Page 645 - Encyclopedia of Business and Finance

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Psychographics

between the products (homogeneous demand) and, there- BIBLIOGRAPHY
fore, look for the lowest-priced product to purchase. An Boone, L. E., and Kurtz, D. L. (2005). Contemporary Marketing
industry that has experienced the problem of homoge- (11th ed.). Mason, OH: Thomson/South-Western.
neous demand is the soft-drink industry. With few excep- Churchill, G. A., and Peter, J. P. (1998). Marketing: Creating
tions, most consumers do not make a distinction among Value for Customers. Boston: Irwin/McGraw-Hill.
the numerous beverages that are offered. A company that Kotler, P., and Armstrong, G. (2006). Marketing: An Introduction
excels at product differentiation can normally demand a (8th ed.). Upper Saddle River, NJ: Pearson Prentice-Hall.
higher price for a product because of its perceived higher Semenik, R. J., and Bamossy, G. J. (1995). Principles of Market-
ing: A Global Perspective (2nd ed.). Cincinnati, OH: South-
quality.
Western.
Product Highlights. Companies have another tool to
employ in order to justify a higher-priced product: A firm Allen D. Truell
can accentuate the product’s exceptional quality in detail Michael Milbier
to convince consumers that the extra cost is worthwhile.
Highlighting a product’s quality might sound easy, but a
company must first develop superior advertisements to
promote the product. Moreover, the firm must develop a PSYCHOGRAPHICS
reputation for making a superior product that is well SEE Lifestyles; Target Marketing
known to the average consumer. Volvo is one company
that has done an excellent job of creating the image of
producing only high-quality, safe cars. Thus. Volvo can
charge an extra premium for its cars. Caterpillar has also PUBLIC COMPANY
nurtured and promoted a reputation for producing only ACCOUNTING
the best heavy earth-moving equipment in the world. It,
too, charges an increased price for its products. OVERSIGHT BOARD
The Sarbanes-Oxley Act of 2002 began with this state-
Sales Stabilization. A challenge that companies face is ment of purpose: to protect investors by improving the
inconsistent demand for their products throughout the accuracy and reliability of corporate disclosures made pur-
year. Reasons for this fluctuation can range from seasonal suant to the securities laws, and for other purposes. As
demand to changing economic conditions. Most compa- stated in the act:
nies would rather have a consistent demand for their
products throughout the year, since this would allow them There is established the Public Company
to have steady production and distribution facility opera- Accounting Oversight Board (PCAOB), to over-
see the audit of public companies that are subject
tions. Ice cream manufacturers often face this dilemma
to the securities laws, and related matters, in order
because in the summer months demand for ice cream nor-
to protect the interests of investors and further the
mally reaches its highest levels while sales decrease sub- public interest in the preparation of informative,
stantially in the winter. In order to combat these shifts in
accurate, and independent audit reports for com-
product demand, ice cream companies might offer panies the securities of which are sold to, and held
coupons to encourage the purchase of their products dur- by and for, public investors. The Board shall be a
ing slow sales seasons. body corporate, operate as a nonprofit corpora-
tion, and have succession until dissolved by an Act
SUMMARY of Congress. (Sec. 101)
Companies engage in promotional activities virtually The board provides a structure that is a marked
every day of the year. The various tools available to mar-
departure from the earlier regulatory structure. Previously,
keting managers for such activities are known as the pro-
the Securities and Exchange Commission (SEC) had del-
motional mix. Elements of the promotional mix include egated a considerable degree of rule making and oversight
advertising, personal selling, public relations, and sales
to the public accounting profession. Nevertheless, with
promotion. Each of these promotional mix elements can
the initial decisions of the PCAOB in the spring of 2003,
be further divided into sub-elements depending upon rule making for auditing and oversight of auditors and
company objectives.
their firms became fully the responsibility of the PCAOB
SEE ALSO Advertising; Marketing; Marketing Mix itself.

622 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION