MKT 4650 Comprehensive Final Exam

Treacy and Wiersema Strategies

Operational excellence, product leadership, or customer intimacy

emotional connection

makes you experience certain emotions like joy, excitement, fun, etc.

Focused

mantra of these companies is typically, "We do one thing very well"; often serve niche markets; customers in that segment can be very satisfied, very loyal, and rather price insensitive EX: Rolls Royce

category based framing

Defines the offering by relating it to an already established product category.

Relative Market Share

-how much of the market you have -can be defined as high or low --if you're a leader that's high --if you're a follower thats low EX: there are 5 competitors in your industry and you own 15% of the market and the competitors own the rest

sales

price * quantity sold

market segmentation

"a company can't be all things to all customers. it must choose a segment to serve." -mass marketing (low customer satisfaction) -marketing segmentation (just right) -one-to-one marketing (not profitable)

Setting Communication Goals

-create awareness; generate interest; create and strengthen preference; motivate purchase -the above goals are interdependent and are prerequisites for others; managers need to quantify the goals to be achieved eg create a thousand website visits in month of September -what it is that we communicate, awareness, interest, preference, purchase. whenever you set communication goals, they are interdependent. cant have one without the other

selecting media

-2 types of media - outbound and inbound -Media should match with the target consumers' preferences -Based on what your goal is you should develop the message accordingly. Identify the two broad kinds of media, things you are doing yourself are outbound this is where your costs lie (more expensive) relatively less believable than inbound media which is less expensive relatively more believable. Word of mouth is quite difficult to generate, less expensive and believable and tis what consumers use to make a decision. EX: based on reviews you want to buy something.

one-to-one marketing

-Common in business markets where companies design unique programs and/or systems for each customer -Common in luxury and custom-made products and service firms (e.g., hairstylists, lawyers, doctors etc. customize their marketing programs to match individual consumer needs)

mass marketing

-Companies aim mass marketing campaigns at the total (whole) market for a particular product -Companies that adopt mass marketing take an undifferentiated approach that assumes that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program -This marketing program typically consists of a single product or brand (or, in the case of retailers, a homogeneous set of products), one price, one promotional program, and one distribution system

image

-Create a meaningful brand image in customers' minds -Brand image is the network of all brand related associations; can be visually represented as an association map illustrating the key concepts linked to a brand -To ensure that brand image creates value for target consumers, it should be guided by a clear understanding of the meaning of the brand reflected in the brand position -Ideally, the image in the minds of the consumer ought to reflect the image the company aims to project -Brand provides value in three different components - need to keep in mind brand image: have notions about what it is.

Identifying Target Audience

-challenging to deliver the message to the right people at the right time and place -geolocation and predictive analysis helps -when you are trying to understand your customer this helps -instead of simply targeting individuals, target usage or occasions; the same individual might have different needs depending on the usage/occasion involved -create target audience based on needs to audience has at that particular time -look at the usage, why particular people want to use your product.

Marketing Strategy

-company ought to be able to create value for stakeholders -VALUE is the biggest thing in marketing -marketing is not static, it is dynamic -value creation: develop target market, create value -key to a companies growth, that is why many older powerful companies are falling because their strategy hasn't changed with the times.

positioning

-refers to creating a mental image of the product offering and its differentiating features in the minds of the target market -is a space in your mind for a particular brand. Whenever we think of products there are different ways of differentiating products, they can be based on different characteristics.

line extension

Brand name may be applied within a product line to go for depth EX: Coming up with different flavors is line extension or different car brands

multi-benefit

Emphasizes the benefits delivered by the offering on two or more attributes

segmentation

-Most firms use some form of market segmentation by (1) dividing the total market into groups of customers having relatively common or homogeneous needs, and (2) attempting to develop a marketing program that appeals to one or more of these groups -This approach may be necessary when customer needs are similar within a single group, but their needs differ across groups

inelastic demand curve

-brand loyalty indicates a ________ because if prices change, there sales don't change significantly -not as sensitive - if the demand curve is almost vertical it is ____ EX: of deal-prone demand curve: people dont care what brand of salt they buy, they buy the cheapest one. therefore it is prone to pricing which makes it elastic.

communication

-campaign's goal is to inform the target market, company, and its collaborators about the offering and the ways it will create market value -particularly, in the form of ads, is the most visible aspect of a company's offering -aims to create an optimal value proposition for the target customers, company, and its collaborators -THE MOST important thing when it comes to promotion -all things a marketer is going they are always trying to communicate -promotion is going through three separate stake holders - company customer collaborator

Cause-Related Marketing

certain percentage of profits go to a charity or philanthropy EX: KFC did this for a breast cancer organization although fried food causes women over 40 to get breast cancer

Breadth

coming up with different types of products EX: Dove facewash, dove body wash, dove shampoo

Customers

defined by way of needs (basic/fundamental deprivation) and profile (demographics, psychographics, behavioral etc.)

Company

defined in terms of profile (who are we; what are we known for) and goals (end result company wants to achieve)

competitive matching

in many industries, pricing strategy focuses on matching competitors' prices and price changes. This is especially true in commoditized markets such as airlines, oil, and steel.

performance signal

informs consumers about functional performance of the offering associated with the brand; e.g., Tide signals cleaning power, Crest signals effective tooth protection, etc.

Outbound Media

initiated by the company (ad, PR, social media, personal selling, trials, product placement, samples)

Inbound Media

initiated by the public (online search, personal interactions, phone, online interactive forums, email, mail)

customer intimacy

involves the knowledge of customers' fuller set of needs, and trying to offer them a full package of benefits, highly tailored to their unique desires -while there are non-tech versions of intimacy (e.g., a customer's relationship with a good hairstylist, realtor, banker, etc.), it's no surprise that this approach is very effective online -on the Web, customer relationship management hits new highs because of the data storage and access capabilities; all recommendation engines for books, music, movies, etc. demonstrate a strong advance toward customer intimacy

Elasticity of demand

marketing - need is backed by financial power, economic: when prices increase quantity demanded decreases -a lot of times marketers get confused when they do this calculation because the answer you get has a minus sign -luxury marketer sometimes price goes up and demand goes up because of exclusivity - does not follow the law of demand -inverse relationship minus sign -some products don't follow the law of demand -elasticity tells you how much price will affect demand -elastic = huge change in demand -inelastic = small change in demand

perishable

services are more perishable -EX: sometimes you have to pay for missed appointments, doctors time is wasted -services are only valuable at that time not provided then and there its value declines immediately -EX: overbook flights -when a person interacts with you it is very valuable, a machine isn't because most of the time it works the same way

price skimming

sets a high price relative to the competition, thereby "skimming" off the profits early after the product's launch. Price skimming is designed to recover the high R&D and marketing expenses associated with developing a new product.

prestige picking

sets prices at the top end of all competing products in a category. This is done to promote an image of exclusivity and superior quality; is a viable approach in situations where it is hard to objectively judge the true value of a product.

value based pricing

sets prices so they are consistent with the benefits and costs associated with acquiring the product. There are price points in a product category with higher prices associated with more bells and whistles. One popular example of value-based pricing is everyday low pricing (EDLP).

niche market

some companies narrow the market concentration approach even more and focus their marketing efforts on one small, well-defined market segment or _________ that has a unique, specific set of needs

price penetration

designed to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price. This approach works best when customers are price sensitive for the product or product category, research and development and marketing expenses are relatively low, or when new competitors will quickly enter the market.

differential effect

differences in consumer response should exist; if there is no difference, then the brand has the same value as a generic version of the product

measuring behavior

difficult to do by looking only at sales; discounts and price promotions might have an immediate impact on sales, whereas, brand building communication takes much longer and will be difficult to disentangle from other factors affecting sales

measuring preference

difficult to measure; one way to do it is to measure attitude towards the ad which is then thought to extrapolate to the brand; measure purchase intention before and after exposure to ad and see if there is a difference

Mass Customization

each Dell customer gets to choose from a variety of options (storage, screen sizes, colors, etc.) to configure a computer as they want it; Dell gets to take advantage of scale economies because it builds thousands of the same basic computer for its other customers EX: Dell - basic framework with small customizations drove a huge improvement for Dell -very popular is the US, this led to individual marketing although not all companies can do this

identifying company's offerings

enables consumers to distinguish it from competing brands

market concentration

firms using the ________ approach focus on a single market segment

why brand matters

for consumers -Product identification -Assignment of Responsibility -Symbol of quality -Promise, bond, or pact for manufacturers -Legal protection for unique features of the product -Brand loyalty - building value for the marketer

distribution margin

for retailer is 40%...what this means: of the sales, 40% (i.e. $32,000 * .4 = $12,800) is kept by the retailer for expenses borne by the retailer to sell your products; hence, your Firm Revenue = $ 32,000 - $ 12,800 = $19,200

social responsibility

helps take a stand on relevant social issues

single benefit

highlights the importance of a single attribute in order to establish a distinct message in the minds of the consumers - for instance, BMW & performance

self-expression

tells others who you are; sometimes might also enable consumers to highlight their wealth and socioeconomic status

mass market targeting

the largest firms have the capability to execute this; involves the development of multiple marketing programs to serve all customer segments simultaneously

reference price effects

(competitive pricing) -the product is sold just below the price of a competitor's product. Reference price is the cost at which a manufacturer or a store owner sells a particular product, giving a hefty discount compared to its previously advertised price. -Price is one element that has a strong correlation with psychology because it is the most diagnostic element a consumer uses when purchasing something. -EX: people prefer 10% and 40% discounts together rather than 50% because it looks like its more when it really isn't. people do not negotiate when there is such a specific price because they believe there is a reason.

umbrella branding

-A company that attaches the same brand name to all of its products is using an umbrella branding / family branding / branded house approach -New product will begin with higher than usual levels of awareness -Critical that the majority of the existing brand's associations are positive, or new products will be introduced to the market with a perceived handicap -Communication builds the shared brand name synergistically across the products -The biggest advantage is that that name has so much recognition so hopefully people will buy that new product because they recognize that brand

house of brands

-A company that use a new brand name for every product it brings to the marketplace is using an individual brand / house of brands approach -The independence between brands assures that any problems with one brand shouldn't negatively affect any of the others -Brand images need not be consistent, allowing the company to reach multiple segments -Requires more advertising to build the multiple brands' equity Ex: Coca- Cola when they decided to start selling milk (Fair life) it will say that it is apart of the Coca-Cola company

initial price

-A firm's base pricing strategy establishes the initial price and sets the range of possible price movements throughout the product's life cycle -is critical, not only for initial success, but also for maintaining the potential for profit over the long term -There is always shifts in price, there is rarely ever a time where a product will always have the same price. -This is why consumers wait for deals because this price always changes. -It is important to understand how to set the initial price correctly.

channel structure

-A good distribution strategy is essential for success because once a firm selects a channel and makes commitments to it, distribution often becomes highly inflexible due to long-term contracts, sizable investments, and commitments among channel members -There are three basic structural options for distribution in terms of the amount of market coverage and level of exclusivity between vendor and retailer: exclusive, selective, intensive

Market Value Map

-A schematic presentation enabling managers to clearly articulate the key aspects of company's strategy and tactics -Comprises of - target market, value proposition & market offering

incentives

-Aim to increase the value of an offering; usually are temporary in nature -Tend to be a function of the distinctiveness of the company's offering whereby increased commoditization leads to an increased use; luxury brands usually tend to use less of incentives -Pricing and communication strategies influence incentives -For customers - coupons, loyalty programs, sweepstakes, contests, premiums etc. -For collaborators - price cuts, volume discounts, allowances, co-op advertising -For company - bonuses, rewards, contests

message appeal

-Approach used to communicate the message - information and feelings based -Information based relies on factual presentations, slice-of-life stories, demonstrations, testimonials -Feelings based relies on emotions -Assuming were looking at an outbound media. Every ad that you see would have some combination of information and feelings.

tactical plans

-At this level the firm will detail how it will gain a competitive advantage by doing something better than the competition: Its products must be of higher quality than competitive offerings, its prices must be consistent with the level of quality (value), its distribution methods must be as efficient as possible, and its promotions must be more effective in communicating with target customers -It is also important that the firm attempts to make these advantages sustainable -product, price, place, and promotion

cost

-Breakeven analysis and cost-plus pricing are important tools; but, they should not be the driving force behind pricing strategy -By setting prices solely on the basis of costs, firms run a major risk in setting their prices too high or too low; if a firm's costs are relatively higher than other firms, it will have to accept lower margins in order to compete effectively -Conversely, just because a product costs very little to produce and market does not mean that the firm should sell it at a low price -Even if the firm covers its costs, the fact is that customers may not be willing to pay their prices and hence, market demand is also a critical factor in pricing strategy; Cost is best understood as an absolute floor below which prices cannot be set for an extended period of time EX: movie theater popcorn, over 200% markup

Coercive Power

-Bully -one party can make another do something by taking away benefits or inflicting punishment

brands as a means for creating company value

-Can bolster customer demand -Can ensure greater collaborator support -Can facilitate in recruiting and retaining skilled employees -The mere fact that something has been branded helps in creating loyal consumers. People who are working with you to make sure that the brand meets the final consumer they are more likely to effectively work with you. -The higher the index the better it is to work for that company.

supply chain & channel structure

-Channel and supply chain are used separately. -Supply chain interacts with companies upstream, -channel is downstream. -In channel the retailer is always the intermediary that sells to the final consumer. -Intermediaries= indirect channels. -Walmart sells both directly and indirectly = hybrid channel.

power

-Channel integration requires a fundamental understanding of how channel members work together -Instead of competitive attitude there ought to be a collaborative attitude between the channel members; each firm exhibits a different degree of authority or power in managing or controlling the activities within the channel -Powerful channel members have the ability to get other firms to do things they otherwise would not do -Depending on how the channel member uses its influence, power can create considerable conflict, or it can make the entire supply chain operate more smoothly and effectively

segmentation depth

-Closely related to market heterogeneity - customers vary in the manner they are likely to respond to the offering; seek different benefits, have different financial resources, etc., -How many segments to create is balanced by considering a trade-off between costs and revenue -Greater number of segments enables the marketer to satisfy consumers' needs more accurately albeit at the expense of increasing cost -Fewer number of segments is more cost efficient but at the same time has the disadvantage of not appealing to all consumers in the segment

Information Power

-also known as expert power -know-it-all -one party gets cooperation because they have information the other seeks

brand equity

-Different outcomes result from the marketing of a branded product than if it were not branded -Such different outcomes arise from the value (created in several different ways) attributed to the product as a result of "branding" it -The advantage/s gathered from the value results in greater profits or lower costs or both -This is something that you develop. The main idea is if you were to market an unbranded product there would be a different outcomes from if it was marketed. Once a marketer puts this information on a tangible product it provides value to the product. -Underlines the importance of the brand in marketing strategies -A glove Michael Jackson wore sold for $330,000 in 2010; a pair of earrings worn by Kate Winslet in Titanic fetched $25,000 at an auction in 2010; without the celebrity associations it is doubtful whether these items would have cost that much

evaluation and control

-Final section of the marketing plan - details how the results of the marketing program will be evaluated and controlled -Marketing control involves establishing performance standards, assessing actual performance by comparing it with these standards, and taking corrective action if necessary to reduce discrepancies between desired and actual performance -Performance standards should be tied back to the objectives stated earlier in the plan; these standards can be based on increases in sales volume, market share, or profitability, or even advertising standards such as brand name recognition or recall -If the marketing plan has not lived up to expectations, the firm can use a number of tools to pinpoint potential causes for the discrepancies; one such tool is the marketing audit -A systematic examination of the firm's marketing objectives, strategy, and performance; marketing audit helps isolate weaknesses in the marketing plan and recommend actions to help improve performance -The control phase of the planning process also outlines the actions that can be taken to reduce the differences between planned and actual performance -If I'm McDonalds my marketing goal is to create value and objectives is 10% of the market share in the next 10 years. Its 7 years and they are no where near their objective that's when they look and do this.

goals and objectives

-Goals and objectives are formal statements of the desired and expected outcomes resulting from the marketing plan -Goals are broad, simple statements of what will be accomplished through the marketing strategy; major function of goals is to guide the development of objectives and to provide direction for resource allocation decisions -Marketing objectives are more specific and are essential to planning; objectives should be stated in quantitative terms to permit reasonably precise measurement -Goals are more abstract, objectives are more specific.

value proposition vs. positioning

-Idea of positioning is that most of us cannot process and/or remember all information; company makes a conscious choice to promote and focus on the most important information -Value proposition reflects all aspects of the offering; positioning reflects only the most important aspects and focuses on benefits only

criteria for successful segmentation

-Identifiable and measurable: The characteristics of the segment's members must be easily identifiable. This allows the firm to measure identifying characteristics, including the segment's size and purchasing power. -substantial: The segment must be large and profitable enough to make it worthwhile for the firm. The profit potential must be greater than the costs involved in creating a marketing program specifically for the segment. -accessible: The segment must be accessible in terms of communication (advertising, mail, telephone, etc.) and distribution (channels, merchants, retail outlets, etc.). -responsive: The segment must respond to the firm's marketing efforts, including changes to the marketing program over time. The segment must also respond differently than other segments. -viable and sustainable: The segment must meet the basic criteria for exchange, including being ready, willing, and able to conduct business with the firm. The segment must also be sustainable over time to allow the firm to effectively develop a marketing strategy for serving the needs of the segment.

process of creating a position

-Identify the needs, wants, and preferences desired by the target market -Evaluate differentiation and positioning of current and potential competitors -Compare the firm's current relative position vis-à-vis the competition across the needs, wants, and preferences desired by the target market -Identify unique differentiation and positioning not offered by the competition that matches the firm's capabilities -Develop a marketing program to create the firm's position in the minds of the target market -Continually reassess the target market, the firm's position, and the position of competing offerings to ensure that the marketing program stays on track and to identify emerging positioning opportunities

criteria for targeting segments

-If the market is attractive and corporate strength... go for it! -if the market is attractive and less capable: depending on how far the newly-required capabilities are from the current in-house expertise, taking this path could mean a huge investment of time and money -if market doesn't look so hot and corporate strengths: key question is whether we can develop a market; would require investing in things like marketing research to understand the customer's level of knowledge and points of resistance, possible product modifications to make it more appealing and advertising to educate the customer -if market doesn't look so hot and less capable... avoid

pricing services

-In general, services pricing becomes more important—and more difficult—when service quality is hard to detect prior to purchase, the costs associated with providing the service are difficult to determine and customers are unfamiliar with the service process -The variable nature of services limits standardization and, therefore, customer knowledge about pricing is limited; variability also limits price comparison among competing providers; service pricing is also a key issue with respect to balancing supply and demand during peak and off-peak demand times

Variability

-Manufacturers of goods can set quality standards because (likely) a machine is producing their products; for a service provider, experiences vary across customers or even with one customer across time -When customers interact with technology and machines, the variability of the service encounter is reduced by the standardization of the equipment

execution style

-Media specific; for instance, print ads will involve decisions concerning the copy of the ad, visual elements, layout; tv ads will involve visual elements, voice-over narration, audio, duration -Balance the marketing message and entertainment component

Even pricing

-refers to a price ending in a whole number or in tenths, such as $0.20, $2.50, or $65.00. -Marketers use even pricing when there is a denote of quality.

channels of distribution

-Network of firms that are interconnected in their quest to provide sellers a means of infusing the marketplace with their goods and buyers a means of purchasing those goods, doing all as efficiently and profitably as possible -Included are manufacturing firms, distributors or wholesalers, retailers, consumers, and other players with other names; the names aren't as important as the functions that the parties serve -These functions include customer-oriented activities, such as ordering and handling and shipping; product-oriented activities such as storage, display, and sorting; marketing-centric activities such as promotion; financial activities such as financing, etc. -When managers speak of logistics, they're talking about coordinating the flow of goods and services and information throughout the channel, among the channel members

branding

-One of the most valuable strategic assets of a company -A name, term, sign, symbol, design, or a combination thereof intended to identify goods/services of a seller (or a group of sellers) and to differentiate them from the competition -Another way of thinking...it is a set of associations that are linked to any offering

brand personality

-One way that marketers get customers to relate to their brands is by creating a brand personality -How we act in certain situations. In every situation you act or react to those situations. Personality is a part of what makes up an image. Match my brand with target market in terms of the personality. Worldwide personality traits changed due to culture. We have a characteristic of finding living faces in inanimate objects. -Competence often characterizes technical firms, exciting brands are those that are innovative or cool, sophisticated brands are often leaders in tasteful design and fashion, and rugged brands bring to mind their toughness

brands as a means for creating collaborator value

-Partnering with a strong brand can generate demand for collaborator's products and services; example - partnering with an established multinational financial services corporation like Mastercard or Visa is likely to have a 'halo effect' on a lesser known collaborator (think cobranding) -Two different brands - co branding. A very big brand any other company would love to be in association with them because of exposure and if done correctly provides value for both.

Michael Porter's Classification

-Porter is the thought leader in (and some call him the father of) the field of modern strategy -A company can dominate its market in one of three ways: 1. Cost leadership 2. Differentiation 3. Focused

perceptual map

-Positioning can be illustrated in several ways; perceptual maps is a common methodology -A represents customer perceptions and preferences spatially by means of a visual display -Axes signify brand attributes important for the consumers and allow for maximum differentiation among brands -3 key benefits: know more about competitors and industry, communicating where the brand is heading, and Confirming alignment with business and brand strategy - whether a brand's position is the right position, given the organization's overarching business strategy and brand strategy

Product Line

-Product lines can be pruned or supplemented -During economic boom and when the current market offerings and brands are financially healthy, introducing more products (in either the breadth or depth direction) is an absolutely good idea to do, or at least consider -Expanding has to be in the same area as the other products. A group of products that perform in the same manner or sold to the same group of customers. EX: opening up different bank accounts or mutual funds at the same bank, there is financial advising and then there is banking. EX: Coca-Cola just came up with a new milk product, fair life, never sold milk before.

Marketing Tactics Providing Value

-Product, service and brand; price and incentives are the key value drivers -Communication and distribution are the channels by which this value is communicated and delivered -Thus, 3 questions need to be answered: 1. What makes the offering attractive to target customers? (key value) 2. How will target customers become aware of the offering? (communication which is apart of promotion) 3. How will target customers acquire the offering? (place)

situation analysis

-Summarizes all pertinent information obtained about the five key elements -SWOT analysis focuses on the internal factors (strengths and weaknesses) and external factors (opportunities and threats)—derived from the 5C -These strengths, weaknesses, opportunities, and threats should be analyzed relative to market needs and competition -This analysis helps the company determine what it does well and where it needs to make improvements

executive summary

-Synopsis of the overall marketing plan; provides an overview of the plan so the reader can quickly identify key issues or concerns related to his or her role in implementing the marketing strategy -Does not provide detailed information found in the following sections; instead, it introduces the major aspects of the marketing plan, including objectives, sales projections, costs, and performance evaluation measures; should also identify the scope and time frame for the plan -Should always be the last element to be written because it is easier and more meaningful to write after the entire marketing plan has been developed -An abstract write this after finish the entire project but appears up front.

brand extensions

-The marketer leverages the brand's good name to get customers to buy something new -This notion of fit between a parent brand and the extended brand. Parent brand is the original brand the new one is the extended brand. What we are saying is that these two things should match or fit. The question usually is not whether they can do it but more so if they can market it or not. If you have too low of fit then that is probably not going to work.

marketing plan

-The result of the strategic planning process is a series of plans for each functional area of the organization -For the marketing department, the marketing plan provides a detailed formulation of the actions necessary to carry out the marketing program -Think of the marketing plan as an action document—it is the handbook for marketing implementation, evaluation, and control -Living document how we implement evaluate and control what marketers have done.

Market Value Principle

-also known as 3-V Principle -encapsulates value proposition -creating all 3 types of value -The problem arises when the decision has to be made regarding which value to prioritize; marketers and CMOs want customer value, finance and C-level executives prefer company value; finally, sales force prefers collaborator value -The solution (quite difficult) is to balance the three and create the right value to achieve the strategic goal -Focusing and building on any one usually is not sustainable

targeting

-The targeting question is this: Which of the segments do we want to be our customers? -The idea of targeting is selection; marketers can align better with some segments than with others and so they will try to serve the segments whose needs match their abilities to deliver; in doing so, there will ultimately be loyal and profitable customers -Attractive segments might be dropped for several reasons - lack of resources, no synergy with the firm's mission, overwhelming competition in the segment, an impending technology shift, or ethical and legal concerns over targeting a particular segment

global brands

-To be defined as global, at least 30% of the brand's revenues should come from other countries (no more than 70% from the brand's home country) -Some companies go global with different brand names in different countries with the motto, "Manufacturer globally, brand locally" - glocalization -Other companies maintain the same brand name in every country they enter -A true global brand carries one brand name and logo anywhere it is offered, and is available in most markets in the world, e.g. Amazon.com looks just like Amazon.co.uk and Google.com looks like Google.fr. -There are corporate efficiencies to using the same brand information, communications, and strategies everywhere; true global brands are those that seek, achieve, and maintain similar positioning in all their markets EX: McDonald's provides the same value in different parts of the world but they do it differently. In India, it is a very upscale establishment they wait on tables there's no free drink they would also deliver. In Hong Kong people get married in McDonalds. There is a long list of McDonalds list of weddings in each location. In US value is added in terms of price. - Glocalization. Have the same brand name make sure it looks the same every aspect looks the same

Value Proposition

-Understand the notion of value exchange between the company, customers, collaborators, and competitors operating in a context -Creating value is a two-way street; example, customer gets value from a product and so the customer stays loyal to the firm -The 3 types of values to be considered - customer value, collaborator value, and company value -the answer to the question "why would anyone buy a product" -whenever we buy anything there is a reason (can be very complex decision or a very mundane one) -marketing is an exchange, value provides a two way street, does not include competitor value -Does not physically exist in the market -Value is created by the specific offering(s) the company and its collaborators design, communicate and deliver to target customers -Designing the offer is looked at next

Linking value and profile

-Value has the shortcoming of not being observable and hence cannot be readily acted on to reach target customers -Tactical targeting involves identifying several components of the strategically selected target customers; in a way, tactical targeting overcomes the shortcoming of strategic marketing -Hence, strategic and tactical targeting are two complementary aspects of identifying target customers

list price

-Whenever a consumer looks at any product's price, their mind references the list price as a reference point. -Marketers give consumers this reference point so the consumer can make a judgement of a fair price. -EX: $422 Dog Treats list price. The price of the product here on amazon is $7.90 therefore they show you're saving 99%. it has everything to do with psychology, plenty of lawsuits because of ridiculous list prices -Amazon is trying to no longer use list price because it can be quite unethical. -EX: amazon was selling a Nespresso machine for $400 but had the list price set at $800. When a consumer would go directly to the products website, they would see that it has always been sold for $400 but that the MSRP (Manufacturers Suggested Retailer Price) was $800. This is misleading to consumers.

what can be branded

-Whenever consumers are deciding between alternatives; consumers are in a situation involving choices -Key to branding is that consumers understand the difference in options in a product category

STP

-With the 5Cs nailed down, we should have a good background for understanding and interpreting our customer segments, which in turn offers a clearer basis for choosing the segments to target -segmentation: what kinds of customer knowledge do we need to form segments, use customer analysis to identify segments, and descriptive data to validate the marketing segmentation scheme -targeting: choose segments to target wither by size or fit -positioning: perceptual maps, where are we in the positioning matrix, write position statement

market segment

-a group of customers who share similar inclinations toward a brand. On a continuum from mass marketing to one-to-one marketing, market segmentation is in the middle -The marketplace is thought of as being comprised of several segments, each of which is more (or less) favorable to your brand

?

-a new venture that a company is not sure about, very little profits, probably not breaking even. EX: toyota Mirai is a eco friendly car that was released on the west coast although many people are ending their leases because there aren't enough hydrogen pumps. Those funds to be able to support and fund the mirai is from the camery, their staple brand. Therefore, toyota has to decide to keep investing in the mirai

cost-plus pricing

-a strategy that is quite common in retailing; the firm sets prices based on average unit costs and its planned markup percentage - unit cost/1-X% -where X% is the intended return (say, 30%, so we'd compute: Unit cost/0.7) -want to earn a minimum of profits, if I want to make a rate of return to calculate my price - this gives you an idea at what minimum you need to sell, costs are $5 and need 30% profit what should my price be?

Yield Management

-allows the service firm to simultaneously control capacity and demand in order to maximize revenue and capacity utilization -concerned with the number of rooms that should be sold at various rate levels; in case of airlines, yield management is usually divided into overbooking and managing discounts -define the trade-offs and maximizing revenue -a broad term that describes how a service provider can secure high revenues from its relatively fixed capacity -Hotels use yield management pricing to determine the number of rooms available at select price levels. In order to maximize revenues, the hotel must decide how many rooms it needs to sell at discounted rates to maximize total occupancy while making sure to have enough rooms left over the late-booking travelers, who are more likely to pay full rates. -Very early committers typically get a price break while those who commit on short notice usually pay a premium. -Hence, in case of hotels, yield management deals with the number of rooms to be sold at venues rate levels; in case of airlines, yield management usually divided into overbooking and managing discounts -define that trade-offs and maximizing revenue -understand and predict demand patterns based on a service providers reservation history

Value Creation

-develop target market, create value proposition for stakeholders, design appropriate offering -The 3 activities define the 2 components of a business model - strategy and tactics -while strategy deals with the first two activities, tactics deals with the third activity -strategy is usually unobservable to the public, tactics on the other hand are -strategy is more abstract and intangible -tactics are more straightforward, concrete, and tangible -the combination of these two things is marketing mix

sub-branding

-e.g. Dell Inspiron; Samsung Galaxy -Uses existing associations about the family brand and allows for creation of new brand beliefs to position the new offering; sub-brands allow for consumers to expect similarities & differences

growing the market

-either of these can be achieved by -getting current customers to buy more frequently -stealing customers from our competitors -finding a new group of customers -reduce brand switching by raising our customer satisfaction -adding value through a loyalty program -raising switching costs so that leaving our brands is not attractive

sections of marketing plan

-executive summary -situation analysis (the 5C framework and SWOT analysis) -Marketing segmentation, targeting and positioning (STP) -Goals and objectives -Tactical Plans -Implementation -Evaluation and control

branding strategies

-f the brand strategy is to attain a certain personality, and the image concurs that the brand achieved that characterization, then the branding and marketing efforts succeeded -Brand naming strategies for new products -Brand extensions and co-branding -Brand equity -how do i add value to my brand. focus on these 3.

tactical targeting

-focuses on customer profile including factors such as age, gender, income, location and buying behavior -Subsequently, it aims to identify an effective and cost-efficient approach to communicate and deliver the offering to the selected target customers -Aims to reach all strategically important consumers effectively and efficiently -Focuses on the means by which the company can reach these customers -Concerned with customer profile which reflects customers' readily observable characteristics such as age, gender, income, social status, location and buying behavior

holistic

-focuses on overall performance without highlighting any particular benefit -Emphasizes overall performance without highlighting individual benefits, enticing customers to choose the offering based on its performance as a whole rather than on particular benefits

functional benefits

-focuses on the utility of an offering -based on a product attribute that provides the customer with functional utility. The goal is to select functional benefits that have the greatest impact with customers and support a strong position relative to competitors.

strategic targeting

-focuses on the value defined by customer needs and the potential to create value for the company -target compatibility and target attractiveness -Involves trading off market size for a better fit between the offering's benefits and customer needs; conscious decision to ignore some potential customers in order to better serve others -Focuses on value that the company can create for and capture from target customers -Concerned with customer needs and preferences and their resources

brands as a means for creating customer value

-functional: identifying company's offer, performance signals -psychological: emotional connection, self-expression, social responsibility -monetary: price signal

demand

-goes up as a function of a customer's desire for the brand -goes up with enhanced perceptions of the product's benefits or brand image -goes up if competitors' brands aren't great, i.e., if there are few good substitutes, or they're priced even higher

STAR

-good place to be but the downside is in terms of profits the company isn't making much because the company is the leader of a fast growth market, therefore the money the company has is being invested in maintaining the leader position in a high growth rate market which if the company fails at maintaining they'll become a DOG category.

Legitimate Power

-great dane and a chihuahua -by size or expertise, one party can make claims and threats which encourage the other party to confirm

brand knowledge

-has a differential effect on consumer response to the marketing of the brand -how much and what you know about the brand

Corporations

-have brands underneath their umbrella called business units -sets goals

Business Units

-have different set of competitors and customers separately from each other and the overall corporation. -strategizes ways to meet corporations goals EX: Coca-Cola is a corporation and all the brands they own such as Sprite and Dasani. Coca-Cola's competitors Pepsi has brands that compete with each others brands.

why we need strategy

-helps achieve business and marketing goals -no company is in business to break even year after year; even non profits want more money to be able to support their socially responsible missions -so let's agree that growing profit is the ultimate goal - how do you do it? --once you realize what your sales are and what your costs are you will be able to achieve profits --you have profits because you're providing value to your consumers -at a fundamental level... increase sales and/or decrease costs

Reward Power

-i have goodies for you -one party has the ability to provide good outcomes for another

Referent Power

-i want to be like you -one party cooperates with another because the former seeks affiliation with the latter

Predictive Analysis

-in e-commerce, ______ makes it possible to predict not only the current needs of customers, but also their future needs. -retail networks are able to use purchasing history to make deduce -knowledge is taken advantage of by salesperson who use it to send appropriate offers to such customers at the right time EX: Target participated in predicative analysis/big data analysis by sending flyers that were very targeted towards newly pregnant women. They found through big data analysis studies that certain products associated or indicated that consumers were at the beginning of their pregnancy. Target proceeded to come up with a flyer to target these customer which turned out to be super invasive because some women hadn't even discovered that they were pregnant yet.

Differentiation

-involves creating differences in the firm's product offering that set it apart from competing offerings -Customer perceptions of a brand are of utmost importance in differentiation because differences among competing brands can be based on real qualities (e.g., product characteristics, features, or style) or psychological qualities (e.g., perception and image) -In addition to the brand, other important bases for differentiation include product descriptors and customer support services -Providing good customer support services—both before and after the sale— is another way to differentiate -Support services include anything the firm can provide in addition to the main product that adds value to that product for the customer - assistance in identifying and defining customer needs, delivery and installation, technical support for high-tech systems and software, financing arrangements, extended warranties and guarantees, repair, convenient hours of operation, affinity programs (e.g., frequent flyer/buyer programs), etc. -done by the market, all about competition at the minimum you have to meet the competition. -may be fostered through excellent quality in products and customer service, distinctive design, exclusivity, value-added bundled into the core purchase, etc. EX: BMW

elastic demand curve

-is more sensitive to price change and almost horizontal -Customers are more price sensitive (price is more elastic for them) when they don't care that much about the purchase, purchase category, or brand; if their preferences aren't strong, they feel no brand loyalty -Price sensitivity is greater when the item is a luxury good rather than a necessity, when many substitutes are available, when the purchase is a relatively big one (compared to a customer's household income); price sensitivity is generally greater for customers with lower household incomes

Competitive advantage

-is something another company can not mimic easily -see if you are capable of doing something, if so that could become your _______. EX: no one can operate on the scale of Walmart that is their _________

need based framing

-links benefits to customer needs -Directly links the benefits of the offering to a particular customer need.

DOG

-low growth rate and low market share, LIQUADATE IMMEDIATELY EX: a product that a company has that doesn't sell well so the company does not focus much on it, the easiest things is to sell it off

intensive distribution

-makes a product available in the maximum number of merchants or outlets in each area to gain as much exposure and as many sales opportunities as possible -for most consumer convenience goods; to gain this visibility and sales volume, the manufacturer must give up a good degree of control over pricing and product display

exclusive distribution

-most restrictive type of market coverage; one merchant or outlet has the sole right to sell a product within a defined geographic region -associated with prestige products, major industrial equipment, or with firms that attempt to give their products an exclusive or prestige image

selective distribution

-most restrictive type of market coverage; one merchant or outlet has the sole right to sell a product within a defined geographic region -is used across many product categories, including clothing, cosmetics, electronics, franchising , and premium pet food; companies carefully screen the image and selling practices of merchants to ensure that they match those of the manufacturer and its products

SWOT Analysis

-must be customer focused to gain maximum benefit; strengths are meaningful only when they serve to satisfy a customer needs; when this is the case, that strength becomes a capability. -Marketers can then develop strategies that leverage these capabilities in the form of competitive advantage. -the manager can develop strategies to overcome the firm's weakness or find ways to minimize effects of these weaknesses. -An important assessment in strategic thinking is to know your company's strengths and weaknesses, and its corporate identity with regard to the company's typical philosophy toward the marketplace -Some companies are innovative and want to invest in R&D; other companies have a more conservative, careful culture, so they will rarely lead temporally (although they may lead in market share) -Similarly, some companies are combative (initiating price wars or launching competitive advertising claims), while others are defensive -A company's philosophy in the marketplace does not have anything to do with size - an entrepreneurial smaller company may be more risk seeking than an established larger firm -Companies can be referred to as leaders for various reasons - they may have the largest market share; may have been first to market; may be known for being innovative, quick to improve another company's ideas; known to please its customers, etc., -Opportunities and threats typically occur in the external environment -After identifying opportunities and threats, the marketer can develop strategies to take advantage of opportunities and minimize or overcome the firm's threats -Marketer must be mindful of trends and situations in the external environment -Stressing strengths while ignoring external issues can lead to an organization that, although efficient, cannot adapt when external changes either enhance or impede the firm's ability to serve the needs of its customers

consumer response

-perceptions, preferences, choice, loyalty, etc. regarding the brand -Response to the marketing of the brand -When people talk about brand equity they are referring to how much knowledge the consumer has this knowledge will have some time of a differential affect on the consumers outlook on the brand. Equity = knowledge

Breakeven

-perhaps the most popular way to associate costs and prices in through breakeven pricing, where the firm's fixed and variable costs are considered -TC/Unit price - unit VC -To use breakeven analysis in setting prices, the firm must look at the feasibility of selling more than the breakeven level in order to make a profit - only a point of reference in setting prices, as market conditions and customer demand must also be considered -revenue meets costs -

Ansoff's Product-Market Growth Matrix

-product development EX: Hummer is making its first electric car, they are targeting their existing customers with a new product -market development: expanding your market EX: if you sell your product exclusively on Amazon and then begin selling on Etsy -when you sell things internationally, be super careful of culture

odd pricing

-refers to a price ending in 1,3,5,7,9 just under a round number, such as $0.19, $2.47, or $64.93. -used when a marketer wants to make an illusion of a deal (every deal will have an odd number -EX: $49.99 phone, consumers look at the 4 and subconsciously think that's a better price because it isn't $50 even though essentially it isn't.

reduce costs

-spend less on R&D, unless company is highly innovative -spend less on advertising - being more creative with current advertising dollar eg fewer TV spots, more social media -"milk the brand" - let strong brands speak for themselves and not spend much on their continued development or maintenance -"cash cow" brands: certain brands don't need promotion because people already have a good perception of them EX: gillette Mach 3, they have multiple Mach styles but the 3rd brings in the most money so they dont need to promote it

The 5-C Framework

-the central placement of the 'customers' reflect their defining role -the other 3 elements: company, collaborators, and competitors --aim to create value for these customers -context defines the environment in which all of these operate -profit makes everything go round and customers bring in those profits (always looking at customers) -context = macro-environmental factors (very dynamic)

Core/Value-Added Offering

-the fundamental reason the company is in business, the basics that the customer expects - the company should get this right -A company does not earn points if the core offering is good; however, if bad, they can definitely trigger dissatisfaction -To this core add the value-added services; a marketer can affect a customer's level of satisfaction (or dissatisfaction) through good (or bad) value-addeds; companies often compete on the value-addeds -Core businesses change as industries change or as a firm's competencies change -what the product is -you have to make sure that your core product works -anything that is in addition to your core that is value added -profits are coming from whatever value added assuming your core is good

Market Growth Rate

-the growth rate of the industry you are in -there is no number associated with high or low market growth --the industry guideline is anything about 8% is high EX: VCR is a very low growth rate

elasticity

-the percentage change in quantity demanded compared to the percentage change in price -The negative signs signify a downward sloping demand curve to the right If demand is elastic (more than 1) - a change in price results in drastic changes in sales units -If demand is inelastic (less than 1) - a change in price results in smaller changes in sales units -If demand is unitary (equal to 1) - a change in price results in sales units staying the same (Rarely be a situation where it is equal to 1, Nothing happens)

ingredient branding

-the primary form of cobranding in which one of the companies and its product is the primary host, and the other company and its product add value to the host product -Have a main product and then you have something else that adds value to that main product. Ex: laptop has a different brands processor and their logo will usually be placed on the product. Ex: lenses on cameras are cobranded. Provides values and increases sales.

General Electric Model

-two dimensions are measured: market attractiveness and business strength -these dimensions are analogous to the external and internal pieces of SWOT Analysis -internal is easier to control, external is harder to control -market attractiveness is analogous to the external component and business strength is analogous to the internal component of SWOT determining market attractiveness and business strength -assess each category -calculate weight: 0-1 EX: if you're selling a lot of products the score will be closer to 1, if not a 0. -calculate rating: 1-5 1=not important 5=very important -once calculating the value, plot the scores on a graph -there are 9 possible positions and based on where you land, come up with a strategy to make money for your company -this is not the only strategy that GE uses

(in)tangibility

-understand the extent to which the purchase is tangible -search attributes: may be evaluated prior to purchase -experience attributes: need some trial or consumption before evaluation -credence attributes: difficult to judge even post-consumption, hence the term "credence"; sometimes credence means we go beyond trust to sheer hope... captured perfectly when Charles Revlon says of his company: "In the factory we make cosmetics; in the store we sell hope" -Goods are dominated by search and experience qualities, and services are mostly comprised of experience and credence qualities; what do you think are the marketing implications? -Probably easier to price a pair of socks than an hour of consulting advice; given that customers can more confidently assess the socks purchase than the consulting advice, consultants will want to take marketing actions to cue the client that their advice is sound and that the quality of the service they provide is excellent

Price

-very important, people put less emphasis on price: stay away from numbers and difficult to understand -the biggest problem is how to price your product -only element that directly brings in profit -fixed: ex rent -variable: ex wages

cobranding

-when two companies collaborate in a joint venture to create a good or service for the customer -Ingredient branding is the primary form of cobranding

CASH COW

-where a company will make an immense amount profit because they are a leader in an industry that has slowed down. IDEAL -can now invest less because the company does not have to promote as much because it is a staple brand meaning they can use those profits to invest in ?'s EX: Gillette Mach 3

Geolocation

-where you are at -become an increasingly important marketing tool -especially those that depend on customer traffic like restaurants -exploit the communication networks to pinpoint the location of smartphones and other mobile devices

3 types of Communication

1. customer -most complex because there are so many of them 2. company 3. collaborator -collaborator and company focused share many commonalities with customer-focused communication

development of positioning strategy

1. how many benefits to promote 2. which benefits to promote 3. how to frame the benefits - how many benefits to promote -which benefits to promote -how to frame benefits

The BCG Matrix

Boston Consulting Group - came up with this idea of how you can market or sell -companies can move from each category

category extension

Brand name may be applied across different kinds of products

competitive framing

Defines the offering by explicitly contrasting it with competitors' offerings

brand contribution

Finally, when you deduct marketing expenses from gross margin, you get _______

Developing the Message

Message should be aligned with marketing goals - for e.g., if goal is to inform about the benefits of the offering, the message should focus on product aspect; if goal is to inform about an upcoming sale/deal, the message should focus on that incentive

Designing the Offering

The 7 tactics defining the company's offering are the tools that marketers have to create market value 1. Product 2. Service 3. Price 4. Brand 5. Incentives 6. Communication 7. Distribution

gross margin

When you subtract the cost of goods solds (COGS = Unit sales * Unit costs) from this firm revenue, you get ______

Perishability

Whereas goods can be manufactured and then inventoried in distribution warehouses, most services have to be created on the spot in the presence of the customer; e.g., when an airplane leaves the ground with some seats vacant, the airliner cannot recoup those empty seats during rush traffic

target compatibility

ability of the company to fulfill the needs of its customers better than competition

target attractiveness

ability of the given segment to create superior value for the company

Operational excellence

ability to deliver products or services smoothly and reliably; in some industries, it is a necessity - a package delivery company or a cell phone company wouldn't go far if they could not provide excellent operations

product leadership

achieved by providing predictably excellent quality in products and services or by being a market leader in terms of innovations in those products and services

margin

amount of money that you give to a retailer bc of the services that the retailer performs. The amount of money that they charge. Working towards brand contribution as a manager.

Goods and Services Continuum

an important job of the marketer is to understand where the 'product' lies on this continuum; this will help in understanding the second point above -you have offerings that lie on a line that are either tangible or intangible -the emphasis are being put on services rather than manufacturing in the US -when I am selling something that is more of a good, I need to have some kind of intangible component because that's what people are looking for -some are more to one side than the other but that will help you decide your strategy when it comes to marketing -search-expereince-credence -when selling a product figure out where it will lay on the continuum then come up with your strategy on how to market it

measuring interest

asking directly the relevance of the offering; also gauged by looking at things like banner click throughs, company/store visits, enquiries, etc.

measuring awareness

assess whether customers have been exposed, understood, and can recall message

Depth

deals with the variations EX: different flavors, Campbell's different flavors of soup, different scents of shampoos.

non price strategies

builds the marketing program around factors other than price. By downplaying price in the marketing program, the firm must be able to emphasize the product's quality, benefits, and unique features, as well as customer service, promotion, or packaging in order to make the product stand out against competitors, many of whom will offer similar products at lower prices

Key Product and Service Decisions

creating & managing products involves a series of decisions concerning the following factors 1. performance- different products in the same category perform differently; key principle when deciding on level of performance is optimizing its value for the company, customers and collaborators 2. consistency- performance should be kept as similar as possible; Six Sigma helps in managing product consistency - the idea being that for a product to be consistent, the difference between the actual and desired outcomes should not exceed six standard deviations or approx 3.4 defective items per million outcomes 3. reliability- product will do what it is supposed to do 4. durability- long lasting 5. degree of customization 6. compatibility- consistent with certain already existing standards and complimentary offerings 7. style & design- style refers to the appearance, while design refers to the ease and effectiveness of use 8. packaging EX: orange liquor manufacturer - over its entire duration, the company had changed the bottle only three times, the most copied/counterfeit brand in the world

permission marketing

customers give companies permission to specifically target them in their marketing efforts; opt-in e-mail list, where customers permit a firm to send periodic e-mail about goods and services that they have interest in purchasing

selective targeting

multiple capabilities in many different product categories; advantages include diversification of the firm's risk and the ability to cherry pick only the most attractive market segment opportunities; company carefully selects product/market combinations where its capabilities match customers' needs EX: Procter & Gamble uses selective targeting to offer customers many different products in the fabric and home care, health and grooming, baby, feminine, and family care, and beauty, hair, and personal care markets. Besides the familiar deodorants, laundry detergents, and hair care products, P&G also sells products in the cosmetics, cologne, and prescription drug markets. One of the keys to P&G's success is that the company does not try to be all things for all customers. The company carefully selects product/market combinations where its capabilities match customers' needs

Freedom of choice

paralyzes our decision making skills EX: Netflix, Subway

price signal

portrays the level of prices associated with it; price image conveyed is particularly important when buyer are unaware of the competitiveness of the price of a given offering - in such cases consumers often rely on the brand to infer the attractiveness of an offering's price

cost leadership

producing goods and services more efficiently than the competition. Company might have resources as easy access to plentiful, good raw materials, cheaper labor sources, or other technologies, etc. The cost savings might be passed along to customers in the form of low prices, or they might be retained as higher margins than those of the competition, thereby fueling other actions, e.g., R&D, more advertising, etc. EX: Walmart, Dollor stores, etc

Collaborators

refer to suppliers, manufacturers, distributors, service providers, ad agencies, etc.

Context

refers to the environment in which the company operates - political and legal, economic, demographic, sociocultural, technological -need is the basic reason for marketing EX: starbucks made it okay to sell coffee for $5, need food but want McDonalds

Competitors

their strengths and how they might respond to company's actions; think of not only direct, but also indirect competition

single segment targeting

when capabilities are intrinsically tied to the needs of a specific market segment; specialists in a particular product category; successful because they fully understand their customers' needs, preferences, and lifestyles; constantly strive to improve quality and customer satisfaction by continuously refining their products to meet changing customer preferences

market specialization

when company's intimate knowledge and expertise in one market allows them to offer customized marketing programs that not only deliver needed products, but also provide needed solutions to customers' problems EX: Follett Corporation specializes in the education market and serves over half of the students in schools, colleges, and universities in the United States and Canada

product specialization

when expertise in a product category can be leveraged across many different market segments; firms can adapt product specifications to match the different needs of individual customer groups EX: Littmann Stethoscopes, a division of 3M, offers high-performance electronic stethoscopes for cardiologists, specially designed stethoscopes for pediatric/infant use, lightweight stethoscopes for simple physical assessment, and a line of stethoscopes for nursing and medical students. The company also offers a line of veterinary stethoscopes

collaborator value

why should a collaborator choose your product

customer value

why should a customer buy your product; answered by looking at (1) customer needs, (2) benefits and costs of company's offering, and (3) competitive offerings

company value

why should the company choose this offering instead of alternative options