4840 Final Exam

Top 5 global brand 2022

-Apple -Microsoft -Amazon -Google -Samsung

In class shower cap example

-English so bad -Transaltion super important -not a lot of money went into packaging

Seven imporant U.S. test markets

-Grand Junction -Cedar Rapids, IA -Eau Claire, WI -Pittsfield, MA -Odesa-Midland, TX -Wichita Falls, TX -Las Vegas, NV

Digging for Gold: Identifying Ideal consumer handout

-How we actually look at the product as being for a customer -successful companies do this -Know your customer and what they want and thats why you made this product -Build a product that a customer wants

According to the CEO, what is a well managed brand worth to their company (equity)?

-Market cap-balance sheet -Take market cap and subtract anything from balance sheet that is concrete, not close to market cap (difference is goodwill) -Long term, maintain customer trust (its value), encourages brand loyalty, allow brand. to grow eternally

What are products?

-Product item -Product line -Product Mix

1. Understand why a consistent brand matters

-Project professionalism -Established authenticity -Provides Clarity -Builds Trust -Offers internal direction -Provides simplicity -The brand can become disjointed, unreliable and divided so much that it confuses customers, clients, employees, and even the executive team.

5. Create a Plan for the future

-aka create a marketing plan -schedule annual update for brand plan and design elements -schedule a biannual content audit

4. Audit and Update Existing brand materials

-match new brand guide -webpages -social media profile and posts -brochures -business cards -signage -presentation slides -videos -subtle aspects (overhead music, uniforms, packaging and labels) -brand should be consistently represented at each customer facing touchpoint

3. Circulate the brand guide

-should be incorporated into all departments and people outside the organization because it is what the company is founded on and how the company is presented -sales team -product production -3rd party consultants -potential partners

How was Nestle CEO so successful and how did they hold their position so long?

-top down management style -branding is their thing

5 Steps for making Your brand identity more consistent handout

1. Understand why a consistent brand matters 2. Create a brand guide 3. Circulate the brand guide 4. Audit and update existing branded materials 5. Create a plan for the future (marketing plan)

What is a smile curve?

A value-added chain which starts off with the production of new technology and high-tech components parts are then combined with other lower-tech inputs, like pieces of molded plastic and small flashing lights, during a manufacturing process. finished product is marketed and sold to consumers, together with certain kinds of after-sales servicing

Basics of promotions

Advertising -any form of non personal presentation and promotion of ideas, goods, or services by an individual sponsor -Tends mass media, "shot gun approach", also includes digital platforms w/ targeted audiences Direct Marketing -Message that targets particular customer w/ personalized message -promotion that relies on direct communication or distribution to individual consumers rather than through 3rd party (mass media)

Amazon Logistics robots Video

Amazon using robots to deliver orders faster

(IMC) Advertising

American Marketing Association defines IMC as "a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time Objective: to maintain your brand message's holistic nature across all media choices - with customers and all business partners (employees, distributors, society, etc. Ex: TV ads, press releases, billboard, pop-up ads, sponsored events, distributor or supplier correspondence, company newsletter, etc.

The Nestle CEO says that "Brands are..

An expression of the functional and emotional value of the product brands must communicate various aspects, brand is the functional and emotional value, brand management

Examples of brand equity

Apple Disney Nike McDonalds Walmart Honda Amazon

What is the smile curve argument

As most of the economic gain from this global supply curve is collected at the front end (new tech and high tech components) and at the back end (marketing and sales), with less of the economic gain collected in the middle stages

Pricing Power Handout (two new terms for pricing tactics)

Barbell pricing strategy -Low cost item to get you into the store, then buy something else -Why we put certain products next to each other (merchandising) -Milk in back of store -Diapers next to beer aisle (Parents buy diapers/men) Companies increasing prices because of rising labor and raw materials costs -Seem to be passing higher costs onto customers w/ no ill effects -Pepsi raising prices to fix transportation costs Pricing power: -The ability to pass costs to customers w/o harming sales and keeping margins steady -Prized by investors -Ex: diabetics and insulin Identifying firms with pricing power crucial -3 things -Markup (diff between price and marginal cost) profit margin -Big and steady profit margins another sign of pricing power -Size (Companies with greater market share have more pricing power than smaller ones) Loss leader Demand is still robust and healthy and consumers seem insesntive to price changes

Basic product strategies

Based on positioning (for this part of the MM is primarily differentiation) -product attributes -packaging -branding Perception is everything

Smile curve handout: Who benefits within a give economy from participation in global value chains (smile curve)

Benefits distributed high unevenly: For US the big winners appear to be high skilled workers and multinational corporations -GVCs have enabled them to benefit from productivity gains in developing countries such as China -ordinary workers in US have no seen as much (if any benefit) -in china, ordinary workers have benefited In developing countries deeply involved in GVC's, the entire population benefits from the expanded trade and faster growth, though not all to same extent -in developed countries benefits of expanded international trade and investment highly concentrated among the very skilled in the workforce and owner of the capital -both groups are already high up in income distribution and globalization increases their share

Steps 4 and 5

Both about writing a marketing plan

Branding and Brand Management

Branding in the 21st Century Brand Personality Brand Equity

Corporate logos that contain subliminal messaging

Brands logos speak to its viewers on many levels Initial recognizability factor: if a logo is too complex or unrelated to its brand, it risks being glanced over w/o communicating its brand message -for that reason, modern logos ten to err on side of boldness and simplicity Closer look at logos reveals more subtle marketing tactics

Breakeven chart

Breakeven chart= single price and single BE point TC= VC+ FC TR= Revenue at a specific price BE= where two lines cross BE= TFC/P-VC

Customer Oriented

Classical economics models Perceived Value pricing Objective is to maximize profits with respect to price

Your brand is much more than logo handout

Color pallets and fonts matter, but comes down to how your customer feels about the promise you make to them Message we have for our brand personality in this country Consistency is key -only adapt where prudent and necessary

Cost Oriented Pricing

Cost-plus or profit-target pricing Centers on production and distribution costs of a product With Caveats, optimal mark-up over unit costs -assumes avg unit costs are constant over the demand range -costs are constant over time

Smile Curve Handout (my notes)

Countries with low wage labor costs should be where manufacturing occurs -is the bottom of the curve For US big winners appear to be high-skilled workers and multinational corporations -GVCs has enabled them to benefit from enormous productivity gains in developing (adolescent economy/relying on exports) such as China -ordinary workers in US have not seen any benefit, Chinese workers have

Rethinking the store

Creative brick and mortar concepts, including but not limited to store formats, displays, unattended commerce, collection services, checkout processes, and new in store services -The e-commerce acceleration does not diminish the significance of physical retail Reinvention of brick and mortar space -create new elevated in store experience -shoppers demand tech advancements that are seamless, streamlined, and integrated w/online channel In Store and tech not seperate entities -optimize store formats and in store experiences to weave physical and digital channels together Top store format changes in 2021 -Devoting more space for digital fulfillment operations -Shifting to/opening experiential format -Reducing in store inventory -Opening pop-up or modular stores

3 C's of Pricing

Customer Oriented -Classical economics models -Perceived Value pricing Competition-Oriented -Psychological -going rate pricing Cost-Oriented -Cost+ pricing -Break-even analysis and target profit pricing

New robots handout notes from handout

Decade ago amazon started to introduce robots into fulfillment centres (giant distribution warehouses) -now have 350,000 robots of various sorts Automation in warehousing is imperative for sustainable growth -newer more efficient robots are needed Bots are faster and smarter -choreographed by AI computer system What jobs will remain -technicians maintaining and fixing robots -supervisors watching over the bots and lending a hand -people building robots -drivers loose jobs once driverless delivery exists Technological change will create new -overall level of employment in e-commerce should still increase, as logistics get more efficient

Brand equity

Develop a positive brand awareness Establish a brand's meaning Elicit the Proper Response Create intense loyalty

Smile curve handout: Overall impact of GVC

Developing countries and emerging markets -offers opportunity to become involved in piece of production chain w/o producing all of a finished product, before being able to participate in world trade -tend to have faster growth -geography matters for developing countries in GVC, Countries that participate in global value chains have the physical, legal, and regulatory infrastructure that enables not just imports and exports, but also flows of financial capital and enforceable contracts--which are factors that should tend to boost prosperity, too Advanced economies -less important, gains from GVC accrue to high income workers and investors of capital -if US firms did not have access to GVC, find it harder to compete in global markets w/ firm rom other countries that do

Factors encouraging adaptation

Differing use conditions Government and regulatory influences Differing consumer behavior patterns -If people buy this product differently, have to adapt -large quantities of food a bad thing in some countries, like small and fresh Local competition -might have to adapt because of a company that only exists in one area True to the marketing concept -Marketing cycle -Always come up with something new

Because all parts of marketing mix are interconnected

Don't change the product

Transfer pricing handout highlighted sections

Due to increased IRS audit procedures transfer pricing become one of riskiest areas for multinational corporations for compliance and tax planning -causes issues for both multinationals and small companies Transfer price: price chaged between related parties (parent company and its controlled foreign corporation) in an inter-company transaction -directly affect the allocation the allocation of group-wide taxable income across national tax jurisdictions and can directly affect after tax income to the extent that tax rates differ across national jurisdictions Determining arms length transfer price requires identifying where value is created and transferred across members: -value determined by: assets used, risk assumed, functions of the respective parties -Transfer price is considered arms length is it falls into the range computed -correctly apply an appropriate economic method provided in treasury regulations and other guidance

Dynamic Pricing handout

Dynamic pricing: concept of selling the same product at different prices to different groups of people Dynamic pricing two forms -Based on groups -Based on Time Based on Groups - A/B test -predicting higher willingness to pay based on machine type, location, demographic info and showing diff price to diff group Based on Time -car lot - lower prices at end of month to meet quota Is it fair -theoretically yes, we all have a choice, all about willingness to pay -consumers don't think its fair How to implement dynamic pricing strategy: 4 steps -Price differentiation -Ensure you are using a proper value metric -Utlize time in an auction type model -Couponing and Discounts Be Upfront and Transparent -All of above suggestions solve for both being transparent and eliminating the feeling of missing out -no legal trouble w/dynamic pricing but need to be careful about brand, image, and PR backlash -PRICE TRANSPARENCY IS KEY

Factors encouraging Standardization

Economies of Scale in production Economies in product R and D Economies in marketing "Shrinking" of the world marketplace/economic integration Global competitors

2. Create a Brand guide

Essential business document, ensures entire business is on same page -Brand Mission -Value Propositions and Differentiators -Voice and Tone -Logo Usage -Iconography -Brand colors -Fonts and Typography -Signage Specs -Media Formatting -Photography and graphic styles

Examples of Subliminal messaging

FedEx -logo hides an arrow in its negative space. subliminally inspires thoughts of efficiency and forward motion Baskin Robbins -uses company initial to advertise its number of ice cream flavors Tour de France -contains a biker Toblerone -bear dancing in the mountain, tribute to swiss town where it was developed Milwaukee Brewers Amazon -arrow points from a to z, also a smile Tostitos -conjures up feelings of togetherness and friendship over chips and salsa

Mature Stage

Flat Sales Profits Decline Fewer Competitors

Emerging global retail concepts handout

Forces shaping retail development -Accessibility v Exclusivity -Choice v Curation -Consumers v Companies -Consumption v Minimalism -Efficiency v Effectiveness -Human v Bot -Personalization v Privacy -Physical v virtual -retailers v brands -values v values Retailers and brands need to be aware of the influential digital channels and pressures it places on store Company has to meet consumers when and where they want to shop -sustainability initiatives gain most momentum moving forward -eco awareness of consumers increasing

Smile Curve (class notes)

GVC's Stan Smith Smile Curve Want to bring more manufacturing jobs to the US Curve tells us where the profit is in the system (in whole process from production to after the sale) -manufacturing in middle, lowest profit margin in whole process -lots of low paying jobs, lot of it to spread around Where money is -Designing the marketing before hand or after the sale/service

Selection Criteria for Choosing an International Distributor

Goals and Strategies Size of the Firm Financial Strength Reputation Trading areas covered Compatibility Experience Sales organization Physical facilties Willingness to carry inventories After-sales service capabilities Use of promotion Sales performance Relations with local government Communications Overall attitude

Shape of PLC

High learning product Low earning product Fashion product Fad Product

Neuromarketing

If people prefer Pepsi, why do they buy Coke Why is a brain scan better than a focus group How is the taste experience influenced by branding

Ditch your store for full time e-commerce handout main points

In store retail on the rise Top e-commerce platforms For e-commerce it's all about fast fulfillment -demographic profiles Urge to Merge Retails New Normal

4 P's

Influences consumer decision process Product, Price, Place, Promotion Product: Can include services, physical and not physical. Price: Competitor based, cost based, value based. You can play around with price to target specific customer. Place: The product must be accessible when and where customers want it. Promotion: Communication product through various media, like TV, radio, magazine, sales force, new media

Stages of the Product Life Cycle

Introduction Growth Maturity Decline

Promotional tools used over PLC

Introduction -Promotional obj: to inform -Promotional Activity: Publicity in magazines, advertising, salesforce calling intermediaries, sales promotion in form of free samples Growth -Promotional obj: To persuade -Promotional Activity: personal selling to intermediaries, advertising to differentiate products attributes from competition Maturity -Promotional obj: To remind -Promotional Activity: reminder advertising, sales promo in form of discounts and coupons, limited personal selling, direct-mail reminders Decline -Promotional obj: To Phase out -Promotional Activity: little money spent on adv.

Charting the Product Life Cycle

Introduction Stage Growth Stage Mature Stage Decline Stage

Smile Curve in depth

Japan and US in upper left corner reflecting high value added contributions from financial services sector Chinese industry that manufactures the good, Chinese electrical and optical is at bottom point of the curve, reflecting assembly activity at low waves Activities closest to consumer are marketing, logistics, and after product servicing Market knowledge industries are high value added, shown by upward sloping part of smile curve, tend to be carried out in advanced economies where mass consumption products are purchased by households Compensation in US industry rose, whereas Chinese wages remained very low on SC -total value produced by China expanded 10 fold -China may have held a low position in value chain throughout period but brought huge number of workers from impoverished countryside to work in related factories

3 aspects of the PLC

Length of PLC Shape of PLC PLC and Consumers

Decline

Marketing objective: Harvesting, Deletion Competition: Reduced Product: Best Sellers Price: Stay Profitable Promotion: Minimal Promotion Place (distribution): Fewer Outlets

Maturity

Marketing objective: Maintain Brand Loyalty Competition: Many Product: Full Product Line Price: Defend Market share, Profit Promotion: Reminder Oriented Place (distribution): Maximum Outlets

Growth

Marketing objective: Stress Differentiation Competition: More Product: More versions Price: Gain market share, deal Promotion: Stress points of difference Place (distribution): More outlets

Nestle Video Value of brand Video important info

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Product tactics

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Smile curve handout highlighted sections

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Dynamic Pricing Notes

Often economically based, or the reason we are doing it is because times have changed, leads to cost and demand going up and down Location

Digital shopping and engagement

Online customers keep raising expectations of shopping journey -Covid-19 increased need for online presence Innovative online shopping concepts like improved digital shopping experiences, new apps or digital loyalty programmes, livestream shopping, last mile delivery and integration of new tech (AR, VR) AR/VR being used to enhance brand interactions and replace physical experience online Impact of AR/VR development (ON TEST) -Brand engagement -Create a Virtual showroom -Enhance in person shopping experience -Enhance path to purchase -purchase transaction -Replicate physical experience online

3 General pricing Strategies (ON TEST)

Price Skimming -Uses a high price, usually as first-mover -Apple with unique product line Penetration Pricing -Attempts to increase market share w/ temporary price reductions -Reliance Telecom- to attract new clients Economy pricing -placed at "no frills" low price -Costs of marketing and manufacturing are kept to a minimum -Soups, biscuits, "economy brand"

Determining Price by relating Marginal Revenue to MC

Price at the intersection of MR curve with the MC curve will maximize profits (with demand AR at some Price P) On a table, it is the highest profit, before it turns back into loss

Pricing Calculations

Price often determine by analyzing cost and revenue curves Average Total Cost -Total Costs/Number of units Produced Marginal Cost -change in Total Cost that result from Producing Additional Unit of Output Average Revenue -Total Revenue/Quantity of Goods sold Marginal Revenue -Change in Total Revenue results from selling additional Unit of Output

Competition-Oriented

Prices set chiefly on the basis of what competitors charge Reflects the availability of supply relative to demand Acts as a constraint, depending on "bundle" differentiation Strategies: Psychological pricing -prestige pricing -odd number ending (1.99 v 2) Going rate or imitative pricing -assume homogenous markets -market structure: oligopoly or pure competition Competitive bidding -Closed bidding -Open Bidding -Negotiated pricing

Growth Stage

Rapid Sales Growth More Competition Broad Distribution

Modified breakeven concept

Reality on top of break even chart Pricing technique used to evaluate consumer demand by comparing number of products that must be sold at a variety of prices in order to cover total cost w/ estimates of expected sales (demand) at various prices Implies a sales forecast that can predict demand at various prices, with that info (and BE numbers) we can choose price that maximize profits

In store retail on the rise

Recent data shows that the skew toward e-commerce is righting itself, and consumers are becoming very comfortable with in store shopping again -means retailers should build most convenient in store experience they can -ecommerce has to stop coasting, focus on easier product discovery and ever-faster fulfillment strategies

Logic of smile curve

Research and design activities for critical components of the electrical and optical equipment occur early in the production process (left side of the figure). These knowledge activities tend to be high-value-added activities in GVCs and tend to be carried out in more advanced economies

Retails New Normal

Retailers need to adjust to new long term trends Foot traffic is growing for brick and mortar, but still face ongoing challenges of adequate staffing and keepign up w/ product demand -managing these variables while working to make consumer's shopping experience as convenient as possible should be top priorties E-commerce vendors focus on fulfillment speed and consumers online shopping experience as simple and frictionless as possible -making it easier for them to find what they want, up to date payment methods, getting to their door asap Combine online and physical operations with cross over marketing, discounts, and order fulfillment

Urge to Merge

Retailers with both a physical and online presence need to combine these aspects of their operations -do this through promotion and in-store pickup In store pickup growing, but number of those customers hunting specific products Ecommerce vendors must find better ways for consumers to find what they are looking for while effectively promoting latest products and deals

Emerging Retail handout main concepts

Rethinking the store Digital Shopping and Engagement Social and Environmental Responsibility Whats next for Retail

Smile curve handout: Rich and poor countries contemplating contemporary trade

Rich countries worry that manufacturing is being hallowed out, semi skilled production jobs have moved to developing countries or if they still remain in advanced countries, have suffered downward pressure on wages Poor countries worry that they are trapped in low value-added activities and are locked out of the higher value added activities in design, key technological inputs, and marketing

The New Warehouse Robots handout notes from class

Robots taking over warehouses, most picking jobs will be done by bots Sequoia taking the place of Squid Little blue robot called Stitch State of the art in element of marketing mix -Critical especially when your international -Might try to do this in another country that may not have the tech -Marketing department sets the factory agenda

Decline Stage

Sales Drop Delete Products Harvest

Distribution Criteria Handout

Selection Criteria for Choosing an international Distributor What's in agreement with that Intermediary -Elements of a Distributor Agreement -One day have to find a distributor and make an agreement with them Foreign intermediaries -Distributor Inquiries -US Department of Commerce: Trade Opportunities Program Commercial Service

The goods-services continuum

Service dominated offering (intangible) Balanced Good dominated Offering (tangible) Ex: Fast food restaurant is equally weighted between goods and services

Top E-Commerce platforms

Shopify Wix BigCommerce For brick and mortar operations main drivers are older shoppers and rural neighborhoods -older shoppers: gen z and millennial consumers who favor in person shopping -rural areas, especially those where median household income 50,000 or less see physical stores offering more reasonable prices and likes local deals and coupons at stores Young consumers continue to opt for e-commerce

Length of PLC

Shorter and shorter "turn around time for each product category, probably due to technoolgoy and consumer behavior

Picking a good brand name

Should suggest product benefits Should be memorable and positive Should fit the company or product image Should have no legal or regulatory restrictions Should be simple and emotional

Introduction Stage

Slows Sales growth Skimming Strategy Penetration Strategy

Social and Environmental Responsibility

Social and Environmental concerns sway purchase desicions and loyalty -must go beyond providing quality products -doing this through eco-friendly packaging, circular models, reducing environmental impact Retail concepts w/ core social and envionrnmental purpose, including recycling and reselling, reducing use of plastic/waste, transparency in supply chain, services for underserved demographics and promotion of minority owned businesses

Cultural and Physiological factors affecting product adaptation handout important info

Standardize as much as possible, adapt when necessary or prudent Standardization Vs. Adaptation

For e-commerce, all about fast fulfillment

Supply chain slowdown challenging both b and m and e-commerce -E-commerce operations more challenged bc speedy order fufillment is one of key ways consumer judge online shopping Demographic of consumers fulfillment expectations -men, millennials, and city dwellers driving fast delivery trend the hardest (others willing to wait up to 5 days) -youngest consumers want to use the latest payment methods and that goes for both online and in store shoppers (65% of millennials use contactless and mobile payments)

Current Shipping Porblems/World trade handout (why skippers aren't scuppered)

Surging demand for goods and supply disruptions have restricted the flow of trade, at ports around the world, ships wait to unload and cost to ship from china to US jumped tenfold Backup of shipping containers in ports in CA -forces us to think abt alternatives and adapt Under intense pressure, global supply chains are adapting not failing -they are improvising -Walmart charters ships exclusively for own cargo -passenger aircraft being refitted for freight -soaring shipping fees themselves help adjust flow of goods -higher freight costs matter more bulky low value goods like furniture and scarcely affect expensive electronics Some consumers may be disappointed, but this means shipping tangles depress the value of trade by less than otherwise might be the case

What's Next for Retail

Tech continues to break down barriers -digital touch-points necessity to reach and engage shoppers -reflected in the shift of strategic priorities of retailers In year ahead, most report need to: -increase revenue in online channels -develop omni-channel strategy -evaluate role of the store

Transfer pricing implications handout (TEST QUESTION)

Transfer pricing: arm lengths charges between related parties such as parent corporation and a controlled foreign corporation -area of high-tax compliance risk for multinational corporation and carries important implications for tax planning and financial reporting Or: selling to yourself for usually an ulterior motive (fairly illegal) Do it because you have excess inventory Cant tax it bc product belongs to diff country

Types of products?

Use two categories when talking about consumer goods -B2B (business to business) -B2C (business to consumer) Consumer products Convenience -items in checkout stand Shopping -TV Specialty -Rolls Royce Unsought -don't shop for these items, coffin

What are the four halo effects of a brand?

Value= (price/quantity) -Availability -Consistency -Price/Value relationship -Emotional Issues

Stages of the Product Life Cycle

Works for product categories, not individual products

Product

a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers needs and is received in exchange for money or something else of value

Branding much more than your lego in depth analysis

how you stand out from the crowd, what your customers feel when they think of you. promise you make to your customers, business's success depends on how well you fulfill that promise 1. Sell emotions -sell you a feeling and deliver it through service or product. They deliver it through an experience -coke sells happiness 2. Consistency is Key -branding promise MUST be made consistently throughout your front and back-end marketing campaigns to maintain integrity -Define your brand, create a consistent message that speaks to your audience's emotions, and make sure you continually measure any and all new possible products, services, or marketing channels against who and what your brand is 3. Create community -best brands create communities accidentally -this allows customers to relax and trust the information's validity -earned social authority with customers by leveraging someone they know, like, and trust summary: -its how customers feels about you and your products/services and every touchpoint they've ever experienced from your business -abt providing your customers with solutions to their problems that create a change in their lives and, most importantly, in their emotional state and quality -creating a consistent place of business where they can reliably come to get their needs met. -it's about creating a community where they know their answers will be met with the best and most reliable information they possibly can get.

Increase revenue without..

increasing the perceived price for your customer (all abt perceived value)

Branding

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General Pricing Concepts

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Steps for making Your brand identity more consistent handout

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