marketing 305 exam 3 chapter 11-16
packaging benefits
-attracts attention, promotional tool (NEW, IMPROVED) -different sizes, appeal to different markets, update packaging -change or update their packaging
time/effort
-fave brands (unique, go where it is) -convenience goods (easy to grab access goods to cashier.. example put umbrellas right next to door when raining) -differentiated segments( milk has soy, almond, 2%, etc) long term products (satisfied?) -homogenous (same features/benefits.. then shop based on price/sale (decision heuristics)) -heterogenous (will always be different... example houses on same block, looks the same, but located differently)
price fixing
-price fixing: practice of colluding with other firms to control prices.. horizontal (when competitors that produce and sell competing products or services collude or work together to control prices, effectively taking price out of the decision process for consumers) or vertical (different levels of the same marketing channel agree to control the prices passed onto consumers)
What are the specific pricing Strategies (4)
1. Everyday Low Pricing (over time on average low price) 2. High/Low pricing (start out high, go low) 3. Penetration Pricing, 4. Price Skimming.
flows.
1.customer to store( best buy employee scans UPC tag on HDTV packaging. ) 2. store to buyer (Point of sale/ POS records the purchase info and electronically sends it to the buyer at Best buy's corporate office... inventory management system and used to monitor and analyze sales..order more..prices. promotion planning, etc) 3. buyer to manufacturer (purchase information...creates an order for new merchandise and sends it to sony.. negotiate prices... shipping dates, promotional events. etc) 4. store to manufacturer ( sent directly from store to manufacture... manufacturer decides when the ship more merchandise to the distribution centers and stores.. or ordering process is done automatically bypassing the buyers) 5. store to distribution center (stores also communicate with best buy distribution center to coordinate deliveries and check inventory status..) 6. manufacturer to distribution center and buyer ( when manufacturer ships the HDTVs to the best buy distribution center, it sends an advanced shipping notice to the distribution center. ASN document.. then makes appointments for trucks to make delivery at a specific time and date and loading dock. when shipment is received at center buyer is notified and authorizes payment to the vendor
laggards
16% -like to avoid change and rely on traditional products until they are no longer available
early adopters
2nd group of consumers, to generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review -opinion leaders -enjoy novelty 13.5%
early majority
34% 3rd group.. crucial because few new products/services can be profitable until this large group buys them. -its members don't like to take as much risk and tend to wait until bugs are worked out of a particular product/service -prob rents the latest movie during the first week it comes out on video -little risk because all reviews are in and their costs are lower because renting movie instead of theatre -peak.
late majority
34% last group of buyers to ender a new product market -when they do product achieved full market potential -movie watchers wait until the newest movie is easy to find at the rental store or put it low on their netflix queue, to be delivered after the other consumers interested in watching it have already seen. --sales tend to level off, decline.
pricing strategies
EDLP: every day low pricing.. companies stress the continuity of their retail prices at a level somewhere between regular, non sale price, and deep discount sale prices their competitors may offer. consumers can spend less of their valuable time comparing prices, and at different stores. (walmart) high/low pricing: relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. "get them while they last" excitement/ athmosphere during a sale. (2 market segments: people awho are not price sensitive and are willing to pay the high price.... and price sensitive who wait for the low sale price)
Benefits of brick vs click
IN STORES: browsing, touching and feeling products, personal service, cash/credit payment, entertainment and social experience, immediate gratification, risk reduction INTERNET AND MULTICHANNEL RETAILING; deeper and broader selection, personalization (customer service, offerings/suggestions), expand market presence
The Uniqueness of Services (4 I's)
Intangibility Inconsistency Inseparability Inventory
Four factors to consider when designing retailing strategy
Retailing Strategies (4) choosing retail partners, identify types of retailers, facilitating retail strategy, managing a multi-chain strategy (selling in more than 1 channel like internet or stores or catalog).
ch 16 retailing
The set of business activities that add value to products and services sold to consumers for personal or family use.
information flows
UPC: universal product code: black and white bar code found on most merchandise RFID:Radio-frequency identification (RFID) is the wireless use of electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. The tags contain electronically stored information. ASN: (in EDI) advanced shipping notice; an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment EDI: electronic data interchange computer to computer exchange of business documents from a retailer to a vendor and back (asn, vmi, CPRF[ collaborative planning, forecasting, and replenishment], intranet, extranet) VMI (in edi) : vendor managed inventory (automatically sends data to send merchandise when inventory reaches certain level) push (orders based on sales data, more accurate inventory, better when demand is uncertain) --motivating sellers to highlight the product rather than competitor's and thereby PUSH the product onto consumers vs pull ( merchandise is allocated based on forecast, does not need sophisticated IS system, good for steady demand items) designed to get consumers to PULL the product into the supply chain by demanding it.
breadth
a count of the number of product lines offered by the firm (kellog has 4) -too much breadth can become costly to maintain and can weaken the firm's reputation
distribution centers
a facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialist
family brand
a firm's own corporate name used to brand its product lines and products example.. Kellog's Rice Krispies -when all products are sold under one family brand, the individual brands benefit from the overall brand awareness associated with the family name
product line
a group of products that are closely related because they are similar in terms of consumer needs and uses, market segments, sales outlets, or prices. Ex. Nike's shoes, clothing, etc. clothing lines.
brand
a name, term, symbol, design, logo, jingle or combination thereof that identifies a seller's products and differentiates them from competitors' products
brand repositioning (rebranding)
a strategy in which marketers change a brands focus to target new markets or realign the brand's core emphasis with changing market preferences
reliability
ability to perform the service dependably and accurately
Complexity of products
actual product (brand name, quality level, packaging, features/designs) and associated services (financing, product warranty, and product support)
benefits of product lines
advertising economies package uniformity standardized components efficient sales and distribution equivalent quality
evaluation of results
analysis of the performance of the new product and making appropriate modifications was it a failure or success and what kind of changes to marketing mix are needed if any or what additional resources needed?
ch 13 service:
any intangible offering that involves a deed, performance, or effort that can not be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer
tangibles
appearance of physical facilities, equipment, personnel, and communication materials
zone of tolerance
area between customer's expectations regarding their desired service and minimum level of acceptable service-- that is the difference between what the customer really wants and what he or she will accept before going elsewhere
brand dilution
brand extension adversely affects consumer perceptions about the attributes there brand is believed to hold. unsuccessful brand extensions: (cheetos lip balm was based on the idea that if you like cheetos, you would want to wipe it all over your lips.. colgate kitchen entres, bic thought that since people wanted disposable lighters and razors they would want disposable underwear.. they were wrong)
purposes of packaging
brand identification POP advertising: a reason to buy facilitate product transport at home storage task assistance ( make shopping easier, make using the product easier)
Individual product decisions
brand strategy decisions include: brand positioning (attributes, benefits, beliefs and values) brand name selection brand ownership
retailer/store brands/private level brands
brands developed and marketed by a retailer and available only from that retailer
manufacturer brands( national brands)
brands owned and managed by the manufacturer
Consumer product classifications
by time and effort involved in the decision process by durability by tangibility by user
perishable
cannot be stored for use in the future
intangible
cannot be touched, tasted, or seen like a pure product can physical examination, you can see and hear doctor but service itself is intangible -difficult to convey benefits.. try describing whether your dentist experience visit was good or bad and why.
managing the channel/supply chain
channel conflict: .vertical channel conflict : members of the same marketing channel (retailers, manufactures, wholesalers) are in a disagreement or discord .horizontal channel conflict: same level of a marketing channel (such as 2 competing retailers or manufactures) are in a disagreement or discord, such as when they are in a price war vertical marketing systems: ia supply chain in which the members act as a unified systems; there are three types administrated (supply chain system in which here is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship), contractual and corporate. --->opposite from independent/ conventional strategic relationships:Chains through Mutual trust, open communication, common goals, interdependence, credible commitments.
five c's of pricing
competition costs company objectives customers channel members
5 steps to the product development process
concept testing product development market testing product launch evaluation of results
brand licensing
contractual arrangement between firms whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for negotiated fee example: use of characters created in books or other media.. disney made a lot of extra revenue with products based on the princess and the frog movie, and star wars memorabilia.
4 kinds of products/services
convenience, shopping, speciality, unsought
Service Gaps Model
customer exception for service quality, management perceptions of customers expectations, standards specifying service to be delivered, actual service delivered, retailer communication about service quality. customer and management expectations: knowledge gap management to standards is standards gap standards to actual service is delivery gap actual service to communications is communications gap customer expectation to actual service delivered is service gap
service quality
customer's perception of how well service meets or exceeds their expectations, often is difficult for customers to evaluate
legal and ethical aspects
deceptive/ illegal pricing predatory pricing: firm's practice of setting a very low price for one or more of its products with the intent to drive its competition of of business price discrimination: when firms sell the same product to different resellers at different prices -price fixing: practice of colluding with other firms to control prices.. horizontal (when competitors that produce and sell competing products or services collude or work together to control prices, effectively taking price out of the decision process for consumers) or vertical (different levels of the same marketing channel agree to control the prices passed onto consumers) -loss leader pricing: lowering price below the store's cost.. build store traffic. -bait and switch: bait them with a really low priced item and try to switch them to a more expensive one or saying they're out of the low priced one
decline
declining sales declining profits laggards low number of competitors and products
customers
demand curves (how many units of product/ service consumers will demand during a specific period of time at different prices) and pricing prestige products/ services...-( purchase for their status rather than their functionality ) -demand increases with lower prices -demand decreased with higher prices -signals quality
product development/design
development of prototypes and/or the product -balancing various engineering, manufacturing. marketing, and economic considerations to develop a product's form and features or a service's features -alpha testing: internal testing, employees try ice cream flavors beta testing: opposite of alpha
standards gap
difference between firm's perceptions of customer's expectations and the service standards it sets. training employees to meet and exceed standards can close the gap
delivery gap
difference between firm's service standards and actual service it provides to customers. closed by getting employees to meet or exceed service WHEN the service is being delivered by empowering service providers, support, incentives, and using technology when appropriate
communication gap
difference between the actual service provided to customers and service that the firm's promotion program promises. be realistic and manage customer expectations effectively = close gap
compatibility
diffusion process may be faster or slower depending on various consumer features like cultural differences -chinese version of firefox has different features because chinese users surf internet differently -adobe flash doesn't work on iPad
ch 15 SCM: designing marketing channels
direct: manufacturer sells directly to buyer indirect: when 1 or more intermediaries work with manufactures to provide goods and services to customers
merchandise flows
distribution centers (Management of inbound transport -> Receiving and checking using UPC (universal product code) -> Storing and Cross Docking -> Getting merchandise floor ready -> Preparing to ship -> Shipping to store.) , direct store delivery JIT (Just In Time Systems A way to manage inventory by responding quickly to inventory losses.) aka quick response.. inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise "just in time" for it to be used in the manufacture of another product, in the case of parts or components, or for the sale when the customer wants it, in the case of consumer goods in retailing.
advantages of private brands for retailers
earn higher profits on own brand less pressure to mark down price manufacturer can become a direct competitor or drop a brand/reseller ties customer to wholesaler or retailer wholesalers and retailers have no control over the intensity of distribution of manufacturers brands
observability
easily observed= benefits or uses are easily communicated to others.. seeing friends use iPad or on tv -- want to purchase one too
new products (pioneers or break-throughs)
establish a completely new market or radically change both the rules of competition and consumer preferences in a market -apple iPod (change way people listen to music but also new industry devoted to accessories for it) -first motivators: first to create the market or product category
ch 11; product concepts product
everything, both favorable and unfavorable, that a person receives in an exchange
value of BRANDING for the customer and the marketer
facilitate purchasing establish loyalty product from competition reduce marketing costs are assets (legally produced by trademarks and rights) impact market value
predatory pricing:
firm's practice of setting a very low price for one or more of its products with the intent to drive its competition of of business (illegal!!!!)
product launch
full-scale commercialization of the product -uses all marketing mix: price (manufactured suggested retail price), promotion, place,
product lines
group of associated items such as those that consumers use together or think of as part of a group or similar products
market penetration strategy
growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers, set initial price LOW
advantages of manufacturer's brands for intermediaries (wholesalers, distributors, and retailers)
heavy consumer ads by manufacturers attract new customers enhance dealer's prestige rapid delivery, carry less inventory if dealers carries a poor quality brand, customer may simply switch brands and remain loyal to dealer
brand awareness
how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it -- kleenex meaning all tissues
ch 12 product management: innovation
ideas are transformed into new offerings, including products, services, processes, branding concepts that will help firms grow
benefits of a broad product mix
increased market share limits overall product risk helps understanding of target market reinforces brand and organization name more target market segments
Product strategy decisions
individual product product line product mix
5 groups of adopters:
innovators, early adopters, early majority, later majority, laggards BELL SHAPED CURVE
4 services
intangible, inseparable, heterogenous, perishable
idea sources
internal R & D, consortia (with other groups), licensing, brainstorming, outsourcing, competitor products[ reverse engineering], customer input)
product life cycle 4 steps
introduction growth maturity decline
perceived value
is a relationship between a product's or service's benefits and it's cost
assurance
knowledge of and courtesy by employees and their ability to convey trust and confidence
complexity and trial-ability
less complex are also relatively easy to try. new tablet= go to apple story and try it there. options for trying kindle are more complex= lack of amazon stores..may not be aware it's also at best buy.
service recovery
listening to the customers and involving them in service recovery - then finding a fair solution -distribution fairness (customer's perception of the benefits he or she received compared with the costs ( loss or inconvenience); want to be compensated. procedural fairness: perceived fairness of the process use to resolve the complaints. -resolving problems quickly
introduction
low sales low/negative profits innovators= typical consumers one or few competitors
majority of brands marketed in the us are ____ brands
manufacturer
brand ownership
manufacturer brands or national brands vs private label brand or store brands (premium, generic, copycat, exclusive co-branded)
direct marketing channel
manufacturer sells directly to buyer
channel members
manufacturers, wholesalers, retailers can have different perspectives when it comes to pricing strategies. manufacturer concern to increase sales to maintain better image while retailer wants lower prices gray market: irregular, not necessarily illegal. sells shit at lower prices than those intended by the manufacturer.
brand associations
mental/emotional links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personaility example.. state farms insurance uses slogan "like a good neighbor, state farm is there)
depth
number of products within a product line (kellogg's breakfast snack product line has special k, kashi,poptarts,etc)
three levels of distribution intensity
number of supply chain members to use at each level of the supply chain intensive: designed to place products in as many outlets as possible. (having pepsi in many grocery stores)
brand loyalty
occurs when a consumer buys the same brand's product or service repeatedly over time rather than buy from multiple suppliers within the same category example.. airlines, hotels, phone providers, credit card companies, etc... Customer management programs (CRM)--> points to redeem for discounts/services --- costs are lower to maintain loyal customers
primary package
one the consumer uses example.. toothpaste tube ..consumer typically seeks convenience in terms of storage, use, and consumption
status quo pricing
only changes price only to meet those of competition --- competitive orientation
ch 14: price
overall sacrifice a consumer is willing to make to acquire a specific product or service (like money, or time)
multichannel retailing
overcome the limitations of an existing format, increasing share of wallet, expanding market presence, insight into customers shopping behavior. ---------------- price, SCM, brand image, integrated CRM
maturity
peak sales peak to declining profits late majority high number of competitors and competitive profits - reaching peak so firms try and rejuvenate their products by adding new features or repositioning them, decline
new product pricing
penetration: set the initial price low for the introduction of the new product or service. objective is to build sales, market share, and profits quickly. experience curve effect ( sales grow, costs drop) price skimming: innovators and early adopters are willing to pay a higher price to obtain the new product or service.. willing to pay the premium price to have the innovation first.
relative advantage
perceived to be better than substitutes, diffusion will happen quickly. instead of just offering an e-reader, apple developed multi purpose tablet (iPad)
break even point
point at which the number of units sold generates just enough revenue to equal the total costs; at this point profits are ZERO FIXED COSTS DIVIDED BY PRICE MINUS VARIABLE
co-branding
practice of marketing 2 or more brands together on the same package, promotion, or store example: Yum Brands frequently combines two more more of its restaurant chains ( long john silvers, pizza hut, taco bell, kfc, and a&w) into one store space risk!-- burger king and haagen-dazs tried it but failed because too different
competition
pricing price wars monoplys pure competition
Individual product decisions
product attributes: quality, features, style and design core, actual, augmented Branding Packaging Labeling product support services
product mix decisions
product line breadth (number of different product lines carried by company) product line consistency
product line decisions
product line depth: (line stretching: adding products that are higher or lower priced than the existing line) (line filling: adding more items within the present price range=== more profits, satisfying dealers, excess capacity, plugging holes to fend of competitors)
product support services
product support services augment actual products... companies must continually: (assess the value of current services to obtain ideas for new ones, assess theists of providing these services, develop a package of services to satisfy customers and provide profit to the company)
4 P's and retail strategy
product: providing the right mix of merchandise and services that satisfies the needs of the target market is one of retailer's most fundamental activities price: helps define the value of both the merchandise and service; and the general price range of a partial store helps defines its image promotion: advertising in traditional media such as newspapers, tv and magazines continues to be inportant to get customers in stores. increasingly electronic communications are being used for promotions as well. place: location location location is so important
unsought products/services
products or services consumers either do not normally think of buying or do not know about
company objectives
profit oriented (companywide policy that all products must provide for atleast an 18% profit margin to reach a profit goal) sales orientated (set prices very low to generate new sales and take sales away from competitors, even if profits suffer) competitor orientated (to discourage more competitors from entering market, set prices very low) customer orientated (target a market segment of consumers who highly value a particular product benefit and set prices relatively high( premium pricing)
product labeling
provides information that consumer needs for his or her purchase decision and consumption of the product -they identify the product and brand, promotion elements, must comply with general and industry-specfic law and regulations, ingredients, where it was made, directions for us, safety precautions -COMmunication tool, not just a sticker on the package
supply chains streamline distribution
reduce number of transactions increase value for consumers more efficient and effective
marketing channel management/ supply chain management
refers to a set of approaches and techniques first employ to efficiently and effectively integrate their suppliers, manufacturers, warehouse, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize systemwide costs while satisfying the service levels their customers require
knowledge gap
reflects the difference between the customer's expectations and the firms perception of those expectations
5 building blocks of service quality
reliability 40% responsiveness 25% assurance (20%) empathy (10%) tangibles (5%)
service gap
results when a service fails to meet expectations tat customers have about how it should be delivered
growth
rising sales rapidly rising profits early adopters and early majority few but increasing competitors --gains acceptance, demand and sales increase
price skimming
selling a new product or service at a HIGH price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price sensitive segment
inseparable
services are produced and consumed at the same time, unlike a pair of jeans made 6 months prior to their purchase. haircut- customer is not only present but also may participate in service process can't be returned
Inconsistency
services depend on who provide them, often inconsistent. Ex. baseball team performance for ticket buyers.
brand equity
set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service (awareness, perceived value, brand associations, brand loyalty) VALUE OF THE BRAND
product line contraction
some products have low sales or cannibalize sales of other items resources are disproportionately allocated to slow-moving products items have become obsolete because of new product entries
customer service
specifically refers to the human or mechanical activities firms undertake their customers' needs and wants
market testing
testing the actual products in a few test markets -pre market tests -surveys -pre testing: generates a sales estimate then decides to introduce product, abandon it, or redesign it or revise marketing plan -offering to a limited area prior to national, uses all marketing mix.
concept testing
testing the new product idea/statement among a set of potential customers for reactions (research and development = r & d )
empathy
the caring, individualized attention provided to customers
product mix (assortment)
the complete set of all products offered by a firm
inseparability
the consumer cannot distinguish the service provider from the service itself. Ex. the quality of education at the university vs. quality of service.
co branding
the practice of marketing two or more brands together, on the same package or promotion
diffusion of innovation
the process by which the use of an innovation, product or service, spreads through a market group over time and over various categories of adopters --fashion cycles, short. -new to the world products aren't adopted by everyone at the same time. rather they spread/diffuse
brand extensions
the use of the same brand name for new products being introduced to the same or new markets, increases product mix's breadth. example. colgate and crest sell toothpaste, toothbrushes, and other dental shit even tho original product line was just toothpaste
line extensions
the use of the same brand name within the same product line and represents an increase in a product line's depth -several advantages: brand name is well established (less money to develop consumer brand awareness and brand associations for the new product)
innovators
those buyers who want to be first on the block to have the new product or service -enjoy taking risk! highly knowledgeable, person who stood in line overnight to get first ticket. prob subscribed to magazines keeping well informed 2.5% word of mouth- positive
wholesalers
those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, THEN reselling the goods (usually in smaller quantities) to retailers or industrial or business users)
shopping products/services
those for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances
convenience products/services
those for which the consumer is not willing to spend any effort to evaluate prior to purchase
intangibility
unable to be touched or seen before purchase, services are based on performance and harder for consumer's to evaluate, consumers compare experiences, marketers try to make them tangible or show benefits of using service.
individual brands
use of individual brand names for each of a firm's products ex.. kellog has other products such as morning star farms, keebler cookies and cheez-its. keeps individual identities not readily seen as being under the kellogg's umbrella
break-even analysis
used to help determine how many units need to be sold, examine relationships among costs, price, revenue, to determine the break even point
heterogeneous
variability in the service's quality. hair stylist may give bad haircuts in the morning because he/she went out the night before. yet stylist still may offer better service than undertrained stylist working the next station over. restaurant services can control food quality but not the variability in food prep or delivery. --replace humans with machines : ATM
costs
variable costs: vary with production volume ( primary labor and materials) fixed costs- unaffected by production value (costs like equipment, rent, utilities, insurance, salaries, etc) total costs= sum of variable and fixed costs
price discrimination:
when firms sell the same product to different resellers at different prices
responsiveness
willingness to help customers and provide prompt service
secondary package
wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product info that may not be available on the primary package
