Chapter9MotivatingtheWorkforce

humanrelations

the study of the behavior of individuals and groups in

organizationalsettings
motivation = an inner drive that directs a person's behavior
towardsagoalorsatisfactionofaneed
human relations involves motivating employees to achieve
organizationalgoalseffcientlyandeffectively
HR has become an increasingly important field as bus try to
understandhowtoboostmorale,maxproductivityandcreativity
andmotivatediverseeomployeestobemoreeffective

motivatingtheworkforce

whatmotivatesemployeestoperform?howcanmanagersboost
morale?howdoyoumaxworkerperf?howcanyouencourage
creativityandinnovation?
motivation can be complicatedsometimes motivational
factorswillencourageemployeestotakeexcessiverisksorengage
ineithicalmisconductinordertoberewardedforperformnace
notmotivatingemployeesenough,orinthewrongwayswilllead
tounderperformance

thebasicmodelofmotivation

lookatchart
when a need exists, an individual engages in goaldirected
behaviordesignedtosatifythatneed
need>goaldirectedbehavior>needsatisfaction
humanrelationsisconcernedwiththeneedsofemployees,their
goalsandhowtheytrytoachievethem

morale

an employee's attitude toward his or her hob, employer and

colleagues

moraleisaprominentaspectofhumanrelations
highemployeemoraleisanimpgoaltoachievewithinanorg

moraleboosters

respect, involvement, appreciation, compensation, promotion,

pleasantworkenviro,posorganizatiolculture

whatarethetwotypesofrewards?

intrinsicandextrinsicrewards
both are important in motivating employees to contribute to
businessgoals

intrinsicreward

thepersonalsatisfactionandenjoymentyoufeelfromattaininga
goal
feelingofaccomplishment

extrinsicreward

benefitsandorrecognitionyoureceivefromsomoneelse
aawards,benefits,payincreases

employeemotivation

itcanbedifficulttomotivateemployees
motivationisdifficulttodefineandvariesfrompersontoperson
motivation conventions exist taht are dedicated to suggesting
waystomotivateworkers

work/lifebalance

mostemployeesaremotiatedbymorethanpay...work/lifebalance
and flex, compensation, work culture, training opportunities,
advancementopportunities
nonpaymotivators can result in longerlasting satisfaction and
higherlevelsofemployeeloyaltytotheorg

classictheoryofmotivation

early20thcenturyFrederickTaylor&LIllianGilbreth
scientificfocusonworktasksandproductivity

moneythoughttobethesolemotivatorforworkers
satisfactorypayandjobsecuitymotivateemployeestoworkhard
.TaylorandGilbrethsuggestedmakingworkhighlyspecialized
and linking payto output so that employees would make more
moneyastheyworkedfaster.Thisideaisstillappliedtoday,but
weunderstand that motivationismore complicated thanTaylor
andGilbreththought.

hawthornestudies

192432attheHawthorneWorksPlantbyeltonMayo
postulated that physical conditions in workplace sstimulate
productivity
findings show social and psychological factors influence
productivity/morale
maksbeginningofconcernforhumanrelationsintheworkplace

theoriesofemployeemotivation
maslow'shierarchyofneeds
herzerg'stwofactortheory
mcgregor'stheoryxandtheoryy
theoryz
variationsontheoryz
equityandexpectancytheory
knowthese

maslow'shierarchyofneeds

pyramidtop to bottomselfactualization needs, esteem needs,

socialneedssecurityneeds,physiologicalneeds
mostbasicarelistedlast
Maslowstheorystatesthatpeopleprogressthroughaseriesof
needs.Astheyachieveone,theymoveontoothers.Peoplemust
achievethelowerlevelneedsbeforeachievinghigherlevelones.
Manypeopleneverachievethehigherorderofneeds,andpeople
may slip from one category to the other depending on
circumstancesandtimesintheirlives.

definition of each of maslow's hierarchy of

needs
physiologicalneeds=basicneedsforfood,water,shelter
securityneeds=protectionfromphysicalandeconomicharm
socialneeds=needforlove,companionship
esteemneeds=selfrespectandrespectfromothers
selfactualization=maximizingon'esfullpotential

Herzberg'stwofactortheory

hygienefactors=focusontheworksetting,notthecontentofthe
work(wages,workingconditions,companypolicies,jobsecurity)
motivational factors=focus on content of the work iteself
(achievement, recognition, involvement, responsibility,
advancement)
Herzberg'stheory
this is very similar to Maslow's even though they broke
motivationalfactorsintodifgroups

McGregor'stheoryXandtheoryY

histheorycontraststwodifviewsofmanagement
theoryxbeingthetraditionalviewofmanagementandtheoryy
beingthehumanisticview

TheoryXofMcGregor

consideredthetraditionalmanagementview
assumesthatworkdersgenerallydislikework,mustbeforcedto
do their jobs, average worker avoids responsibility and prefers
direction

TheoryYofMcGregor

consideredthehumanisticmanagementview
assumesexpendingphysicaleffortisnatural
ppl will assume responsibility and selfcontrol to achieve
objectives (workers want to satisfy social, esteem and self
actualizationneeds)

assumepplwillcommittoobjectivesoncetheyrealizetherewill
beapersonalreward
assumesmostorgdon'tadequatelyutilizeimagination,ingenuity,
creativityandintelligenceofworkers

TheoryZ

a management phil that stresses employee participation in all

aspectsofcompanydecisionmaking
incorporates many Jap ideas about management (trust and
intimacy)adaptedforuseintheUS
managers subscribing to this theory will be participative, and
employeeswilltendtofeellikeownersoftheorg

variationsonTheoryZ

qualitycircles(orqualityassuranceteams)
participativemanagement
employeeinvolvement
selfdirectedworkteams
allstrivetogiveemployeesmorecontrolovertheirjobs
makethemresponsibleforoutcomes

equitytheory

theassumptionthathowmuchpplarewillingtocontributetoan
organnizzationdependsontheirassessmentofthefairness(equity)
oftherewardstheywillreceiveinexchange
equalpayforequalwork
employeeswhodon'tfeelequitablytreatedmayslackoffonthe
joborstealtolevelthefield
While equity theory makes sense, it is more complicated in
practicebecausepeoplearenotgoodattakingimpartialstockof
themselves or their work. A worker may not be accurately
assessinghis/hercontributionstotheorganization

expectancytheory

assumes that motivation depends not only on how mmuch a

personwantssomething,butalsoonhowlielyheorsheistogetit

someonewhowantssomethingandhasareasonableexpectation
toachieveitwillbehighlymotivated

motivatingemployees

behavior modificationchanging behavior and encouraging

appropriateactionsbyrelatingtheconsequencesofbbehavioritself
(reward,punishment)
developedbySkinner
behaviorthat'srewardedwilltendtoberepeatedrewardinggood
behavior tends to be a more effective behavior modification
strategyinthelongterm
punishedbehaviorwilltendtobeeliminated

strategies for motivating employeesJob

Rotation
movementofemployeesfromonejobtoanothertorelievethe
boredomoftenassociatedwithjobspecialization
tehedrawbackisthatitdoesnottotallyeliminateriskofboredom

strategies for motivating employeesjob

enlargement
additionofmoretaskstoajobinsteadoftreatingeachtaskas
separate
seekstocounteracttheboredomofdivisionoflabor
manysmallfirmsusejobenlargement
requirestrainingemployeesinnewtaskstakestimeandmoney

strategies for motivating employeesjob

enrichment

incorporating motivational factors (achievement, recognition,

responsibility)intothejob
ideadevelopedbyHerzberginthe50s
givesemployeesfeedbackontheirperformance
rewardsforgoodperformance

valuesandmotivation

many emploees are motivated by working for a company that

sharestheirvalues
patagoniagreatjobofmotivatingitsemployees,keepingmorale
high,andinspiringstrongeomployeeloyalty
corevaluesembracereducingwaste,recycling,enviro
psychologicalsuccess

strategiesformotivatingemployees

flexibleschedulingstrategies
flextime=allowsemployeestochoosetheirstartandendtimes
compressedworkweek40hrsina4dayworkweek
jobsharingoccurswhen2pplsharethesamejob
allowingworkerstoworkfromhomefullorparttimeisanother
strategytoimprovemotivation

Chapter10ManagingHumanResources
humanresourcemanagement(HRM)

alltheactivitiesinvolvedindeterminingtheorganization'sneeds
forhumanresourcesandacquiring,trainingandcompensatingppl
tofillthoseneeds
hrmanagersareconcernedwithmaximizingthesatisfactionof
employees and moticvating them to achieve organizational
objectives

what are some of the concerns of human

resourcemanagers?

compensation, job satisfaction, personal performance, leisure,

enviro,opporutnitiesforadvancement
theseissueschangew/theecon,demoshifts,ageofemployees
diverseworkforcescancomplicatethejobofhrmanagers
compensationisnotwhatdrivesmostppl

whatarethreedifwaysthatHR'splanfortheir
needs?

jobanalysis,jobdescription,jobspecification
HRmanagersseektomatchappropriatehumanresourceswithjob
assignments

whatisjobanalysis?

systematically determining pertinent info about a job (tasky,

abilities,knowledge,skills)
usedtodevelopthejobdescriptionandjobspecifiaction

whatisajobdescription?

formal and written specifications of the job (title, tasks,

relationships,sills,duties,responsibilities)

whatisthejobspecification?

decription of the job qualifications (ed, esperience,

personal/physicalcharacteristics)

whatisemployeerecruiting?

theformationofapoolofqualifiedjobcandidatesfromwhich
managementselectsemployees
internalsources=currentemployees,promotionfromwithin
external sources=advertising, employment agencies, online,
interns
manyfirmshaveapolicyof1stconductinginhouserecruitingfor
positions

inhousehiringischeaperthanexternal

thebenefitsofinternships

givestudentsachancetoexperienceworkenviro,delvopskills
andmakecontactsintheirchosenindustry
internscanbeagreatsourcefororganizationsseekingtorecruit
employees,asinternsalreadyhaveexperienceintheorg
imporvessoftskillslikepresentationskills
acquiringtechnicalskills

employeeselection

selection=theprocessofcollectinginfoaboutapplicantsandusing
infotomakehiringdecisions
application,interviewing,testing,referencechecking
choosingtherightpersonisveryimportant
selection process is long and expensivechoosing ppl who are
committedtotheorgandareagoodfitcansavetheorgtimeand
money

top10mistakesmadeininterviewing

not taking the interview seriously, not dressing appropro, not

apropro discussing experience and ed, being too modest about
one'saccomplishments,talkingtoomuch,toomuchconcernabout
compensation, speaking neg of a former employer, not asking
enoughoraproapro?s,notshowingtheproperenthusiasmlevel,
notengaginginaproprofollowuptointerview

legalissuesinrecruitingandselecting

legalrestraintsarepresentateverystageoftherecruitmentand
selectionprocess
to avoid legal issues, managers must be aware of laws and
regulations
Title VII of the Civil Rights Actpervades all areas of HRM,
prohibits discrimination in employment, equal employment opp
commision(EEOC),testsmustbevalidated

lawseffectingHRM

managersshouldbefamiliarwiththeselaws
americanswithdisabilitiesact(ADA)
agediscriminationinemploymentact
equalpayact

what are the different parts of developing the

workforce?

orientation
training
development
oncequalifiedcandidatesarechosent,theyhavetobeintroduced
totheorganditspolices

orientation

familiarizingnewhireswithfellowworkers,companyprocedures
andthephysicalpropertiesofthecompany
also involves socializing the new workers into the ethics and
cultureoftheirneworg

training

teaching employees to do specific job tasks thru classroom

developmentoronthejobexperience

development

a kind of training taht augments the skills and knowledge of

managersandprofessionals

assessingperformance

importantbcitallowsmanagerstoseehowtheiremployeesare
doingintheirpositionsandprovidesemployeeswithfeedback
difficultformanagersassessonstrengthsandweaknesses
crucialbcitprovidesemployeeswithfeedback
aprraisals may beobjective or subjective, quantitative or
qualitative

managersmustdiscussresultswithemployee

what are different problems in developing the

workforce?

turnover
promotion
transfer
separations
HRmanagersmustbepreparedforissueslikethese
layoffsduetodownsizinghavebecomeanincreasinglyprevalent
factoflife
laoffs can be temporary and employees may be brought back
whenbusinesspicksbackup

turnover

employees voluntarily leave (quit); involuntary leave (fired);

managementmustreplaceworkers
high trnover rate canbe very expensive and can signal probs
withinanorandshouldbeinvestigatedbytheHRmanager
turnover is a huge cost to hire and train a new employee (est
$10,12,0000)
spendmoneyhiringtherightppl

promotion

advancement to higherlevel job with increased authity,

responsibility,andpay

transfer

movetoanotherjobwithinthecompanyusuallyatsameorsimilar
levelandwagerate

separations

employmentchangesinvolvingresignation,retirement,termination
orlayoff

financialcompensation

wages=financialrewardsbasedonhoursworkedand/orlevelof
outputachieved
timewages=usedwhenqualityismoreimportantthanquantityno
incentivetoincreaseproduction
piece wages=based on level of output achieved, motivate
employeestoincreaseoutput,littleincentivetoimprovequality
commision=incentivesystemthatpaysafixeddollaramoountora
percentageoftheemployee'ssales,motivatesemployeestosellas
muchaspossible

compensation

salrary=financialrewardcalculatedonweekly,monthly,orannual
basis. associated with white collar employees, executives,
professionals
bonuses=monetary rewards provided by firm for exceptional
performanceorincentivetoincreaseproductivity

compensationprofitsharing&employeestock
ownershipplan(ESOP)

profit sharing=a percentage of company profits distributed to

eomployees,sometimesintheformofstock.makesemployees
feelinvestedintheorg
ESOP=company distributes shares to employees as a form of
compensation,gaininginpopularity.workinghardermeansthey
willseetheirstocksincreaseinvalues

benefitsnonfinancialformsofcompensation

benefitsareprovidedasameansofcompensation
pensionplans,insurance(health,disability,life),childandelder
care,employeeassistanceprogramsareallnonfinancialformsof
compensation
employeeassistanceprog=offeremployeescounselingandother
forms of help to assist with addictions, psychological probs, or
otherpersonalissues

benefitstraditionalfringebenefits
sickleave
pensionplans
healthplancs
extracompensation(bonuses)

benefitssoftbenefits/perks

notofferedbyeveryemployerandtendtovaryalotbworg
includeonsitechildcare,spas,foodservice,hairsalons
offeredtohelpemployeesfinaabetterwork/lifebalance
veryappealingtoemployeesandpotentialemployeesremainin
theorg

unionized employeeslabor union, collective

bargaining

labor union= employee org formed to deal with employers for

achievingbetterpay,hoursandworkingcondition.helptogive
employeespowerthatindividualworkersdon'thavethrucollective
bargaining
collective bargaining= negotiation process where management
and unions reach agreement on wages, hours and working
conditions for the bargaining unit (employees represented by
union)
powerinnumbers=unions.uniongrowthdecreasi

whataredifferenttypesofresolvingdisputes?

pickets
strike
boycott
lockout
strikebreakers
disputesarideswhenmanagementandunionscan'tcometoan
agreementonacontract

pickets

publicprotestsagainsttheactionsofthecompanyormanagement

strike

employee walkouts; work toppage. most effective economic

weaponforunionsinprivatesector

cott

attempttokeeppplfrompurchasingthecompany'sproducts

ckout

management'sversionofthestrike.worksiteiscolosedtoprevent
employeesfromworking

trikebreaser

hired by management to continue operations and reduce losses

duringastrike

whyisdiversityimportant?

increasingly diverse workforce reflects increasingly divers

customerbase
diversity brings multiple perspectives to issues and improves
problemsolvinganddecsionmaking
organizationsshouldworktoimprovetheirworkforcediversity
bringsinmultipleperspectives

affirmativeaction

legallymandatedplansthattrytoincreasejobopportunitiesfor
minoritygroupsby...
analyzingthecurrentpoolofworkers
identifying areas where women and minorities are
underrepresented
establishing specific hiring and promotion glas to resolve the
discrepancy
prohibits org from setting hiring quoatas that might result in
reversediscrimination

Chapter11CustomerDrivenMarketing
Marketing

A group of activities designed to expedite transactions by

creating,distributing,pricingandpromotinggoods,servicesand
ideas
Createsvaluebyallowingindividualsandorganizationstoobtain
whattheyneedandwant

whatmarketingisandisnot

marketingoftenhasanegativeconnotation
isnotmanipulatingconsumers,justsellingandadvertising
isasystematicapproachtosatisfyingconsumers

theexchangeprocess

buyer>somethingofvalue(money,credit,labor,goods)>seller
>somethingofvalue(goodsservices,ideas)>backtobuyer
When determining value, the image associated with a good or

serviceisjustasimportantasthetangiblething.
Brandname,forinstance,representsaveryimportant,intangible,
somethingofvalue.

functionsofmarketing

Marketinginvolvesacomplexsetofactivities,allofwhichmust
beperformedtoaccomplishobjectivesandgenerateexchanges
buying, selling, transporting, storing, grading, financing,
marketingresearch,risktaking

value

Acustomerssubjectiveassessmentofbenefitsrelativetocostsin
determiningtheworthofaproduct
customervalue=customerbenefitscustomercosts
Creating something that customers will view as valuable is an
importantpartofmanaginglongtermcustomerrelationshipsand
implementingthemarketingconcept

benefits

Anythingabuyerreceivesinanexchange

costs

Anythingabuyermustgiveuptoobtaintheproductsbenefits
Monetary costs and time and effort expended to procure the
product

whatisamarketingconceptandhowcanitbe
implemented?

The idea that an organization should try to satisfy

customersneedsthroughcoordinatedactivitiesthatalsoallowit
toachieveitsowngoals
afirmmusthavegoodinformationaboutwhatconsumerswant,
adoptaconsumerorientationandcoordinateitseffortsthroughout
theorganization.Otherwise,itwillwasteresourcesonproducts
consumersdonotwantorneed

why is implementing the market concept

difficult?

Determiningcustomersneedsisdifficultbecausenoonefully
understandswhatmotivatespeopletobuythethingstheydo.
Successfully implementing the marketing concept requires that
businesses view customer value as the ultimate measure of
performance,andimprovingvalueasthemeasureoftherateof
success.

how is the level of success measured for a

company?
bythecustomers'perceptionofvalue

whatarecustomercontactemployees?

Employeesthatcomeincontactwithcustomersmustknowwhat
customerswant.
these employees are not selling goods and services, but ideas,
benefitsandexperiences
Ifacustomer perceives that heorshehasreceivedavaluable
goodorservice,thenthecompanyhasbeensuccessful

whatistheevolutionofthemarketingconcept?

Productionorientation
productionorientationfocusedonmanufacturingefficiency
Salesorientation
littlefocusonprovidingtheproductscustomersmostwanted
Marketorientation
newtechnologiesarehelpingtoimprovecommunicationandare
learningwatcustomerswant

marketingstrategy

Aplanofactionfordeveloping,pricing,
distributingandpromotingproductsmeeting
theneedsofspecificcustomers

OREO
Marketsegmentationisgeographic
Variationsinthecookierecipe
Packagingmayvary
Some countries pair the brand name with different company
names

market

Agroupofpeoplewhohaveaneed,purchasing
powerandthedesireandauthoritytospendmoney
ongoods,servicesandideas

targetmarket

Amorespecificgroupofconsumersonwhoseneedsandwantsa
companyfocusesitsmarketingefforts
Marketingmanagerscandefineatargetmarketasasmallersubset
ofthetotalmarket,orasthewholemarket.

marketsegmentation

Astrategytodividethetotalmarketintogroups
ofpeoplewithrelativelysimilarproductneeds
For most products, marketers will have to segment markets in
ordertobesttargetcustomers.
Marketsegmentationisastrategytodividethetotalmarketinto
groupsofpeoplewithrelativelysimilarproductneeds.

marketsegment

Acollectionofindividuals,groups,ororganizationssharingone
ormorecharacteristics,thushavingrelativelysimilarneedsand
desiresforproducts
Women are the largest market segment (51% of the U.S.
population). The growing Hispanic population is an important
marketsegmenttomanymarketers.Minoritymarketsegmentsin
general are growing in the U.S. and are therefore increasingly
importanttomarketers.

segmentationapproaches

concentrationapproach
multisegmentapproach
once a market has been segmented, a firm must decide which
approachitwilltaketomarkettowardsthosemarketsegments

concentrationapproachsegmentationapproach
type
Amarketsegmentationstrategywherebyacompanydevelopsone
marketingstrategyapproachforasinglemarketsegment

multisegment
approaches

approachsegmentation

A market segmentation strategy whereby a company aims its

effortsattwoormoresegments,developingamarketingstrategy
foreach

nichemarketing

Anarrowsegmentfocususuallyononesmall
welldefinedgroupwithauniqueandspecific
setofneeds
When the appeal of a product is limited to a very group of
consumers, niche marketing is utilized. Niche marketing is a
narrow segment focus usually on one small welldefined group
withauniqueandspecificsetofneeds

targetmarketstrategies
LOOKATCHART

Threemainsegmentationapproaches

totalmarket approach, concentration approach, multisegment

approach

segmentationapproacheswillonlybesuccessful
whenthefollowingneedsaremet:

1.Consumerneedfortheproductisheterogeneous
2.Segmentsaredivisible
3.Totalmarketisdividedsothatitallowsforcomparison
4.Atleastonesegmentmusthaveenoughprofitpotentialtojustify
aspecialmarketingstrategy
5.The chosen market segment must be reachable with the
marketingstrategy

basesformarketsegmentation

demographic,geographic,psychographic,behavioristic
Marketscanbesegmentedalonganumberofdifferentlines.
Marketersmustdecidewhichsegmentationvariablesworkbest
fortheirproduct.
Thesegmentationapproachchosenwilldifferdependingonthe
product or service, the industry and the goals of the individual
firms.

lookupthediftypesofbasesformarketseg
developingthemarketingmix

lookatchart
Thisslideillustratestherelationshipbetweenthecustomer,the
marketingmix,andthemarketingenvironment.
The marketing mix involves four controllable factors (product,
promotion, price and distribution). This mix is affected by
external,uncontrollable,factorscallthemarketingenvironment.
Thecustomeristhecentralfocusofallmarketingactivities.

promotion

Promotionisapersuasiveformofcommunicationthatattemptsto
expedite a marketing exchange by influencing individuals and
organizationstoacceptgoods,servicesandideas

whatdoespromotioninclude?

includes advertising, personal selling, publicity, and sales

promotion
Theaimistocommunicatewithpotentialcustomerstofacilitate
exchanges.
Websites and other digital media have become increasingly
importantpromotionaltools.

marketingresearch

Systematicandobjectiveprocesstocollectinformation
aboutpotentialcustomers
Beforemarketerscandevelopamarketingmix,theymustcollect
indepthinformationaboutcustomersandtheirneeds
Guidesmarketingdecisions
Mayincludedataonage,income,ethnicity,educationallevel,etc.
ofthetargetmarketandhowfrequentlytheypurchasetheproduct

marketinginformationsystems

Aframeworkforaccessinginformationabout
customersfromsourcesinsideandoutsidethe
organization

whatdomarketinginformationsystemsdo?

canhelpmarketerscollectandorganizedata.
Insidetheorganization:
Continuousflowofinformationonprices,salesandexpenses
Outsidetheorganization:
Dataareavailablethroughpublicandprivatereports,census
statistics,digitalmediasources,etc.

twokindsofdatamarketerscollect
primarydata
secondarydata

primarydata

Primarydataismarketinginformationthatisobserved,recorded,
orcollecteddirectlyfromrespondents

secondarydata

Secondary data is information compiled inside or outside the

organization for some purpose other than changing the current
situation.

onlinemarketingresearch

Newinformationtechnologiesarechanginghowbusinesseslearn
aboutconsumersandmarkettheirproducts
Digitalmediaandonlinesocialnetworks
OpportunitytoreachnewmarketsviatheInternet
Newtechnologiesallowconsumerstoeasilyposttheiropinions
aboutproductsonlineandallowmarketerstogetfeedbackandto
promotenewproducts

virtualtesting

Interactivemultimediaresearchthatcombinessight,soundand
animationtoimprovetestingofproductsandtheirfeatures

psychologicalvariablesforbuyingbeahvior

perception,learning,attitude,personality
Therearefourmainvariablesthatgointoconsumersdecisionsto
buywhattheydo.
Whilebuyingbehaviorisnotfullyunderstand,analyzingitalong
thetermsoutlinedintheslidecanhelpmarketersbetterunderstand
consumersandtheirwants

perception

Processbywhichapersonselects,organizesand
interpretsinformationreceivedfromonessenses
(hearingaradioad,touchingaproduct)

learning

Bringschangesinbehaviorbasedoninformationandexperience

attitude

Positiveornegativefeelingsaboutsomething

personality

Individualsdistinguishingcharactertraits,attitudes,orhabits

socialvariablesforbuyingbehavior

socialroles,referencegroups,socialclasses,culture
Peoples decisions to make certain purchases are undoubtedly
influencedbygroupsliketheirfamily,friendsandpeers,aswellas
thepositionstheyholdwithintheirsocialgroups.
Many different social groups and situations may influence
peoplesdecisionstobuycertainthings

socialroles

set of expectations of individuals based on some position they

occupy

referencegroups

groupswithwhombuyersidentifyandwhosevvaluesorattitudes
theyadopt

socialclasses

rankingofpplintohigherorlowerpositionsofrespect

culture

integrated,acceptedpatternofbehaviorincludingthought,speech,
beliefs,actionsandarticfacts

themarketingenvironment

The marketing environment includes external forces that are

uncontrollable and that directly and indirectly affect marketing
strategy.
These forces can be political, legal and regulatory; social;
competitiveandeconomic;andtechnological.
Environmentalforcescanchangequicklyandmarketersmustbe
prepared.

themarketingenviro
lookuptheseforces

greenmarketing

Green marketing involves creating more ecofriendly and

sustainableproductsandthenmarketingthemtoconsumerswho
care about the environment. Green marketing has become
increasinglymoreimportantandmorepopularinrecentyearsas
consumers become more aware of the consequences of their
productchoices.Thesechangesinthemarketingenvironmenthave
comeaboutbecauseofconsumersincreasedconcernoverclimate
changeandtheenvironment.

themarketingmixandmarketingenviro

pg.358LOOKATIT
political,legal,andregulatoryforces;socialforces;techforces;
marketingenviro;competitiveandeconomicforces

Chapter12DimensionsofMarketingStrategy
themarketingmix

Themarketingmixisthepartoftheoverallmarketingstrategythat
involvesdecisionsusingcontrollablevariables

threekeystodevelopinganeffectivemarketing
strategy

developingtherightmarketingmix,satisfyingthetargetmarket,
andbuildinglongtermcustomerrelationships.
Eventhougheverysuccessfulcompanyhasatleastonedimension
ofvalueatwhichitexcels,itcannotignoretheotherdimensions
successful companieshaveat least onedimension ofvaluethat
surpassesallothers

productdevelopmentprocess

idea generation>product screening>concept testing>bus

analysis>productdevel>tesingmarketing>commercialization
pg368
Beforeintroducinganewproduct,afirmmustgothroughamulti
stepprocess,illustratedinthisslide

whataretheclassificatiosofproducts

usually classified as either consumer products or industrial

produccts

consumerproducts

productsintendedforhousefoldorfamuse

convenienceproducts

Productscanbeclassifieddifferentways.Convenienceproducts
tendtobeverylowinprice,meaningconsumerswillnotdomuch

comparisonbeforepurchase.
Purchasedwithoutdoingresearchintoprice
Widelyavailable
Oftenforimmediateconsumption
vExample:Agallonofmilk

shoppingproducts

Consumer has compared competitors prices and has shopped

around
Price,features,quality,style,serviceandimageallinfluencethe
decisiontobuy
Example:clothing,furniture
Generally,consumersspendmoretimethinkingaboutshopping
products before they buy them. They will do some price
comparisonbeforetheypurchase.Theseitemsarenotaswidely
availableasconvenienceproducts.

specialtyproducts

Requirethegreatestlevelofresearchandshoppingeffort
Notwillingtoacceptsubstitutes
Consumersknowexactlywhattheywantandgooutoftheirway
tofindit,doalotofresearch
Pricenotthestrongestconsideration
Ex:designerclothing,art,antiques
less widely available, only available in stores specializing in
particularitem
comparetodifitems

productline

Group of closely related products that are treated as a unit

becauseofasimilarmarketingstrategy,production,orenduse

productmix

Alltheproductsofferedbythecompany

theproductlifecycle

Aproductsstagehelpsthemarketertodeterminethemarketing
strategyandmarketingmix.Marketingstrategyandmarketingmix
willvaryfordifferentproductsatdifferentpointsinthelifecycle.
pg.372

whatarethedifferentwaystoidentifyproducts

branding
packaging
labelingall used to identify and distinguish products from their
competitors

whatdoesbrandinginvolve

Theprocessofidentifyingproducts
name,term,symbol,design
Brandinginvolvesidentifiablenames,termsorsymbolsthathelp
customersidentifyparticularproducts.

trademark

AbrandregisteredwithU.S.patentandtrademarkoffice
Protectedfromusebyanyotherfirm

whatarethedifferenttypsofbrandcategories
manufacturerbrands
privatedistributorbrands
genericproducts

manufacturerbrands

Initiatedandownedbythemanufacturertoidentifyproducts
fromproductiontopointofpurchase

privatedistributorbrands

Cost less than manufacturer brands; owned and controlled by

wholesalerorretailer

genericproducts

Nobrandnameoftencomeinsimplepackagesandcarrytheir
genericname

tendtocomeinsimplepackagesandcarryagenericname

themostvaluableglobalbrands

google,microosoft,cocacola,ibm,mcd's
Thevalueofabrandrepresentsmorethansimplyannualsales,
butalsohowrecognizablethebrandisandintangiblefactorslike
consumergoodwilltowardthebrand.

packaging

Externalcontainerthatholds&describestheproduct
several functions of packaging= protection, economy,
convenience,promotion
It can influence consumers attitudes about the product and
decisiontobuyit.Mostconsumersarewillingtopaymoremoney
forproductswithcertainpackagingattributessuchasreusability,
keepingproductfreshlonger,etc.

labeling

Thepresentationofimportantinformationon thepackage(often
bylaw)
Itiscloselyassociatedwithpackaging.Theinformationonlabels
canstronglyimpactsales.Someoftheinformationprovidedon
packagingisoftenmandatedbylaw.
Ex: Ingredients or content, Nutrition facts , Care instructions,
Suggestions or use (such as recipes),manufacturers address,
Website

productquality

Thedegreetowhichagood,service,orideameetsthedemands
andrequirementsofcustomers
Thelevelofqualityistheamountofqualityaproductpossesses.
Consistencyofqualitydependsonaproductmaintainingthesame
level of quality over time. Quality is subjective and therefore
difficulttogaugeitdependsoncustomersperceptions.
canfindonConsumerReports.org

pricingstrategy:4commonpricingobjectives

Customers evaluation of value may be influenced by time

constraints,pricelevels,perceivedqualityandmotivationstouse
available information about prices. For most goods, supply and
demandsetsthepriceasdemandgoesup(andsupplygoesdown),
sodoesprice.Marketersgenerallyhavefourmainobjectiveswhen
settingprices
1.maximizeprofitsandsales
2.boostmarketshare
3.maintainthestatusquo
4.survival

pricingobjectives

specifytheroleofpriceinanorgmarketingmixandstrategy

specificpricingstrategies

newproductpricing,psychologicalpricing,pricediscounting

newproductpricing

price skimming=charging the highest possible price that buyers

willpay
penetration pricing=setting a low price that will help a product
gainmarketsharequickly

psychologicalpricing

Even/oddpricingtakesadvantageofthefactthatpeoplewillbuy
moreofaproduct$9.99thanat$10becauseitseemslikemoreof
abargainattheoddprice.
Symbolic/prestige pricing utilizes peoples perception that high
connotequalitytoconsumers

pricediscounting

sellingproductsatadiscount.Discountsareoftenemployedto
boostsales
quantitydiscounts,seasonaldiscounts,promotionalsdiscounts

premiumpricinginthepetmarket

Often,petsaretreatedasfamilymembersandownersspareno
expense.Tosatisfypeoplesdesirestopampertheirpets,premium
petbrandsofferallnatural,highendpetfoodandotherproducts
to the roughly 17 million pet households in the U.S. Complete
NaturalNutritionisoneofthesepremiumpetfoodbrands

distributionstrategies

marketingchannel,retailers,wholesalers
Distributionensuresthatproductsareavailablewhereandwhen
theyareneededandwanted

marketingchannel

Agroupoforganizationsthatmovesproductsfrom
theirproducertoconsumers

retailers

Buyproductsfrommanufacturersandsellthemtocustomersfor
usesotherthanresale
Manynowcompeteonline

wholesalers

Intermediariesthatbuyfromproducersorotherwholesalersand
selltoretailers
Alsocalledmiddlemen

physicaldistributionandtypesofthem

all the activities necessary to move products from producers to

customers
inventory control, transportation, warehousing and materials
handling

transportation

Theshipmentofproductstobuyers
Railroads,trucks,airandpipelines
Factorstoconsiderare:cost,capabilitytohandletheproduct,

reliabilityandavailability

warehousing

Design and operation of facilities to receive, store and ship

products

materialshandling

Physicalhandlingandmovementofproductsinwarehousesand
transportation
Canincreaseefficiencyandreducecosts

moreondistributionstrategy

The distribution strategy is important for marketers to get right

because,onceimplemented,itisquiteinflexible
Theleastflexibleelementofmarketingmix
Commitsresourcesandestablishescontractualrelationships
Difficulttochange
Expansion into new markets may require new distribution
strategy

promotionstrategy

Promotionisusedtosellproductsandtoinfluenceopinionsand
attitudestowardanorganization,person,orcause.
Goal is to communicate with individuals, groups and
organizations
Encouragesmarketingexchanges
Used to influence opinions and attitudes toward organizations,
people,orcauses

thepromotionmixtypes

Theapproacheslistedinthisslidearecollectivelyknownasthe
promotionmixbecauseasuccessfulpromotionstrategywillcome
outofchoosingandblendingtheseelementsappropriatelyforthe
target market.advertising, personal selling, publicity, sales
promotion
integratedmarketingcommunications:coordinatingthepromotion

mixelementsandsynchronizingpromotionasaunifiedeffort

advertising

Apaidnonpersonalcommunicationcommunicated
throughmassmedia
Advertising campaign involves designing a series of
advertisementsandpositioningthemtoreachatargetaudience
Onlineadvertisingisincreasing
Onlineadvertisingisontherisebecauseithelpsmarketersreach
newtargetmarketsandisoftenmoreaffordablethantraditional
advertisingmedia.

personalselling

Directtwowaycommunicationwith
buyers/potentialbuyers
Itisthemostflexibleofthepromotionalmethods.Therearethree
categoriesofsalespeople:ordertakers,creativesalespersons,and
supportsalespersons

publicity

A nonpaid, nonpersonal communication through mass media

channels
Canbeextremelyimportantforacompany
Buzz marketing: marketers attempt to create a trend through
publicity
.Itisusuallyinformativeordescriptive,suchasanewsstory.
importantwayforcompaniestoimprovesalesandmarketshare
throughenhancingitspublicprofile.Afirmdoesnotpayforthe
costofpublicityanddoesnotmakeupthemessage

promotionstrategy
pg.393
pushstrategy
pullstrategy

psuchstrategy

attemptstomotivateintermediariestopushtheprductdownthe
line
producer>wholesalers>retailers>consumers

pullstrategy

uses promotion to create consumer demeand for a product so

consumers put pressure on distribution channels to make the
productavailable

objectivesofpromotion

Promotionisonlyoneelementofthemarketingstrategy
Mustbetiedtogoalsoffirm
Stimulatedemand,Stabilizesales,Inform,Remind,Reinforce
customers
promotionalpositioning

promotionalpositioning

Tocreateandmaintainanimageofaproductinbuyersminds
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Ch. 13Digital Marketing and Social

Networking
whatisdigitalmarketing?
Ebusiness
digitalmedia
digitalmarketing=usingdigitalmediatodevelopcommunications
andexchangeswithcustormers

Digital marketing involves new digital technologies that are

changing the way marketers work and communicate, and how
customers gather information and make decisions. New digital
technologiesareevenchangingwhatandhowcustomerspurchase
andconsumeproducts

ebusiness

Carryingoutthegoalsofbusinessthroughuse
oftheInternet

digitalmedia

Electronicmediathatfunctionusingdigitalcodes

digitalmarketinghas5keycharacteristics...

addressability,interactivity,accessibility,connectivity,control

addressability

Theabilityforabusinesstoidentify
consumersbeforetheymakeapurchase

interactivity

1.Allowscustomerstoexpresstheirneedsandwants
directlytothefirminresponsetoitscommunications

accessibility

1.Allowsconsumerstofindinformationaboutcompetingproducts,
prices,andreviewsandtobecomemoreinformedaboutafirmand
therelativevalueofitsproducts

connectivity

Keepscustomersandbusinessesconnectedwitheachother

control

1.Consumersabilitytoregulatetheinformationtheyreceivevia
theInternet

usingdigitalmediainbusiness

Digitalmediahavecreatednewwaysofdoing
businessandshopping

Fastcommunication
Moreinteractive
Comparisonshoppingeasier
Easiertoconductmarketingresearchandadvertise

usingdigitalmediainbusinessdownfalls

Digitalmediahaveloweredthecostof
communicationandtransactions
Digitalmediaaremoresimilartotraditionalmedia
thantheyaredifferent
Growing problem with controlling employee access to digital
media
Wastingtimeatworkonpersonalcommunications

productconsiderations

Like traditional marketers, digital marketers must anticipate

consumerneedsandpreferences,tailortheirproductsandservices
tomeettheseneeds
Digitalmediaconnectivitycreatesopportunities
toaddservicesandbenefitstoproducts
Someproductsonlyavailabledigitally
Internetcanmakeiteasiertolearnaboutandanticipateconsumer
needs
Competitionmakesqualityandserviceofferingsmoreimportant
thanever

distributionconsiderations

TheInternetisanewdistributionchannel
Processing orders electronically can reduce inefficiencies, cost
andredundancies
Canalsoincreasespeed
Shippingtimesandcostsareimportanttocustomers

promotionconsiderations

TheInternetisanewdistributionchannel
Processing orders electronically can reduce inefficiencies, cost

andredundancies
Canalsoincreasespeed,Shippingtimesandcostsareimportantto
customers
more people spend their days connected to their computers,
cellular phones and smart phones. This has changed how
consumers access information. Apps even exist that allow
marketerstosendconsumerspromotionsanddiscounts

priceconsiderations

Themostflexibleelementofthemarketingmix
Digitalmediacanenhanceaproductsvaluebyprovidingservice,
information,andconvenience
Discountsandsalescanbequicklycommunicated
Dealswebsitesallowconsumerstocomparepricesofproducts
Whenpricechangesdogointoeffect,digitalmediacanquickly
communicatesalesandpromotions.

onlinesocialnetworks

Awebbasedmeetingplaceforfriends,
family,coworkersandpeersthatletsusers
createaprofileandconnectwithothersfor
avarietyofpurposes
Buildrelationshipswithcustomers
Provideproductinformation
Learnaboutcustomerneeds
Contactnewtargetmarkets
utilize Facebook, Twitter and other services as Online social
networkingsitesallowmarketerstoreachtheoftenelusiveteens
andyoungadultsmarkets

types of consumergenerated marketing and

digitalmedia

Twomainfactorshavesparkedtheincreaseinconsumergenerated
information.
1.Theincreasedtendencyforconsumerstopublishtheirthoughts,

opinionsandreviewsofproductsviablogsandotherdigitalmedia
2.Consumerstendtotrustotherconsumersovercorporations

types of consumergenerated marketing and

digitalmediacont.

Digitalmediaaremoreconsumerdriventhantraditionalmediaand
give
consumersmorecontrol.Companiesmustbeawareofthisbcbad
customer service experiences, poor product quality, or
disappointedconsumerscanresultinbadreviewsonlineatproduct
rating sites, blogs, or sites like amazon.com. This can result in
decreasedsalesandnegativelyimpactacompanysreputation

videosharing

LetsusersuploadvideostotheInternet
Viral Marketing: Using video sharing and online social
networkingsitestospreadanadvertisementormessageabouta
product
Companiesincreasinglyuseconsumergeneratedcontentforads
ratherthanprofessionaladagencies
canbeusefultomarketersasameansofprovidinginformationon
productsorservices,

viralmarketing

ViralMarketing:Usingvideosharingandonlinesocial
networkingsitestospreadanadvertisementormessageabouta
product
Viralmarketingisahitormissprocess.Manyadvertisementsand
campaignsthatcompanieswouldliketomakeviralmarketinghits
are unsuccessful, while many videos go viral that were not
intendedtobepopular.unpredictablecust

socialnetworks

2/3ofconsumershavevisitedonlinesocial
networkingsites

Therearemanydifferentsitesandthenumberisgrowing
MySpace
Facebook
LinkedIn
Twitter

Facebook

Thelargestsocialnetworkingsiteintheworld
Appealstoabroaddemographic
Fastestgrowingdemographiciswomenover55
Encouragesconsumerinteractionwithcompaniesandproducts
Goodresourceformarketers
Marketresearch
Lowcostmeansofadvertising
Reachnewmarkets

LinkedIn

Asocialnetworkforprofessionals
Aprofileresemblesarsum
Facilitatesprofessionalnetworking,jobsearchesandrecruiting
Companiesusethesitetofamiliarizepeoplewiththeirbusiness

mobilemarketing

Consumersincreasinglydotheirbusinessand
shoppingfrommobiledevicesandsmartphones
Marketerscanusedigitalmediatotheir
advantage
Requiresadaptingtonewtechnologies
andconsumptionpatterns

whatkindofdigitaltechuserareyou?

Digitaltechnologyuserscanbebrokendownintosixmaingroups,
dividedbytheironlinehabits,asoutlinedinthisslide.Thegroups
arecreators,critics,collectors,joiners,spectators,andinactives

creator

Createtheirownmediaoutlets(e.g.blogs,
podcasts,videos

critics

Peoplewhocommentonblogsorpostratings
andreviews

collectors

Collectors: Collect and organize content generated by creators

andcritics

joiners

Includesanyonewhobecomesauserofsocialnetworkingsitesor
otheronlinecommunitiestoconnectandnetwork

spectators

:Readonlineinformationbuttonotjoincommunitiesorpost
anywhere

inactives

Donotparticipateinonlinedigitalmedia;numbersaredwindling

legalissuesininternetmarketing:privacy

ShoppingontheInternetallowscompanies
tobettertrackconsumerstracking
Lawsandregulationscannotkeepupwiththerapidlychanging
Internet
FederalTradeCommissionconsidering creatinglegislation that
limitsinformationcompaniescangatheronline
The Better Business Bureau and other organizations can help
organizationsdevelopprivacypolicies

legalissuesininternetmarketing:identitytheft

Occurswhencriminalsobtainpersonalinformation
thatallowsthemtoimpersonatesomeoneelseinordertoaccess
financialaccountsandmakepurchases
Security breaches are serious threat to organizations and

individuals
Phishing is using a familiar website to deceive people into
divulgingprivateinformation

legalissuesininternetmarketing:onlinefraud

Includesanyattempttoconductfraudulent
activitiesonline
Cybercriminalsareincreasinglyusingonline
networkingsitesandotherdigitalmediatocommitfraud
Theysometimesusesocialnetworkingsitestoposeascharities
andcollectdonations
Alwaysbecarefulwhatinformationyougiveoutwhenonline;
andusedtrustedsiteswheneverpossible

legal issues in internet marketing: intellectual

property

Intellectualpropertycanincludesongs,movies,
books,electronics,software,etc.
Itisgenerallyprotectedbypatentsandcopyrights,butthesecan
bedifficulttoenforceglobally
Piracyandillegalsharingcostsglobalindustriesbillionsannually
90%ofillegalsoftwarecopyingisdonebybusinesses
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