limited to marketing and there is an overlap with many other disciplines. 1986). and hier archy. London: Routledge. he proposes that networks should be viewed as emergent and cumulative and that it should be recognized that they look different to all actors and for all situations – they are not fixed and actors do not have common goals. 1980).. Johanson and Mattsson (1992) further de velop the concept of position and point out that position provides a means for conceptualizing how individual actors are related to (or embed ded in) the environment. he believes that each step/ move should be seen as part of the overall stra tegic pattern. at best. which they perceive will give them a c o m p e t i t i v e a d v a n t a g e . Bibliography Axelsson. such managers may concen trate on developing one or two dyadic relation ships. new op portunities can be seen because it will be appar ent which actors could be mobilized for different strategies. With respect to the above debate. However. Axelsson and G. where the micro position refers to an actor’s relationship with another specific individual actor in the network.. is faceless. even within the same organization. They do see some organizations making a success out of man aging from a network perspective. and network (Thorelli. 1975). 2000). Add itionally. He also points out that all relationships between firms are both competitive and cooperative and it is meaningless to try to reduce them simply to positive or negative relationships.). one aspect of network theory that should be recognized as making a useful input to strategic thinking is the concept of network position. . bur eaucracies and clans (Ouchi.

(1996). (1988) identify key drivers for new product development as being the market. and Ha˚kansson. (eds. W. 3rd edn. Mo¨ller. No business is an island: The network concept of business strategy. J. in house product testing. or NPD.). and Woodruffe. T. Boston: Kluwer.) (1995). J. and increasingly intense competi tion. In B. Networks: Between markets and hierarchies. the greater the difficulty in making ex ante assessments of the technical and market opportunities. Ha˚kansson. The uncer tainties of NPD are recognized and relate to both market uncertainties and technological uncer tainties (see u n c e r t a i n t y ). (1996). London: Routledge.-G. Campbell. Fox et al. Industrial Net works: A New View of Reality. J. (ed. Williamson. and clans. 29. New products can make a profound contri bution to competitiveness and this is particularly acute in an era of accelerating technological change. H. International Journal of Research in Marketing. 7. New York: Free Press. In D. pre commercialization business activities. How competitive forces shape strategy. G. Markets. Formal and informal cooperation strategies in international industrial networks. process. L. 201 14. San Diego. Oxford: Butterworth-Heinemann. Ha˚kansson. H. speed to market. Ha˚kansson. Easton (eds.). R. Understanding Business Markets.) (1995). (2000). However. M. CA: Academic Press. Ouchi. Network marketing: The ultimate in international distribution? Journal of Marketing Management. Developing Relationships in Business Networks. and Kock. Business Marketing: An Interaction and Network Perspective. 13 (5). (1996). Industrial Networks: A New View of Reality. A model of industrial networks. London: Routledge. (1989). Markets as networks: Editorial introduction.’’ and various indicators have been . and Mattsson. Thousand Oaks. Bengtsson. S. 37 51.) (1992). San Diego. (1986). customer tests of product. G. Reprinted in David Ford (ed. Marketing Strategy. San Diego. Iacobucci (ed. general shortening of the p r o d u c t l i f e c y c l e .new product development Axelsson. Johanson. D. H. Cooper and Kleinschmidt (1986) identify 13 stages of the NPD: 1 2 3 4 5 6 7 8 9 10 11 12 13 screening of new product ideas. physical product development. learning. 407 13. Networks in Marketing. D. and Johanson. Easton. Managed networks: Creating strategic advantage. (1988). Internationalization in industrial systems: A network approach. (1992). H. CA: Academic Press. Reprinted in David Ford (ed. Porter.) (1990). business/financial analysis. B. Johanson. A considerable amount of re search has been devoted to ways to improve the likelihood of new product success. and Snehota. Reprinted in David Ford (ed. and Snehota. However. bureaucracies. O. there is little agreement as to what constitutes ‘‘success. H. J. A.-G. 1992: 16). Ford. D. CA: Academic Press. 25. 229 new product development Margaret Bruce and Liz Barnes New product development. 2003). Coopetition in business networks to cooperate and compete simultaneously.) (1990). Industrial Marketing Management. The more radical the NPD. E. Understanding Business Market ing and Purchasing. E. (1975). Markets and Hierarchies: An alysis and Antitrust Implications. preliminary technical assessment.) (2002). G. T. London: Routledge. K. and market launch. and Wilson. (1988). (1979).) (1990). The most common representation of the NPD process is as a series of decision stages or activ ities (Kotler. detailed market study/market research. (1980). Thorelli. Understanding Business Markets. and Mattsson. technology. 1995). H. 12. CA: Sage. Axelsson and G. Network positions and strategic action: An analytical framework. Industrial Networks: A New View of Reality. Strategic Management Journal. such as c u s t o m e r s and s u p p l i e r s (Hart. and cost. (eds. Easton (eds. trial production. London: Thomson Learning. 411 26. (eds. (1992). and Wilson. Ha˚kansson. and Johanson. J. London: Routledge. test market/trial sell. H. L. preliminary market assessment. B. I. Administrative Science Quarterly. 129 41. I. production start up. Understanding Busi ness Markets. ‘‘is the process that transforms technical ideas or market needs and opportunities into a new product that is launched onto the market’’ (Walsh et al. Croft. Axelsson and G. the traditional sequential model of NPD has been criticized for ignoring the inter actions that occur between the stages and the interactions between different departments as well as with external agencies.). M..) (1995). and Easton. Reprinted in Dale Littler and Dominic Wilson (eds. In B.

R. e. Computer aided design (CAD). such as different financial measures and different units of analysis. Wong and Burton. which provides 3D modeling of new product concepts. In M. and marketing from the very early stages of NPD to market launch have been associated with success (e. deficiencies and impact. Process uncertainty: A new dimension for new product development.. In M. CAD) can assist the development of virtual teams. and Kleinschmidt. and Jones. Increasingly. G. 19 27.