MKT 111 Final Exam
Moderate customer participation
Consumer inputs are required for service creation - clients input customizes a standard service - requires customer purchase - participation is necessary for adequate outcomes
Research objectives (step 1)
Exploratory research Descriptive research Casual research
Step 2: Idea screening
General formula: (probability of technical completion) x (probability of X commercialization) x (probability of economic success) = Attractiveness of Opportunity
Market Channeling
Intermediaries so manufacturers and households don't have to go to each other but through a middle man
Step 1: Idea generation
Major Idea sources: Internal: company's owners, management, employees External: sources outside the company (ex: customers, competitors, distributers
Informing
Pioneering- new product- new uses how it works where it can be found
Interpreting the results of concept testing
Q = M x A x P Q= sales M= market sales A= awareness x availability P= probability of purchasing
Three types of advertising
R.I.P
Introduction stage
Sales-slow growth profits- negative customers- visionaries competitors- few
Late majority
Skeptical, adopt because most others have adopted - pressure to conform - Older, below average income and education
Five Steps of New Product Development
Step: 1. Idea generation 2. Idea screening 3. Idea evaluation a. Concept development and testing b. Marketing strategy and development c. Business analysis 4. Development a. Product development b. Test Market 5. Commercialization
Product life cycle
The course that a products sales and profits take over its lifetime. The PLC has 5 stages
Exploratory research
define the problem and suggest hypothesis ex: ask what people want from a bike
Cons of surveys
difficult with wording/placing questions cheating difficult to collect sensitive info
three types of cost
fixed cost variable cost total cost
Pros of surverys
flexible, good for understanding people's knowledge, attitudes
Five research methods
focus groups, depth interviews, surveys, experiments, observational research
exclusive distribution
giving limited number of dealers the exclusive right to distribute the company's products in their territory
Pros of observational research
good for information that cant be obtained by simply asking a Q or that people are unwilling to provide
Channel conflicts
horizontal conflict vertical conflict disintermediation
Laggards
independent, tradition- bound - decisions made in terms of past - by time adopt, most often innovation is rendered obsolete - Lowest socio-economic status
how channeling members add value
information promotion contact matching negotiation
sales promotion
short term incentive to encourage a purchase - discounts - coupons - contests
Research plan (step 2)
specify constraints identify data needed for marketing actions
secondary data
data already exists somewhere, collected for another purpose
Collect data (step 3)
data collected by the company or outside sources
Steps of marketing research
1. define the problem 2. develop the research plan 3. collect relevant information 4. develop findings 5. take marketing actions
Development stage
...being made?
Step 3a. Concept Development and Testing
An opportunity or idea converted to a testable version of the product Describes/ shows the new product and its positioning
Six steps in developing an effective communication plan
1. Identifying Target Audience 2. Determine communications objectives 3. Designing the message 4. Choosing media 5. Selecting message source 6. Collect feedback
Customers as competitors
"compete" with the service provider
Classifying social media
- Media richness: degree of contact between two communication parties - self-disclosure: about a person's thoughts, feelings, likes and dislikes
Customer participation in the marketing mix
- Product development: Nike designing own shoes - Product design/ customization: personalize M&Ms - Service production and delivery: pick up your own meds at CVS - Customer pricing: name your own price - Promotion: sharing on social media, Gerber baby contest - more in slides
Three types of customer roles in service delivery
- Productive resources - Contributors to service quality and satisfaction - Competitors
Customers are productive resources
- considered "partial employees" bc they contribute time and effort - using customers as a resource for productivity ex: product testers
Low customer participation
- consumer presence is not always required - products are standardized - service is provided regardless- watching a show - payment may be the only customer participation
Early adopters
Adopt early in product life cycle - more reliant on group norms and values than innovators - strongest opinion leaders
Early majority
Deliberate carefully before adopting - collect info, evaluate brand alternatives
Innovators
Eager to try new ideas: - higher income, better educated, more cosmopolitan
retailers
a business whose sales come primarily from retailing
vertical marketing system
a channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate corporate vs. contractual
conventional distribution channel
a channeling consisting of one or more independent producers, wholesalers, and retailers, each separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole
channel level
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
indirect marketing channel
a marketing channel containing one or more intermediary levels
direct marketing channel
a marketing channel that has no intermediary levels
competition-based pricing
above, at, or below the market pricing
retailing
all activities involved in selling goods or services, directly to final consumers for their personal, nonbusiness use
Advertising
any paid form of non-personal presentation and promotion of ideas, goods, or services by and identified sponsor
Customers as contributors to service quality and satisfaction
asking questions, taking responsibility if it is their fault, complaining if it isnt
horizontal conflict
between firms at the same level or function within the channel
vertical conflict
between successive or sequential levels within the channel
Cons for experiments
cant be easily generalized
persuading
competitive- why your product is better- growth product- brand reference
social media
computer- mediated tools that allow people to create, share, or exchange information, career, interests, ideas, and pictures/videos
Why IMC?
conflicting messages from different sources or promotional approached can confuse company or brand images: stride advertisement
primary data
consist of information for the specific purpose at hand
Pros for experiments
control factors casual relationships
Pros of secondary data
cost, speed, could not get data otherwise
three general pricing approaches
cost-based competition-based value-based
Cons of secondary data
current, relevant, accurate, impartial
High customer participation
customer co-creates the service product - active participation guides the customized service - cant be created without customer participation - customer inputs are mandatory
channel choice consideration (Target market coverage)
intensive distribution exclusive distribution selective distribution
Step 3c. Business analysis
involves a review of the sales, costs, and profit projections to find out whether they satisfy the company's objectives
multichannel marketing
involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining and building relationships with customers who shop and buy in traditional intermediaries and online
Step 4a. Product development
involves the creation and testing of one or more physical versions by the R&D or engineering departments
Cost-based pricing
let's recover our costs and make a profit adding a standard mark up to cost
Three levels of customer participation
low, moderate, high
Cons of observational research
not good for feelings, attitudes or motives
cost-based pricing
setting high prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's efforts and risk
disintermediation
occurs when product or service producers cut out intermediaries or displace traditional resellers with radical new types of intermediaries ex: selling cars online and in the dealership upsets customers
Reminding
reinforcement- mature product: top of mind
Growth stage
sales- fast growth profts- rising customers- early adopters competitors- appear, start to enter and grow
Maturity stage
sales- peak profits- flat/decline customers- majorty competitors- well established
Decline stage
sales/profits- decline customers- people who have not adopted the replacement competitors- exit market
intensive distribution
stocking the product in as many outlets as possible
Descriptive research
study consumer attitudes. describe market potential, demographics, etc
Casual research
test hypothesis about cause and effect relationship ex: how consumers react to a 10% price increase
Pricing
the amount of money charged for a product or service
Integrated marketing communications (IMC)
the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products
fixed cost
the costs that do not vary with production or sales levels
variable cost
the costs that vary with the level of production
Customer participation
the degree to which customers are involved in the service production and delivery process - cooperating with service providers - self-serving - it is inevitable
Step 5. Commcercialization
the introduction of the new product - when to introduce - when to launch - to whom - how: an action plan
Diffusion of Innovation
the process by which an innovation is communicated through certain channels over time among the member of a social system
Step 4b. Test market
the product and entire marketing program program are introduced into more realistic marketing settings
total cost
the sum of fixed and variable costs for any given level of production
Marketing research
the systematic design collection, analysis, and reporting of data relevant to a specific marketing situation facing and organization
selective distribution
the use of more than one but fewer than all of the intermediaries who are willing to carry the company's products
Step 3b. Marketing Strategy development
this refers to the initial marketing strategy for introducing the product to the market and includes: - environment assessment - Target market and value proposition - Marketing mix - Long-run sales and profit goals
horizontal marketing system
two or more companies at one level join together to follow a new marketing opportunity
shopper market
use point of sale promotions and advertising to extend brand equity to the "last mile" and encourage favorable in-store purchase decisions
value-based pricing
uses buyers perceptions of value rather than sellers costs to set price