Marketing Final
What are some competitive strategies companies can use?
Market leader strategies: Expand total demand Protect current marketshare Expand current market share
Public Policy and Pricing Concerns
"Competition Act" - foster competitive environment and protect consumers Pricing within channel levels: Price fixing (sellers must set prices without speaking to competitors) and predatory pricing (selling below cost with the intention of punishing a competitor) Pricing across channel levels: price discrimination (ensuring that sellers offer the same price terms to customers at a given level of trade), retail price maintenance (manufacturer cannot require dealers to charge a specified retail price for it's product), deceptive pricing (seller states prices or price savings that mislead consumers or are not actually available to consumers)
What is sustainability (both the sustainable marketing principles and environmental sustainability) and how does it affect marketing?
(Product) **Planned Obsolescence**/Recalls/Pollution. (Price): Dumping/Price Fixing/Deceptive Pricing. (Distrib.) Restriction of supply/abuse of power. (Promotion): Targeting vulnerable groups/deceptive adv.
What are the levels of products and services?
(Target symbol) very center - Core customer value: what is the benefit to the customer Next level - Features, design, packaging, quality level, brand name, actual product Next (outermost level) - Augmented product, delivery and credit, after-sale service, product support, warranty
Why do companies have NPD?
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Consumer-based brand equity pyramid (CBBE)
1) Consumer brand resonance (relationships) 2) Consumer Judgments & Consumer 3) Feelings (Responses) Brand Performance & Brand Imagery (Meaning) 4) Brand Salience (Identity) - Name: should be easy to pronounce, have meaning, be extendable for other products, capable or registration and trademark. Shape/symbol: Easily recognizable, can come with sounds (DEPTH: Ease of Recall/recognition ex. Bank of America vs. Chase Bank) (BREADTH: Range of consumption situations ex. Amazon you can use in many situations of consumption)
What is a marketing channel and how does it add value, what are its functions and "flows"?
A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for consumption Value: Reduces the number of marketplace contacts, boosting exchange efficiency, matches consumer' needs to companies' products (sorting), Facilitates information flow through the channel, standardizes exchange transactions, making them efficient and fair Functions/flows: Transaction completion: Information, promotion, contact, matching (matching their needs, bundling), negotiations Transaction fulfillment: Physical distribution, financing, risk taking
What is a brand?
A name, a sign, a term, a symbol, a sound that identifies the maker of a product. Adds value to the product.
Be able to know what defines a product and what characteristics distinguish a product from a service
A product meets a need or want of a target market and is a benefit they wouldn't get from somewhere else. Whereas a service is not a tangible good, it is inseparable, variable, perishable, and intangible. The difference: Goods should be the same every time you experience it, whereas a service will differ depending on who serves it to you, and where, etc.
Define a product mix, the characteristics of a product mix, and the importance of a product mix.
A product mix is a company's complete assortment of goods and services. Width: number of different product lines a company has Length: total number of items the company carries within each line Depth: Number of versions per product Consistency: how closely related the products are at the end Products help increase business by adding new product lines, lengthen existing product lines, add more versions of the product and pursue product line consistency Create e product mix to extend life of company since each product has a lifecycle
What are the tools in the promotional mix, what is their nature, and potential advantages/disadvantages?
Advertising - broadcast, print, Internet, mobile, outdoor, and others. Sales promotion: discounts, coupons, displays, and demonstrations Personal selling: sales presentations, trade shows, incentive programs PR: press releases, sponsorship, web pages Direct marketing: catalogs, direct response TV, kiosks, internet mobile marketing
What kinds of Strategies do you want to implement for Advertising?
Advertising Objectives: Informative (awareness), Persuasive (top of mind), Comparative, Reminder Characteristics of advertising appeal: Meaningful, believable, and distinctive Message Execution styles: Slice of life, Lifestyle, fantasy, mood/image, musical, scientific evidence, etc.
How do you set a promotional budget (same for both IMC and Advertising)?
Affordable Method: Setting the budget at the level mgmt. thinks the company can afford Percentage of sales Method: Setting budget at a certain % of current or forecasted sales or as a percentage of the unit sales price Competitive Parity method: Setting budge to match competitors' outlays Objective and task method: Developing budget by defining specific promotion objectives, and determining the tasks needed to achieve these objectives and estimating the costs of performing these tasks. The sam of these is the promotion budget.
AIDA
Attention Interest Desire Action
What is the Consumer Adoption Process and **methods companies can use to accelerate adoption?
Awareness Interest Evaluation Trial Adoption
What are the objectives you need to set when designing advertising?
Awareness, knowledge, liking, preference, conviction, purchase
Brand Attributes?
Brand representation:Logos that demonstrate the positioning of the brand. Change and don't always stay the same (As the brand evolves, the logo should evolve with it) Brand personality: The total of all brand attributes, and the emotions it inspires in consumers. A set of human characteristics that are attributed to a brand name. Is something to which the consumer can relate. Brand status: The social status or social regard in relation to other brands (Ex. Bentley vs. Kia) Brand value (brand equity): Response placed on a brand above and beyond the actual product offering (How does the brand add value over its actual offerings) Ex. How people love and are attached to Tropicana over other orange juices
How do you calculate a Break-Even Analysis (both units/volume and $)
Break even point ($) = Total FC / (1 - (unit VC / unit price)) Break even point (units) = Total FC / Unit CM Contribution Margin (CM) = sales price - unit VC (if targeted return is sought) Break even point (units) = (total FC + profit) / Unit CM
In the Customer-Based Brand Equity (CBBE) Pyramid, there are two pathways toward creating relationships with a brand. What are the pathways (2 pts) and describe how these pathways differ (2 pts).
Cold Pathway: Up left side of pyramid (Salience, performance, judgements, and then Resonance) Hot Pathway: Up right side of pyramid (Salience, imagery, feelings, and then resonance.)
What are the benefits of packaging for manufacturers, retailers, and consumers and what are the functions packaging can fulfill?
Communication benefit: Directions of how to use, composition of the product and warnings Functional benefits: Convenience, protection, or storage Perceptual benefits: Connote status, economy, and/or product quality
What is the importance of competitive advantage?
Companies can benchmark themselves against other firms, comparing the company's products and processes to those of competitors or leading firms in other industries to identify best practices and find ways to improve quality and performance
How are products classified and what distinguishes these classifications from each other?
Consumer Products: Convenience products (groceries, buy all time), Shopping products (bigger purchase, car), Specialty Products (holiday products, good and makes you more willing to purchase), Unsought products (products you don't know exist) Industrial products: Materials and parts, Capital items, Supplies and services
Seven C's of Effective websites
Context - layout/design Content - text, pictures, sounds, video Community - ways website enables user to use communication Customization - ability to tailor itself to different users or allow users to personalize the site Communication - site to user, user to site, or 2 way communication Connection - degree the the site is linked to other sites Commerce - capabilities to enable commercial transactions
How do companies choose the correct competitors to attack and avoid?
Customer value analysis: determine benefits that target customers value and how customers rate the relative value of various competitors' offers. Develop Strategy: Define business/marketing objectives, develop plan to achieve objectives, develop strategy to achieve goals accounting for potential competitive actions and reactions
What are the 3 major pricing strategies and their importance as well as components?
Customer value based pricing - Considered along with other marketing mix variables, sets ceiling on price, types of value based include good value and value added (ex. introducing less expensive versions of brand name products, everyday low pricing, high-low pricing) Cost based pricing - Set the floor for the price the company can charge. Cost does not equal value. Competitor based pricing - Looks at competitors price and how they are doing and price your product according to your competition
What do you need to consider when you are designing your channel?
Customer/Market factors: Expectations, geographic location/dispersion, average order size/quantity, service needs Product Factors: Perishability, complexity/customization, type of product: convenience, shopping, specialty, exclusivity Organization factors: Size and resources, Product line scope, level of control desired Identifying Major Alternatives: Types of intermediaries, #of intermediaries, responsibilities of channel members
Class Notes: What are the 5Ds and what occurs in each?
Desires - Consumer's desires (current needs/wants, future needs/wants) and Company's objectives (business and marketing objectives) Develop - Analyze strengths and weaknesses of brand, develop plan to meet consumer and business desires, repositioning of existing products Design - What will product look like? How will the product be packaged? How will the consumer interact with the product? Distribute - Information (who, what, where), Product (should we, when, where), Defend (stake position, maintain market dominance, adapt with consumers, consistency)
Briefly describe the steps in the new-product development process (8 pts) and under which of the 5Ds do they fall (5 pts).
Desires: Idea Generating / screening Develop: Concept dev / marketing strategy / business analysis Design: Product dev. Distribute: test marketing / commercialization Defend:
What do you need to know about the global environment when deciding whether to enter the market?
Do I understand the consumer? Can I offer competitively attractive products? Can I adapt to local culture?
Once you've decided to enter the market, what ways can you enter and what decisions do you need to make about your marketing strategies?
Exporting: direct and indirect Joint venturing: licensing, contract manufacturing, management contracting, joint ownership Direct investment: Assembly and manufacturing facilities
NPD Process:
Idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing, commercialization
How does a company conduct competitive analysis (e.g., what are the stages of competitive analysis)?
Identify competitors Assess objectives/strategies (profitability, market share growth, cash flow) Select which competitors to attack or avoid
How do you extend the PLC?
Increase frequency of use Increase number of users Find new uses Change pkg. sizes, labels, quality Innovate to stimulate demand
What is Diffusion of Innovation theory?
Innovators (2.5%) Early Adopters (13.5%) Early Majority (34%) Late Majority (34%) Laggards (16%)
What are the desirable qualities for a brand name? (6 pts.)
It should be pronounceable, have meaning, trademark-able, identifiable, and be able to have a sound associated with it
Importance of labeling and what must be present legally on a label?
Labeling: identifies, describes, promotes. Required to have: nutritional labeling, unit price, date of prod
How does a firm use social media and what distinguishes each method?
Marketers can participate in existing online communities or set up their own Firm as listener: to learn from social media interactions, tom evaluate customer satisfaction, brand equity, and competitive position Firm as participant: Takes steps to foster and manage consumer to consumer and consumer to firm interaction (establishing online communities, youTube/Twitter/Facebook pages, corporate blogs)
Why is there a need for integrated marketing communications and how do you design IMC?
Need stems from: Consumers today are bombarded by commercial messages from a broad range of sources. Conflicting messages from different sources can result in confused company images. New digital world and social media can make for fragmentation of overall choice. Design IMC: What will be said, How it will be said, When it will be said, Where it will be said, Who will say it
What are the five stages of a product life cycle and what are the characteristics that define each stage and potential strategies within each? *Table 9.2 (p. 280) has a good table.
New Product Development: Introduction: Growth: Maturity: Decline:
Packaging and Labels provide many benefits and information for consumers. As such, they can potentially raise legal concerns. Recently, labeling has been affected by recent concerns and requires several items to be listed on the label. What are these items? (3 pts)
Nutrition, price per unit, date of production
Why are brands important?
Positions the product in the mind of the consumer superior in some way. Branding is a promise you are making to the consumer. Something consistent they can expect from the brand. Your brand comes from the promise you keep.
What is price and why is it important?
Price is the total value that customers exchange for the benefits of having or using the product or service. Price is the only mix element that generates revenue. Pricing is an indicator of quality, in the absence of other information, it determines perceptions about brand. (an art not a science)
What are the decisions that go into creating a product? What decisions do firms have to make?
Product Attributes: Quality - Characteristics of a product and its ability to satisfy stated consumer need (dimensions level and consistency) Features - variety of features available (car options) Style - Appearance Design - Shaping product based on consumer experience (about consumer use) Packaging Labeling Product Support decisions
Product Mix Strategies
Product Line Pricing - Setting price steps between various products in a line based on cost differences, customer evaluations of features and competitors' prices * Take into account differences between the products in the line BUT ALSO account for differences in customer perceptions of the value of the different features Optional Product Pricing - Pricing optional or accessory products sold with the main product (ex. Heated seats with a car). Must decide what to offer as base and what to offer as options Captive Product Pricing - Pricing products that must be used with the main product (ex. blades for razors). Also called two-part pricing because the price of service is broken down into a fixed fee plus a variable usage rate. By-Product Pricing - Pricing by-products to make a main product's price more attractive (e.g. wood by-products) Product Bundling Pricing - Combining several products and offering the bundle at a lower price (ex. fast food combo meals)
Define a product line and the ways in which the product line can be extending?
Product line is a group of related products manufactured by the same company. Group of associated items (considered similar, or used together) Can expand line length (add more items) Line extension (new product added to existing line - depth) Brand extension (new line added to existing mix - breadth)
What are the levels of competition in the marketplace and how do these impact pricing?
Pure Monopoly - Dominated by one seller (e.g. government monopoly, private regulated monopoly, private unregulated monopoly) Oligopoly - Market consists of only a few large sellers (e.g. cable tv providers, cell phone providers) Monopolistic competition - Many buyers and sellers trading over a range of prices rather than a singe market price (e.g. cars, frequently purchased consumer goods) Pure competition - Many buyers and sellers trading in a uniform commodity (e.g. wheat, copper, financial securities)
What are Push/Pull strategies?
Push: Pushing a product through marketing channels, aimed at marketing channel and sales people. (Providing products to companies, incentives for selling product) Pull: Directed at final customer (Marketing reaches to get them to the store or website)
What decisions do you need to make when launching advertising and how do you select your advertising media (pros/cons)?
Reach (% exposed) Frequency (# times seen) Impact (qualitative value) Media timing (Seasonal patterns, etc.) Patterns of Ads (Continuity - even, Pulsing - uneven, bursts) Media Types: (pros/cons) TV: + mass marketing coverage, low cost per exposure, combines sight sound, and motion; appealing to senses. - High absolute costs, high clutter, fleeting exposure, less audience selectivity Internet: + High selectivity, low cost, immediacy, interactive capabilities. - Potentially low impact, audience controls experience. Newspapers: + Flexible, timeliness, local market coverage, broad acceptability, high believability. - short life, poor reproduction quality, small pass along audience Direct mail: + High audience selectivity, flexible, no ad competition within same medium, allows personalization. - high cost per exposure, "junk mail" image Magazines: + High geographic and demographic selectivity, credibility and prestige, high quality reproduction, long life and good pass along readership. - long ad purchase lead time, high cost, no guarantee of position Radio:+ good local acceptance, high geographic and demographic selectivity, low cost. - audio only, fleeting exposure, low attention, fragmented audiences Outdoor: + flexible, high repeat exposure, low cost, low message competition, good positional selectivity. - Little audience selectivity, creative limitations.
What are major social concerns of marketing?
Safety, Environmental Damage (kitkat palm oil). Deceptive Pkging (popsicles), Planned Obsolescence (company already knows next product so current will go out of style quicker), vulnerable audience (children), disadvantaged consumers
How do you establish an online presence?
Setting up online social networks Creating a website Placing ads or promotions online Using email
New Product Pricing
Skimming (a.k.a. market-plus pricing) - setting a relatively high price (may be reduced as competition increases) Penetration pricing (a.k.a. market-minus pricing) - setting a low price to attract new customers, grow market share
How do you identify major alternatives (think about channel breadth - 3 types) and how do you evaluate these alternatives?
Types of Intermediaries # of Intermediaries Responsibilities of channel members
Be able to create and understand channel structure, organization (4 different organization structures, one with 3 different possible types)
Vertical Marketing: Corporate: own everything Contractual: franchises Administered: large corporation controls strong influence on manufacturers (Walmart influences LED lights to be less expensive) pg. 347) Horizontal Marketing: Two or more companies as a single level join together. (Starbucks inside Target) Multichannel Dist. Systems Changing Channel Organization
What is viral marketing and how do you conduct viral marketing?
Viral marketing is the use of a self-perpetation mechanism to grow a user base in a manner similar to the spread of a virus Word of Mouth Network Effects Online Viral Marketing (social media)
What is the role of ethics in marketing?
Want consumerism: improve rights of buyers in relation to sellers. Bring the power back to the buyers.
What are the different dimensions of a company's product mix? Briefly describe each dimension. (6 pts)
Width: Number of different product lines Length: total items the company carries Depth: versions per product Consistency: how related the products are at the end
Why are ad expenditures high for products in the introduction stage of the PLC? (1 pt)
You're in the introduction stage which you need to get your brand information out and get on the radar of consumers. You are spending tons of money to inform and introduce your product to the market.
