Marketing Exam 2

Determining Brand Equity

Brand awareness: how many consumers in a market are familiar with the brand, what it stands for, and have an opinion about it Perceived value: relationship between a product/service's benefits and its costs Brand associations: reflect the mental and emotional links that consumers make between a brand and its key product attributes, such as logo, colors, slogan, famous personality Brand loyalty: when a customer buys the same brand's product/service repeatedly over time rather than from multiple suppliers within the same category

Innovation Continuum

Continuous Innovation: minor modifications to an existing product; little to no change; ex. Coke w/ lime Dynamically Continuous Innovation: pronounced modifications to an existing product; ex. flat screen TVs vs streaming video (bigger behavioral impact?) Discontinuous innovation: nothing similar to it exists on the market; new to the world; extreme changes;the internet

Layers of Product Concept

Core Product Actual Product Augmented Product (Pittsburgh Penguins example)

Marketing Research: Step 5

Develop and implement action plan Executive summary description of research methods discussion limitations conclusions/recommendations

Marketing Plan: Step 5

Evaluate Performance Using Marketing Metrics identify metrics analyze (over time, competing firms) Portfolio Analysis (BCG matrix - relative market share, market growth rate)

Introduction

Full-scale launch of new product into marketplace Sales are low, high failure rate Little competition Frequent product modification Limited distribution High marketing and product costs Promotion focused on product awareness and to stimulate primary demand Intensive personal selling to retailers and wholesalers

Observability

How visible the product is to people who might adopt it The higher the visibility, the more rapid the adoption rate

The Service Sector

In the U.S., services account for 70% GDP and 80% of jobs

Why New Products Fail

No discernible benefits Poor match between features and customer desires Overestimation of market size Incorrect positioning Price too high or too low Inadequate distribution Poor promotion Inferior product

Decline

Signaled by a long-run drop in sales Rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted Falling demand forces many out of market Few specialty firms left; focus on niche/special needs

Marketing Plan: Step 2

Situation Analysis (Internal and External Environment) Internal: S&W External: O&T - include cultural, demographic, social, technological, economic and political forces (CDSTEP); must consider what we can/cannot control or influence

Idea Generation

Sources of new ideas: customers, salespeople, service providers, anyone with direct customer contact, competitors, supply chain members, R&D division, consultants

Complexity

The degree to which to product or its use is difficult to understand The more complex the product, the more slowly a product's rate of adoption Overcome perception of complexity with demonstrations, personal selling, and emphasis on ease of use

Panel and Scanner

can be secondary (syndicated) or primary quantitative

Primary Data

data collected to solve specific problem at hand commonly collected later in the process advantages: precise, current, known methodology, secret, reliability disadvantages: high costs, time consuming, perspective may be limited, corporate limitations

Knowledge Gap

difference between customer's expectations and firm's perception of those expectations close by: determining what customers really want through research and metrics like service quality and zone of tolerance

Observation

examining purchase and consumption behaviors through personal or video scrutiny or tracking movements electronically good way to track movement, determine product usage qualititative

Product Launch

marketing strategy: develop a marketing strategy that can be used to introduce the product to the marketplace identify/confirm the target market prepare the 4 Ps launch - full-scale production

Marketing Myopia

narrow, short-term thinking may happen when define mission with products/services offered; what if Nintendo stuck to playing cards? Nike to shoes?

Employee Satisfaction

net value of the job (costs vs. benefits) impacts customer satisfaction impacts costs to the organization (recruiting) impacts productivity and quality

Product Development

new products & existing markets create growth by selling new products in existing markets

Factors Affecting the Rate of Adoption

relative advantage compatibility complexity trialability observability

Exploratory Research

technique marketers use to generate insights for future, more rigorous studies generally provides qualitative data

In-depth Interview

trained researchers ask questions and listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue qualitative

Determinants of Price

-Costs: Variable - varies with level of output/production Fixed - does not change as output changes -Competition -Stage in product lifecycle -Promotion strategy -Perceived quality -Target market -Distribution strategy

Brand Elements

-Name: spoken component of branding -URL: online location -Logos/symbols: visuals that stand for corporate name; symbols are logos without words -Characters: human, animals, animations -Slogans: short phrases -Jingles/sounds: audio messages and distinctive music

Justifiable Price Discrimination

-Products are physically different -The retailers paying different prices are not competitors -Competition is not injured -Price differences are due to differences in supplier costs (manufacturing or quantity discount savings) -Market conditions change - costs rise or fall, competing suppliers shift their prices, value of product declines with time

Non-monetary Costs

-Time -Effort - physical or mental -Risk - physical, social, psychological, financial -Opportunity cost: The value of what else I could do with my time or my money (the value of what I am "giving up" when I make this commitment)

Classifying Consumer Products

-by how long they last (durable vs nondurable) -by how they are used (business vs consumer) -by how consumers buy them (convenience vs shopping vs specialty vs unsought)

Why is Marketing Research Useful?

-helps reduce uncertainty under which it currently operates -links firms with environments, allowing better customer orientation -anticipate and respond to competitive moves

Steps in the Research Process

1. Define objectives and research needs 2. Design the research 3. Collect the data 4. Analyze data and develop insights 5. Develop and implement action plan 6. Follow up!!!

AMA Guidelines for Ethical Research

1. prohibits selling or fundraising under guise of research 2. supports maintaining research integrity by avoiding misrepresentation or omission of pertinent research data 3. encourages fair treatment of clients and suppliers Bottom Line: produce unbiased, factual info only

Early Adopters

13.5%, the second to adopt an innovation heavy media users tend to be concerned with social acceptance opinion leaders primarily come from this group

Laggards

16% - last to adopt an innovation Lower in social class than other categories Bound by tradition Product may have already been replaced by another innovation

Five Steps of a Marketing Plan

1: Define the Organization's Mission 2: Situation Analysis (Evaluate Internal/External Environment) 3: Identify and Evaluate Opportunities Using Segmentation, Targeting, and Positioning (STP) 4: Implement Marketing Mix and Allocate Resources 5: Evaluate Performance Using Marketing Metrics

Innovators

2.5%, the first to accept a new idea or product venturesome and willing to take risks cosmopolites: willing to seek social relationships outside of their local peer group rely heavily on impersonal information sources

Early majority

34% adopt the product prior to the mean time of adoption Deliberate and cautious Spend more time in the innovation decision process Slightly above average in education and social status

Late Majority

34% follow the average adoption time Older, more conservative Peers are the primary source of new ideas Below average in education, income, and social status Wait to purchase until product has become a necessity and/or peers pressure to adopt

Concept Test

A test to evaluate a new-product idea, usually before any prototype has been created. Present concept statement to potential buyers/users to obtain their reactions. -Measure purchase intentions -Frequency of purchase -Assess perceived value to help with pricing Findings can help to predict sales potential, and thus, profitability potential of new product.

Pioneers

AKA breakthroughs establish a completely new market or radically change both the rules of competition and consumer preferences in a market first mover advantage

Service

An act, deed or performance offered by one party to another (performances are intangible, but may involve use of physical products) An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in customers themselves, physical possessions, or intangible assets Goods - objects, devices or things Products - goods, services, people, ideas, etc...

Nonprofit Marketing

An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment. How are nonprofits like services? nonprofits are services -Market intangible products -Production requires customers' presence -Variation in service delivery -Cannot be stored

Marketing Research: Step 4

Analyze the Data and Develop Insights Turn data into information (enter, clean and code data -> choose appropriate analysis techniques -> interpret analysis)

Recover from Service Failure

Apologize Resolve the problem Listen to the customer Involve them in service recovery Fair solution

Issues in Pricing

Auctions: Used to only be for local markets, with Ebay and similar online services, this is now more feasible for a wider range of products and sellers Think long-term: Threat from competition, cost of ownership (including complimentary products), loss leader pricing Bundling/Un-bundling: Netflix

Marketing Research: Step 3

Collect the Data (secondary, primary)

Five C's of Pricing

Competition: type affects pricing strategy; ex. price wars and predatory pricing Costs: should not be the sole basis of pricing because shoud capture value to consumer who doesn't care (considers variable and fixed costs, break-even analysis, contribution per unit) Company Objectives: orientation (profit, sales, competitor, customer) based on company goals Customers: how will customers react to price changes (use demand curve and price elasticity); dynamic pricing Channel Members: manufacturers, wholesalers, retailers; different strategies at each part of the channel may result in conflict (gray marketing)

Forms of Exploratory Research

Consumer Interviews: one-on-one in-depth interviews Focus groups: group discussions/interview Ethnography: direct observation in natural setting Projective techniques: various techniques to assess things people are unable to express, often because these things are part of the person's subconscious processes (ex. roach killer)

Four Macro Strategies

Customer excellence: focuses on retaining loyal customers and excellent customer service Operational excellence: achieved through efficient operations and excellent supply chain and HR management Product excellence: having products with high perceived value and effective branding and positioning Locational excellence: having a good physical location and internet presence

Marketing Research: Step 1

Define the Objectives and Research Needs Specify the research objectives (identify core components of needs) Identify the consumer population of interest

Marketing Plan: Step 1

Define the Organization's Mission broad description of firm's objectives and scope of activities it plans to undertake Mission describes what type of business and objectives/goals **not defined by products or services offered (leads to marketing myopia)

Marketing Research: Step 2

Design the research What type of data? (qualitative vs. quantitative, primary vs. secondary, internal vs. external, causal?) What do we use to get the data? (communication - surveys, interviews, focus groups; observation - personal, mechanical; experiments; purchased) Ethical concerns

Expectations after Complaining

Distributive fairness - is restitution fair? Procedural fairness - is process to complain fair? Interaction fairness - am I treated with respect during the complaint/resolution process?

Trialability

Ease of sampling the product prior to purchase The trial experience serves to reduce the risk of a consumer's being dissatisfied with a product after having permanently committed to it through outright purchase

Marketing Research: Step 6

Follow Up were the recommendations followed? was sufficient decision-making information in the report? what could be done to make report more useful to management?

Product Line Strategies

Full vs. limited lines line stretch: upward, downward, two-way filling out vs. contracting

Goods/Services Continuum

Good-dominated products: tangible products assisted by supporting services (automobiles, home appliances, electronics) Equipment or Facility-based Services: heavy reliance on both equipment and personnel (hospitals, tanning salons, health clubs) People-based services: heavy reliance on personnel with little/no equipment needed (decorators, realtors)

Specialty Products

Goods or services bought with much consumer effort in an extended problem-solving situation; consumer has developed strong preferences and will not accept substitutes brand name often important; must create emotional attachment ex. clothing brands, BMWs (for big BMW fans) pseudo-specialty products (Jif and Hallmark)

Unsought Products

Goods or services for which a consumer has little awareness or interest until a need arises; Do not normally think about buying or are unaware require great deal of advertising or personal selling to interest people ex. life insurance, retirement investing, funeral services

Product Line

Groups of associated items that consumers tend to use together or think of as part of a group of similar products or services (e.g., P&G's line of dish detergents: Dawn, Ivory, Joy) Products within the line can stress different characteristics or benefits Products within the line are closely related

Government Regulations of Pricing

Horizontal Price Fixing: Illegal to agree on a price within a group of manufactures OR retailers OR wholesalers; cannot work with the competition to fix prices Vertical Price Fixing: parties at different levels of the marketing channel to control prices passed on to consumers; ex. manufacturer's suggested retail price Price Discrimination (Robinson-Patman Act): Manufacturers/Wholesalers cannot charge a different price to different retailers, discounts must be equitable (exceptions on next slide) Price Advertising: Guidelines/laws regarding advertising price reductions, advertising prices in relation to competitor's prices, and bait-and-switch advertising Predatory Pricing: Means that a company sets a very low price for the purpose of driving competitors out of business, they will then raise prices when competitors are gone - illegal

New Product Development

Idea Generation Concept Testing Product Development Market Testing Product Launch Evaluation of Results

Marketing Plan: Step 3

Identify and Evaluate Opportunities Using Segmentation, Targeting and Positioning (STP)

Marketing Plan: Step 4

Implement Marketing Mix and Allocate Resources 4 P's (product, price, place, promotion) and at the center is customer needs

Branding Strategies

Individual brands: Each product has its own brand Family brands: Market all (or a group of) products under an umbrella brand National/Manufacturer brands: producer's brands (Kraft mayo) Private label/Retailer/Store: store brands (Giant Eagle mayo) Licensing: One firms sells the right for another firm to use its brand name under specific circumstances Co-branding: Ingredient branding: One brand is a part that makes up the other product/brand (ex. Coke with Splenda) Cooperative branding: Two brands receive fairly equal treatment, borrow from each other's brand equity Complementary branding:Two brands marketed together to suggest use (ex. milk and Oreos)

Adopter Categories

Innovators (2.5%) Early Adopters (13.5%) Early Majority (34%) Late Majority (34%) Laggards (16%)

Types of Secondary Data

Internal External (free/inexpensive, syndicated - scanner, panel)

Psychological Issues in Pricing

Internal Reference Prices: consumers have a set price or price range in their mind; If the actual price is higher, consumers will feel the product is overpriced; If it is too low below the internal reference price, consumers may assume its quality is inferior Competition as Reference Price: If the price is close, the assimilation effect will encourage the customer to think the products are similar enough and choose the lower priced product Odd/Even Pricing: Odd pricing often seen as "more of a deal"; Even pricing often used to distinguish luxury items

Stages of the PLC

Introduction - no profits, recover R&D costs Growth - profits increase and peak Maturity - sales peak, profit margin narrows Decline - market shrinks; sales fall; profits fall

Market Positioning

Involves the process of defining the marketing mix (4P's) variables so that the target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products (4P's)

Gap Model

Knowledge gap: Customer's expectations are not accurately understood by firm Standards gap: Service firm does not set service standards to deliver to perceived customer expectations Delivery gap: Actual service delivered is different than expectations Communication gap: Actual service delivered is different than what is promised in communications

Three Phases of the Marketing Plan

Planning Phase: business mission and objectives & situation analysis (SWOT) Implementation Phase: Identify opportunities using SCP & implementing marketing mix (4Ps) Control Phase: evaluate performance using marketing metrics

Break-even Analysis

Pricing technique used to determine the number of products/units that must be sold at a specified price in order to generate sufficient revenue to cover total cost. All costs are covered but there isn't a penny left over

Research Design

Primary Research --> Exploratory Research (customer interviews, focus groups, projective techniques, case studies, ethnographies) Descriptive Research (cross-sectional, longitudinal) Causal Research (laboratory research, field studies)

Descriptive Research

Probes systematically into the marketing problem and bases conclusions on large samples of participants large samples quantitative data (cross-sectional; longitudinal)

Market Segmentation

Process of dividing the market into groups of customers with different needs, wants or characteristics (SCP)

Target Marketing/Targeting

Process of evaluating the attractiveness of various segments and then deciding which to pursue (STP)

Service Quality Scale

Reliability: Dependable, accurate, consistent; Do it right the 1st time Assurance: Trust, knowledge, skill Empathy: Caring and individualized attention Responsiveness: Promptness Tangibles: Physical Evidence

Price Orientations

Sales Oriented Pricing: Set prices based on consumer reactions (estimated demand) at various price levels - either to maximize market share or total sales Profit Oriented Pricing: Sets prices to reach a profit goal: profit maximization, target profit pricing, or target return Competitor Oriented Pricing: Retailer sets prices based on competitors Competitive parity or status quo pricing Customer Oriented Pricing: Pricing to add value to customers

Maturity

Sales continue to increase but at a decreasing rate Marketplace is approaching saturation (enter new markets/segments and/or develop new products?) Typified by annual models of products with an emphasis on style rather than function Product lines are widened or extended Marginal competitors drop out Heavy promotions - sales promotions Prices and profits fall

Growth

Sales grow at an increasing rate Many competitors enter market Large companies may acquire small pioneering firms Profits are healthy Promotion emphasizes brand advertising and comparative ads Wider distribution Toward end of growth stage, prices fall Sales volume creates economies of scale

Assessment of Services

Search qualities - characteristics of a product that the consumer can examine prior to purchase Experience qualities - characteristics that customers can determine during or after consumption Credence qualities - attributes we find difficult to evaluate even after we've experienced them

HR in Service Firms

Service Excellence and Productivity 1. Hire the Right People: be the preferred employer; intensify selection process 2. Enable your people: training; high performance team 3. Motivate and energize your people: utilize the full range of rewards Leadership: -focuses organizations on supporting frontline -foster strong service culture with passion for service and productivity -drives values that inspire, energize and guide service providers

Demand Curve

Shows the quantity of a product that customers will buy in a market at various prices if all other factors remain the same Vertical axis represents the different prices a firm might charge Horizontal axis shows the number of units

Nonprofit Challenges

Target Markets -Apathetic or strongly opposed targets -Pressure to adopt undifferentiated strategies Product -Benefit complexity: benefits are often more difficult to understand -Benefit strength: benefits are often indirect or do not impact the payer/customer at all. Promotion Limited financial resources: Volunteers, Sales Promotions, PSAs Pricing Pricing objectives, nonfinancial prices, indirect payment (taxes), Payers vs users, below-cost pricing

Market Testing

Try out the complete marketing plan (product, price, place, and promotion) in a small geographic area that is similar to larger target market Traditional test marketing is expensive and gives competition a chance to evaluate the new product Premarket tests and simulated test markets eliminate competitive viewing and cost less but are not as accurate a test as a traditional test market.

Data Quality

Validity: Extent to which the research actually measures what it was intended to measure Reliability: Does the assessment tool produce stable and consistent results? Is it repeatable? If the question is asked again under different conditions would we get the same answer? Representativeness/Sampling Error: Error that occurs when the selected sample is drawn from a population different from the target population or does not represent the target population.

Product Mix

a firm's entire range of products E.g., Mars offers candy (Dove, M&Ms, Snickers, etc...), pet food (Sheba, Whiskas, etc...), food (Uncle Ben's, Suzi Wan, etc...) and drinks (Klix and Flavia) Strategic mix decisions usually relate to the width (breadth) of the product mix (# different lines offered by the firm)

Brand

a name, term, symbol, logo or any other unique element of a product that identifies one firm's product(s) and sets it apart from competition It is the combination of these, not one of these by itself a signal or promise to the consumer should be memorable, have a positive connotation, convey certain image

Relative Advantage

a product innovation is perceived as better than existing alternatives positively correlated with an innovation's adoption rate exist when a new product offers better performance, increased comfort, saving in time and effort, or immediacy of reward

Marketing Research

a set of techniques and principles for systematically collecting, recording, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas

Focus Group Interviews

a small group of persons (8-12) come together for an intensive discussion about a particular topic qualitative

Survey Research

a systematic means of collecting information from people using a questionnaire (structured or unstructured questions) quantitative

Marketing Plan

a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected pro forma financial statements.

Dynamic Pricing

aka individualized pricing the process of charging different prices for goods or services based on the type of customer, time of the day, week, or even season, level of demand, loyalty status, etc.

Compatitbilty

an innovation is perceived to fit into a person's way of doing things the great compatibility, the more rapid rate of adoption overcome perception of incompatibility through heavy advertising to persuade consumers

Causal Research

attempts to understand cause-and-effect relationships experimental design allows researchers to control possible explanations try something & measure how it works. experiment implies intervention usually involves a control group (placebo)

Boston Consulting Group Matrix

best-known approach to portfolio planning addressing a firm's prospects for success within the industries in which it competes two factors: relative market share, industry growth rate - high/high: stars should be funded and encourage to grow -low/high: question marks should be resolved by executives to decide whether to foster or sell -low/low: dogs should be sold if possible and abandoned if necessary - high/low: cash cows should be milked to supply funds to more promising business

Brand Equity

brand's value to an organization: Assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Provide customer loyalty, perceived quality, brand name awareness, competitive advantage, and can be used to establish brand extensions

Concept Testing

concept - brief, written description of the product. testing occurs when the statement is presented to potential users to obtain their reaction The first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are inappropriate for some other reason.

The Core Product

consists of all the benefits the product will provide for consumers or business customers (does a customer want a drill bit or a hole?) **marketing about supplying benefits, not products**

The Actual Product

consists of physical good or delivered service that supplies the desired benefit (the machinery of the drill) includes appearance, styling, packaging, and the brand

The Augmented Product/Associated Services

consists of the actual product plus supporting features such as warranty, credit, delivery, installation, and repair service after the sale (why you may choose one tool over other brands)

Non-Probability Samples

convenience sample: select people based on who is available when collecting data quota sample: researcher finds a prescribed number of people in various categories judgment sample: researcher selects sample based on personal judgment that the people chosen will give accurate information snowball sample: Additional respondents are selected based on referrals from initial respondents. Especially useful when the desired respondent is hard to find.

Secondary Data

data previously gathered for purposes other than current research commonly used in the design phase, but also useful later advantages: inexpensive, available, speedy, credible sources, aids exploratory research disadvantages: may be obsolete, may lack suitability, questionable methodologies, undisclosed findings, conflicting results, reliability may not be proven, non-credible sources

Deceptive Price Advertising

deceptive reference pricing loss leader pricing - aggressive pricing below costs (bogo) bait and switch

Marketing plans

describe the marketing environment outline marketing strategies identify plans for implementation and evaluation

Diffusion

describes how the use of a product spreads throughout the population

Evaluation of Results

determine whether the launch was a success or failure (satisfy technical requirements, customer acceptance, satisfy financial requirements) adjustments needed??

Communication Gap

difference between actual service provided to customers and the service that the firm's promotion program promises closed by: be realistic about services they can provide and manage customer expectations effectively

Standards Gap

difference between firm's perception of customer's expectations and the service standards it sets close by: setting appropriate standards, training employees to meet and exceed them, and measure service performance

Delivery Gap

difference between firm's service standards and actual service it provides to customers close by: get employees to meet or exceed standards by empowering service providers, providing support (emotional and instrumental) and incentives, and using technology where appropriate

Fair Resolutions to Service Failure

distributive fairness: pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure procedural fairness: refers to the customer's perception of the fairness of the process used to resolve complaints about service

Pricing Strategies

everyday low pricing: companies stress the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sales prices their competitors offer high/low pricing: relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases (use reference pricing)

Market Penetration

existing product & existing markets seek to increase sales of existing products to existing markets

Market Development

existing products & new markets introduce existing products to new markets

The Product Life Cycle

explains how features change over the life of a product concept that seeks to describe a product's sales, competitors, customers, and marketing emphasis from its beginning until it is removed from the market. marketing strategies must change and evolve as a product moves throughout the PLC

Lessons from New Coke

fickleness of taste do not tamper with tradition - symbols of security media's role garbage in - garbage out don't underestimate herd mentality

Product Development/Design (New Product Process)

further development of product concept (expand ideas into more complete product concepts, describe features and benefits provided) technical: refine with engineers, develop prototypes (alpha) and test with prospective customers (beta), apply for patent (if applicable)

Shopping Products

good or service for which consumers will spend time and effort gathering information on price, product attributes, and product quality consumers tend to compare alternatives before making a purchase -homogeneous product: products easily compared bc similar characteristics (TVs, washing machines) -heterogeneous: dissimilar charactersitics (universities, housing) example: appliances, cars

Convenience Products

good or service that consumers purchase frequently with a minimum of comparison and effort ex. gum, milk, soda

Business Plans

guide entire organization or business units

Marketing Strategy

identifies target market, related marketing mix, and bases on which the firm plans to build a sustainable competitive advantage

Factors Influencing Price Elasticity of Demand

income effect: change int he quantity of a product demanded by consumers due to a change in their income substitution effect: consumer's ability to substitute other products for the focal brand cross-price elasticity: percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B (varies if products are complements or substitutes)

Types of Innovations

innovations differ in their degree of newness and this helps to determine how quickly products will be adopted by a target market the more novel, the slower the diffusion innovation continuum is based on the amount of disruption or change

Challenges of Services

intangible: cannot be touched, seen, tasted, or felt variable (heterogeneity): less standardized and uniform; labor-intensive, consistency and quality control can be hard to achieve (but customization could better fit needs) inseparable: Goods are produced, sold, and then consumed. In contrast, services are often sold, produced, and consumed at the same time. Consumers are often involved in the production of the services that they buy. perishable: Services cannot be stored, warehoused, or inventoried. If not used, the revenue is lost.

Market Penetration (objectives and pricing)

low prices higher sales (leading to experience curve effect - lower costs at higher volume) low profit per unit

Social Media

major source of data for marketers (likes, dislikes, preferences) blogs are a major influence virtual communities: online network of people who communicate about specific topics sentiment mining: data gathered by evaluating customer comments posted through social media sites such as Facebook and Twitter qualititative

Portfolio Analysis

management evaluates the firm's various products and businesses -its portfolio- and allocates resources according to which products are expected to be most profitable for the firm in the future typically performed at SBU or product line level of the firm

Self-fulfilling Prophecy

many firms may engage in a self-fulfilling prophecy, whereby they predict falling sales and then ensure this by reducing or removing marketing support.

Growth Strategies

market penetration product development market development diversification product-market growth matrix: product emphasis & market emphasis

Characteristics of Good Objectives

measurable/specific realistic time specific compared to a benchmark (when appropriate) - ex. return on investment, revenue and sales, market share, customer satisfaction SBU and functional objectives must support (be consistent with) the overall priorities of a firm

Good Marketing Information Enables Marketers To

**make research systematic Gain a competitive edge Reduce financial and image risks Determine consumer attitudes Monitor the environment Gather competitive intelligence Coordinate strategy Measure performance Improve advertising credibility Gain management support for decisions Verify intuition Improve effectiveness Prepare SWOT Be prepared Maximize performance

Levels of Strategy

- corporate level - business unit level (SBUs) - functional level (ex. marketing) ex. Yum Brands & GE

Diversification

new products & new markets emphasize both new products and new markets to achieve growth can be related (similar element to current business) or unrelated

Sample Types

non-probability: sample in which little or no attempt is made to get a representative selection from the population probability: each member of the population has some known chance of being included in the sample

Market Skimming (objectives and pricing)

premium pricing does not maximize sales high profit per unit more common in technology markets with innovators as target; then when saturate this market, move down a bit

Primary Package vs Secondary Package

primary: one the consumer uses (ex. toothpaste tube) secondary: wrapper or exterior carton that contains the primary package and provides the UPC scanner label

Ethical Concerns of Market Research

privacy and disclosure data breaches awareness biometric data neuromarketing

Place

product availability where and when the customers want them all activities from raw materials to finished products ensure products arrive in usable condition at designated places when needed

Packaging Functions

protect the product communicate brand personality provide specific information make the package more user-friendly

Physical Elements

provide tangible/physical evidence of service performance servicescapes: environment in which the service is delivered and where firms and customers interact create and maintain physical appearances: buildings/landscaping, interior design/furnishings, vehicles/equipment, staff grooming/clothing, other tangibles

Primary Data Collection Methodologies

qualitative research: understand the phenomenon of interest through broad, open-ended responses; includes observation, following social media sites, in-depth interviews, and focus groups quantitative research: structured responses that can be statistically tested; experiments, scanner and panel data

Promotion

role is to bring about exchanges with target markets by: informing, educating, persuading and reminding Integrated Marketing Communications: encompasses personal selling, advertising, sales promotion, public relations, direct marketing, electronic media in combination to provide clarity, consistency and max communicative impact *any type of communication expressing value proposition*

Elasticity

sensitivity of customers to price changes in terms of the quantities they will buy %change in demand/%change in price elastic when less than -1

Probability Samples

simple random sample: every member of the population has a known and equal chance of selection stratified sample: divide the population into relevant groups, then select randomly within those groups cluster sample: divide population into mutually exclusive groups, then select a random selection of clusters and collect data from everyone within the cluster systematic: every nth member of the population is selected after a random start

The Story of New Coke

sweeter variate introduced in 1985 in response to competition from Pepsi (growth slowing, loyalty eroding, etc.) tested a 55% acceptance rate to try New Coke; launch new formula and expect growth --> huge outrage instead tested for an addition to the product line, not elimination of current; did not account for depth of feeling and emotional ties (herd instinct ignored)

Experimental Research

systematically manipulates one or more variables to determine which have a causal effect on others quantitative

zone of tolerance

the area between customers' expectations regarding their desired service and the minimum level of acceptable service; difference between what the customer really wants and what they will accept before going elsewhere

Strategic Planning

the managerial decision process that matches the organization's resources and capabilities to its market opportunities for long-term growth

Adoption

the process by which a consumer or business customer begins to buy and use a new good, service, or idea

Innovation

the process by which ideas are transformed into new offerings, including products, services, processes and branding concepts that will help firms grow

Product

the starting point of the 4 Ps tangible goods ideas services includes: physical unit, package, warranty, service, brand, image, value

Price

what a buyer must give up to obtain a product most flexible of the 4Ps -- quickest to change competitive weapon, but easily copied most related to revenue, rather than costs