Marketing Simulation Chp. 1: Create Customer Value Powerfully Fit V2 (Score: 100%, choices are based on my opinions and thinking!)
Another key relationship that Powerfully Fit must develop is with its intermediaries, the retailers and wholesalers who will make the products available for sale to the ultimate consumers. Intermediaries can add value to the marketing system in many ways including product display, customer service, and product assortment. Keep Powerfully Fit's target market and value proposition in mind as you choose which intermediary you will recommend to carry Powerfully Fit's products. a) Warehouse Club: This warehouse club focuses on selling items in bulk to its members at deep discounts. Merchandise is displayed haphazardly on tables and open shelving, and customer service is nonexistent. b) Discount Superstore: This large chain store carries a small selection of items across many departments including clothing, electronics, toys, and beauty aids. The store provides limited customer service and merchandising. c) Sporting Goods Store: This sporting goods chain carries a large selection of items for many sports. There is some customer service available in the departments and a wide variety of manufacturers' products for sale at manufacturers' suggested retail prices. d) Specialty Running Store: This small independent store carries a large selection of items, all related to the sport of running. This high-end store provides a high level of customer service and charges high prices.
Specialty Running Store: This small independent store carries a large selection of items, all related to the sport of running. This high-end store provides a high level of customer service and charges high prices. REASONING: This one is a pretty difficult question, so understanding the basic principles is essential. a) Warehouse Club: Just look at the name, "warehouse" and you can already see a certain connotation. Warehouses sell items in bulks and tend to be a place to just receive inventory and move it out as fast as possible. You can possibly place your high quality product in a storage room can you? Who would go to a bulk store expecting to find high quality fit bits? Yea, nope I wouldn't. Now look at the customer service, non-existent, how are customers supposed to ask questions about an expensive product without any associates? b) Discount Superstore: This is like dollar tree. You don't go to dollar tree to purchase phones and electronic devices expecting it to be like apple/samsung quality. Although their customer service does exists, with limited service, it's basically having the associate stand there, but the associate has no idea what that product is. I'm sure we've encountered this at least once in our life where the associate's sole purpose is just to exist, but has no idea of anything else. c) Sporting Goods Store: Now if you chose this, it's understandable but not the best option. Because the production process is already quite expensive, choosing an active wear chain with many brands isn't a bad choice. However, think of it like this. There's never a product that's high quality that can survive without high quality customer service. This is a high quality product which has numerous and complex functions which needs a large amount of support for inquiries and such. d) Specialty Running Store: This is where your target market is mostly like to visit. Your aim is your target market, so don't forget about that. They provide a "high level of customer service" and this always needs to follow a high quality product, or they won't survive. Here's an example: Lululemon Athletics Lululemon athletics sells active-wear and equipment for about $100 +, but how can they maintain their popularity when there's other brands with similar quality, but are much less popular? That's right, customer service. They have an amazing defect policy, where if the item is damage of some sort, before or after wear, regardless if the tags are attached or not, they will trash the item and send you a full refund because their quality promise wasn't met. In addition, they offer free alteration services for your items, how could you say no?
Now that you have chosen which consumers to serve, you need to decide how best to serve them. Powerfully Fit's value proposition should capture the values and benefits it promises to deliver to its consumers to satisfy their needs and wants. Marketing analysts present you with three different value propositions to choose from. Given your target market selection, choose the value proposition that would be most effective. a) "Lead the Pack, Create Power" - Powerfully Fit provides innovative fitness technologies that never run out of power b) "Train Smarter, Spend Less" - Powerfully Fit provides innovative fitness technologies that fit any budget c) "Athlete Approved, Style Ready." - Powerfully Fit provides fitness apparel that is both functional and stylish.
"Lead the Pack, Create Power" - Powerfully Fit provides innovative fitness technologies that never run out of power REASONING: What was the function of these products again? "Powerfully Fit's motion-powered innovations include a highly flexible, moisture-wicking fabric that generates and stores energy within the material and a line of fitness trackers with integrated nano generators." Power, power and power is mentioned multiple times. The function is the top priority over style and cost.
SCENARIO Fitness industry startup Powerfully Fit is ready to launch two new products -- a power-generating workout shirt available in two styles and three colors and one self-charging fitness tracker -- available for men and women. Your boss, the VP of Marketing, has been highly involved in the new product development process and has hired you as the Marketing Manager responsible for a successful launch. The VP of Marketing tells you about Powerfully Fit's new products: "Powerfully Fit uses proprietary, cutting-edge nanotechnology to generate power from human motion. Powerfully Fit's motion-powered innovations include a highly flexible, moisture-wicking fabric that generates and stores energy within the material and a line of fitness trackers with integrated nano generators. The research and development investment was significant; therefore, Powerfully Fit's products will be priced higher than the competition's products, which lack the ability to generate power." Your boss explains: "Your job is to evaluate the market for fitness technology to uncover opportunities for our new products. Your focus should be on making recommendations where customer value can be created and firm goals achieved." "The fitness technology industry is full of well-established competitors. Powerfully Fit needs to break through the clutter to grab the consumer's attention. Keys to our successful product launch and profitability are creating customer value and developing loyal customers."
-
The VP of Marketing gives you marketing research on three different consumer desires in the fitness technology market. As a first step, you need to prioritize the desires of actual and potential buyers of Powerfully Fit's products. In order for exchange to happen, Powerfully Fit must be able to satisfy these wants. VP of Marketing: "Keep in mind that our goal is to engage customers by creating exceptional customer value that results in a profitable customer relationship. The first step in creating customer value is understanding consumer needs and wants relative to our new products. Choose the market desire Powerfully Fit should focus on satisfying." a) Function: consumers want wearable technology with the latest and greatest functionality. b) Style: consumers want wearable technology that helps them express their sense of style and individuality. c) Price: consumers want wearable technology that is inexpensive.
Function: consumers want wearable technology with the latest and greatest functionality. REASONING: What was the reason that this product was created, and how is it DIFFERENT from other products on the market? It was created for the purpose of function and it differs from other products because of its "ability to generate power from human motion through nanotechnology," therefore, it is trying to satisfy the "function" aspect.
One of the key relationships Powerfully Fit must build is with its suppliers. Because power-generating nanotechnology is the most important feature in its product, Powerfully Fit collects four proposals from manufacturers who want to produce Powerfully Fit's patented nanotechnology. Your boss asks you to evaluate these potential suppliers, each of which has a different competitive advantage. Keep Powerfully Fit's target market and value proposition in mind as you choose a supplier for the nanotechnology. a) Close Location: This supplier is located closest to Powerfully Fit's manufacturing facility, so delivery lead-times would not be an issue. It produces a mid-level quality product that is moderately priced. b) Quick Turnaround: This supplier can fill nano-processor orders more quickly than competing suppliers. The quality and price of the products it produces are average. c) Low Price: This supplier produces the least expensive nano-processor on the market, but its reliability is the worst. Its products are known for its high defective and malfunction rate. d) High Quality: This supplier produces the highest quality nano-processors available on the market today. Although the unit prices are on the high side, their reliability is the best.
High Quality: This supplier produces the highest quality nano-processors available on the market today. Although the unit prices are on the high side, their reliability is the best. REASONING: Remember, the selling point of your product is the quality of it, so this should be your highest priority. If it doesn't meet the promises it makes, the product is pointless.
Providing customer service creates value for consumers not only at the point of sale, but also during the consumption process. Therefore, Powerfully Fit needs to determine how it will handle customer service for product support on its end. Because its products contain revolutionary power-generating technology, it expects that a significant number of consumers will have questions about the products after the purchase. Customer service creates value for consumers but is an expense to the firm that must be managed. Your boss asks for your recommendation as to how Powerfully Fit should provide customer service. a) Unlimited Support: Customers can access customer service agents via phone and Internet 24/7/365. Representatives are always available and willing to help customers. The cost to provide this level of service is extremely high. b) Minimal Support: Customers can access customer service agents via Internet only from noon-4 PM, Monday through Friday. Consumers are encouraged to troubleshoot their own issues via the website FAQ. The cost to provide this level of service is low. c) Limited Support: Customers can access customer service agents via phone and Internet during regular business hours, Monday through Friday. The cost to provide this level of service is moderate.
Limited Support: Customers can access customer service agents via phone and Internet during regular business hours, Monday through Friday. The cost to provide this level of service is moderate. a) REASONING: Most of the time, purchases for technological products, needed to be tested in person before purchase to assure that it meets the expectations. We've already established that we have a high level of customer service IN STORE, so most likely customers can have their inquiries solved in store. Therefore, with a high level customer service in store, it is already extremely pricey, so a moderate price for limited support online is perfectly acceptable. Assuming that with limited support there is already an FAQ, customers can refer to that, but even if there is 24/7 support for the fit bit, it doesn't mean for example if the device is broken, that they can fix it. Even if your phone is broken, and you contact 24/7 support, what can they do? At most they can help verify the problem and set up an appointment for you to come IN STORE to have them fix it and look at it, so therefore, Limited Support is most likely the best option.
You report back to your boss that you plan to focus on the desire for functionality. Your boss agrees with your analysis and recommendation: "Now we need to identify the type of customer that would benefit the most from our product offerings." "Assuming that we focus on the desire for fitness technology functionality, what market do you think would benefit most from our offerings?" a) Gym Newbie: This largest market is new to fitness and working out. Gym newbies work out once a week and are price sensitive about their fitness spending. b) Weekend Warriors: This large market works out 2-3 times a week and mixes up running with gym time. Weekend warriors typically purchase mid-level shoes and apparel and use a fitness app on their phone to track their workouts. c) Marathon Madness: This mid-size market works out daily. Workouts often include long distance runs. Quality, durable products are attractive to this market, and marathoners are willing to pay premium prices to get the latest tech.
Marathon Madness: This mid-size market works out daily. Workouts often include long distance runs. Quality, durable products are attractive to this market, and marathoners are willing to pay premium prices to get the latest tech. REASONING: Because we know the purpose of the product is for functionality, we have to keep our focus on that. 1) Although Gym Newbie has a large market, they don't work out enough to purchase high quality products for their workouts, and would most likely not spend money on this product because it is priced quite highly. 2) Weekend Warriors work out more often than the gym newbie, but it states that they usually use fitness apps to track their status which are usually free to only a couple bucks versus the fit bit which costs significantly more. Put yourself in this situation. For example, I workout about 3-4 times a week, however I'm not serious about training or running marathons, so I track my status using my app. On the other hand, one of my friends who often runs marathons and competitions, trains daily and therefore feels the need to purchase a fit bit because it is necessary to track her training progress. 3) Marathon Madness is the correct answer because they're the market that would most likely purchase it to use. When you're running marathons and such, it's not easy to hold your phone or keep it in a case, because 1) it's usually much heavier than a fit bit, 2) if you want to see your time or progress, you have to take out your phone and hold it to see it, and that's not efficient when you're running a marathon. In addition, they're more likely to try out new products with new functions to see if it can improve the efficiency of their training.
Creating value for the consumer is one important responsibility for marketers, but no less critical is the marketer's responsibility for creating value for the firm. One measure of value from a firm's perspective is whether the exchange was profitable to the firm. Loyal customers are often, but not always, the most profitable customers. Your marketing analysts have developed two different customer relationship strategies at your request. You need to choose the strategy that will maximize value for the firm. a) New Customers: Powerfully Fit needs to focus on getting new customers, and therefore should dedicate all of its marketing budget to new customer acquisition. b) New and Old: Powerfully Fit needs to focus on getting new customers as well as keeping its existing customers. Therefore, Powerfully Fit should split its marketing budget between new customer acquisition and existing customer retention.
New and Old: Powerfully Fit needs to focus on getting new customers as well as keeping its existing customers. Therefore, Powerfully Fit should split its marketing budget between new customer acquisition and existing customer retention. REASONING: This is a marketing concept that you need to know. It costs more to continuously invest in just new customers, than retain old customers. It's much easier to add items to a returning customer's cart than it is to a completely new customer who you haven't formed a value relationship with. You want both new and old customers to help build your relationship with your customers.
Deciding on the target market and value proposition are important steps in creating value for consumers and serve as the foundation for a solid consumer relationship. To deliver value to the consumer, firms construct integrated marketing programs for their target markets using the 4 Ps. After a firm understands a consumer's needs and wants and designs a value-driven marketing strategy, it must construct an integrated marketing program (often called the marketing mix) that delivers value to the consumer. The marketing mix is the marketer's toolbox, which contains the 4 Ps: Product, Price, Promotion, and Place. Keeping with the fitness theme, identify the marketing mix elements for a personal trainer.
PRODUCT: Package of six one-hour sessions with an ACSM Certified Personal Trainer, Kathy PRICE: Training sessions are available for $50 per hour, or $250 for a package of six one-hour sessions PLACE: You meet with your personal trainer at 10 am on Friday at the gym to receive your first personal training session PROMOTION: ACSM Personal Trainer Kathy uses her social media outlets Facebook and Instagram to connect and communicate with existing and potential clients by highlighting her clients' success stories
