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tag:blogger.com,1999:blog-44073501385342266722011-11-28T01:19:55.433+01:00economicsblogPepijn van Eckhttp://www.blogger.com/profile/17014565271350416618noreply@blogger.comBlogger541100tag:blogger.com,1999:blog-4407350138534226672.post-22897761356254134292011-10-30T02:26:00.000+02:002011-10-30T02:26:00.899+01:00Marketing summary 2.0<div class="MsoNormal" style="text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 12: Creating and managing brands and brand equity<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Perhaps the most distinctive skill of marketers is their ability to create, maintain, enhance and protect brands through their use of all the marketing mix variables. Building a brand is a very expensive and long-term development for companies and must be managed with great expertise.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A name that is given to a particular product or service or range of products or services. It distinguishes a particular product or service from its competitors. A brand is the embodiment of customer goodwill accumulated during the lifetime of a service or product. A brand is a name, symbol, logo, design or image, or any combination of these, which is designed to identify the product or service. A successful brand is an identified product, service, person or place, augmented in such a way that the buyer or user perceives relevant unique, sustained added value that matches their needs most closely. A brand is a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. The differences between a product and a brand can be rational and tangible or symbolic, emotional and intangible.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Branding: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A means to distinguish the products or services of one company from those of another.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand values: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A set of abstract associations (attributes and benefits) that characterize the five to ten most important aspects or dimensions of a brand.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Two views on brands are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand identity</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: The way a company aims to identify or position itself or its product or service;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand image</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: The visual or verbal expressions of a brand which leads to the psychological or emotional associations that the brand aspires to maintain in the minds of the consumer. Brand image is the way the consumer actually perceives this aim.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers need to compare brand identity and brand image.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand promise: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The marketer’s vision of what the brand must be and do for customers.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand knowledge: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">All the different things (thoughts, feelings, images, experiences, beliefs) that become linked to the brand in the minds of consumers and is the foundation of brand equity. <o:p></o:p></span></div><div class="MsoListParagraph" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Transfer of secondary knowledge: Consumers have secondary associations to other entities (parent company, events, country of origin) to which the brand is linked, associations may be transferred to the brand. Some sources to leverage secondary brand knowledge are licensing; celebrity endorsement; sport, cultural or other events; third party sources.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Emotional branding: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Engaging the customer on the level of senses and emotions; forging a deep, lasting, intimate emotional connection to the brand that transcends material satisfaction; it involves creating a holistic experience that delivers an emotional fulfillment so that the customer develops a special bond with and unique trust in the brand. Emotions play a powerful role in the customer’s selection, satisfaction and loyalty towards brands.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are two perspectives to the role of branding:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer perspective: </span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands perform many valuable roles for consumers;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands signal a certain level of quality;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands assure expected levels of satisfaction;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands facilitate purchase;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands reduce the perceived risk in the purchase situation;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands identify the source of the product;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Channel members’ perspective: </span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands perform many valuable roles for companies:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A brand offers legal protection for unique features or aspects of the product or service;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands create greater customer loyalty;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands are hard to copy;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Branding can be a powerful means to secure a competitive advantage;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands attract higher-quality employees;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands elicit stronger support from channel and supply chain partners;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands create growth opportunities through brand extensions and licensing;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands help companies segment their markets;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brands signal a certain level of product quality.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Strategic brand management: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">To develop a brand vision (clear and constant), to operationalize brand visions through long term and short term marketing endeavors, and to provide a clear direction to all employees about brand value. There are four processes in strategic brand management:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l4 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">1.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Identify and establish brand positioning and values;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l4 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">2.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Plan and implement brand marketing programs;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l4 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">3.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Measure and interpret brand performance;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l4 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">4.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Grow and sustain brand equity.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are three main challenges to creating and managing brand identities:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The initial choices for the brand elements or identities making up the brand, including brand names, logos, symbols etc. <b>Brand elements</b> are those trademarkable devices that identify and differentiate the brand.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">All accompanying marketing activities must support the brand;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Other associations indirectly transferred to the brand by linking it to some other entity (a person, place or thing).<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Many brands create brand equity by linking the brand to other information in memory, which conveys meaning to consumers.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Co-branding/ Dual branding/ Brand bundling: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Two or more well-known brands are combined into a joint market offering or marketed together in some fashion. Forms of co-branding are <i>same-company co-branding, joint-venture co-branding, multiple-sponsor co-branding, retail co-branding.<o:p></o:p></i></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The main advantage of co-branding is that a market offering/product service may be convincingly positioned by virtue of the multiple brands. The potential disadvantages of co-branding are the risks and lack of control in becoming aligned with another brand in the minds of consumers. For co-branding to succeed, the two brands must separately have brand equity.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ingredient branding</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> is a special case of co-branding. It creates brand equity for materials, components or parts that are necessarily contained within other branded products.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are six main criteria for choosing brand names. In general brand names should be short and simple, easy to spell and pronounce, pronounceable in only one way and one language and easy to recognize and remember. The main criteria are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">‘Brand building’ criteria:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Memorable; meaningful; and likeable.<o:p></o:p></span></i></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">‘Defensive’ criteria:<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Transferable; adaptable; and protectable.<o:p></o:p></span></i></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The first branding strategy decision is whether to develop a brand name for a product or service. A brand element should provide a positive contribution to brand equity. Four general strategies are often used:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Individual names: This creates a house of brands;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Blanket corporate, family or house names: This creates a branded house;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Separate family or house names for all products and services: This lies in between a house of brands and a branded house;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Corporate name combined with individual product names:  This lies in between a house of brands and a branded house.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">When a company introduces a new product or service marketers have three main choices:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">They can develop new brand elements for the new product or service;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">They can apply some of their existing brand elements;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">They can use a combination of new and existing brand elements.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Family brand: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If the parent brand is already associated with multiple products through brand extensions. Brand extensions fall into two categories:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Line extension:</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> The parent brand covers a new product or service within a product or service category it currently serves;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Category extension:</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> The parent brand is used to enter a different product or service category from the one it currently serves.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advantages of brand extensions are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Extensions can avoid the difficulty and expense of coming up with a new name; <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand extensions can ensure positive expectations as extensions can reduce risk;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Business-to-business (B2B) companies can use brand extensions as a powerful way to enter consumer markets. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Disadvantages of brand extensions are: <o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Line-extension trap: line extensions may cause the brand name to be less strongly identified with any one product; <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand dilution</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: consumer no longer associate a brand with a specific or highly similar products or services and start thinking less of the brand;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Inappropriate extensions; <o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Extensions might lead customers to switch to a competing brand instead of the line extension had not been introduced.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand line: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">All products or service, original as well as line and category extensions, sold under a particular brand.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand mix: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The set of all available brand lines from a company.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Branded variants: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Specific brand lines supplied exclusively to specific retailers or distribution channels.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Licensed product or service: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A brand name which has been licensed to others.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand portfolio: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The set of all brands and brand lines a particular company offers for sale in a particular category or market segment. Marketers often need multiple brands in order to pursue multiple segments. The basic principle in designing a brand portfolio is to maximize market coverage, so that no potential customers are being ignored, but to minimize brand overlap, so company brands are not competing for customer approval. Brands can also play a number of specific roles as part of a portfolio:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Flankers</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: These are positioned with respect to competitors’ brands so that more important (and more profitable) flagship brands can retain their desired positioning;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Cash cows</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Some brands may be kept around despite dwindling sales because they still manage to hold on to enough customers and maintain their profitability with virtually no marketing support;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Low-end entry level</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: The role of a relatively low-priced brand in the portfolio may often be to attract customers to the brand franchise;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">High-end prestige</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: The role of a relatively high-priced brand is often to add prestige and credibility to the entire portfolio.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand in terms of: what products and service the brand represents, what core benefits it supplies and what needs it satisfied; how the brand makes service or products superior to others and which strong, favorable and unique brand associations should exist in the minds of consumers.  <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-indent: 35.4pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Changes in consumer tastes and preferences, the emergence of new competitors or new technology, or any new development in the marketing environment can affect the fortunes of a brand. Often the first thing to do in revitalizing a brand is to understand what the sources of brand equity are to begin with.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand equity </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is the added value given to products and services. Brand equity and value is reflected in how consumers think, feel and act with respect to the brand, as well as the prices, market share and profitability that the brand commands for the company. Brands play a major role in enhancing the financial value of companies.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing brand equity consists of:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reinforcing brands;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Revitalizing brands;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Adjustment to brand portfolio.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A <b>brand audit </b>is a consumer-focused procedure to assess the health of the brand, uncover its sources of brand equity and suggest ways to improve and leverage its equity.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand value chain </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is a structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create brand value. See the following figure:<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand tracking </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">studies collect quantitative data from consumer on a routine basis over time to provide marketers with consistent, baseline information about how their brands and marketing programs are performing on key dimensions. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing managers need a model to link brand equity and brand performance. Four major stages in this model are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What companies/ marketing managers do;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What customers think and feel;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What customers do;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">How financial markets react.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer-based brand equity </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">(CBBE) is the differential effect that brand knowledge has on consumer response to the marketing of that brand. Customer-based approaches view the brand from the perspective of the consumer, either individual or an organization. The premise of customer-based brand equity models is that the power of a brand lies in what customers have seen, read, heard, learned, thought and felt about the brand over time. Customer-level brand equity can be characterized in terms of awareness, association, attitudes and activity. A brand has a positive CBBE when consumers react more favorably to a product or service and the way it is marketed when the brand is identified, than when it is not identified. A brand has a negative CBBE if consumers react less favorably to marketing activity for the brand under the same circumstances. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Another model to measure brand equity is the <i>brand asset valuator (BAV)</i>: This provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. There are five key pillars of brand equity, according to BAV:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Energized brand strength:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Differentiation</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Measures the degree to which a brand is seen as different from others;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Energy</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Measures the brand’s sense of momentum;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Relevance</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Measures the breadth of a brand’s appeal.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand stature:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Esteem: </span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Measures how well the brand is regarded and respected;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Knowledge: </span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Measures how familiar and intimate consumers are with the brand.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing a service brand means focusing on four aspects, these are: service, staff behavior, brand positioning, environment.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A major aspect of both products and services has been the move to co-creation, customization or personalization in the branding field.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand contact: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Any information-bearing experience, whether positive or negative, which a customer has with the brand.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 14: Designing, developing and managing market offerings</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The product life cycle usually has four stages, these stages are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Introduction:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Growth;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maturity;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Decline.<u><o:p></o:p></u></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;"><tbody><tr> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 111.75pt;" valign="top" width="149"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stage in the PLC<o:p></o:p></span></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 12.0cm;" valign="top" width="454"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Introduction<o:p></o:p></span></b></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 111.75pt;" valign="top" width="149"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Costs<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customers<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitors<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 12.0cm;" valign="top" width="454"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Low sales<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">High cost per consumer<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Negative<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Innovators<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Few<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 111.75pt;" valign="top" width="149"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing objectives<o:p></o:p></span></u></i></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 12.0cm;" valign="top" width="454"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Create product awareness and trial<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 111.75pt;" valign="top" width="149"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Strategies:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advertising<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales promotion<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 12.0cm;" valign="top" width="454"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Offer a basic product<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Charge cost-plus<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Build selective distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Build product awareness among early adopters and dealers<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Use heavy sales promotion to entice trial<o:p></o:p></span></div></td> </tr></tbody></table><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies that plan to introduce a new market offering must decide when to enter the market. To be first can be rewarding, but risky and expensive. To come in later makes sense if the firm can bring superior technology, quality or brand strength. Speeding up innovation time is essential in an age of shortening product life cycles. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What are the sources of pioneer’s advantage? <o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Early users will recall the pioneer’s brand name if the product satisfies them;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The pioneer’s brand also establishes the attributes the product class should possess;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The pioneer’s brand normally aims at the middle of the market and so captures more users;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customer inertia and producer advantages;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Pioneers can benefit from effective marketing communications and enjoy higher rates of consumer repeat purchases.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The first mover advantage states that the first company entering a certain market will gain massive market share and thanks to the competitive advantage developed, it will also be able to defend its leadership position from new entrants. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Golder and Tellis raise further doubts about the pioneer advantage. They distinguish between an inventor, first to develop patents in a new product category; a product pioneer, first to develop a working model; and a market pioneer, first to sell in the new product category. They conclude that although pioneers may still have an advantage, a larger number of market pioneers fail than has been reported, and a larger number of early market leaders (though not pioneers) succeed.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span class="Apple-style-span" style="font-size: 14px; line-height: 16px;"><br /></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;"><tbody><tr> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stage in the PLC<o:p></o:p></span></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Growth<o:p></o:p></span></b></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Costs<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customers<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitors<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Rapidly rising sales<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Average cost per customer<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Rising profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Early adopters<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Growing number<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing objectives:</span></u></i><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maximize market share<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Strategies:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advertising<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales promotion<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Offer product extensions, service, warranty<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price to penetrate market<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Build intensive distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Build awareness and interest in the mass market<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reduce to take advantage of heavy consumer demand<o:p></o:p></span></div></td> </tr></tbody></table><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">During the growth stage, the firm uses several strategies to sustain rapid market growth:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It improves product quality and adds new product features and improved styling;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It adds new models, accessory items and personalizing options;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It enters new market segments;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It increases its distribution coverage and enters new distribution channels;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It shifts from product-awareness advertising to product-preference advertising;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It lowers prices to attract the next layer of price-sensitive buyers.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A firm in the growth stage faces a trade-off between high market share and high current profit.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;"><tbody><tr> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stage in the PLC<o:p></o:p></span></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maturity<o:p></o:p></span></b></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Costs<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customers<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitors<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Peak sales<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Low cost per customer<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">High profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Middle majority<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stable number beginning to decline<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing objectives:</span></u></i><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maximize profit while defending market share<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Strategies:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advertising<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales promotion<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Diversify brands and items models<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price to match or best competitors’<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Build more intensive distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stress brand differences and benefits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Increase to encourage brand switching<o:p></o:p></span></div></td> </tr></tbody></table><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Dominating the industry are a few giant firms that serve the whole market and make their profits mainly through high volume and lower costs. Surrounding these dominant firms is a multitude of market nichers, including market specialists, product specialists and customizing firms.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Three potentially useful ways to change the course for a brand are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Market modification: Try to increase sales volume through: expanding the number of brand users by converting non-users, entering new market segments, or attracting competitors’ customers; or by increasing the usage rates among users: have consumers use the product n more occasions; have consumers use more of the product on each occasion; have consumers use the product in new ways.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product modification: Managers also try to stimulate sales by modifying the product characteristics through:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Quality improvement: This aims at increasing functional performance;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Feature improvement: This aims at adding new features such as size, weight, materials, additives, and accessories that expand the product use performance, versatility, safety or convenience;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Style improvement: This aims at increasing aesthetic appeal.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing program modification: Marketing managers might also try to stimulate sales by modifying other marketing program elements, by questioning:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advertising;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales promotion;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Personal selling;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Services.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;"><tbody><tr> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stage in the PLC<o:p></o:p></span></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Decline<o:p></o:p></span></b></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Costs<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customers<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitors<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Declining sales<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Low cost per customer<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Declining profits<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Laggards<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Declining number<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing objectives:</span></u></i><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reduce the expenditure and milk the brand<o:p></o:p></span></div></td> </tr><tr> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><i><u><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Strategies:<o:p></o:p></span></u></i></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advertising<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales promotion<o:p></o:p></span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 230.3pt;" valign="top" width="307"> <div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Phase out weak products<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Cut price<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Go selective: phase out unprofitable outlets<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reduce the level needed to retain hard-core loyals<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reduce to minimal level<o:p></o:p></span></div></td> </tr></tbody></table><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Unless strong reasons for retention exist, carrying a weak product is very costly to the firm, and not just by the amount of uncovered overhead and profit. In handling ageing products, a company faces a number of tasks and decisions. The appropriate strategy also depends on the industry’s relative attractiveness and the company’s competitive strength in that industry. Harvesting calls for gradually reducing a product or business’s costs while trying to maintain sales.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">We all know the bell-shaped product life cycle (PLC), however there are alternative patterns:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Growth-slump-maturity pattern: Sales grow rapidly when the item is first introduced and then fall to a residual level that is sustained by late adopters buying for the first time and early adopters replacing t;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Cycle-recycle pattern: First the product is promoted aggressively which produces the first cycle. Later, sales start declining and the company gives the product another promotion push, which produces a second cycle (usually of smaller magnitude and duration);<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Scalloped PLC: Sales pass through a succession of life cycles based on the discovery of new product/ market offering characteristics, uses or users.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Three special categories of product life cycles can also be distinguished:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Style: A basic and distinctive mode of expression. Styles appear in homes, clothing and art;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Fashion: A currently accepted or popular style in a given field. Fashions pass through four stages: distinctiveness, emulation, mass fashion and decline.<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Fads: Fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Critiques</span></i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> of the product life cycles are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The life cycle patterns are too variable in shape and duration to be generalized;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers can seldom tell what stage their product is in;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The PLC is the self-fulfilling result of marketing strategies, and that skilful marketing can in fact lead to continued growth.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Firms need to visualize a market’s evolutionary path as it is affected by new needs, competitors, technology, channels and other development. <i><u>Markets evolve</u></i> through four stages:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Emergence: Before a market materializes, it exist as a latent market. Once a pioneer firm has launched the product, the emergence stage begins;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Diffused-preference market: A type of market, in which buyer preferences scatter evenly.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Growth: If the new product sells well, new firms will enter the market, ushering in a market-growth stage;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maturity: The competitors cover and serve all the major segments and the market enters into the maturity stage. As market growth slows down, the market splits into finer segments and high market fragmentation occurs. Market fragmentation is often followed by a market consolidation, caused by the emergence of a new customer-perceived value attribute that has strong appeal. Mature markets swing between fragmentation brought about by competition, and consolidation brought about by innovation.<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Decline: Eventually, demand for the current products will begin to decrease, and the market will enter the decline stage.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Anything that can be offered to a market to satisfy a want or need and consists of a set of attributes, including physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In planning its customer offering, the marketer needs to address five Customer Perceived Value (CPV) benefit levels. Each level adds more customer-perceived value that results in the appropriate market offering:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The fundamental level is the <b>core benefit: </b>The benefit the customer is really buying;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">At the second level, the marketer must turn the core benefit into a <b>basic product;</b><o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">At the third level, the marketer prepares an <b>expected product</b>, a set of attributes and conditions buyers normally expect when they purchase this product;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">At the fourth level, the marketer prepares an <b>augmented product</b> that exceeds customer expectations;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">At the fifth level stands the <b>potential product</b>, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumption system: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The way the end customer obtains and uses CPV offerings.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The product hierarchy knows six levels: <i>need family, product family, product class, product line, product type and item.<o:p></o:p></i></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product system: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A group of diverse but related items that function in a compatible manner.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product mix/ Product assortment: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The complete set of all products and items that a company brings to the market place. A company’s product mix has a certain width: how many different product lines the company carries; length: the total number of items in the mix; depth: how many variants there are in the market offering/product mix portfolio; and consistency: how closely related the various lines are in end use, production requirements, distribution channels, or in some other way.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A company can classify its products into four types that yield different gross margins, depending on sales volume and promotion:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Core product offerings;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Staples;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Specialities;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Convenience items.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product map: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This shows which competitors’ items are competing against company X’s items.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Company objectives influence marketing offering/ product line length. Product lines tend to lengthen over time. A company lengthens its product line in two ways:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Line stretching occurs when a company lengthens its line beyond its current range. The company can stretch its line down market, up market, or both ways;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Line filling: A firm can also lengthen its product line by adding more items within the present range. Motives for line filling are reaching for incremental profits, trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, trying to be the leading full-line company, and trying to plug holes to keep out competitors.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are several types of market offerings:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Durability and tangibility: Marketers classify products or CPV offerings into three categories on the basis of durability and tangibility: non-durable goods; durable goods; services;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer goods classification: This can be classified on the basis of shopping habits.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumers usually purchase convenience goods frequently, immediately, and with a minimum of effort, several convenience goods are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Staples: Goods consumers purchase on a regular basis;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Impulse goods: Goods purchased without any planning or search effort;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Emergency goods: Goods purchased when a need is urgent.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Shopping goods are goods that consumers characteristically evaluate on such criteria as suitability, quality, price and style.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Homogeneous shopping goods are similar in quality but different enough in price to justify shopping comparisons;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Heterogeneous shopping goods differ by offering high customer-perceived value and a strong brand association.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Specialty products have unique characteristics or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Unsought goods are those the customer does not know about or does not normally think of buying.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Industrial goods classification: These can be classified in terms of their relative cost and how they enter the production process:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Materials and parts are goods that become part of a complete manufacturer’s product offering:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Raw materials: Farm products and natural products;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Manufactured materials and parts: Component materials and component parts.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Capital items are long-lasting goods that facilitate developing or managing the finished CPV offering:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Installations: Building and heavy equipment;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Equipment includes portable factory equipment and tools and office equipment.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Supplies and business services are short-term goods that facilitate developing or managing the finished product. <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Supplies:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maintenance and repair items;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Operating supplies.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Business services:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maintenance and repair services;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Business advisory services.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are several types of differentiation:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product differentiation:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Form: The size, shape or physical structure of an offering;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Features;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customization: This features mass customization: the ability of a company to meet the each customer’s requirements – to prepare on a mass basis individually designed products, services, programs and communications;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Performance quality: This features performance value: the level at which the market offering’s primary characteristics attributes operate<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Conformance quality: Buyers expect products to have a high conformance quality, which is the degree to which all the produced units are identical and meet the promised specifications;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Durability: A measure of the market offering’s expected operating life under natural or stressful conditions, is a key attribute in some markets;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reliability: A measure of the probability that a key benefit or valued attribute will not malfunction or fail within a specified time period;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Repairability: A measure of the ease of putting right a market offering when it malfunctions or fails;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Style: The market offering’s look and feel to the buyer.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Design differentiation: The mix of features that affect how a market offering looks, feels and functions in terms of customer requirements;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Service differentiation:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ordering ease: How easy it is for the customer to place an order with the company;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Delivery: How well the market offering is brought to the customer;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Installation: The work done to make a product operational in its planned location;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customer training: Training the customer’s employees to use the vendor’s equipment properly and efficiently;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customer consulting: Data, information system and advice services that sellers offer buyers;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maintenance and repair: The service program for helping customers keep purchased market offerings in good working order;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Returns:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Controllable returns: Returns that could have been eliminated with proper strategies;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Uncontrollable returns: Returns that could not have been eliminated with proper strategies.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Market offering/ product mix pricing: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The firm searches for a set of prices that maximizes profits on the total mix. Six situations calling for market offering/ product-mix pricing can be categorized:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product-line pricing: Companies normally develop product lines rather than single products, and introduce price steps;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Optional feature pricing: Many companies offer optional products, features and services along with their main product;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Captive product pricing: Some products restore the use of ancillary products, or captive products;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Two part pricing: Firms in service sectors engage in two-part pricing, consisting of a fixed fee plus a variable usage fee;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">By-product pricing: If the by-products have value to a customer group, they should be priced to reflect customer-perceived value;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product-bundling pricing: Pure bundling occurs when a firm offers its product only as a bundle. Mixed bundling occurs when a firm offers goods both individually and in bundles.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Packaging </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is traditionally defined as all the activities of designing and producing the container for a product or market offering. Packages might include up to three levels of material – primary, secondary and shipping packages. Packaging can also be used as a marketing tool because of:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Self-service in supermarkets;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer affluence;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Company and brand image;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Innovation opportunity.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">After the company designs its packaging, it must test it. Engineering tests ensure that the package stands up under normal conditions; visual tests, that the script is legible and the colors harmonious; dealer tests, that dealers find the packages attractive and easy to handle, and consumer tests, that buyers will respond favorably.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The overuse of plastic materials is stimulating passionate debate as they are not easily biodegraded. Cardboard packaging is more ecologically friendly.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The label may be a simple tag attached to the item or an elaborately designed graphic that is part of the package. It might carry only the brand name, or a great deal of information. Labels perform several functions:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The label identifies the product or brand;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The label might also grade the item;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The label might describe the item;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The labels on food items increasingly carry messages about healthy eating;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The label might promote the product through attractive graphics.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Warranties </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">are formal statements of expected product/ market offering performance by the manufacturer. Warranties and guarantees reduce the buyer’s perceived risk.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 15: Introducing new market offerings<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A company can add new products through acquisition or by innovative development. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a license or franchise from another company. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">New product development </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is the development of: original products; product improvements; product modifications; new brands, through the firm’s own R&D efforts.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Continuous innovation to improve customer satisfaction can force competitors to retaliate. New products introductions have accelerated in recent years.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In strong buyers’ markets many products fall into decline – as a result of technological developments, severe competition, changing market and societal factors and customer purchase experiences – making innovation a necessity. Highly innovative firms are able to identify and quickly seize new market opportunities, and strive to create a radical innovation.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">New product development (NPD) can be risky, <u>failure </u>can result for many reasons, analogously success can also result for these reasons:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">No unique or superior product;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Poor marketing strategy;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Quality problems;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitive reactions;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Bad timing.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Some factors that hinder new product development are: shortage of important ideas in certain areas; fragmented markets; cost of development; capital shortages; shorter product life cycles.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies handle the organizational aspect of NPD in several ways, some are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Many assign responsibility for new ideas to <u>product managers</u>;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Some companies have <u>a high-level management committee</u> charged with reviewing and approving proposals; <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Large companies often establish a <u>NPD department</u> headed by an executive who has direct access to top management; <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Venture teams:</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Cross-functional groups charged with developing a specific product or business. Cross-functional teams can collaborate and use concurrent new offering development to push new offerings to market;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Stage-gate system:</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> This system manages the innovation process. The system enables companies to strike a considered balance between entrepreneurial creativity and business acumen.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The new product development decision process looks like this:<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span class="Apple-style-span" style="font-size: 14px; line-height: 16px;"><br /></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Introducing a new product to the marketplace requires a firm to manage three process activities:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">1.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing idea generation and screening;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">2.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing activities as selected ideas develop from concepts to strategy;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">3.<span style="font: 7.0pt "Times New Roman";">       </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing the introduction of new product to the marketplace/ development to commercialization.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The make or buy decision is depended on legislation; profitability, risk and know-how. For now, we assume a make-decision.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing idea generation and screening<o:p></o:p></span></u></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Idea generation<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Invention: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The idea for a new product to develop.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Innovation: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The first practical application of a new mode of thought that can generate a better solution to an existing need. Types of innovation are:<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Many companies use customer-driven engineering to design new market offerings. The traditional company-centric approach to innovation is giving way to a world in which companies co-create products with customers. A company can motivate its employees to submit new ideas to an idea manager whose name and phone number are widely circulated or by means of the traditional suggestion box.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The following list is a sampling of techniques for stimulating creativity in individuals and groups:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Attribute listing: List the attributes of an object;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Forced relationships: List several ideas and consider each in relation to each other one;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Morphological analysis;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reverse assumption analysis;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">New contexts;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Mind mapping.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Idea screening<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In screening ideas the company must avoid two types of error:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Drop-error: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This occurs when the company dismisses a good idea;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Go-error: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This occurs when the company permits a poor idea to move into development and commercialization.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">An <i>absolute product failure </i>loses money; its sales do not cover variable costs. A <i>partial product failure </i>loses money, but its sales cover all its variable costs and some of its fixed costs. A <i>relative product failure </i>yields a profit lower than the company’s target rate of return. The purpose of screening is to drop poor ideas as early as possible.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing activities as selected ideas develop from concepts to strategy<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">An <i>idea </i>is a possible product the company might introduce to the market. A <i>product concept </i>is a elaborated version of the idea expressed in customer terms.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Concept development<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In this stage we need to ask ourselves: who, what, when, and how will the people use the product. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand-positioning map</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: A perceptual map showing the current positions of existing brands as seen by consumers. It can also be useful to overlay consumer preferences on to the map in terms of their current or desired preferences. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Concept testing</span></i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> (iterative process) means presenting the product idea concept, symbolically or physically, to target consumers and getting their reactions. Researchers measure product dimensions by getting customers to respond to the following types of questions: communicability and believability; need level; gap level; perceived value; purchase intention; user targets.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Conjoint analysis </span></i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is a scaling technique method for deriving the use of benefit values that consumers attach to varying levels of a product’s value attributes. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing strategy development<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Following a successful concept test, the firm will develop a preliminary three-part strategy plan for introducing the new product to the market. The first part describes the target market’s size, structure and behavior; the planned positioning; and the sales, market share and profit goals sought in the first few years. The second part outlines the planned price, distribution strategy and marketing budget for the first year. The third part of the marketing strategy plan describes the long-run sales and profit goals and marketing mix strategy over time.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Business analysis<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">After management develops the product concept and marketing strategy, it can evaluate the proposal’s business attractiveness, by estimating total sales, total costs and profits.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies use other financial measures to evaluate the merit of a new product proposal. The simplest is the <i>breakeven analysis</i>, another is the <i>risk analysis</i>(optimistic, pessimistic, most likely).<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing the introduction of new product from development to commercialization.<o:p></o:p></span></u></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product and market development<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The job of translating target customer requirements into a working prototype is helped by a set of methods known as <i>quality function deployment (QFD)</i>. The methodology takes the list of desired <i>customer attributes (CAs) </i>generated by market research and turns them into a list of <i>engineering attributes (EEs) </i>that engineers can use. The R&D department will develop one or more versions of the core offer product concept in the form of , for example, a prototype.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">When the prototypes are ready, they must be tested. This can be done in two ways:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> <b><i>Alpha testing </i></b>is the testing the product within the firm to see how it performs in different applications. <o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Beta testing </span></i></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">with customers. Consumer testing can take several forms, from bringing consumers into a laboratory to giving them samples to use in their homes.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Market testing<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer products tests seek to estimate four variables: <i>trial, first repeat, adoption and purchase frequency</i>. Some major methods of consumer good market testing are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sales-wave research</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Consumer are reoffered the product, at a slightly reduced price;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Simulated test marketing</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Qualified shoppers are questioned about brand familiarity;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Controlled test marketing</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: A panel of stores will carry new products for a fee;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Test markets</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: To create full-scale test markets in which we must address the variables: trial, first repeat, adoption and purchase frequency in questions.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Business goods can also benefit from market testing. The company will ask test customer to express their purchase intention and other reactions after the test. Companies can also introduce the new product at trade shows. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Commercialization and new product launch<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The company faces three choices when timing is considered:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">First entry</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Firm enjoys first mover advantages, but first entry can backfire;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Parallel entry</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Entry coincides with a competitor’s entry;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Late entry</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Delay entry after competitors have entered.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The company must also: decide where to launch a product; adopt a CRM approach; and develop an action plan for introducing the new product. To coordinate the many activities involved in launching a new product, management can use network-planning techniques such as <b>critical path scheduling.</b><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Adoption </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is an individual’s decision to become a regular user of a product. The consumer adoption process is followed by the consumer loyalty process, which is the concern of the established producer. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer adoption process: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The mental process through which an individual passes from first learning about an innovation to final adoption. Adopters of new products move through five stages:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Awareness;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Interest;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Evaluation;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Trial;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Adoption.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Factors influencing the adoption process are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Readiness to try new products and personal influence: the five adopter groups differ in their value orientations and their motives for adopting or resisting the new product:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Innovators: technology enthusiasts, risk takers;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Early adopters: opinion leaders, social acceptance;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Early majority: deliberate pragmatists, deliberate;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Late majority: skeptical conservatives;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Laggards: tradition bound.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Personal influence: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The effect one person has on another’s attitude or purchase probability.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics of the innovation: Five characteristics influence the rate of adoption of an innovation:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Relative advantage: The degree to which the innovation appears superior;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Compatibility: The degree to which the innovation matches the values and experiences of the individual;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Complexity/Simplicity: The degree to which the innovation is difficult to understand or use;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Divisibility/ Triability: The degree to which the innovation can be tried on a limited basis;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Communicability/ Observability: The degree to which the benefits of use are observable or describable to others.<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Organizations’ readiness to adopt innovations.<o:p></o:p></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><span lang="EN-US">                     <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 16: Developing and managing pricing strategies<o:p></o:p></span></b></div><div class="MsoNormal" style="tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price is not just a number on a tag. Traditionally, price has operated as one of the major determinants of buyer choice. The pricing environment has changed with the Internet, both buyers and sellers have more options to compare and buy online. This has made pricing a challenging process for many companies.<o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In small companies, prices are often set by the boss, in large companies, pricing is handled by division and product line managers. In industries where pricing is a key factor companies will often establish a pricing department. Common mistakes with pricing include: not varying price enough for different products, market segments, distribution channels and purchase occasions.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are many ways to find out how much customers value a company’s offerings. Some ways are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Discrete choice analysis: </span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Customers view different products with different features and judge the varying prices researches attach to them;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ask customers directly;</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ask company employees.</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Purchase decisions are based on how consumers perceive prices and what they consider the current actual price to be - not the marketer’s stated price. Understanding how consumers arrive at their perceptions of prices is an important marketing priority. We consider three key topics:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reference prices</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Comparing an observed price to an internal reference price they remember or to an external frame of reference. Possible prices are: fair price, typical price, last price paid, upper-bound price, lower-bound price, competitor prices, expected future price, usual discounted price;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price-quality inferences</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Many consumers use price as an indicator of quality. When alternative information about true quality is available, price becomes a less significant indicator of quality. When this information is not available, price acts as a signal of quality;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price endings: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Many sellers believe prices should end in an odd number. Price encoding is important if there is a mental price break at the higher, rounded price.<b><o:p></o:p></b></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A firm must consider many factors in setting its pricing policy. This policy holds six steps:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting the price objective:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Survival: Company plagued with overcapacity or intense competition;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maximize current profit: Estimate demand and costs, and try to maximize profit;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maximize market share: Try to increase sales volume </span><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-char-type: symbol; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin; mso-symbol-font-family: Wingdings;">à</span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> economies of scale.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Market penetration: Set the lowest price, assuming a price sensitive market.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Maximize market skimming: Start with high prices and slowly drop over time;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product-quality leader: Create ‘affordable luxuries’ with high perceived value;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Other objectives such as partial cost recovery or full cost recovery.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Determining demand:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price sensitivity: Factors leading to price sensitivity are: distinctive product; low awareness of substitutes; hard to compare quality; low-cost products; product cannot be stored, etc. A seller can charge a higher price than competitors and still get the business if it can convince the customer that is offers the <i>lowest cost of ownership (TCO).</i><o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Estimate demand curves through surveys, price experiments, and statistical analysis;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price elasticity of demand: If demand hardly changes, with a small change in price we say the demand is <i>inelastic</i>. If demand changes considerably, demand is <i>elastic</i>.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Estimating costs:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Types of costs and levels of production: Variable costs, total costs, average costs<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Activity-based cost (ABC) accounting: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This tries to identify the real costs associated with serving each customer.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Accumulated production: This leads to a <b>experience curve </b>or <b>learning curve</b>: a decline in the average cost with accumulated production experience;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Target costing: Market research establishes a new product’s desired functions and the price at which the product will sell, given its appeal and competitors’ prices.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Analyzing competitors’ costs, prices and offers: Within the range of possible prices determined by market demand and company costs, the firm must take competitors’ costs, prices and possible price reactions into account.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting a pricing method:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Mark-up pricing: Adding a standard mark-up to the product’s cost;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Target-return pricing: The firm determines the price that would yield its target rate of return on investment (ROI);<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Perceived-value pricing: An increasing number of companies now base their prices on the customer’s perceived value;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Value pricing: Companies win loyal customers by charging a fairly low price for a high-quality offering. <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Everyday low pricing (EDLP)</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> and <b>high-low pricing</b><o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Going-rate pricing: The firm bases its price largely on competitors’ prices, charging the same, more, or less than major competitor’s.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Auction type pricing: Types of auctions are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">English auctions (ascending bids);<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Dutch auctions (descending bids);<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Sealed-bid auctions.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting the final price: Pricing methods narrow the range from which the company must select its final price. In selecting that price, the company must consider additional factors:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Impact of other marketing activities: The final price must take into account the brand’s quality and advertising relative to the competition;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Company pricing policies: The price must be consistent with company pricing policies<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Gain-and-risk-sharing pricing: Buyers may resist accepting a seller’s proposal because of a high perceived level of risk. The seller has the option of offering to absorb part or all the risk if it does not deliver the full promised value;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Impact of price on other parties: Management must also consider the reactions of other parties to the contemplated price.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In geographical pricing, the company decides how to price its product to different customers in different locations and countries. Many buyers want to offer other items in payments: <b>countertrade. </b>There are several forms of countertrade:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Barter: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The buyer and seller directly exchange goods;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Compensation deal:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> The seller receives some cash and the rest in products;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Buyback arrangement:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> The seller sells assets but promises to receive some inventory back;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Offset:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> The seller receives full payment in cash but agrees to spend a substantial amount of the money in that country within a stated time period.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Most companies will adjust their list price and give discounts and allowances for early payment, volume purchases and off-season buying. These discounts are called: cash discount, quantity discount, functional discount, seasonal discount, and allowance.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies can use several pricing techniques to stimulate early purchases, this promotional pricing types are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Loss-leader pricing: Companies drop the price on well-known brands to stimulate sales;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Special-event pricing: Sellers will establish special prices in certain seasons to stimulate sales;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Cash rebates;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Low-interest financing;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Longer payment terms;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Warranties and service contracts;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Psychological discounting: This strategy sets an artificially high price and then offers the product at substantial savings.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price discrimination </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">occurs when a company sells a product or service at two or more prices that do not reflect a proportional difference in costs. In first-degree price discrimination, the seller charges a separate price to each customer depending on the intensity of his or her demand. In second-degree price discrimination, the seller charges less to buyers who buy a larger volume. In third-degree price discrimination, the seller charges different amounts to different classes of buyers, such as: customer-segment pricing; product-form pricing; image pricing; channel pricing; location pricing; time pricing.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Yield pricing</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">: Companies offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Several circumstances might lead a firm to cut prices. Some are <i>excess plant capacity; a drive to dominate the market through lower costs.</i> A price-cutting strategy can lead to possible traps, such as: low-quality trap; fragile market-share trap; shallow-pockets trap; price-war trap.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A major circumstance provoking price increases is cost inflation or overdemand. Companies often raise their prices by more than the cost increase, in anticipation of further inflation or government price controls, in a practice called <i>anticipatory pricing</i>. The price can be increased in the following ways, each of which has a different impact on buyers:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Delayed quotation pricing: The company does not set a final price until the product is finished or delivered;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Escalator clauses: The company requires the customer to pay today’s price and all or part of any inflation increase that takes place before delivery;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Unbundling: The company maintains its price but removes or prices separately one or more elements that were part of the former offer;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reduction of discounts: The company instructs its sales force not to offer its normal cash and quantity discounts.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product customization and differentiation and communications that clarify differences are critical.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Alternative approaches that will allow companies to avoid increasing prices are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Shrinking the amount of product instead of raising the price;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Substituting less expensive materials or ingredients;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reducing or removing product features;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Removing or reducing product services;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Using less expensive packaging material or larger package sizes;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reducing the number of sizes and models offered;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Creating new economy brands.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In general, the best response to competitors’ price changes varies with the situation. The company must consider the product’s stage in the life cycle, its importance in the company’s portfolio, the competitor’s intentions and resources, the market’s price and quality sensitivity, the behavior of costs with volume, and the company’s alternative opportunities. The first approach to competing against cut-price players is to differentiate the product or service through various means: Design ‘cool’ products; continually innovate; offer unique product mix; brand a community; sell experiences.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Kumar cautions that three conditions will determine the success of a differentiation response:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies must not use differentiation tactics in isolation;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies must be able to persuade consumer to pay for added benefits;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Companies must first bring costs and benefits in line.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Kumar cautions that unless sizeable numbers of consumers demand additional benefits companies may need to yield some markets to price warriors. Another approach that many companies have tried in responding to low-cost competitors is to introduce a low-cost venture themselves. Kumar asserts that companies should set up low-cost operations only if:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The traditional operation will become more competitive as a result;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The new business will derive some advantages that it would not have gained as an independent entity.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A dual strategy succeeds only if companies can generate synergies between the existing businesses and the new ventures.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A morphological analysis consists of:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Start with a problem;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Identify and define the parameters;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Assign each parameter;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">List all the possible combinations: Each combination marks out a particular state or configuration of the problem; many new solutions can be created.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 17: Designing and managing supply networks<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers must manage a network of relationships often called value networks. Suppliers, manufacturing sites, distributors and transport companies all over the world have to be managed to ensure a perfect product every time for the consumer. The leading supply network managers are applying new technology, new innovations and process thinking with a customer focus.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Supply chain/ supply network: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A set of three of more entities (organizations or individuals) directly involved in the upstream or downstream flows of product, service, finances and/or information from a source to a customer.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Logistics </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">usually focuses on products and is the flow of products from point of origin to end user, it is heavily influenced by operations research, optimization and modeling and a focus on improving efficiency and speed.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distribution channels </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">are sets of intermediaries that are usually <i>interdependent </i>organizations involved in the process of making a product or service available for use or consumption.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Value chain/ value network: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A system of partnerships and alliances that a firm creates to source, augment and deliver its offerings, consists of primary and support activities.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt; text-align: justify;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Supply chain management (SCM) </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">encompasses the planning and management of all activities involved in buying, making, providing and distributing. It also includes coordination and collaboration with channel partners. In essence, SCM integrates supply and demand management within and across companies. A SCM philosophy has the following characteristics:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A systems approach;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A strategic orientation;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-align: justify; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A customer focus.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A <b>network </b>consists of nodes and relationships with which interaction takes place. It can accommodate movements in any direction and change shapes. Its nodes include people, organizations, machines, events and activities. Network effectiveness is determined by the three As:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Agility: Supply networks need to be agile to react rapidly, reliably and cost effectively;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Adaptability: When conditions change the supply network strategy needs to be re-examined;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Alignment: Marketers need to create and manage relationships and align their partners’ incentives with their own interests to maximize the chain’s overall performance.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">During the 20<sup>th</sup> century companies used a push-driven supply network. During the 21<sup>st</sup> century it has become a demand-driven supply network </span><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-char-type: symbol; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin; mso-symbol-font-family: Wingdings;">à</span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> <i>Figure 17.8.<o:p></o:p></i></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Balanced centricity </span></i><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is the challenge to balance the interests of so many players in the supply or demand network – a customer and a profit focus.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Demand-driven value networks: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers should first think of the target market and then design the supply network backwards from that point. There are 3 steps in moving to a demand-driven philosophy:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Transform forecast-based, push-driven supply chains into demand-driven networks;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">‘Outside-in’ translation of priorities from the point of product or service consumption;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Transform supply chains into end-to-end, process-oriented value networks.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There are eight key processes that form the core of supply chain management: <b>customer relationship management; </b><i>customer service management process; </i><u>demand management;</u> <b>order fulfillment; </b><i>manufacturing or service process flow management; </i><u>supplier/distributor/intermediary relationship management;</u> <b>product or service development and commercialization; </b><i>returns.<o:p></o:p></i></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A <b>direct channel,</b> or a <b>zero-level channel</b>, consists of a manufacturer or a service provider going directly to the final customer using their own distribution, sales force or other method.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A <b>one-level channel </b>has one intermediary, such as a retailer or a distributor. This analogously counts for second-level and third-level channels as well.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Multichannel marketing </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">occurs when a company uses two or more marketing channels to reach one or more customer segments.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Multiple channels </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">strategy simply provides multiple-channels for the consumer while a multichannel strategy has cross-channel benefits based on the management of the multiple channels.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Consumer may choose the channels they prefer based on a number of factors: the price, the product or service assortment, the convenience of a channel option, as well as their own particular needs and wants.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Researchers Nunes and Cespedes argue that in many markets, buyers fall into one of four categories: <i>habitual shoppers; high-value deal seekers; variety-loving shoppers; high-involvement shoppers</i>. In supermarkets mostly <i>service/quality customers, price/value customers, or affinity customers</i> exist.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">With the increase in offline and online, customers expect channel integration.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Members of the marketing channel perform a number of key functions such as gathering information, assuming risks, providing for storage, providing for buyers’ payment of their bills </span><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-char-type: symbol; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin; mso-symbol-font-family: Wingdings;">à</span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> <i>Table 17.3<o:p></o:p></i></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Designing a marketing channel requires:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Analyzing customers’ needs: Five service level need to be studied from the customer perspective;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Quantity of purchase;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Waiting/delivery time;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Convenience;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product variety;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Service backup.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Establishing channel objectives and constraints: <o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Product characteristics;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Company characteristics;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Characteristics of the intermediary;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Competitors’ channel;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Environmental factors.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Deciding on the number of intermediaries: Marketing managers have to decide on the number of intermediaries to use at each channel level, three strategies are available:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Exclusive distribution: Severely limiting the number of intermediaries;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selective distribution: Reliance on more than a few but less than all of the intermediaries willing to carry a particular product or service;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Intensive distribution: The company places the product in as many outlets as possible.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Assign terms and responsibilities of channel members: The main elements in the management of channel members are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Price policy;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Conditions of sale;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distributors’ territorial rights;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Mutual services and responsibilities.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Identify and evaluate major channel alternatives: Marketers need to consider:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Financial/ economic criteria;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Control criteria;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Adaptive criteria.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">After a marketing manager has chosen a channel system he or she must select, train, motivate, and evaluate individual intermediaries for each channel:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Training and motivating;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Gaining cooperation:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Channel power: </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The ability to alter channel members’ behavior so that they take actions they would not have taken otherwise;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reward power:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Extra benefits offered;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Coercive power:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Threaten to withdraw resources;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Legitimate power:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Contract states a higher position;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Expert power:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Expertise knowledge;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Referent power:</span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> Highly respected.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Evaluating channel members;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; tab-stops: 47.25pt; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Modifying channel design and arrangements.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As the internet, mobile phones and other technologies advance, service industries are operating through new channels. With the internet buyers have easy access to a great deal of information. They can get information from: supplier websites; infomediaries; market makers; or customer communities. Along with an internal focus for managing the supply network, there are many self-service options that have arisen through advances in technology. Many customer now opt to use technology-based systems to interact with the company and particularly for distribution.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Disintermediation </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">is the elimination of channel intermediaries by product or service providers. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; tab-stops: 47.25pt;"><br /></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Chapter 19: Designing and managing marketing communications<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketing communications </span></b><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">are the means by which firms attempt to inform, persuade, and remind customers – directly or indirectly – about the brands they market. Although marketing communications can play a number of crucial roles, they must do so in an increasingly difficult environment. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The <b>marketing communications mix </b>consists of eight major modes of communication: advertising, sales promotion; events and experiences; public relations and publicity; direct marketing; interactive marketing; word-of-mouth marketing; personal selling.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers need to assess which experiences and impressions will have the most influence at each stage of the buying process. Anything that causes the consumer to notice and pay attention to the brand can increase brand awareness, at least in terms of brand recognition.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers should understand the fundamental elements of effective communications. Two models are useful: a macro- and a                                                                               micromodel. <o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Effective communications should accomplish four things: establish a connection, promise a reward, inspire action and stick in the memory. The eight key steps in developing effective communications are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Identifying the target audience;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Determining the communications objectives;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Designing the communications;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting the communication channels;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Establishing the budget;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Deciding on the media mix;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Measuring the results;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Managing integrated marketing communications.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Determining the communications objectives<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Marketers can set marketing communications objectives at any level of the hierarchy-of-effects model. Rossiter and Percy identify four possible objectives, as follows:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Category need: Establishing a product or service category as necessary to remove or satisfy a perceived discrepancy between a current motivational state and a desired emotional state;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand awareness: Ability to identify the brand in sufficient detail to make a purchase;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand attitude: Evaluating the brand with respect to its perceived ability to meet a currently relevant need;<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Brand purchase intention: Self-instructions to purchase the brand or to take purchase-related action.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Designing the communications<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Formulating the communications to achieve the desired response will require solving three problems: <o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Message strategy: What to say;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Creative strategy: How to say it;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Informational appeal elaborates on market offering quality and payment attributes or benefits;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Transformational appeal elaborates on a non-market offering-related benefit or image.<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Message source: Who should say it.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If a person has a positive attitude towards a source and a message or a negative attitude towards both, a state of congruity is said to exist. Osgood and Tannenbaum argue that attitude change will take place in the direction of increasing the amount of congruity between the two evaluations. The <b>principle of congruity </b>implies that communicators can use their good image to reduce some negative feelings towards a brand but in the process might lose some esteem with the audience.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Multinational companies wrestle with a number of challenges (product, market segment, style, local or global) in developing global communications programs.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting the communications channels<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Selecting efficient means to carry the message becomes more difficult as channels of communication become more fragmented and cluttered. Communications channels may be personal and non-personal and in each category there are many sub channels:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Personal communication channels let two or more persons communicate face-to-face, person-to-audience, over the telephone or through mail. Some forms of personal communication are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Advocate channels consists of company people contacting buyers in the target market;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Expert channels consists of independent experts making statements to target buyers;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Social channels consist of family members, and associates etc. talking to target buyers.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Non-personal communication channels are communications directed to more than one person and include media, sales promotions, events and experiences and public relations.<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Interpersonal communication channels are a mix of both personal and non-personal channels:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 72.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level2 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: "Courier New"; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-fareast-font-family: "Courier New";">o<span style="font: 7.0pt "Times New Roman";">    </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Word-of-mouth (WOM) has been defined as an interpersonal communication of products and services where the receiver regards the communicator as impartial. Types of word of mouth are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Buzz marketing</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> generates excitement, creates publicity and conveys new relevant brand-related information through unexpected or even outrageous means with help of guerilla marketing: creating a buzz with a small budget;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Viral marketing</span></u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> encourages consumers to pass on company-developed impressions of company offers to other online;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Opinion leaders: Cliques are small groups whose members interact frequently. Liaisons connect two or more cliques without belonging to either, and bridges are people who belong to one clique and are linked to another.<o:p></o:p></span></div><div class="MsoListParagraphCxSpLast" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 108.0pt; margin-right: 0cm; margin-top: 0cm; mso-add-space: auto; mso-list: l3 level3 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-family: Wingdings; font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">§<span style="font: 7.0pt "Times New Roman";">  </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Blogs.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The objective-and-task method of setting the promotion budget, which calls upon marketers to develop their budgets by defining specific objectives, is the most desireable.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><u><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Establishing the total marketing communications budget<o:p></o:p></span></u></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">One of the most difficult marketing decisions is determining how much to spend on promotion. The most common methods to decide on this problem are:<o:p></o:p></span></div><div class="MsoListParagraphCxSpFirst" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;">-<span style="font: 7.0pt "Times New Roman";">          </span></span><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Affordable method;<o:p></o:p></span></div><div class="MsoListParagraphCxSpMiddle" style="margin-bottom: .0001pt; margin-bottom: 0cm; mso-add-space: auto; mso-list: l3 level1 lfo1; text-indent: -18.0pt;"><span lang="EN-US" style="font-size: 10.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fa