All the Marketing I
Rate-affecting Characteristics
- Relative advantage - Compatibility - Complexity - Divisibility - Communicability
Major Influencers on Business Buyers
- Environment - Organization - Interpersonal - Individual
How has WOM (word of mouth) influence risen over the past several years? What is an "Opinion Leader"?
Word of Mouth influence has become significantly more important because of the creation of online reviews. Word of mouth influence: The impact of personal words and recommendations of trusted friends, associates, and other consumers on buying behavior Opinion leader: A person within a reference group who, because of special skill, knowledge, personality, or other characteristics, exerts social influence on others
Private brand (Store brand)
a brand created and owned by a reseller of a product or service
New task
a business buying situation in which the buyer purchases a product or service for the first time
Straight rebuy
a business buying situation in which the buyer routinely reorders something without any modifications
Horizontal Marketing System
a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
Conventional distribution channel
a channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole
Retailer
a channel intermediary that sells mainly to consumers
Multichannel Distribution systems
a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
Wholesaler
a firm engaged primarily in wholesaling activities
Selective distribution
a form of distribution achieved by screening dealers to eliminate all but a few in any single area
Convenience sample
a form of nonprobability sample using respondents who are convenient or readily accessible to the researcher—for example, employees, friends, or relatives
Ethnographic research
a form of observational research that involves sending trained observers to watch and interact with consumers in their "natural environments"
Category killer
a giant specialty store that carries a very deep assortment of a particular line
Idea Generation is the life-blood of New Product Development and internal sources, external ideas, crowd-sourcing are all methods for new products to be introduced. How did Under Armour get new ideas from their "future show" method? How does Bose do it?
-Under Armour gives the public an opportunity to present ideas for new products, and makes a big show out of selecting their winner from 12 finalists and presenting a cash prize and contract to be the winner. -Bose massive investments are put into R&D, almos tan unhealthy amount
Why was the ALS Ice bucket challenge so successful?
-Was structured as a challenge, encouraged people to share it and make friends participate -Utilized real time marketing using power of social media -Celebrity endorsements -No money required up front
Zappos successfully re-thought the "telesales" model and adopted the "deliver happiness" theme to their clients. What was their secret of success in this new model?
-Zappos understood the frustration many consumers had when dealing with product support so they pioneered the change to be more accommodating -Zappos offered free returns - Zappos made sure its telemarketers were very happy, well paid, employees who would enjoy doing their job and be helpful and refreshing to consumers in need -KEY: happy employees offer better results when interacting with consumers
What is a "focus group" and why would you use one?
-a focus group is when a small group of people meet with a trained moderator to talk about a product, service, or organization. It can be very useful in order to gather important information on a product or how people perceive a company's brand or product. It allows the company to hear opinions from possible customers.
What is the purpose and use of a Brand Logo and why are some companies doing "makeovers"?
-brand logos are used to build notoriety, and send messages about the brand itself -makeovers are used to modernize a brand look -a problem with this is that for some reason loyal consumers are worried by the change and can cause an uproar by having mass protests of the changes
Analyzing the Current Business Portfolio
1. Identify strategic business units (SBUs) 2. Assess the attractiveness of its various SBUs 3. Decide how much support each SBU deserves
Requirements for Effective Segmentation
1. Measurable 2. Accessible 3. Substantial 4. Differentiable 5. Actionable
Explain the five decisions one has to make about individual product marketing--Product, Attribute, Branding, Packaging, Labeling/ Logos and Product Support services?
1. Product and service attributes 2. Branding 3. Packaging 4. Labeling and Logos 5. Product service and support
Market segment
a group of consumers who respond in a similar way to a given set of marketing efforts
Direct marketing channel
a marketing channel that has no intermediary levels
Packaging
All consumers interact with the packaging
Judgment sample
a nonprobability sample in which the sample elements are handpicked because they are expected to serve the research purpose
SWOT Analysis
a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
Selective distortion
a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs
Discount store
a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume
Specialty store
a retail store that carries a narrow product line with a deep assortment within that line
Department store
a retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers
Stratified random sample
a sample from selected subgroups of the target population in which everyone in those subgroups has an equal chance of being included in the research
Business Markets
Few, large buyers, with inelastic demand - Characterized by desired demand
Compensating Salespeople
Fixed amounts Variable amounts Expenses Fringe benefits
McDonald's does Segment and Target Marketing by dividing their customers into what kind of groupings and segments. Would you do it their way?
McDonald's does Segment and Target Marketing by dividing their customers based in racial and ethnic groups. For example with the South West Salad they observed that African Americans were not viewing the product as a meal. As a result they developed marketing strategies to specifically address the issue. Would you or would you not do it their way?- potential for racism, benefit might be serving customers better
What are the different brand positioning elements of Guitar Center, Musician's Friend, Music123, Woodwind & Brasswind and Music & Arts?
Music 123 - primarily focused on beginners G/C - heavy metal folks WW & BW - intermediate band/orchestra M&A - middle school band/orchestra Musician's Friend - more inclusive type of combo musician
Target Market
a set of buyers sharing common needs or characteristics that the company decides to serve
Marketing Channel
a set of independent organizations that help make a product or service available for use or consumption by the consumer or business user
Convenience store
a small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods
Contractual VMS
a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts
Corporate VMS
a vertical marketing system that combines successive stages of production and distribution under single ownership- channel leadership is established through common ownership
Administered VMS
a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties
Broker
a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
Agent
a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods
Four A's
acceptability, affordability, accessibility, awareness
Marketing concept
achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do
Promotion
activities that communicate the merits of the product and persuade target customers to buy it
Differentiation
actually differentiating the market offering to create superior customer value
Product line filling
adding more items within the present range of the line
Dynamic Pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations
Retailing
all the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use
Wholesaling
all the activities involved in selling goods and services to those buying for resale or business use
Consumer market
all the individuals and households that buy or acquire goods and services for personal consumption
Buying center
all the individuals and units that play a role in the purchase decision-making process
Sharing Economy
an economic model involving the sharing of underutilized resources - Constantly evolving - Challenges the notion of ownership - Built on efficiency - Enabled by big data
Independent off-price retailer
an off-price retailer that is either independently owned and run or is a division of a larger retail corporation
Warehouse club
an off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees
Factory outlet
an off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods
Non Probability Sample
any sample in which little or no attempt is made to get a representative cross section of the population
Core beliefs and values
are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government
Value-added pricing
attaching value-added features and services to differentiate a company's offers and charging higher prices
Brand Positioning
attributes, benefits, beliefs and values
Child Protection Act (1966)
bans the sale of hazardous toys and articles. sets standards for child resistant packaging
Building Strong Brands
brand positioning, brand name selection, brand sponsorship, brand development
Modified rebuy
buyer wants to modify product specifications, prices, terms, or suppliers
Order-Routine Specification
buyer writes the final order with the chosen suppliers, listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties
Systems selling
buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
Product specification
buying organization decides on and specifies the best technical product characteristics for a needed item
Characteristics Affecting Consumer Behavior
cultural factors, social factors, personal factors, psychological factors
Goal of Logistics System
deliver a targeted level of customer service at the least cost
General need description
describes the characteristics and quantity of the needed item
Marketing Strategy Development
designing an initial marketing strategy for a new product based on the product concept
Marketing Channel Design
designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives
Product Development
developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
Channel conflict
disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards
Geographic segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
Income segmentation
dividing a market into different income segments
Behavioral segmentation
dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product
Occasion segmentation
dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Benefit segmentation
dividing the market into segments according to the different benefits that consumers seek from the product
Demographic segmentation
dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation
Simple random sample
every member of the population has a known and equal chance of selection
Shopper marketing
focusing the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online, or mobile shopping
Intermarket (cross-market) segmentation
forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries
Customer Insights
fresh marketing information-based understandings of customers and the marketplace that become the basis for creating customer value, engagement, and relationships
Survey research
gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior
Observational research
gathering primary data by observing relevant people, actions, and situations
Exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company's products in their territories
Primary data
information collected for the specific purpose at hand
Secondary data
information that already exists somewhere, having been collected for another purpose
Cultural Environment
institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors
Characteristics of a Service
intangibility, inseparability, variability, perishability
total market strategy
integrating ethnic themes and cross-cultural perspectives within a brand's mainstream marketing, appealing to consumer similarities across subcultural segments rather than differences
Types of Service Marketing
internal, external, interactive
Commercialization
introducing a new product into the market
Crowdsourcing
inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process
Product Mix Depth
number of versions offered for each product in the line
Supplier development
systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others
Local marketing
tailoring brands and marketing to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores
individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers
Micromarketing
tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing
Product Mix width
the number of product lines an organization offers
Customer Relationship Management (CRM)
the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Share of customer
the portion of the customer's purchasing that a company gets in its product categories
Showrooming
the practice of examining merchandise in a physical retail location without purchasing it, and then shopping online for a better deal on the same item
Optional Product pricing
the pricing of optional or accessory products along with a main product
Portfolio analysis
the process by which management evaluates the products and businesses that make up the company
Market Targeting
the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
Market targeting
the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
Service variability
the quality of services may vary greatly depending on who provides them and when, where, and how they are provided
Value chain
the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products
Value proposition
the set of benefits or values a company promises to deliver to customers to satisfy their needs
Marketing Mix
the set of tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market
Performance Review
the stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement
Proposal solicitation
the stage of the business buying process in which the buyer invites qualified suppliers to submit proposals
Supplier selection
the stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers
Idea Generation
the systematic search for new product ideas
Google Moonshot has a development process that is unique? Describe the process.
- It wants its engineers to pursue bold projects that would normally be shot down in early development - The company is hoping to sift through many adequate ideas (balloon that can provide wifi in remote areas for months at a time) to reach a few highly valuable one (self-driving cars)
Generation Z
- Kids, tweens, teens - Fluency with digital technologies
An aggressive approach to eliminate competition is "market-penetration pricing". What is the goal and objective of this strategy?
- MARKET PENETRATION PRICING: Setting a low price on a new product in order to attract a large number of buyers and a large market share. Sacrificing high sale profits to better promote and expand a product, resulting in a larger market share. Hunting a whole lot of small fish - Lower prices Higher sales - Conditions for this to work: o Market must be highly price sensitive, high elasticity o Production and distribution costs must both decrease while sales volume increase o Low price must help keep out competition o Providers must keep price low so as to not lose customers
Psychological pricing is used when a store practices "even/odd pricing" What do they do?
- PSYCHOLOGICAL PRICING: Pricing that considers the psychology of pricing and not simply the economics; the price is used to say something about the product -consider the psychology (not just the economics) behind the price; set a price in odd numbers (499 vs 500)
Campbell soup uses Big Data and analytics insights to do a "Deeper Dive" and read the consumer minds. What did they learn and how did it help their business?
- People have strong nostalgic emotions associated with soup, but labelling and branding was not letting people see it as that - Campbell serves a ton of different markets - Changed branding of cans to evoke some of those feelings - Changed marketing approaches to become more segmented to target appropriate groups (just broth)
Why is the shopper at the Whole Foods store willing to use a different type of pricing philosophy at that store and what is their main criteria for shopping there?
- Whole Foods buyers know that cheaper options exist but instead want to buy Whole Foods because they believe that they are paying more for higher quality, which they can afford. This is described as a type of minor everyday luxury
Before one can develop a good marketing strategy, it is important to perform a "situational analysis". What are the key components of the sa?
-strengths, weaknesses, opportunities and threats
What is the advantage of a social media center?
-the advantage of a social media center is being able to respond personally to people's complaints or concerns that they post. This allows companies to reach their customers on a more personal level and be able to see customers reactions and thoughts on their products almost immediately
What is the difference between product idea, product concept and a product image?
-Idea screening: screening new product ideas to spot good ones and drop bad ones ASAP -Product concept: a detailed version of the new product idea stated in meaningful consumer terms -Product image: the way consumers perceive and actual or potential product
Name four steps of Market research. Why is step one most critical?
-defining the problem and research objectives: this is the most important step because it guides the entire research process -Developing the research plan for collecting information -Implementing the research plan- collecting and analyzing the data -Interpreting and reporting the findings
Why is the choice of marketing channels critical in maintaining your brand image/essense
channel decisions affect every other marketing decision
Product Bundle Pricing
combining several products and offering the bundle at a reduced price
What does it mean to "commercialize" a product? what role does marketing play in the process?
commercialization: introducing a new product to the market
Marketing Strategy Statement
consists of: Target market description Value proposition planned Sales, market-share, and marketing mix
Complex buying behavior
consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands
Dissonance-reducing buying behavior
consumer buying behavior in situations characterized by high involvement but few perceived differences among brands
habitual buying behavior
consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences
Variety-seeking buying behavior
consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences
External idea sources
distributors and suppliers, competitors, customers
Usage rate segmentation
dividing a market by the amount of product bought or consumed
Age and life-cycle segmentation
dividing a market into different age and life-cycle groups
Gender segmentation
dividing a market into different segments based on gender
Psychographic segmentation
dividing a market into different segments based on social class, lifestyle, or personality characteristics
Marketing myopia
focusing only on existing wants and losing sight of underlying consumer needs
Steps in Strategic Planning
1. Defining the company mission 2. Setting company objectives and goals 3. Designing the business portfolio 4. Planning marketing and other functional strategies
Concentrated (niche) marketing
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
What is a value delivery network?
A network composed of the company, suppliers, distributors, customers who partner with each other to improve the performance of the entire system in delivering customer value
What is the value of the "Lexus Covenant" for communicating with their customers?
Lexus covenant is a promise Lexus makes to its customers to provide the most painless car buying and maintaining process possible. Including home pick ups for servicing and services at dealerships to ease the pains of car buying. This makes people value Lexus more, promotes loyalty, and makes consumers associate the brand with a positive experience.
Information search
Consumer is motivated to search for information - Commercial sources inform, personal sources legitimate
Labelling and Logos
Consumers become strongly attached to the logos; representative of brand and quality/experience
When might a business desire fewer customers over more customers in developing their marketing plans?
It is very expensive to have quality relationships with lots of people luxury marketing: having a higher value with limited production
To what lengths is Costco going to preserve the $4.99 price point of its rotisserie chickens?
Its their strategy to increase foot traffic and increase purchases on higher margin items
Product Support Services
Keeping customers happy after the sale is key to building lasting relationships
Internal Data
Powerful customer insights & comparative advantage
How is your brand affected-if you are using a "prestige product" strategy? If you are using a "comparison" pricing strategy? If you use a "technical or innovation selling" strategy?
Prestige--high quality producer Comparison-compare low price to those of competitors Technical or innovation-most innovative producer
Price Changes
Price Cuts: excess capacity, increased market share Price increase: inflation, increased demand, lack of supply
How does an advertiser create "behavioral targeting"?
The advertisers mine the data about what sites you visit or products purchase and use that to target what products and services you might buy. Therefore, the advertiser targets your consumer behavior in order to predict your next purchases.
Dunkin donuts refreshed their Brand and Marketing Strategy recently. What does the Brand Essence and slogan "Nothing too fancy - just meeting the everyday, all-day needs of the Dunkin tribe" say about the company.
The company has a very established target market. Not trying to go after Starbucks customers. Instead it avoids fancy names (stuffed melt instead of Panini) in order to offer coffee at a reasonable price to working-class customers. It also establishes consistency of its offerings.
What is third-party logistics (3PL) and why have these companies mushroomed over the past 20 years?
Third-Party logistics (3PL) providers are independent logistics providers that perform any or all the functions required to get a client's product to market. They've mushroomed because many companies hate doing logistics "grunt work" (bundling, loading, unloading, sorting, storing etc)
The term "value" is relevant to different people but it makes for a challenge for a marketing team. Why is it key to understand the many different types of value in product selection?
This allows companies to acquire a greater share of the customer, or the portion of the customer's purchasing that a company gets in its product categories firms can offer greater variety to current customers can create programs to cross-sell or up-sell more products
MOM as Brand Ambassador programs have been very successful. What is the good news and bad news for a company to use this approach in their marketing?
This allows them to get a better sense of the needs of their consumers, and give back to them. It also makes the brand appear more caring for their customers However this also shows a brands disinterest in dads, and can be seen by some as reinforcement for a negative stereotype
Shopping center
a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit
Channel level
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
Total Quality Management (TQM)
a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement
Undifferentiated marketing
a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer
Differentiated (segmented) marketing
a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
Indirect marketing channel
a marketing channel containing one or more intermediary levels
Zone pricing
a modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone
Value Delivery Network
a network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value
Value delivery network
a network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value
Product/market expansion grid
a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
Freight-absorption Pricing
a price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer
Uniform delivered pricing
a price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge
basing-point pricing
a price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped
FOB-origin pricing
a price tactic that requires the buyer to absorb the freight costs from the shipping point ("free on board")
Selective retention
a process whereby a consumer remembers only that information that supports his or her personal beliefs
Unsought product
a product unknown to the potential buyer or a known product that the buyer does not actively seek
Service retailer
a retailer whose product line is actually a service; examples include hotels, airlines, banks, colleges, and many others
Business Analysis
a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives
Mission statement
a statement of the organization's purpose - what it wants to accomplish in the larger environment
Superstore
a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services
Strategic Business Unit (SBU)
a subgroup of a single business or collection of related businesses within the larger organization Includes: - Company division - Product line within a division - Single product or brand
Individual Differences in Innovativeness
a. Innovators (first 2.5% people to own product)- venturesome b. Early adopters- (13.5%)guided by respect, opinion leaders c. Early mainstream (34%) d. Late mainstream- (34%)skeptical, buy once majority of people do e. Lagging adopters (16%)
Marketing Planning
involves choosing marketing strategies that will help the company attain its overall strategic objectives
Downsizing
is when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy.
Shopping products
items for which the consumer compares several alternatives on criteria such as price, quality, or style
Convenience products
items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort
Specialty products
items with unique characteristics that buyers are willing to expend considerable effort to obtain
Brand Development
line extensions, brand extensions, multibrands, new brands
Customer-engagement marketing
making the brand a meaningful part of consumers' conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community
Supply Chain Management
managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
Brand Sponsorship
manufacturer's brand, private brand, licensing, co-branding
Descriptive research
marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers
Exploratory research
marketing research to gather preliminary information that will help define problems and suggest hypotheses
Generation Marketing
marketing to members of a generation, who tend to share the same outlook and priorities Risky; alienation
What is the future of the shopping center/mall given the changing nature of retailing?
o A newer form of shopping center is the power center. o Power centers are huge unenclosed shopping centers consisting of a long strip of retail store, including large, free standing anchors such as Walmart, Home Depot, Costco. Each store has its own entrance with parking directly in front for shoppers who only want to go to one store. o New lifestyle centers which consist of mixed-use developments with ground-floor establishments and apartments or condominiums above, combining shopping convenience with the community feel of a neighborhood center
How does Red Bull use Sales Promotions and Events in their Marketing program?
o Energized fans with a unique product, brand personality and event-marketing approach o Holds hundreds of events designed to bring community together o Extreme sports events and athletes with off the grid experiences o Red Bull Stratos project with extreme skydiver jumped from a helium balloon breaking the sound barrier and numerous other records
How does a sales quota motivate sales people/ What is the role of sales contests?
o Sales quota: standard stating the amount a salesperson should sell and how sales should be divided among the company's products. Compensation often related to how well they meet quotas o Organizational climate: valuing the salespeople o Sales contests: spur efforts to go above and beyond what is expected
What is the difference between the different roles of a sales person?
o Salesperson: individual who represents a company to customers by: prospecting, communicating, selling, servicing, information gathering, and relationship building § Order taker: department store salesperson standing behind the counter § Order getters: position demanding creative selling, social selling, relationship building for products and services
What are observational research, ethnographic research and experimental type research?
observational research: involves gathering primary data by observing relevant people, actions and situations ethnographic research- involves sending observers to watch and interact with consumers in their "natural environments" experimental type research: involves selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses
Reference prices
prices that buyers carry in their minds and refer to when they look at a given product
Psychological Pricing
pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product
Target Costing
pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
Market-skimming pricing (price skimming)
setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales
Market-penetration Pricing
setting a low price for a new product in order to attract a large number of buyers and a large market share
By-Product pricing
setting a price for by-products in order to make the main product's price more competitive
Captive-Product Pricing
setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console
Customer Value-Based Pricing
setting price based on buyers' perceptions of value rather than on the seller's cost
Competition-based Pricing
setting prices based on competitors' strategies, prices, costs, and market offerings
Cost Based Pricing
setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk
Geographical pricing
setting prices for customers located in different parts of the country or world
Product Line Pricing
setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices
Probability Sample
simple random sample, stratified random sample, cluster (area) sample
Market offerings
some combination of products, services, information, or experiences offered to a market to satisfy a need or want
Intensive distribution
stocking the product in as many outlets as possible
Major Types of Buying Situations
straight rebuy, modified rebuy, new task, systems selling
Disintermediation
the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
Business Buying Process
the decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands
New Product Development
the development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts
Brand Equity
the differential effect that knowing the brand name has on customer response to the product or its marketing
Customer satisfaction
the extent to which a product's perceived performance matches a buyer's expectations
Selective attention
the focusing of conscious awareness on a particular stimulus
Product
the goods-and-services combination the company offers to target customers
Big Data
the huge and complex data sets generated by today's sophisticated information generation, collection, storage, and analysis technologies Marketers don't need more information, but better information
Production Concept
the idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency -Risk of market myopia
Product concept
the idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements
Selling concept
the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort - Risks -- Sells what company makes, not what market wants -- Focuses only on transactions, not customer relationships
Macroenvironment
the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces
Test Marketing
the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation
Marketing ROI
the net return from a marketing investment divided by the costs of the marketing investment
User-status segmentation
the process of determining the status as users of competitors' products, ex-users, potential users, first-time users, and regular users
Strategic Planning
the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities
Market segmentation
the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups
Assessment of Marketing ROI
• Brand awareness • Sales • Market Share • Customer acquisition • Customer engagement • Customer experience • Customer retention • Customer lifetime value • Customer equity
Marketing Internal Environment
• Goals, objective, culture • HR • R&D/Tech capabilities • Service capabilities • Production & supply chain capabilities • Financial resources
Millennials
- Cash-strapped - Frugal, practical
Internal idea sources
Internal social networks Intrapreneurial programs
Buying Behavior Chart
Complex: Car Dissonance-Reducing: Medicine, Carpet Low Variety: Candy Habitual: toothpaste
Service inseparability
services are produced and consumed at the same time and cannot be separated from their providers
Service intangibility
services cannot be seen, tasted, felt, heard, or smelled before they are bought
Service perishability
services cannot be stored for later sale or use
Supermarket
A large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products
Product Sales Force
- Improves product knowledge - Can lead to territorial conflicts
Value of a marketing channel
- Information - Promotion - Contact - Matching - Negotiation - Physical distribution - Financing - Risk taking
How does a franchise represent a marketing channel for a company and what is good and bad about it as a way of doing business?
- A franchise is a branch extension into new markets that provides more promtional awareness to customers - Parent company also supports logistical side of marketing for these franchisees - One negative is that the company has the franchises does not have much control over each of the individual branches
Marketers roles in New Product Development might include testing by the consumer of new products. What advantage does involvement by the marketer have for the process?
- A marketers job is to display to a consumer how a good will fix one of their problems, so by better understanding how a good does or does not help a consumer is very valuable for a marketer
Describe the current strategies of Amazon and Walmart in their current Price War for Online Supremacy? What approach and competitive strategy are each one using?
- Amazon is focusing on providing better delivery and a larger array of goods, as well as an easier buying experience - Walmart is trying to have the best prices, but their inventory is strictly Walmart goods
Marketing Channel Design: Framework
- Analyzing customer needs - Setting channel objectives - Identifying major alternatives - Evaluating the major alternatives
How can a company make a lot of money even in the maturity stage of a product?
- By modifying their product and the market for their product, most competition will begin to lower prices, and some will even drop out. Companies should look to find new customers from people who already consume the product, just from their competition.
Printer manufacturers, Amazon Kindle and shaving companies often use "captive" pricing to make profits. How does it work?
- CAPTIVE PRODUCT PRICING: Setting price for main products low but necessary add-ons high, to attract customers with low initial prices, and then profit once they are trapped o EX: Razor blades, video game consoles, amazon kindel
How does one practice Cost-Based Pricing and what is the advantage and disadvantage of this method? What is cost-plus method of pricing?
- COST BASED PRICING: Setting prices based on the costs of producing, distributing, and selling the product in addition to fair return for effort and risk - Pros o Attractive to costumers for low prices -if the business can make the product for less than their competitors, they can price it lower, and do more in bulk sales, higher margins - Cons o Lower profits are caused from only charging the necessary, may affect efficiency, your income is directly tied to time Cost-Plus method: adding a standard markup to the cost of a product, -many people feel that cost-plus pricing is fairer to both buyers and sellers. Sellers earn a fair return on their investment but do not take advantage of buyers when buyers demand becomes great.
Partnering with Other Company Departments
- Company departments are links in the company's internal value chain - Firm's success depends on how well the various departments coordinate their activities - Marketers should ensure all the departments are customer-focused and develop a smooth functioning value chain
Types of Buying Decision Behavior
- Complex buying behavior - Dissonance-reducing buying behavior - Habitual buying behavior - Variety-seeking buying behavior
Consumer Products
- Convenience - Shopping - Specialty - Unsought
What was the "big mistake" in looking at data Craftsman made when it originally discontinued the tape measure product category?
- Craftsman was losing money on the product, but they failed to realize that it was an entry product (once you have a Craftsman, you're likely to get more)
Characteristics Affecting Consumer Behavior: Cultural
- Culture - Subculture - Total Market Strategy
Intuit's "Design for Delight" philosophy has helped their product development in what way?
- Deep customer empathy - Broad-narrow focus - Much more customer focused
Territorial Sales Strategy
- Defines salesperson's job - Fixes accountability - Lowers sales expenses - Improves relationship building & selling effectiveness
Sales Force Management
- Designing sales force strategy and structure - Recruiting and selecting salespeople - Training salespeople - Compensating salespeople - Supervising salespeople - Evaluating salespeople
Problems with Matrix Approaches
- Difficulty in defining SBUs and measuring market share/growth - Time consuming - Expensive - Focus on current businesses, not future planning - No clear hierarchy of reporting
What is "dynamic pricing" and how does Amazon implement it?
- Dynamic pricing is the process of determining pricing based of off demand at any given moment. Recently companies like amazon have come under fire for such aggressive tactics like rapidly changing the prices of any given good throughout a day. For example, a videogame rapidly dropping from $50 to $15 dollars with dips and rises on one black Friday from Amazon trying to compete with best buy and Walmart to have the lowest price on the market.
RWW Idea Screening
- Is it real - Will it win - Is it worth it
How are "shipping costs" used in geographic pricing as a tactic to pass along price discounts or increases? Example might be FOB-origin pricing, uniform-delvivered pricing, zone pricing, basing point pricing or freight absorption pricing.
- FREE ON BOARD (FOB) ORIGIN PRICING: Pricing in which goods are placed free on board a carrier; the customer pays the freight from the factory to destination CONSIDERED FAIREST o AKA Consumers pay for the good at the goods own price and value, and pay for shipping so that shipping costs are regulated - UNIFORM DELIVERY PRICING: Manufacturers charge all customers the same price for shipping regardless of their origin - ZONE PRICING: Pricing in which the company sets up 2 or more zones. All prices are the same for all consumers within a certain zone - BASING-POINT PRICING: Pricing in which the seller designates some city as a basing point and charges all customers the freight cost from that city to a customer - FREIGHT ABSORPTION PRICING: Pricing in which the seller absorbs all or part of the freight charges in order to get the desired business o Used for market penetration
Government Markets
- Federal, state, county, or local governments that buy goods and services to support their internal operations and provide products to their constituencies - Offer large opportunities as major buyers of good/services --To succeed, must locate key decision makers, identify buyer behavior factors, & understand the buying decision process
Technological Environment
- Forces that create new technologies, creating new product and market opportunities - Most dramatic force shaping society - Changes rapidly
"Emotional branding" to moms had several key attributes identified to make an advertisement successful. What were some examples?
- Formula ads: portray as very loving and caring, bc formula can be seen as a less caring way to feed child - Diapers: you love your baby so much that you want to give them the best
Trader Joe's had a new pricing mix and marketing strategy that changes the nature of pricing decisions. How do they price? Good-Value or value-added pricing?
- GOOD VALUE: off-brand BS - Value-added: Brand names - TJ's is mostly Good value, their store is made up of mostly their own brands, and served as a cheaper option than whole foods
Why was Alphabet formed by Google to help their new product development management?
- Google expanding rapidly into unrelated areas - Alphabet meant to contain all of its ventures - No brand confusion - Because they have unrelated brands, it makes sense to have them all under a parent brand instead of just under google
Characteristics Affecting Consumer Behavior: Social
- Groups & Social Networks - Family
What are some ways that marketing is involved in the creation of a company's Annual Report
- Highlights company goals - Best metrics first ...
Choosing a Differentiation and Positioning Strategy
- Identify possible value differences & competitive advantages - Selecting an overall positioning strategy - Delivering the strategy
When a company practices "market-skimming" what are they doing?
- MARKET-SKIMMING PRICING: Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the high price; the company has fewer but more profitable sales. Only hunting big fish
Laws prohibit "retail price maintenance"--where a manufacturer requires a dealer price a product at a certain level, creating MRSP. What is MRSP and what is Price Discrimination with channels?
- MSRP: Manufacturer's suggested retail price o Retailors oppose this because it displays the production cost of goods, or the amount of money the producer of a product recommends the product be sold for.
Growth of Not-for-Profit Marketing
- Marketing has become a major part of the strategies of not-for-profit organizations, such as universities, hospitals, museums, zoos, symphony orchestras, and even churches.
Generation X
- More family-focused - Most educated
As manufacturer likes setting a "reference price" as a psychological marker. How do they use it? A "promotional price" is set but there are often restrictions on them...what are they?
- Most people do not know what the costs of production are so they judge goods based off of their prices, reference prices are used in the sense that a person think most options for a product should cost $X - REFERENCE PRICES: Prices that buyers carry in their minds and refer to when they consider a certain product - PROMOTIONAL PRICING: Temporary pricing products below the list price, and sometimes even below costs, to increase short term sales
Characteristics Affecting Consumer Behavior: Psychological
- Motivation - Perception - Learning - Beliefs & attitudes
Geographic Shifts
- Moving to the Sun Belt (away from NE & Midwest) - Rise of micropolitan areas
Characteristics Affecting Consumer Behavior: Personal
- Occupation - Age & life stage - Economic situation - Lifestyle - Personality & self-concept
Pharma pricing model is often criticized. What are the two sides of the argument for why Pharma prices are set the way they are? What is predatory pricing? Price fixing?
- PREDATORY PRICING: Setting prices lower than cost for a small amount of time to drive competition and then raising prices once many competitors are driven out of the market - PRICE FIXING: When competitors collude and agree on a price that simulates monopolistic conditions in the market - Pharma is known for being both an incredibly expensive and profitable industry. Developing new drugs is extremely expensive
How is a "price" created for each product and how is it validated by the marketplace?
- PRICE: The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using a product or service
When would you use "price-bundling" prices and what are the good and bad points? What is the difference between passing along discounts or rewarding allowances?
- PRODUCT BUNDLE PRICING: Combining several products and offering the bundle at a reduced price a. Progressive insurance, computer software (Microsoft office), AT&T phone/cable/internet - Pros: Draws in consumers to buy products they initially didn't consider - Cons: Losses in profits for producer
What is the PLC- Product Life Cycle and why is it important to understand?
- PRODUCT LIFECYCLE: The course of a products sales and profits over its lifetime o 1. PRODUCT DEVELOPMENT: before a good is commercialized, when it is actually being created o 2. INTRODUCTION: when a new product is first distributed and made available for purchase o 3. GROWTH: Sales start to climb quickly o 4. MATURITY: When a products sales growth slows or levels off o 5. DECLINE: when sales begin to decrease and a product begins to die
What is the Product Line Pricing? Give an Example
- PRODUCT LINE PRICING: Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices § A company might offer a multitude of membership options ranging in price and features. Bronze $10, Silver $20, Gold $30, Platinum $50
International product and service introduction must consider several critical issues. Name several issues and wha the risks when introducing those products in other countries or regions.
- Products need to be tailored to better fit their surroundings in foreign markets. The original goods should still be prominent, but additional bridging goods need to be present aswell o McDonalds will add salmon burgers in Norway, or mashed potato burgers in China, ect - Styles of providing goods or services also need to be modified o McDonalds has been successful in France because it has changed many venues to fit French styles and cultural norms for eating (longer visits/more food) - Translations were not mentioned but also important Nova car sold poorly in Latin America because the name translates to No Go
What decisions must be made in the Growth Stage of the PLC to extend the life of a product?
- Reviews effect both size and speed of product growth, especially WOM - Introduction of new features is very important - Profits need to be increased by decreasing the costs of production - Consumers need to be educated about the product - Competition needs to be gauged and strategies to stay ahead must be implemented
Style, fashion, fad...how does time differ for each?
- STYLE: A basic and distinctive mode of expression - FASHION: A currently accepted or popular style in a given field - FAD: A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
How does a consumer use "showrooming" to get the best price? Why do retailers hate the price?
- ShowRooming is visiting a physical store and using a product to judge it then going online to buy it Retailors spend money on allowing customers to try multiple different products and help them pick the right one, because of showrooming these costs are not paid back because shoppers go to buy their products from their competition
What are "target-profit pricing" and "break-even analysis" and how are they used to determine price?
- TARGET-Profit PRICING: Calculating how many units of a given product need to be sold before breaking even and eventually receiving wanted returns - BREAK EVEN ANALYSIS: An analysis on what amount of sales is needed to cover costs. Used to realize sales needed for profit to become positive
Changing Economic Environment
- The recession caused many consumers to rethink their spending priorities and cut back on their buying. - More than ever marketers are emphasizing the value in their value propositions. - Marketers are focusing on value-for-the-money, practicality, and durability in their product offerings and marketing pitches. - The goal in uncertain economic ties is to build market share and strengthen customer relationships at the expense of competitors who cut back.
When a company adopts "high/low" pricing (JC Penney) and battles against EDLP pricing (Walmart) how do they compete?
- They make it appear as though they have high quality products by giving an originally high prices, then change to low prices using discounts. EDLP is just constant low pricing -High/Low: start by selling high price then later selling it on clearance or discounted price (JC P.) -Everyday low price (EDLP)-promising a low price without the need for discounts (Walmart)
Lululemon stores take prestige pricing to the limits. What do they do to get value and such high price products?
- They target a group of people who generally will have extra funds for luxuries like high class workout clothes - They make sure their consumers think that the high prices are necessary for profits, by being one of the few suppliers of quality workout clothes - People assume quality from price -selling quality products that create a status symbol -wearing clothes=a sign of healthy lifestyle
Rapid Globalization
- Today, almost every company, large or small, is touched in some way by global competition. - Companies are now not only trying to sell more of their locally produced goods in international markets, they also are buying more supplies and components abroad.
In what ways has the Sharing Economy disrupted traditional industries?
- Transformed the idea of ownership - Increased efficiencies - Maximization of resources - Easier access
What are some of the reasons that carrying a weak product in decline can hurt the company and be very costly?
- Weak products could hog management time and waste other intangible resources - By trying to save a dying product, companies often will miss opportunities to promote new products
Baby Boomers
- Wealthiest veneration (70% disposable income, half of spending) - Open to new brands - Appreciate marketers who appeal to their youthful thinking
Gauging competitive advantages
- Which differences to promote? - How many differences to promote?
How is a brand's value determined and why is it important? What is brand equity?
-Brand equity: the differential effect that knowing the brand name has on customer response to the product or its marketing -Brand Value: The total financial value of a brand, measured by: -differentiation: what makes the brand stand out -relevance: how consumers feel it meets their need -knowledge: how much consumers know about the brand -esteem: how highly consumers regard the brand
The new trend of "customer-generated marketing" has had a big impact on companies marketing plans and messaging. What is it?
-Brand exchanges created by consumers themselves--both invited and uninvited by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. -On blogs, social media, review websites
Why would someone want to "Co-Brand" their product and what are the potential problems?
-Cobranding: the practice of using the established brand names of two different companies of a product -This allows two separate companies to combine to do something neither could do on their own. Spongebob square pants clothing for example, Nickelodeon wouldn't be able to make clothes, so they had other brands help them to make highly successful products. Or Doritos and taco-bell creating the Doritos locos crunch wrap. -These combinations need complex legal contracts and licenses, each brand wants to protect themselves from the other
As with the case of Samsung, many companies develop an OIT strategy? What is IOT and what effect will it have on the economy?
-IOT internet of things- global environment of connecting every one thing with another, cars to phones to buildings to computers all connected -According to research IOT will be a $3 trillion market by 2020
What are the four service characteristics that a company needs to know when designing a Marketing campaign?
-Intangibility: services that cannot be seen, tasted, felt, heard, or smelled before they are bought -inseparability: services are produced and consumed at the same time and cannot be separated from their providers -variability: the quality of services may vary greatly depending on who provides them and when, where, and how they provided -perishability: services cannot be stored for later sale or use
Why is "internal marketing" so important in the "services" business?
-Internal marketing: orienting and motivating consumer-contact employees and supporting service employees to work as a team to provide customer satisfaction (making employees happy) -Interactive marketing: training service employees in the fine art of interacting with customers to satisfy their needs -Improving consumers view of company from how their interactions go
Describe the four Brand Development Strategies--Line extensions, Brand extensions, multi-brand and new branding--and when you would use reach?
-Line extensions: extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product or category -KFC used to serve mostly fried chicken but has grown to include grilled chicken sandwiches and other goods -Brand Extensions: extending an existing brand name to a new product or category -smart thermostat companies moved to including carbon monoxide alarms -Multi-Brand: when creating new products, giving each their own brand name, that are all subordinates of a larger ones -Ex: Pepsico owns different sodas, energy drinks, bottled waters, and fruit drinks -all these brands are their own entities that can expand into new markets that PepsiCo alone could not reach. PepsiCo owns Starbucks, and Mountain Dew, but those two brands are very different -New Branding: When a company offers a new brand for a new type of product, for example, toyota creating Lexus for its new comfortable cars
In developing a "marketing strategy statement" what does a developer include in their initial proposal?
-Marketing Strategy Development: designing an initial marketing strategy for a new product based on the product concept -marketing strategy statement: has 3 parts 1.) describes the target market; the planned value proposition; and the sales, marketshare, and profit goals for the first year 2.) outlines the products planned price, distribution, and marketing budget for the first year 3.) describes the planned long run sales, profit goals, and marketing mix strategies
Sustainability Marketing
-Meeting Stakeholders wants and needs. -A commitment to the well-being of the economy, society, and environment.
What are the many definitions of a "new product" and why must a branding and marketing program be developed for each?
-New products are: original products, product improvement, product modification, or new brands -they are the life blood of a company, created products will always fade in popularity over time, so company growth usually requires new products -New product development (SE): the development of new products, through a firm's development efforts -IDEA Generation (SE): the systemic search for new ideas
Ordering and wording can skew a questionnaire. How does it do that?
-Questions that are difficult or personal can cause the respondent to become defensive and cause their opinions be skewed by their attitude. Therefore, questions should be placed in logical order so as to not confuse the respondent causing their responses to change. Researchers should also use care in the wording and ordering of questions. They should use simple, direct, and unbiased wording. Questions should be arranged in a logical order. The first question should create interest if possible, and difficult or personal questions should be asked last so that respondents do not become defensive.
The "New Product Screening" process says one should ask three questions-R,W,W. This stands for -is it real? Can we win? Is it worth doing? What does it mean?
-RWW -Real: is it possible? Is there a need and a market for this product -Win: does this product offer a sustainable competitive advantage? -Worth doing: does this product fit the companies overall growth strategy?
Clayton Act (1914)
Supplements the Sherman Antitrust Act by prohibiting certain types of price discrimination, exclusive dealing, and tying clauses
Describe elements of Buffalo Wild Wings marketing strategy. What is the key to their success?
-Revolves around the B-Dub experience -Utilize restaurant as a total eating and social experience (watch sports, cheer on teams, meet new friends that are into the same thing) -Designs restaurants to imitate stadium experience. -Appeals to avid sports fans as well as families -never rush guests, ecourage people to stay long periods of time and enjoy the experience
Role of the Sales Force
-Serve as a critical link between a company and its customers -Coordinate marketing and sales
Important decisions must be made by a company at each step of the PLC. In the introduction stage, why must a toy maker look at in the current product line when introducing new products?
-Toys have an especially low PLC -New products must be seen as a type of extension and enhancement of later ones
Explain the difference between Exploratory, Descriptive and Causal Research.
-exploratory- the objective is to gather preliminary information that will help define the problem and suggest hypotheses -descriptive-the objective is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product -casual-the objective is to test hypotheses about cause and effect relationships
How does Chick-Fil-A distinguish themselves from other QSR's?
-focus on customers is key, ned to provide the best possible experience to its customers -has a limited menu, original breaded chicken sandwich -customer service must go above and beyond -customer experience-enhancing strategy: give them something to do...eat more chicken. -very family-oriented, and follows religion
What is "Generational marketing" and what are the good points and bad points of this approach?
-generational marketing is creating separate products and marketing programs for each generation Good: undeniable differences between our generations, businesses should take advantage of this when creating campaign strategies Bad: risk turning off an entire generation each time you craft a product or message that appeals affectively to another
"Customer Insights" are achieved through market research, touchpoint analysis, primary and secondary collection and competitive intelligence? Define how each are conducted and the value of each method.
-market research-researchers define the problem and objectives of the research and define a plan that will gather the exact information needed to efficiently gather the data and present it to management. The value that this method gives is the information from their customers about what they plan on doing that could determine whether their idea will fail or succeed -touchpoint analysis-analyzing each interaction with customers and clients. Like website interaction, promotions, call centers, surveys, feedback, ads, commercials. The companies look at how they are reaching their customers and what is the most effective so that they can continue to target that area or put more resources towards it. It helps the company continue to reach more and more customers effectively -primary collection-primary data is normally collected through surveys, observations, and experiments. This allows companies to specifically target certain groups and allows the company to gather as much data as needed, while the secondary data is usually not enough -secondary collection- secondary collection is information that already exists somewhere, having been collected for another purpose. Companies can buy this information from outside suppliers. The value of this is that secondary data can usually be obtained faster and at a lower cost than primary data, allowing companies to gather information faster while spending less money -competitive intelligence-is the systematic monitoring, collection and analysis of publicly available information. It can be done by observing customers firsthand, quizzing the company's own employees, benchmarking competitors' products, online research and monitoring social media buzz. Good competitive marketing intelligence can help marketers gain insights into how consumers talk about and engage with their brands.
In customer-engagement marketing, why is there a shift of "marketing by intrusion" to "marketing by attraction"
-marketing by attraction is creating market offerings and messages that engage consumers rather than interrupt them -utilize social media to great extent -
When using mechanical instruments for research what is biometric measuring and neuromarketing?
-neuromarketing- is when researchers use EEG and MRI technologies to track brain electrical activity to learn how consumers feel and respond -biometric- uses heart rates respiration rates, sweat levels, and facial and eye movements
Two-Fold Goal of Marketing
1. Attract new customers by promising superior value 2. Keep and grow current customers by delivering satisfaction
Buyer Decision Process for New Products
1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption
Evaluating Market Segments
1. Segment size and growth 2. Segment structural attractiveness 3. Company objectives and resources
The Marketing Process
1. Understand the marketplace and customer needs and wants 2. Design a customer-driven marketing strategy 3. Construct an integrated marketing program that delivers superior value 4. Build profitable relationships and create customer delight 5. Capture value from customers to create profits and customer equity
The Marketing Process have four steps in creating value. What are they?
1. Understand the marketplace and customer needs and wants. 2. Design a customer value-driven marketing strategy 3. Construct an integrated marketing program that delivers superior value 4. Engage customers, build profitable relationships, and engage customer delight 5. Capture value from customers to create profits and customer equity
Major Logistics Functions
1. Warehousing 2. Inventory Management 3. Transportation 4. Logistics Information Management
The Business Buyer Decision Process
1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review
Individual Product & Service Decisions
1. product attributes 2. branding 3. packaging 4. labeling 5. product support services
Personal Selling Process
1. prospecting and qualifying 2. pre-approach 3. approach 4. presentation and demonstration 5. handling objections 6. closing 7. follow-up
Describe the seven different types of Retail Store models and what they focus on as their business models? (Specialty, Department, Supermarket, Convenience, Discount, Off-price and Superstore)
1.Specialty- offers specific products with expert knowledge about the specific product (florists, furniture stores) 2. Department-the most complex offering a wide range of products that can appear as a collection of smaller retail stores managed by one company. The department store offers products at various pricing levels. This type of retailer adds high levels of customer service by adding convenience. (Macy's, Neiman Marcus) 3. Supermarket- Supermarkets have significant buying power and therefore often retail goods at low prices. Usually offer food and drink but have recently diversified to home, electrical, fashion, etc. (Publix) 4. Convenience- located in residential areas, this type of retailer offers a limited range of products at premium prices due to the added value of convenience.(7-Eleven) 5. Discount- This type of retailer offers a variety of discounted products. They offer low prices on less fashionable branded products from a range of suppliers (Walmart) 6. Off-price- retailers who provide high quality goods at cheap prices. They usually sell second-hand goods, off-the-season items etc. (TJ Maxx) 7. Superstore- offer a wide variety of all types of products at low prices to get everything you need from one store. (Super Target, Best Buy)
What is a "Positioning Statement" and why is it important?
A "positioning statement" is a statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference). Ex: Evernote is a digital content management application that makes it easy to capture and remember moment sand ideas from your everyday life using your computer, tablet, phone, and the web. Provides the company with a specific mission and calls for concrete action and not just talk. The statement determines what the company must deliver.
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.
Questionnaires can be misleading when using open-ended or close ended questions . Give an example.
A closed ended question can be answered with a yes or no, open ended needs more information For example: are you going on vacation this summer vs. what are your summer plans Open-ended questions are especially useful in exploratory research, when the re- searcher is trying to find out what people think but is not measuring how many people think in a certain way. Closed-ended questions, on the other hand, provide answers that are easier to interpret and tabulate.
How does a "value proposition" help the working relationship in a marketing exchange?
A company must decide how it will serve target customers-- how it will differentiate and position itself in the marketplace. A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
Franchise
A contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.
What is a "Product Positioning" map and what does it tell you about how a company wants to work with their target market?
A product positioning map shows consumer perceptions of brands versus those of competing products on important buying dimensions. How do you differentiate yourself from other brands Tells you what qualities are important to a target market and what the companies focus on/should focus on more
Quota sample
A sample deliberately constructed to reflect several of the major characteristics of a given population
New Product Development Process
A seven-phase process for introducing products: - idea generation - screening - concept testing - business analysis - product development - test-marketing - commercialization
What is the role and the future of a "shopping center" and a "lifestyle center"? What is a "retail convergence" and why is it so highly competitive?
A shopping center is a group of retail business built on a site that is planned, developed, owned and managed as a unit. (Regional shopping center, community shopping center, neighborhood shopping centers, power centers) Lifestyle centers are smaller, open-air malls with upscale stores, convenient locations, and non retail activities such as playground, hotels, movie theaters, etc. Retail convergence is the merging of consumers, products prices, and retailers. This means great competition between places that were mutually exclusive before like Sears and Best Buy, which makes it hard to differentiate a certain company.
Price is one of the biggest headaches for Executive management but also the biggest opportunity to improve profitability. Why do executives not want to deal with it?
A small change in price can be enough to dissuade a customer from purchasing and going to a competitor Aspects of psychological pricing
Briefly describe Maslow's Hierarchy of Needs in relation to Consumer Marketing Insight.
A triangle of needs, only when a lower level is fulfilled will a person move towards the next tier Top Self-actualization (self development and realization) Esteem (self esteem, recognition, and status) Social (sense of belonging, love) Safety (security, protection) Base Physiological (hunger, thirst)
off-price retailers
A type of retailer that offers an inconsistent assortment of merchandise at relatively low prices.
Aldi's has a very precise Brand Differentiation for their stores as they try to reach their target market. What is it and how have they implemented it.
Aldi's brand differentiation revolves around producing quality food for much cheaper prices than their competitors (focus on lowering prices). Aldi stores offer few options/variety for each products and typically do not carry name branded foods. (Often their own store branded foods-almost 95%) Their stores are also smaller and operated by smaller staffs. They also operate only at times which are peak shopping times, they do not focus on losing money by operating at times where a small amount of people shop.
From a retailer standpoint, what are the benefits of the "Free Sample" machine Walmart is testing?
Allows customers to try lots of items, which they'll probably go back to purchase if they like it
"Alternative Buying Evaluation" is an important process brand marketing teams study. Why and what would one learn?
Alternative evaluation: The stage of the buyer decision process in which the consumer uses the information to evaluate brands in the choice set It is very valuable for marketers to learn what traits between brands are the most important to consumers, so that they can understand how to better appeal to consumers over their competition.
Robinson-Patman Act (1936)
Amends the Clayton Act to define price discrimination as unlawful. Empowers the FTC to establish limits on quantity discounts, forbid some brokerage allowances, and prohibit promotional allowances except when made available on proportionately equal terms.
A company's' "Value proposition" is written to communicate Brand image to the "intended" target market. What are the key elements of a value prop?
Answer the question "Why should I buy your brand?", quality, performance, style, price, why product is better than the others (pg 208)
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Many things affect a "buying decision". "Attitude of others" and "unexpected situational factors" occur that might alter your choices. What are they and how can they have you change?
Attitudes of others: Other people, who are not directly involved in the purchase, may have a large influence on the buyers behavior Unexpected situational factors: Factors that suddenly change a person's values when getting a product. For example, if the economy declines, a person may value affordability more than comfort
Why is it important to recognize the "family" and current changes if you are in marketing?
Because families themselves are their own consumer segment. The family is the most important consumer buying organization in society. Changes in the general family dynamics will change how you market For example in past years marketers would target moms because traditionally they would be making most household purchases, but now there is a shift away from that because of the growing number of dads taking on household management
Lifestyle might be the most accurate way to study and identify groups. Why is it becoming so very important when you study a consumer behavior market?
Because when analyzing a lifestyle you can see spending patterns It profiles a person's whole pattern of acting and interacting in the world When analyzing consider AOI dimensions, activities, interests, and opinions
Why must the price demand curve be studied before any strategy or decisions are made on price?
Because when understanding the elasticity of demand, producers can better gauge how to price a good. Low elasticity will result in high prices because price is not a large factor in the consumers decision to buy a good for whatever reason
How does "Behavioral segmentation" help improve customer loyalty or "occasion" shopping on holiday's or "Benefits" segments?
Behavioral segmentation helps improve customer loyalty or "occasion" shopping on holidays or "Benefits" segments. During occasions it keeps customers coming back for the product they desire. It helps firms build up products usage. For example. Pumpkin Spice Lattes at Starbucks are only available during the fall. Benefit segmentation requires companies to deliver the benefits that their customers are looking for. As a result customers are more inclined to continually buy the product as their satisfaction is met. (Ex: Fitbit)
"Old Rules" talks about "Brand Essence". What is it and why is it vital for a company to understand it?
Brand essence is the heart and soul of a brand - its fundamental nature or quality It is important for a brand to understand its essence so it knows the customers it is marketing towards
What is the difference of three levels of Products-- Core, Actual, or Augmented? Give an example by using Apple Ipad
Bullseyes with 3 rings -augmented -actual -core Augmented (builds on the actual and core value of the product, and offers consumers even more benefits) -delivery and credit -after sale service -warranty -product support (apple support, payment plans, product warranties) actual (the combination of the physical product and the core benefits consumers stand to gain from purchasing it, on other words, it is the tangible aspect of the product.) -brand name -quality level -features -packaging -design (apples brand name, lightweight, high performance, fashionable) core (what the consumer is actually offered from the product) -the consumer need that is being satisfied by the product (a phone to connect people, a device for self expression, productivity)
How does the corporate B2B buying process differ from the B2C process? What steps are different in each?
Business Buyer markets involve larger purchases and more dollars than B2C markets Far fewer, but larger buyers in the B2B market Many sets of business purchases are made for only one set of consumer purchases (Good Year Tire example) Business markets have an inelastic and more fluctuating demand, especially in the short run (inelastic= insulin: you will get it no matter what the price) B2B buying process involves more decision participants and a more professional purchasing effort, as they face more complex buying decisions than do consumers B2B demand is a derived demand--it is ultimately derived from the demand for consumer goods In the business buying process, the buyer and seller are often more dependant on each other, which is why B2B marketers must work with buyers throughout all stages of the buying process (including post-purchase operations)
How does B2B Sales handle segmentation?
Business buyers can be segmented geographically, demographically, or by benefits sought, user status, user rate, and loyalty rate. Additionally use operating characteristics, purchasing approaches, situational factors and personal characteristics. Usually have separate systems for dealing with larger or multiple location buyers- help them develop.integrate products into their company
Need recognition
Buyer recognizes a problem or need
Loyalty status segmentation
Buyers can be divided into groups according to their degree of loyalty
What is a buying center? How do businesses use them and why is it important for marketing to understand the dynamics of the process? Who are the participants?
Buying Center: decision making unit of a buying organization that consists of all people and units involved in the business purchase buying decision process Participants include users, influencers, buyers, deciders and gatekeepers (pg 168) IT is important for marketers to understand the B2B buying process in depth and also know the client very well in order to provide a complete solution through solutions selling
How does a company nurture and develop a community of "Early adopters" for their product?
By focusing on the most basic features of a product and not rushing to make grand changes, as well as serving core customers to create loyal returning customers.
Customer Relationship Management relies on good measurement "touchpoints". What is a touchpoint analysis and what does one discover from a TPA?
CRM: Managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty. By using CRM to understand customers better, companies can provide higher levels of customer service and develop deeper customer relationships. They can use CRM to pin- point high-value customers, target them more effectively, cross-sell the company's products, and create offers tailored to specific customer requirements. A touchpoint analysis analyzes each interaction with the customers and clients and the company. Therefore, the company can see where each customer saw their ads or purchased their products and can target these people in order to build customer loyalty. Customer loyalty is the main reason for TPAs as the company wants to build as much customer loyalty as possible.
What are some examples of Notre Dame's "sub-brands" that use both their own branding elements as well as Notre Dame's?
Campus Dining; Notre Dame Landscape Services
Because of change in technology and access, how has "micromarketing" and "local marketing" become possible and more common? Is "Individual" or "hyper targeting" possible and good.
Changes in technology have helped "micromarketing" and "local marketing" become more common. Thanks to the explosion in smartphones and tablets that integrate geolocation technology allowing companies to track consumers' whereabouts closely and engage them in localizes deals and information fast. (SoLoMo marketing- social+local}+mobile) Individual marketing is possible with these new technologies.- Mass customization of goods and marketing messages. (Hyper targeting can be good and can engage the customers more for example Nike fans who train with FuelBands and Nike+ Running App) Hyper targeting can overstep by collecting data inappropriately and deceptive messaging.
Why is "competition-based pricing" method often preferred by the sales function? What are the pros and cons?
Competition based pricing: setting prices based on competitor's strategies, prices, costs, and market offerings. Consumers will base their judgments of a product's value on the prices that competitors charge for similar products
What is Luxottica's business model?
Complete vertical integration
What are the changes seen for marketing because of "Environmentalism, sustainability and social responsibility" as reflected in their branding and product development?
Companies are responding to consumer demands by producing more environmentally responsible products... better pollution controls, biodegradable packaging, recycling Companies learning that what's good for the planet and customer well being can be good business More efficient operations and less wasteful products are good for environment and save money Ex: Patagonia donates 1% of revenues to environmental causes Before, it used to be hard on costs but now it has become more cost-efficient
"disintermediation" is the constant concern of players in the marketing channel? When does it occur and give some examples of how companies fight it.
Companies must be innovative to avoid people going straight to final buyers "disintermediation: cutting middle men in a supply chain do not suck at your job and work with trustworthy partners and you will be safe
What is a "customer value delivery network" and how do marketing channels play a key role in satisfying consumer needs?
Companies, suppliers, distributors, and customers who partner with each other to improve the performance of delivering customer value Marketing channel helps make product or service available
What is a "corporate" chain, franchise chain and a "voluntary" chain in retail?
Corporate chain-two or more outlets that have common ownership and control, centralized buying and merchandising options, and similar lines of merchandise are considered corporate chain stores. They appear in all types of retailing but strongest in department, discount, good, drugstores, and restaurants (can buy in large quantities at lower prices and gain promotional economies) Franchise chain- franchise arrangements are characterized by a contractual relationships between a franchiser (a manufacturer, wholesaler, or service organization) and franchisees (independent entrepreneurs who purchase the right to own and operate any number of units in the franchise systems). (McDonald's, Subway) Voluntary chain- sponsored group of independent retailers that engaged in group buying and common merchandising. These are associations of independent retailers, unlike corporate chains, Wholesaler-sponsored voluntary chains of retailers who engage in bulk buying and collective merchandising are prevalent in many countries. One example is Try Value hardware stores.
Federal Food and Drug Act (1906)
Created the Food and Drug Administration (FDA). It forbids the manufacture or sale of adulterated or fraudulently labeled foods and drugs.
How does "crowd sourcing" help in new product development?
Crowd Sourcing: inviting broad communities of people- customers, employees, independent scientists and researchers, and even the public at large--into the new product innovation process -this outsources some of the idea production process, but more importantly gives the company excellent insight to consumer needs
Outline the factors that Influence Consumer Behavior and give examples.
Cultural, the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Ex Culture, Social class, Subculture Subculture: a group of people with shared value systems based on common life experiences and situations (nationalities, religions) Social, factors that are brought from who a person is surrounded by. Ex: Groups and social network, family, roles and status Personal, factors that are created from the actual physical needs of a person. Ex: Age and lifecycle stage, occupation, lifestyle, personality and self-concept, economic situation Physiological, factors that are created from the consumer's state of mind. Ex: Motivations, perceptions, learning, beliefs, and attitudes
Wants
Culturally shaped needs
Harley Davidson Motorcycles are an "Iconic" Brand. What are the characteristics of their consumer, their behavior and the marketplace? How does Harley "communicate" to target audience?
Currently 2/3 of riders are older caucasian males, but the company is trying to expand to be known and used by anyone who wants a quality motorcycle Their current users are known for their fierce loyalty to the brand The brand is known for promoting the traits of Freedom, independence, power, and authenticity The brand holds events like anniversary celebrations to celebrate returning users and captivate new ones
"Customer Lifetime Value" and "Customer Equity" are two vital concepts each company needs to understand. What implications do they have for building marketing plans and strategy?
Customer Lifetime Value: the value of the entire stream of purchases a customer makes over a lifetime of patronage Customer Equity: the total combined customer lifetime values of all of the company's customers Value of company comes from current and future customers Companies not only want profitable customers but they want to retain them for life See chart on page 22 of Strangers, Barnacles, Butterflies and True Friends
Managing New Product Development
Customer-centered new product development Team-based new product development
Customer perceived value
Customers buy from the firm with the highest perceived value
Desired demand
Demand that ultimately comes from the demand for customer goods
Who within an organization should set price? Product Developers, Finance, Sales, Marketing?
Depends on the pricing style
Give some examples of "channel conflict" and how do "power" relationships play in channel management. What is "horizontal" conflict and "vertical" conflict?
Disagreement on goals (within the channel) Horizontal--firms at the same level of the channel Vertical--different levels of the same channel (ex: McDonald's corporate & McDonald's franchises)
Dole Foods conducts a rigorous Procurement Process and requires their suppliers to perform many tasks to qualify as a source for food. Why is that so important for their business and how do they make sure they keep improving as a company?
Dole foods is a produce based company, and so they need to ensure that their suppliers are delivering fresh, well kept fruit to them; Always maintains its high quality product standards Improving as a company: started out with just pineapples, now sell all kinds of fruit and vegetables Uses machinery that peels/cuts and packages fruit and vegetables very quickly Uses canning techniques that allows them to be shipped all over the world
Name several types of new retail store models?
E-tailers, dollar stores, warehouse stores, and mom and pop shops (spontaneity and excitement, new and exclusive products, limited time)
Why is your channel strategy so important in developing an International marketing program?
Each country has their own unique distribution systems Because foreign markets are generally very different from local ones, and companies want to ensure they are reaching their consumers in the best ways possible
Needs
Essentials
Federal Trade Commission Act (1914)
Established the Federal Trade Commission to monitor business practices, false advertising, and dishonest labeling
Branding
Everything is branded; represents quality & consistency
Institutional Market
schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care
Companies and Brand Managers look for competitive advantage through a "differentiation" strategy and careful product positioning. Give an example of how they might implement this type of strategy and development of their product's image/ essence.
Example: Dunkin Donuts vs Starbucks Starbucks targets more upscale professionals with more high-brow positioning. Dunkin Donuts targets the "average Joe" with a decidedly more lowbrow, "everyman" kind of positioning. Each succeeded by creating the right value proposition for its customers.
Describe the difference between an exclusive, selective or intensive distributor
Exclusive--few people have the right to distribute products, very few retailers get the right to sell your product (high standards) Selective--choosing a few people who will not receive your product, but most firms may retail your product. (some standards) fewer distributors than the number of intermediaries Intensive--supplying product in as many outlets as you can Intensive: stocking with anyone who will take your product. (no standards)
What are the 8 element in a marketing plan?
Executive summary Business goals Target audience groups Online marketing - current standing Online marketing objectives Tactics Related posts Comments COULD ALSO BE Executive summary Current marketing situation Threats and opportunities analysis Objectives and issues Marketing strategy Action programs Budgets controls
Why is a company constantly re-evaluating their channel strategy? Economics, Control and Adaptability all play a role.
External factors are always changing (ex: economy; consumer preferences)
Post-purchase behavior
Further action, based on satisfaction level - Determined by relationship between consumer's expectations & perceived performance - Also affected by cognitive dissonance
The General Electric model is leading edge in working with their B2B clients. What kind of marketing programs do they have and how is it helping them compete?
GE uses digital and social media marketing programs Way to bind the two companies together, share inside information and thinking. Get everyone to buy into the same culture, essence Creates a way to share problems and concerns, and thus customer focus in maintained. Promotes Efficient communication between parties, Win- Win environment. Know latest thinking and directions
Four examples of Segmentation are Geographic, Demographic, Psychographic and Behavioral. Describe the different types and give examples of each.
Geographic segmentation- dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods Ex:Target's CityTarget vs Supertargets Demographic segmentation- dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation Ex: Dove's Men+Care Psychographic segmentation-dividing a market into different segments based on lifestyle or personality characteristics Ex:Panera-fresh food with no preservatives Behavioral segmentation-dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product Ex: Tacobell's A.M cruchwrap (occasions)
Many products are considered "Habitual- Buys". Compare that to a "Variety-seeking buying behavior" environment. What are the characteristics of each?
Habitual buying behavior occurs under conditions of low involvement and little significant brand difference. In situations characterized by low involvement but significant perceived brand differences, consumers engage in variety-seeking buying behavior.
Harley Davidson has a very specific target market and segment that they have worked with for the past 60 years. What challenges are they having as their demographic and customers change and age?
Harley Davidson is having attracting new customers after their current customers age and change. To combat this they have developed Street Models for people to use in the city in order to widen their market demographic. (Exampand to women, African Americans, and Hispanics) They have also created events where these customers go and socialize, creating more unision and attracting other customers too.
How does the IBM Sales Model for Business to Business relationship selling work? What are the Pros and cons of this business model? What is "Solutions Selling"?
IBM's B2B emphasis is less on selling to customers and more on partnering with them to help solve their complex information and analytics problems They deliver insights and solutions to customer's data and information technology problems Pros: IBM's position involves "Boots on the Ground"--developing close day in, day out relationships with their customers Pros: They are knowledgeable and spend an extensive amount of time getting to know clients and their decision makers and understanding their clients problems and thinking about how IBM can solve their problems (see vodafone example--pg. 163) Pros: Starts with a customer focused mission and translates to IBM individuals working closely to clients to find and provide complete solutions Cons: Honestly can't think of many...maybe it's too time consuming? Solutions Selling: Buying a packaged solution to a problem from a single seller, thus avoiding the separate decisions involved in a complex buying situation
Political and Social Environment
Increased emphasis on ethics - Cause-related marketing - Socially responsible behavior Legislation Regulating Business (Function) - Protect businesses from each other - Protect consumers - Protect the interests of society
How was GoPro successful when they redefined their products with experiences?
Initially the company focused on providing users with equipment for capturing videos then changed their focus to the capture broadcast and recognition and recognition aspects of their products this was to aid company growth, and GoPro was able to attract more customers because average people got a chance to feel like professionals because how easy it is to use when someone buys a GoPro, they are not only buying a camera, they are buying access to a way of telling their story through videos. GoPro enables its users to share the most important moments in their lives through video.
BCG Consulting uses a "portfolio analysis" methodology for their customers showing "growth share matrix" How does it work and what can you communicate with it?
It is a framework created by BCG Consulting that evaluates the strategic position of the business brand portfolio and its potential. Classified into 4 categories based on industry attractiveness and competitive position **look at picture***
What is a "value-chain" analysis? Why is it important to always perform one for a company?
It is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.
Customer "value-based pricing" is determined in what whom and how?
It is setting price based on buyers perceptions of value rather than on the sellers cost. The customer decides what price is right uses buyers' perceptions of value as the key to pricing.
Define "Marketing Mix" and why is it important to a strategist to understand?
It is the set of actions or tactics that a company uses to promote its brand or product in the market 4ps: price, product, promotion, place
Idea Screening
screening new product ideas to spot good ones and drop poor ones as soon as possible
How do Business Buyer Behaviors vary in their decision process and decision criteria?
Like consumer buying decisions, business buying decisions are affected by a incredibly complex combination of environmental, interpersonal and individual factors, but with an extra layer of organizational factors thrown into the mix Environmental factors: the economy, supply conditions, technology, regulation, competition and culture/customs Organizational Factors: Objectives, strategies, structure, systems, and procedures Interpersonal factors: influence, expertise, authority, dynamics Individual Factors: Age, job position, motives, personality, preferences, buying style
What is a "Limited-service Wholesaler" and give three examples like rack jobber, drop shippers?
Limited-service wholesaler: offer fewer services than full-service wholesalers cash-and-carry wholesalers: carry a limited line of fast-moving goods and sell to small retailers for cash. Normally do not deliver. Truck wholesalers: perform primarily a selling and delivery function. Carry a limited line of semi-perishable merchandise (milk, bread) which is sold for cash as deliveries are made to supermarkets, hospitals, restaurants, cafeterias, hotels Dropshippers: do not carry inventory or handle the product. On receiving an order, they select a manufacturer who then ships the merchandise directly to the customer. Operate in bulk industries (coal, lumber, equipment) § Rack jobbers: serve grocery and drug retailers, mostly non-food items. Send delivery trucks to stores where the delivery people set up toys, health and beauty, etc. They price the goods, keep them fresh, set up point-of-purchase displays and keep inventory records. § Producers cooperatives: farmer-owned members that assemble farm produce for sale in local markets. Often attempt to improve product quality and promote a co-op brand name such as sun-maid raisins, Sunkist oranges, diamond nuts. § Mail-order or web wholesalers: send catalogs to or maintain websites for retail, industrial, and institutional customers featuring jewelry, cosmetics, specialty foods, and other small items. Primary customers are businesses in small outlying areas
What are the two different contexts for the term "Marketing Channel"? Give some examples of types of each.
Logistics (Distribution) Network - Physical product development Traditional Marketing Channel - Product attention and garnering customer awareness - Mass media, instore, direct mail, email, internal
Airbnb has a successful business model that use all four characteristics of service. What do they do to make sure they are in tune with their target market?
Make it incredible easy to leave reviews and rating for their experiences
Wheeler-Lea Act (1938)
Makes deceptive, misleading, and unfair practices illegal regardless of injury to competition. places advertising of food and drugs under FTC jurisdiction
What is the difference between manufactured-sponsored retailer, wholesalers and service-firm sponsored retailers?
Manufactured-sponsored retailer - vertical integration (Ford dealerships) Manufactured-sponsored Wholesalers - Coke (sells syrup to wholesaler) Independent wholesaler - buys from manufacturers and sells to customers (Costco) Service-firm sponsored retailer - system of service product delivery where the organization is only producing a service with independent franchises (car rental service)
How does "subculture" play a role in understanding the Consumer? What is a Total Marketing Strategy?
Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to certain subcultures and their general needs The three main subcultures mentioned in the book are Hispanic american (family oriented and price sensitive), African american (motivated by quality and selection), and Asian american (well-educated, brand conscious) Total market strategy: Integrating ethnic themes and cross-cultural perspectives within a brand's mainstream marketing, appealing to consumer similarities across subcultural segments rather than differences
Products, Services, and Experiences
Market offerings include both tangible goods and services. Companies create and manage customer experiences with their brands or companies. -To differentiate their offers from that of the competitors
What is the difference between a product-oriented and a marketing oriented description of a company?
Market oriented: a company that organizes its activities, products and services around the wants and needs of its customers Product orientation: a company who focuses on its product and the skills knowledge and systems that support it
What is "Market Segmentation" and why is it an important first step?
Market segmentation is dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes. It is an important first step because Important to decide who you are marketing to/who the product is for. Understand the differences between each group
Provide a definition of key terms "a market" and "marketing management"
Market: the set of all actual and potential buyers of a product or service Marketing Management: art and science of choosing target markets and building profitable relationships with them
What is "marketing analytics" and why is it so important in developing a marketing strategy?
Marketing analytics is the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights. It is important because companies use this to mine through the big data that they collect from various sources and use it to gain insightful information about their customers and their habits.
What is marketing?
Marketing is the process by which companies engage customers, build strong customer relationships, create customer value in order to capture value from customers in return.
How does marketing myopia affect a seller's ability to deliver value to their customers?
Marketing myopia: the mistake of sellers paying more attention to the specific products they they offer rather than to thee benefits and experience of the products. People lose sight of underlying customer needs, product is only a tool to solve a customer problem. -Hurts seller's ability to deliver value, they should focus on creating brand experiences for their customers.
Causal research
Marketing research to test hypotheses about cause-and-effect relationships
Industrial products
Material/Parts, Supplies/Services, Capital Equipment
Mountain Dew has chosen to focus on a specific segment of the market with their ads and promotions. What segment have they chosen and how have they implemented it.
Mountain Dew has chosen to market their ads and promotions to young, largely millennial-male target market. They have done so through their "Do the Dew" campaign which emphasizes living in the moment and just going for it. The brand sponsors extreme sport events such as The Dew Tour. In addition, they have the Green Label/DEWmocracy programs that allow consumers to help make decisions for the brand and share interact with fellow fans.
What are the five steps in the Buyer Decision process?
Need Recognition Information search Evaluation of alternatives Purchase decision Post purchase behavior
Netflix uses analytics to help improve customer satisfaction. What do they do?
Netflix uses the mined data in order to better recommend shows from their vast library. This allows the consumer to not have to scroll through the thousands of shows and movies that Netflix and can just watch the recommended shows. This helps save the consumer a lot of time and gives them shows that they would like.
Extranets
Networks that link business partners over the Internet by providing them access to certain areas of each other's corporate intranets.
Niche or concentrated marketing has great advantages. What is the good and bads consequences of picking it as your product strategy.
Niche/Concentrated Marketing-a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches Advantages: -firm achieves strong market position -greater knowledge of consumer needs -can market more effectively and efficiently -helps small companies focus their limited resources Disadvantages: -will suffer greatly if one segment turns away from product/service -larger competitors could enter with more resources
What is Omni-channel retailing? Why is it so important in today's environment for retailer to survive?
Omni-channel retailing: integrating all available shopping channels and devices into a seamless customer shopping experience. It is so important because it allows consumers to buy wherever and whenever it is most convenient for them to. In turn, their experience is bettered and their loyalty to the retailer increases. It is also important because physical brick and mortar stores are often going out of business so they need a new channel to sell products. It is creating a seamless cross-channel buying experience that integrates in-store online and mobile shopping Today's buyers shift across online and offline Tactics to deal with this type of buyer such as price matching, personal advice and service, immediacy, convenient locations, easy returns Order online and pickup in store, and then buy additional things in person
Business to Business Social Media and Buying Process is rapidly changing. How is it being affected by the Internet and thee Connected-world?
Online purchasing (e-procurement) has grown rapidly, as it shaves transaction costs and results in more efficient purchasing for both buyers and suppliers E-procurement also reduces the time between order and delivery and frees people from a lot of paperwork B2B marketers are now using a wide range of digital and social marketing, such as on websites, blogs, mobile apps, e-newsletters, and proprietary online networks Digital and social media has become the new space for engaging business customers, as it can create greater customer engagement and interaction
Groups & Social Networks
Online social networks Buzz marketing Social media sites Virtual worlds Word of mouth Opinion leaders
Proctor and Gamble are Strong Advocates of treating their customers like partners. What are they doing to demonstrate that and how do they make sure their clients are successful?
P&G created CBD (career business development) - function is to integrate the customers and partners into the P&G network. Make sure the suppliers and product channels are successful In CBD you will develop your strategic selling skills by building diverse, collaborative relationships with P&G's multi-functional team members Creates a Win-win situation This model is a costly one, but once integrated it can save money. Reduced mistakes and better service, more efficiency Divestment is a management statement. If you can't add value, spin off. Plus, management focus and investment in growth and adding value to the Brand.
What is a "marketing information systems"?
People and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. -assessing information needs -internal databases -marketing intelligence -marketing research -analyzing and using information
How has the "great recession" affected marketing and what changes have come about?
People are focusing more on getting a good value from their purchase. The example in the book was that Target shifted the focus on their slogan from expect more, to the pay less side
Big Data often scares many customers. Why is that? What can go wrong? What are the positives of having Big data systems available to companies?
People are scared of big data because they do not like companies taking and selling their personal information to other companies. People are afraid of what can go wrong and the possibility of their information being taken advantage of. Companies can take advantage of their personal information in order to target specific people. Companies can be hacked and people's personal information can be stolen in order to commit fraud by using their personal information. However, the positives of companies having this data is being able to provide a better more personal service to tailor to the specific customer, allowing the customer to have a better experience.
ESPN is part of the Disney Portfolio, How does it affect their business and their portfolio?
People associate disney with a family atmosphere, so integrating ESPN into the company makes ESPN meet certain standards. Unfortunately, that means the company and Disney are judged more harshly during scandals like John Skipper resigning due to a cocaine addiction
Apple Pay is a potential disinter-mediator? How are they offering change?
People do not need their wallets; the wallet is on the phone They are making it possible to pay for almost everything with an Apple product
Influencers
People in an organization's buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.
Shifts in secondary Cultural views
People vary in their emphasis on serving themselves versus others, More cocooning staying home, home cooked meals, decline of loyalty toward companies
The "Rate of Product Adoption" varies from person to person. Why is that and where do you usually profile? Name the five stages or types of adopters.
People vary in willingness to try new goods or experiences -stages of the adoption process: Awareness: When a consumer first learns about a product Interest: When a consumer seeks information about this new product Evaluation: When a consumer considers whether or not to try the product Trial: When a consumer tests the product Adoption: When a consumer decides to make full and regular use of a product Types of adopters Innovators first 2.5% Early adopters next 13.5% Early mainstream next 34% Late mainstream next 34% Lagging adopters final 16%
Is perception more important than reality in marketing? What makes a "Complex buying" process different?
Perception is most important for attracting buyers initially, but to get returning consumers, the quality of the good must be high Complex buying behavior: consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences between brands The complex buying process is usually for larger more important purchases and involves the buyer becoming much more involved, careful, and well educated in their decision.
Personal Selling
Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships
Selecting customers
Picking the right target market segments to find as many customers as possible and increase demand
Growth-share matrix (BCG Approach)
Portfolio-planning method that evaluates a company's SBUs in terms of market growth rate & relative market share
How does the tier of a product affect the pricing and promotional strategy? (we used the different tiers of bacon as an example of this in class)
Positioning of a product impacts the experience a customer expects to receive, thus impacting the value they are willing to assign to the product
Why does "post-purchase dissonance" and "cognitive" dissonance occur to many buyers?
Post purchase behavior: when buyers take action after a purchase due to their level of satisfaction for a product Post-purchase dissonance: after purchase discomfort caused by traits not noticed until a good is being used Cognitive dissonance: buyers discomfort caused by post-purchase conflict, or regretting not buying another good instead Dissonance occurs because of the consumer's expectations, and perceived performance
Describe the steps in the typical B2B buying process. What is an RFP, QA process and VPA (performance review)?
Problem Recognition: can result from internal or external stimuli. Company recognizes a problem or need that can be met by acquiring a product or service Next, the buyer prepares a general need description, which outlines the characteristics and quantity of the needed item Product Specification: Buying organization decides on and specifies the best technical product characteristics for the needed item Supplier Search: stage of the business buying process in which the buyer tries to find the best vendors Proposal Situation: The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals. The buyer issues a Request for Proposal, or RFP Supplier Selection: the stage of the business buying process in which buyer reviews proposals and selects a supplier or suppliers Order-Routine Specification: The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing technical specifications, quantity needed , expected time of delivery, return policies and warranties Performance Review: the stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement QA=quality assurance i think
Define what is the "Product Mix" or sometimes called "Product Portfolio Mix"
Product Mix: the set of all product lines and items that a particular seller offers for sale
What are the 4 P's of marketing?
Product, Price, Place, Promotion
Why is the question, "What is a Product?" not so simple to answer?
Product: anything that can be offered to a market for attention, acquisition, use , or consumption that might satisfy a want or need. Service: an activity, benefit, or satisfaction offered for sale that us essentially intangible and does not result in the ownership of anything It is hard to define because a product could be anything sold to another person to solve or help deal with a problem, they have, which is a broad definition. It is not so simple to answer the question because a product can be loosely defined to also include events, services, people, places, or organizations. It can be either very broad, or very specific
what is the difference between the five concepts of "production, product, selling, marketing, and societal marketing" concept?
Production concept: the idea that consumers will favor products that are available and highly affordable, therefore, the organization should focus on improving production and distribution efficiency. Product concept: the idea that consumers will favor products that offer the most quality, performance and features; therefore, the organization should devote its energy to making continuous product improvements. Selling concept: the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort Marketing concept: a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Societal Marketing Concept: a company's marketing decisions should consider consumer's wants , the company's requirements, consumer's long term interests, and society's long term interests
What are the Pros and Cons of having your brand become "generic" like Kleenex or Band-Aid?
Pros: most popular product in the market Cons: people too heavily associate brand name as product. Like people calling all adhesive bandages BAND AIDS -Given enough time any seller can claim to be these brands like what happened to Jell-O, kerosene, and yo-yo's.
How does "RFID" technology make an integrated logistics management supply system simpler and inventory management more accurate?
RFID is a technology where small transmitter chips are embedded or placed on products or packaging. It allows companies to know exactly where a product is located physically within the supply chain.
What is "real-time" marketing and give an example of how advertisers are practicing it.
Real Time Marketing: marketing that links into current events that are relevant to an audience in order to engage them with a brand ... "in the moment" Ex: Oreo Super Bowl tweet: You can still dunk in the dark"
CAN-SPAM Act (2003)
Regulates the distribution and content of unsolicited commercial e-mail
Big data is used effectively by Target to analyze their customers' needs and preferences. What mistake did they make in divulging their findings to a young shopper's family? What does this say about research?
Remember they accidentally sent pregnancy ads to a 15 year old and her dad was pissed even though she actually was pregnant Because of her shopping patterns, Target started suggesting baby/pregnancy products.
Federal Cigarette Labeling and Advertising Act (1967)
Requires that cigarette packages contain the surgeon general's warning
As the economy shifts, why is income distribution important to understand as income levels?
Rich have grown richer, middle class has shrunk, poor have gotten poorer Has created a tiered market, companies like Nordstrom aggressively target the affluent, Five Below targets the lower tier
What is a SWOT analysis and what can it reveal?
SWOT Analysis - a planning tool used to reveal an organization's strengths, weaknesses, opportunities, and threats
Most valuable company assets
Salespeople
Segmented pricing is used to pass along lower prices by segment, geography, demographic, age group or sex. Is this fair and why do they do it?
Segmented pricing: selling a product or service at two or more prices, where the differences are not based off of production costs
How does the selling models of Volvo and Tesla threaten the existing car industry marketing channel strategy? What is the advantage and the disadvantage?
Selling cars directly online, boost sales but alienate independent sellers
What is a "service retailer" and what is their role or mission?
Service retailer refers to a retailer whose product line is actually a service, including hotels and motels, banks, airlines, colleges, hospitals, movie theaters, etc. Their mission is to provide a specialized service for the customer They grow faster than product retailers
Organizaitonal marketing programs are conducted by many companies to enhance their corporate image and their brand. What is "social marketing" and how does it help a company?
Social marketing is the use of social ideas; consists of using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well being, improves brand image and favorability to consumers
What is the "Starbucks Experience" and how has it helped their company to grow?
Starbucks is a unique coffee shop, not only are their customers receiving their coffee, but they also gain the atmosphere and the experience of starbucks It is a social setting, free wifi, name on the cup, starbucks has worked to make their customers feel as though they cannot find this experience anywhere else
What are the different considerations when one changes, increase or decrease prices from the customer? From the competition? What is the purpose of the "low-price fighter brand"? How are "store brands" used to serve this function?
Store Brands are used as cheaper alternative to the higher quality name brands, attract consumers for low prices -Customer POV- higher price makes the product seem of higher quality -Competition POV-lower price may signal that the company is trying to boost sales or take a larger part of the market -Low-price fighter brand- add a lower-priced item to compete with other firms -store brands--give the fighter brand the low price it needs to be that way
The three types of buying situations are straight rebuy, modified rebuy, and new task buy. What difference in approach, costs, and structure does each have?
Straight Rebuy: A business buying situation in which the buyer routinely re-orders something without modifications To keep businesses "in" suppliers try to maintain customer engagement & product/service quality "Out" suppliers try to find new ways to add value or exploit dissatisfaction so the business will consider them Buyer makes fewest purchasing decisions in a straight rebuy Modified Rebuy: A business buying situation in which the buyer wants to modify product specifications, prices, terms or suppliers "In" suppliers will feel pressured and have to put their best foot forward on an account "Out" suppliers may see a modified rebuy situation as a opportunity to make a better offer and gain new business New Task Buy: a business buying situation in which a buyer purchases a product or service for the first time Marketer tries to reach as many key buying influences as possible while also providing help and information Buyer makes most decisions in a new task buy
Netflix is seen as a disputer because they have not been afraid of "disintermediating" many companies business models and roles in the marketing chain. They believe in "distermediating" themselves. What does that mean?
Strive to be so innovative that they replace their current business model Netflix revolutionized the streaming and movie service by offering online streams. Therefore, Netflix only needs computers to interact with their customers. Other competitors are forced to follow Netflix to be considered and many channels are lost to the entire industry.
What is a "category killer" in retailing?
Superstores, giant specialty store that carry a very deep assortment of a particular line (Best Buy) A retail chain store that is dominant and its product category Electronics, home-improvement, books, baby gear, toys
Describe how good supply chain management systems work to deliver marketing value for the consumer?
Supply chain management is the managing of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
Understanding technological changes is vital for maketers. Why and give an example
Technological environment is the most dramatic force changing our world the tech environment changes very rapidly, new tech replaces old tech Companies that do not keep up will soon find their products outdated, will miss new products and opportunities Ex: many companies are now using RFID (radio freq ident.) to track products and consumers at various points in distribution channel, such as Disney's magicband
Marketing teams often add someone with Psychology expertise in order to understand the consumer. Why is that role important and what do they study?
That role is important because they study the motives behind why a person buys something. When a person's motives are better understood, marketers can then make their advertisements more appealing
What is the role of a "sales agent" in the marketing value chain? How do they become more powerful and vital for a business?
The "sales agent" is part of the primary marketing value chain. They are responsible for creating, communicating, delivering, and exchanging offerings that have value for customers. They become more powerful and vital for a business when they are able to sell large amounts of a product.
Problem recognition
The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
Why is it important to study the Micro and Macro Environment? Use FITBIT as an example
The microenvironment are the people close to the company that affect its ability to serve its customers (suppliers, competitors, etc) Macroenvironment: larger societal factors that affect the microenvironment (demographic, economic, natural, technological, political, cultural) Important to study because marketers can adapt their strategies to meet new marketplace challenges and opportunities Fitbit heavily involved in both environments Used micro when dealing with tough competition from the likes of Apple and other smart watch producers...allows for innovation and differentiation Macro was involved when marketing their product to corporate America and taking advantage of a health and fitness craze as well as high social media popularity
Setting Company Objectives and Goals
The mission should be converted to supporting objectives at each level of management. Translation of broad company goals into tangible marketing approaches
Cluster (area) sample
The population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview.
Marketing
The process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return - A sense of satisfying customer needs
Product Mix Consistency
The similarity of product lines in a product mix
Marketing Channel Management
selecting, managing, and motivating individual channel members and evaluating their performance over time
Why has the warehouse retailer model been so success, like COSTCO and SAM's Club?
The warehouse retailer model has been so successful because they only minimally markup offerings, they pass along lower costs to consumers, and they proved "differentiated and high quality" products. They are also convenient and provide a variety of materials in one centralized location. Limited selection of nationally branded and private-label products in a wide range of categories at very low prices. Operate out of big, drafty bare bones to keep prices low.
International Marketing Manners are important to practice and to understand. Why?
There are many things that marketers can and should learn from International business practices. Every Country has its own culture, and that they are all different. Every country has differences in thought, values and customs. All major positions in a company or organization, but marketers especially need to understand the needs, customs and cultures of international firms they decide to do business with. As the book says, marketers "must dig deeply to make certain they adapt to these differences" (171). Marketers must be careful with how they market their products in overseas economies and cultures in order to avoid offending the people of these cultures or making an embarrassing mistake. Understanding the culture of the market you are in is crucial to marketers, and they should make it a priority to understand the cultures they are marketing in; not only to avoid making silly and offensive mistakes, but also to create more effective marketing plans and campaigns.
How is "Social Class" measured in the United States? Is it an important distinction?
There are seven american social classes: upper upper class, lower upper class, upper middle class, middle class, working class, upper lower class, lower class. Lines between classes are much less rigid in the US. Overall distinction is important, but similar classes tend to have similar buying habits
Mattel has been extremely successful managing the Product Life Cycle of the Barbie Doll? Describe what they have done and implemented and why is it so important for their survival.
They focused on creating many basic barbie dolls and constantly adding enhancements for barbie to use that are sold separately.
Brand Name Selection
selection, protection
Manufacturer's brand (national brand)
This branding strategy uses the name of the manufacturer on a range of products, not necessarily related to the manufacturer's main products, because it attracts customers loyal to the manufacturer's name. For example, many successful clothing designers have licensed their manufacturer's brand name outside the clothing category to include cosmetics, perfumes,and even jewellery.
Positioning Map
Tool that helps marketers place products in a market by graphically illustrating consumers' perceptions of competing products within an industry.
What is an undifferentiated and differentiated marketing strategy?
Undifferentiated marketing strategy-a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer Differentiated marketing strategy-a market-coverage strategy in which a firm targets several market segments and designs separate offers for each
What is vertical integration of your channels, "corporate vms"? Describe the issues of direct versus indirect channel management.
Vertical integration--producers & retailers acting as a unified system Corporate VMS--one owner in charge of successive production & distribution, a vertical marketing system that combines successive stages of production and distribution under single ownership-a channel leadership is established through common ownership. aKA consolidation of roles to a single company or firm so as to eliminate middle men Direct channel--sells directly to consumers Indirect channel--1+ levels of intermediaries to help bring its products to final buyers
"Targeting" your audience helps a company in many ways. How is it necessary for a Marketing Strategy to have a statement and focus on a target?
Very important as they help decide who the company is actually going to market their product to. Once the market is broken down into different segments, the company needs to select what group fits into the mission and goals of the company.
Describe the different segmentation strategies in either the beverage market (Coke v Pepsi) or retail store business (WalMart, Target, Sears, JCPenney), or Autos (figure 7.3) and how they chose to compete? Why does segmenting establish a brand and image with consumers and customers, and what is the advantage or disadvantage?
Walmart- everyday low prices, quality at low price Target- started as a nicer walmart- but changed to expect more pay less to emphasize cheap prices as it turned away potential customers who thought it was expensive JCPenny- higher end discount shoppers- declined when they stopped the promotions BMW- more for more, getting luxurious cars for a higher price. Segmenting establishes a brand and image with consumers and customers. The advantages is that is creates a loyal base of continuous customers. Marketing and brand image is centered around a specific group. Disadvantage is that it can block out potential customers who are not included in the brand image.
Demands
Wants backed with buying power
Is "web-casing" (web rooming) or "show-rooming" a better strategy to sell products?
Web-casing (web-rooming)- the practice of first checking out merchandise online, then buying it in traditional stores.The key for store retailers is to convert these shoppers into buyers when they visit the store. Showrooming: consumers come into a store to check out merchandise and prices and then buy online from a rival. Some retailers are embracing it as an opportunity to highlight the advantages of shopping in person.
Why is it important to understand whether a customer's state of desire for an offering is either in "needs, wants or demands state"?
Whether an item is a want or a need affects its demand. Need: a state of felt deprivation Want: needs that are shaped by one's society and individual personality Demand: wants that are backed by buying power
What is a wholesaler and what vital role do they play in the economy?
Wholesalers are firms who sell goods and services to those who are buying them for resale or business use. (operate behind the scenes) They play a vital role in the economy because they supply the various items to different companies throughout the world that we use every day. They buy from producers and sell mostly to retailers, industrial consumes and other wholesalers They add value because they perform channel functions: (selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, management service and advice)
What is the difference between types of consumer products-- convenience, shopping, specialty, or unsought-- and their pricing and promotion?
consumer product: a product bought by final consumers for personal consumption convenience product: a consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort (low cost, buying habits, ex: toothpaste) shopping product: less frequent purchase, often involves much planning and comparison. Often have higher prices. a consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality price, and style (higher cost, moderate/high consumer involvement and research--ex: major appliances: TV's, clothing) specialty product: strong brand preference and loyalty, special purchase effort, little comparison of brands, low price sensitivity. High price, More carefully targeted promotion. A consumer product with unique characteristics or brand identification for which a significant group of buyers if willing to make a special purchase effort -very high cost, requires much buyer involvement (luxury goods, Rolex's) Unsought product: Little product awareness or knowledge. Price varies, aggressive advertising and personal selling. A consumer product that the consumer either does not know about, or knows about but does not normally consider buying (varying in price: life insurance) Industrial product: a product bought by individuals and organizations for further processing or for use in conducting a business
Product & Service Classifications
consumer products and industrial products
Gatekeepers
control the flow of information to others
Omni-channel retailing
creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping
Experimental research
gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Place
includes company activities that make the product available to target consumers
Measurable, Accessible, Substantial, Differentiable and Actionable are the five requirements for a segmentation exercise to be successful. Describe each characteristic features.
measurable- the size, purchasing power, and profiles of the segments can be Measured accessible-the market segments can be effectively reached and served substantial- the market segments are large and profitable to serve differentiable- the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs actionable-effective programs can be designed for attracting and serving the segments
Marketing Control
measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
Users
members of the buying organization who will actually use the purchased product or service
Secondary beliefs and values
more open to change and include people's views of themselves, others, organizations, society, nature, and the universe
Industrial distributor
sell to manufacturers rather than to retailers
Why did Bass Pro Shops succeed where Cabela's failed? Was it a good idea to buy them?
o Cabela's failed because they fell victim to intense competition from online vendors, while Bass Pro Shops did not. o It was a good idea to buy them because it made one large successful company o Were able to acquire them at a cheap price, the synergies lined up
Bass Pro Shops and Jungle Jim's are two Retail business models that represent "experiential retailing" shopping. Is this a trend and the way of the future for stores or is it virtual reality?
o Experiential retailing is useful to a company to attract people who wouldn't normally enter the store, but VR could be a new wave of experiential retailing that could put old model of massive museum like stores out of business
What are the four elements of sales force compensation?
o Fixed amount: usually a salary, stable income o Variable amount: commissions or bonuses based on sales performance, reward for greater effort and success o Expenses o Fringe benefits
What is "Green Retailing and why is it catching on among the public?
o Green retailing: adopting environmentally sustainable practices, promoting more environmentally responsible products, launching programs to help customers be more responsible, working with channel partners to reduce environmental impact. o Sustainable building design, construction and operations o Greening up product assortments from renewable sources, sustainable products, packaging, and distribution systems
What is the difference between Inside and Outside sales person roles?
o Inside: conduct business from their offices via phone, online and social media or visits from prospective buyers. Provide support, learn about customers o Outside: travel to call on customers in the field, face-to-face collaboration and relationship building
Segmented Pricing
selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
What is "personal selling"? What is the difference between relationship Sales and Transactional sales? (p. 471)
o Personal selling: o Relationship oriented sale: engage the customer over the long term in a mutually profitable relationship o Transaction oriented sale: aim is to make sales
What is the definition of a "sales promotion"? Give three to four examples
o Sales promotion: short-term incentives to encourage the purchase or sale of a product or service § Freestanding insert in the newspaper with a coupon § Ad offering "buy 1 get 1 free" and other discounts § Supermarket deals § Buy a new phone and get a free memory upgrade § Frequency marketing programs and loyalty cards
What are the seven steps in the selling process?
o Prospecting and Qualifying § Identifying qualified potential customers. Financial ability, volume of business, special needs, location, possibilities for growth o Pre-approach § Learn as much as possible about a prospective customer before calling o Approach § Meet the customer for the first time o Presentation and Demonstration § Tell the value story to the buyer, show how it solves problems o Handling objections § Seek out, clarify, and overcome any objectives to buying o Closing § Ask the customer for an order o Follow-up § After the sale to ensure customer satisfaction and repeat business
How does the sales team link the company with its customers?
o Represent the company to customers § Find and develop new customers and communicate info about the company's products and services § Sell products by engaging customers and learning about their needs o Represent the customers to the company § Acting inside the firm as "champions" of customers' interests and managing the buyer-seller relationship
what is a "trade promotion" and what is it meant to accomplish?
o Trade promotion: sales promotion tools used to persuade the resellers to carry a brand, give it shelf space and promote it in advertising
How does "Team Selling" work? What is the advantage and disadvantage of the model?
o Using teams of people from sales, marketing, engineering, finance, tech support and upper management to service large complex accounts o Multiple minds of experts in different areas can solve problems better/faster o Salespeople are competitive and have been trained and rewarded for outstanding individual performance, may have trouble learning to work with others, can confuse those used to working with one person, difficulty evaluating individual contributions
What are the latest trends in wholesaling as technology changes and disintermediation occurs?
o Wholesalers are facing growing competitive pressures, more demanding customers, new technologies and more direct-buying programs on the part of large industrial, institutional and retail buyers. o Wholesalers today are cutting down on the number of lines they carry, choosing to carry only more profitable ones o Rethinking which services count most in building strong customer relationships o Need to maintain strong presence on social media o Investing in automated warehouses and IT systems, more online business o Increasing the services that they provide to retailers o Wholesalers are opening up their own retail divisions, retailers have become massive wholesalers.
Product line stretching
occurs when a company lengthens its product line beyond its current range
Good-value pricing
offering just the right combination of quality and good service at a fair price
Segmenting Business Markets
operating characteristics, purchasing approaches, situational factors, personal characteristics
Marketing Information System (MIS)
people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights
Deciders
people in an organization's buying center who have formal or informal power to select or approve the final suppliers
Buyers
people in an organization's buying center who make an actual purchase
Marketing logistics
planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit
Sherman Antitrust Act (1890)
prohibits monopolies and activities (price-fixing, predatory pricing) that restrain trade or competition in interstate commerce
Allowance
promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way
Lanham Trademark Act (1946)
protects and regulates distinctive brand names and trademarks
National Traffic and Safety Act (1958)
provides for the creation of compulsory safety standards for automobiles and tires
Fair Packaging and Labeling Act (1966)
provides for the regulation of packaging and the labeling of consumer goods. requires that manufacturers state what the package contains, who made it, and how much it contains
Sales Force Structure
territorial, product, customer, complex
Microenvironment
the actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics
Price
the amount of money customers pay to obtain the product
Marketing management
the art and science of choosing target markets and building profitable relationships with them
Purchase decision
the buyer's decision about which brand to purchase - Affected by attitudes of others & unexpected factors, which manifest themselves between the intention and decision phases
Consumer Buyer Behavior
the buying behavior of final consumers
Business Buyer Behavior
the buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others
The Service Profit Chain
the chain that links service firm profits with employee and customer satisfaction
Product Quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs Level & Consistency
Business portfolio
the collection of businesses and products that make up the company
External Service Marketing
the company markets to the customers
Internal Service Marketing
the company markets to the employees
Supplier search
the stage of the business buying process in which the buyer tries to find the best vendors
Alternative evaluation
the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set
Competitive Marketing Intelligence
the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment
Marketing Research
the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
Building customer equity
the total combined customer lifetime values of all of the company's customers - Goal is to produce customer quality
Brand value
the total financial value of a brand
Customer lifetime value
the value of the entire stream of purchases a customer makes over a lifetime of patronage
Product position
the way a product is defined by consumers on important attributes- the place the product occupies in consumers' minds relative to competing products
Product image
the way consumers perceive an actual or potential product
Does it make a difference if there has been a "geographic shift" in the country for marketing brand managers to consider in their marketing planning?
these are periods of great migratory movement, Definitely, more and more people moving to "micropolitan areas" (small cities located beyond congested metropolitan areas) meaning a shift in where people work More people telecommuting... working from home, in a remote office, work on the phone Resulted in a booming small home/office market Means that marketers now have to target the telecommuting sector to a higher degree in order to turn profits
Product Mix Length
total number of items a company carries within its product lines
Interactive Service Marketing
training service employees in the fine art of interacting with customers to satisfy their needs
Deceptive Pricing
trying to trick consumers into thinking they are getting a deal when they are not
Marketing Implementation
turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
Corporate chains
two or more outlets that are commonly owned and controlled
Cash-and-carry wholesalers
wholesalers that serve mostly smaller retailers with a limited assortment of products
Product Mix Decisions
width, length, depth, consistency
Partner Relationship Management
working closely with partners in other company departments and outside the company to jointly bring greater value to customers
Nature of the Buying Unit
• More decision participants • Professional purchasing procedures
Types of Decisions and the Decision Process
• Usually involves large sums of money • More technical information • More people in company involved
