BUAD 307 MIDTERM

Week 3 "Context" as part of the 5Cs Conscious Marketing, Corporate Social Responsibility and Ethics Identify impacts of big data, cloud computing, internet of things, and artificial intelligence on marketing

"Context" Influences: Technology Marketing evolution= big data, artificial intelligence, Internet of Things, Elastic Cloud Computing Big data: Big data describes the large volume of data - both structured and unstructured - that collect and analyze for insights that lead to better decisions and strategic business moves. Cloud computing: Extent to which computing resources can be scaled up and down easily by the cloud service provider. Internet of Things: The interconnection, via the Internet, of computing devices embedded in everyday objects, enabling them to send and receive data. AI: First conceived in the 1950s, A.I. has rapidly evolved in recent years, dramatically moving forward with machine learning and deep learning. AI in marketing: Personalization Look-Alike Audiences Predictive Analytics Movie or book recommendations, and individualized landing pages Evaluate brand's best customers, and identify prospects to match profile Identify behavior patterns that foretell future actions Product Pricing Content Creation Dynamic pricing models for airline seats, sporting events, and Lyft rides Customer insights drive the content that gets developed and shared

2-5 Outline the implementation of the marketing mix as a way to increase customer value

(step 4 of marketing plan): Implementing Marketing Mix and Allocate Resources Product and Value Creation Products: "These products include services and constitute the first of the four Ps. Because the key to the success of any marketing program is the creation of value, firms attempt to develop products and services that customers perceive as valuable enough to buy. " Price and Value Capture: Value-based marketing requires firms to charge a price that customers deem as good value for the product they receive. Includes: quality, features, brand name, guarantees/warranty, service, options, packaging, services/spare parts. Pricing is the only aspect that actually brings in money, therefore influencing revenue. If the price is too high, it will decrease volume. Therefore, the price has to be based on what the customer perceives the value to be. Place and Value Delivery: available when the customer want it; accessible Promotion and Value Communication: Integrated Marketing Communications (IMC)- Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact; communicates value proposition Evaluating marketing metrics (Step 5 of marketing plan): a measuring system that quantifies a trend, dynamic, or characteristic; data beats opinion; data vs information vs knowledge

Methods for describing market segments graphic

*definition of methods in previous card 9-1*

brand image map

*only graphic. explanation on separate card*

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Differentiate between compensatory and non-compensatory decision strategies.

- Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones) - Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)

Class LO Module 6-4: Differentiate among the different common descriptions used to identify business market segments

-Geographic segmentation - Demographic segmentation a. Size of business b. Type of organization (SIC) - Application segmentation a. Usage level b.Importance to organization's operation c. How product is eventually used - Profitability (more common in B2B markets)

Week 5 "Global Marketing" Identify data useful for calculating the lifetime value of a customer.

-Gross profit per customer -Cost to acquire customer -Annual mktg. cost/customer -Cash flow if customer retained -Expected per customer cash flow -(8%) discount factor -NPV cash flow per customer (net present value)

In Class LO Module Describe how position maps are used. Building on 9-4 and 9-5, create a positioning statement (to avoid confusion, think of a value proposition and a positioning statement as synonymous). *covered in chapter card*

...the brand's promise. Creating distinct and valued physical and perceptual differences between one's product and its competitors as perceived by the target customer. Good ex: Water brand competition positioning 1. Est category 2. Distinguish from competitors -Circles for a Successful Value Proposition Repositioning: Altering a brand's image in the market -EX: Old Spice; Cover Girl Positioning Template: For (insert target market), the (insert brand name) is the (insert point-of differences...tanglible or intangible) among all (insert product category or frame of reference) because (insert reason to believe). 1. What is it? 2. Market category 3. Primary differentiation 4. Target segment 5. Competitive alternatives 6. Job(s) to be done Snake Plot: one form of attribute rating method -black line=norm -new: green -fall short: red Overall Similarity Method (based on market perception): Not based on individual attributes, but on products as a whole. Respondents rank similarity between products. -bigger number= dissimilar -smaller number= more similar Perceptual maps help managers to do the following: • Test where unmet customer needs potentially exist. • Identify where competitors might be vulnerable. • Gain insights into how an under-performing product might be repositioned. Implementing a Positioning Strategy 1. Product/service strategy: product features and objectives; branding strategy 2. Distribution strategy: • Channel Objectives • Channel Management Strategy • Channel Types / Design / Intensity 3. Price strategy: • Pricing Objectives • Pricing Tactics 4. Communications strategy: • Communication Objectives • Creative Strategy • Promotion Tactics 5. Sales Force strategy: • Role and Objective of Sales Force • Required Sales Force Training / Support/Management

steps in marketing plan

1- define the business mission and objectives 2- conduct a situation analysis / swot 3- STP 4- 4ps, implement marketing mix and allocate resources 5- evaluate performance using marketing metrics

Ch 3 In class LO: Identify common reasons collaborations are formed for marketing reasons

1. Co-marketing alliance: Joint marketing and sales programs among suppliers, in order to sell integrated systems directly to the ultimate customer. (EX: drive-thru marketing with movie toys; JCrew putting Red Wing Rugged Classic boot on site because it's "on brand" and will attract larger audience; Timex military watch; Ray Ban club master) 2: Product development alliance: company growth by offering modified or new products to current market segments; risky b/c target group; decrease risk and increase speed (EX: Dunkin Donuts deal with Coke) 3. Global distribution alliance: helps with context/climate and distribution fees; bring in intermediary to deal with foreign market entry Ex: KFC in Japan

In Class LO (1-1---2-7): Identify which parts of a business model relate directly to marketing responsibilities.

1. Consumer relationships 2. Value Propositions 3. Channels 4. Customer segments 5. Revenue Generators

8-1 Describe the components of a country market assessment

1. Economic analysis using metrics (general economic environment, market size and population growth, real income) -Gross domestic product, Gross national income, purchasing power parity, trade surplus or deficit (imprt more than exprt) national income being used more bc gdp doesn't show whole picture 2. Infrastructure and technology (Transportation, channels, communication, commerce) 3. Sociocultural analysis (power distance, uncertainty avoidance, individualism, masculinity, time orientation) 4. Government actions (tariff, quota, exchange control, trade agreement)

**NO LONGER ON ELIGIBLE TOPICS SHEET PERNER Ch 3 In class LO: Identify on online suitability of o Customization needs o Geographic dispersion of customers o Decline of inventory value over time o Degree of assortment needed

1. Extent of customization needed. Highly customized items—e.g., insurance, plane tickets, personalization—allow the customer to do much of the work (i.e., data entry). 1a. Customization can come in multiple forms - An airline ticket should be for a specific name for travel to a specific destination from a specific origin at a specific time • Efficiency is introduced when the customer can enter the relevant data - Insurance policy requires customer-specific info - Clothing may now be customized taking into account many more measurement points 2. Geographic dispersal of consumers. Even if direct-toconsumer sales are not efficient, this may be the only cost effective way to reach customers who are widely dispersed (e.g., bee keepers, Civil War buffs, tall people). 2a. For specialty products, customers may be scattered over large areas—e.g., - Bee keeping equipment - Specialty collector items - Big and tall clothing • Both brick-and-mortar and online distribution will be costly, but, by default, online sales may be less so• 3. Extent of inventory value decline over time. A computer can be distributed to consumers at a lower price through retailers, but the process takes longer and computer parts lose value fast. 3a. Because of rapid innovation and resultant product obsolescence, computer products may lose 1.5% of value per week 3b. Distributing through individual delivery may cost more than distributing through retail stores, but shipping to individual customers may be faster, thus resulting in a product that is more valuable at the time of purchase 4. Assortment of variations needed (e.g., clothing colors and sizes) 4a. • Some product categories will require a large assortment of combinations - E.g., clothing: Color (5) * Sizes (7) = 35 variations • 4b. These products are inherently expensive to make and distribute - Large amount of space may be needed for display in costly retail areas - Exact demand for each combination may be difficult to predict for a specific brick-andmortar location—in a centralized warehouse, many of the store level fluctuations cancel themselves out

How does a marketing segment group come together?/ Steps for segmenting consumer markets (Lecture Module 6-2)

1. Identify benefits/attributes most important to customers 2. Determine value customers place on attributes 3. Group people according to which product attributes are important to them 4. Determine other identifying variables that distinguish the same groups 5. Assess segment attractiveness

7-3 Identify the roles within the buying center.

1. Influencer: participant whose views influence the other members in making the final decision 2. Initiator: first suggests buying the product/service 3. Gatekeeper: controls info or access to decision-makers and influencers 4. User: consumes or uses the product or service purchased by the buying center 5. Buyer: handles the paperwork of actual purchase 6. Decider: ultimately determines any part of or the entire buying decision--whether, what, how, where to buy

In Class LO (1-1---2-7):Describe 5 ways that marketing may contribute directly to an improved income statement.

1. Marketing may help with the overarching consideration of managing expenses or allocating resources for promotion better. This allows for the acquisition and retention of more customers (revenue) and increase share of wallet within and across categories. 2. Increase margins. Charge premium pricing by proving value. 3. Developing brand may increase value tangibly and intangibly, allowing for more flexibility when increasing pricing because the customer perceives an increase in value based on brand recognition/reputation. 4. Because marketing means matching up goods/services with true customer needs, there is more confidence that you will develop and deliver something that customers want/turns inventory. 5. Companies that are well-known have competitive advantage through leveraging brand assets. Marketing helps increase that exposure. Leveraged assets increases revenue streams.

7-2 List the steps in the B2B buying process.

1. Need recognition 2. Product specification 3. RFP process- request for proposals 4. Proposal analysis, vendor negotiation, and selection 5. Order specification 6. Vendor assessment performance using metrics

Ch 3 In class LO: Identify the factors favoring and disfavoring online sales of tangible and intangible merchandise.

1. Value-to-bulk ratio. High value, low weight/volume items can be more readily handled and shipped. 2. Absolute margin. Even if the percentage margin on a high price item is low (e.g., 15%), the absolute margin can cover considerable expenses (e.g., 0.15x$1,000=$150) 3. Ability of consumer to evaluate quality and fit through online description. Standard branded items from a trusted source can be more easily evaluated than items that need to be examined up close. 4. Convenience to the customer and willingness to pay for this convenience. Some consumers may be willing to pay more for door-to-door delivery. It is usually more expensive to buy groceries online. 5. Customer sensitivity to delayed delivery. 6.Extent of customization needed. Highly customized items—e.g., insurance, plane tickets, personalization—allow the customer to do much of the work (i.e., data entry). 7. Geographic dispersal of consumers. Even if direct-toconsumer sales are not efficient, this may be the only cost effective way to reach customers who are widely dispersed (e.g., bee keepers, Civil War buffs, tall people). 8. Extent of inventory value decline over time. A computer can be distributed to consumers at a lower price through retailers, but the process takes longer and computer parts lose value fast. 9. Assortment of variations needed (e.g., clothing colors and sizes)

In Class LO: Building on 2-2, outline a basic marketing process...understand, plan, implement, follow-up: Marketing Plan Steps

1. business mission and objective - must be measurable 2. situational analysis - SWOT 3. Identify Opportunities - STP (segmentation, targeting, and positioning) 4. Implement Marketing Mix (4Ps) 4 1/2. Resource Allocation - how much money to spend on something 5. evaluate performance using marketing metrics ------------------------------------------------------ Understand 5Cs(+ 4 Ps): company, collaborators, customers, competition, and context Plan: marketing obj, value proposition, target market; positioning; resource requirements; forecasted financials Implement: 4Ps /Tactics Follow-Up: Control--performance vs obj performance vs resources used; lessons learned; adjustments circular process; always changing and adjusting

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify stages of consumer information search.

1. need recognition 2. information search 3. alternative evaluation 4. purchase and consumption 5. post purchase

6-1 Articulate the steps in the consumer buying process

1. need recognition: The beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state. 2. info search 3. alternative evaluation 4. purchase and consumption 5. post-purchase

6-5 List the factors that affect the consumer decision process.

1. psychological factors (lifestyle, attitude, perception, learning and memory) 2. marketing mix (place, promotion, product, price) 3. social factors (family, reference groups, culture) 4. situational factors (purchase/sensory situation; temporal state)

In Class LO (1-1---2-7): Marketing metric: Net promoter score

A service feedback rating system % of promoters - % of detractors (% of 9 through 10)- (%0-6)----ignore 7 +8

Building on 8-3, differentiate between indirect and direct exporting.

ADVANTAGES • Exporting company builds relationships directly with a foreign market entity (buyer or intermediary) • Generation of foreign market know-how • Control over sales and client relationships • High returns and profits, especially if sold directly to the end consumer/ buyer DISADVANTAGES • Currency risk/ foreign exchange risk • Increase in risks as usually all legal risks are attributed to the exporting company • Need to establish specific export capabilities within the company, most likely resulting in costs

5-4 Examine the technological advances that are influencing marketers

AI: solutions that rely on computer systems to perform tasks that require human intelligence, such as speech recognition, decision making, or translations Robotics taking over human responsibilities The Internet of Things: when multiple "smart devices" with Internet-connected sensors, such as refrigerators, dishwashers, coffeemakers, combine the data they have collected to help consumers and companies consume more efficiently Privacy concerns by consumers

PERNER Ch 3 In class LO: Differentiate absolute (dollar) margins from percentage margins. Articulate how products with high percentage margins may be unprofitable because of products having low absolute margins

Absolute (Dollar) Margins: Absolute margins refer to dollar amounts. In the above case, the absolute margin is $5.00. Note that if there is a 15% gross margin (a much smaller percentage) on a $1,000 notebook computer, that amounts to $150—a figure that can cover much greater costs even though the percentage margin is less. Percentage margins: When the term "margin" is used without further specification, this usually refers to a percentage figure. For example, if you buy a book for $5 at wholesale and sell it for $10, you have a 100% markup and a gross margin of (10-5)/10) =50%. The 50% gross margin may sound impressive, but it only amounts to an absolute amount of $5.00, a figure for which you can only do a limited amount of work. It may not cover the cost of retrieving the item, packing it, and shipping Even if the percentage margin on a high price item is low (e.g., 15%), the absolute margin can cover considerable expenses (e.g., 0.15x$1,000=$150)

4-1 Define conscious marketing

An approach to marketing that acknowledges four key principles: a higher purpose, stakeholders, conscious leadership, and a conscious culture

1-1: Define the role of marketing

An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders; takes place in nearly any exchange in daily life

In Class LO (1-1---2-7): Distinguish between a "market-driven" and a "market-driving" approach.

Classic Marketing Approach • Market-driven • "Give customer what they want." • Matches well with markets containing products with high buyer familiarity. • Assumes buyers evaluate choices based on fixed value concepts. Alternative Marketing Approach • Market-driving • "Help customers learn what they want." • Matches well with rapidly evolving markets with growing number of novel products. • Assumes buyers can learn and evolve with new value concepts.

Class LO Module 6-3: Building on 9-1, outline a process for identifying a market segment.

Common Basis for Identifying Market Segments: -Demographics: Information is relatively easy to obtain, and is often required even when other segmentation methods are used. -Benefits Sought: Segmenting based on "Job to be done" Ideally, the starting point...comes closest to correlating with what will drive buyers' decisions. Based on attributes customers are seeking from a particular product class. What do customers want from a product? Why will customers care about the product? -Geographical: Market is divided in geographic units based on physical proximity. Geographic segment categories include regions, county size, city size, population density, and climate. (ex: small target in village) -Psychographic: not a good identifier because it has you playing psychic; used as a combo w something else; ...relates to how people think, feel, and behave. ...characteristics include social class, lifestyle, opinions, and personality characteristics. (i.e. Harley Davidson lifestyle) -Behavioral: Divides market based on consumer's uses, knowledge, or attitudes toward product. Describes how consumers interact with the product. (i.e. holiday candy; late night fast food) Behavioral segmentation questions to consider: Are customers ready for product? How loyal are users? For what occasion is product used? From which media do buyers get their information? -Affiliation or Occupation: Identifies customers groups based on their profession or organizations to which they belong. Examples include: USC Alumni Marines Teachers Republicans Religious Groups-Profitability Profitability: evident in B2B markets; becoming more apparent in consumer markets; apparent in markets based on individual relationships (i.e. banking, investing, insurance). Lead customer could even lose $$$. Decide if you want to pursue the relationship/make it more profitable

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify what a consumer problem involves

Consumer problem: Discrepancy between ideal and actual state--e.g., consumer: - Has insufficient hair - Is hungry - Has run out of ink in his or her inkjet cartridge • Problems are not always recognized immediately (e.g., an individual may develop alcohol problems and be in denial) • Problems can range from very small to very large • Problems can be solved in several ways--e.g., stress reduction vacation, movie, hot bath, medication

4-2 Describe what constitutes marketing's greater purpose

Corporate Social Responsibility (CSR): refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders - triple bottom line: a means to measure performance according to environmental, societal, and economic criteria

4-3 Differentiate between conscious marketing and corporate social responsibility.

Corporate social responsibility: -independent of corporate purpose or culture -reflects a mechanistic view of business -often grafted into traditional business model (separate department) -sees limited overlap btwn business and society/business and planet Conscious marketing: -incorporated higher purpose and caring culture -holistic, ecosystem view of business as complex adaptive system -social responsibility at core of business; higher purpose; community and environment as stakeholders -business is a subset of a society and society as subset of planet

(Lecture Module 6-2) Identify characteristics of strong market segment (already in notes from reading) + Building on 9-1, outline a process for identifying a market segment.

Covered from book (expanded on separate card): • Identifiable • Reachable • Responsive • Profitable • Substantial

In Class LO (1-1---2-7): Identify how customer satisfaction is important to marketers

Customer satisfaction increases customer loyalty, thus increasing the lifetime value of a customer. Customers are vital for the success of a business/potential revenue. Customers are mini revenue streams/assets. There is more incentive/less resources exhausted when sustaining customer loyalty rather than continually investing in attracting new customers.

6-4 Discuss post-purchase outcomes

Customer satisfaction, post-purchase cognitive dissonance, customer loyalty, undesirable customer behavior (bad review) "Marketers can take several steps to ensure postpurchase satisfaction: • Build realistic expectations, not too high and not too low. • Demonstrate correct product use—improper usage can cause dissatisfaction. • Stand behind the product or service by providing money-back guarantees and warranties. • Encourage customer feedback, which cuts down on negative word of mouth and helps marketers adjust their offerings." post-purchase cognitive dissonance: an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior

PERNER Ch 3 In class LO: Assess the ability of consumers to evaluate quality and desirability of a product based solely online descriptions and images

Does the customer have to see the product to determine fit and/or quality? • Clothing sizes do not tell the whole story—"fit" differs among brands • Texture and other difficult to describe qualities are important for certain "experiential" products • Customers are less likely to need to see a standard product—e.g., an iPhone X—sold by a reputable online dealer • Lesser known brands may require more inspection, but online reviews can help reduce uncertainty Standard branded items from a trusted source can be more easily evaluated than items that need to be examined up close.

Week 3 "Context" as part of the 5Cs Conscious Marketing, Corporate Social Responsibility and Ethics Link "context" to 5C framework. Macro-environment.

External forces that impact an organization's decisions. Management has very little control. Competitive - Any entity with which a company competes for customers, resources, revenues and/or future opportunities. Technology - Applied science that improves an organization's ability to meet customer needs. Resource - Needed capital, labor, raw materials, equipment, etc. to produce and deliver products. Legal/Political - Laws, regulations, and public interest groups. Social Cultural - Beliefs, values, and norms within a group. The way a group lives, or does things. Economic - Financial condition of the marketplace. Demographic - Human population characteristics Physical - Environmental health of the earth or its regions.

**NO LONGER ON ELIGIBLE TOPICS SHEET PERNER Ch 3 In class LO: Describe basic process by which recommendation systems can identify items of interest for specific customers

For a given customer: Other "similar" customers who have bought many of the same things as the individual are identified = The purchases of these similar customers are analyzed, identifying items that: 1. Many of the "similar" customers have bought but 2. Have not yet been bought by target customer = Of the items identified in the previous step, the ones bought by the largest numbers of "similar" customers are recommended.

In Class LO: Building on learning objective 8-1, apply the PESTLE framework for assessing an international market. COUNTRY MARKET ASSESSMENT USING THE PESTLE FRAMEWORK

Goal: Identification of (company specific) chances and risks in foreign markets as foundation for the formulation of an internationalization strategy Company influenced by economic, socio-cultural, technological, legal, environmental, political

In Class LO (1-1---2-7):Distinguish among types of loyalty...heart, head, hand

Head loyalty: customer loyalty based on specific benefits of a brand, such as product performance Heart loyalty: customer loyalty based on personal identification with the brand Hand loyalty: customer loyalty characterized by habitual repurchase and low interest in product information, that is, low commitment to the brand (easiest to steal)

9-2 Describe how firms determine whether a segment is attractive and worth pursuing

Identifiable: firms must be able to identify who is within their market to be able to design products or services to meet their needs; equally important to ensure that segments are distinct from one another because too much overlap between segments means that distinct marketing strategies aren't necessary to meet segment members' needs Substantial: measure size of potential target market ; if a market is too small or its buying power insignificant, it won't generate enough profit or be able to support the marketing mix activities Reachable: Product or service can't have any impact if the market cannot be reached (or accessed) through persuasive communications and product distribution Responsive: for segment strategy to be successful, customers in that segment must react similarly and positively to the firm's offering Profitable: potential profitability of segment, both current and future; some factors: market growth rate, market competitiveness, market access Segment profitability= (segment size x segment adoption percentage x purchase behavior x profit margin percentage) - fixed cost *where* Segment size = Number of people in the segment Segment adoption percentage = Percentage of customers in the segment who are likely to adopt the product/service Purchase behavior = Purchase price × Number of times the customer would buy the product/service in a year Profit margin percentage = (Selling price − Average variable costs) ÷ Selling price Fixed costs = Advertising expenditure, rent, utilities, insurance, and administrative salaries for managers *MATH WILL NOT BE TESTED*

2-6 Summarize portfolio analysis and its use to evaluate marketing performance.

In portfolio analysis, management evaluates the firm's various products and businesses--its "portfolio" --and allocates resources according to which products are expected to be the most profitable for the firm in the future. Performed at SBU level/product line Strategic business unit: a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives product line: a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges market share: a company's product sales as a percentage of total sales for that industry relative market share: a measure of the product's strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry market growth rate: the annual rate of growth of the specific market in which the product competes

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Differentiate internal and external search characteristics.

Internal: - Memory -Thinking -Use of what is inside the consumer's mind -Typically used more for relatively low involvement decisions External: -Word of mouth, media, store visits, trial -Use of information inside the consumer's mind— talking to others, reading, visiting stores -Typically used more for relatively high involvement decisions

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: For purchase decisions, distinguish between low and high involvement.

Involvement duration - Temporary : The consumer may temporarily become highly involved to make an impending decision on an important purchase (e.g., a car) but may then stop following the category if it is not of great interest - Enduring: The consumer has a lasting interest in the product category even if he or she will not need to make a purchase in the near future • For low involvement products, efforts aimed at affecting internal search tend to be more effective—the consumer is usually not willing to expend energy on external search. • External search is more likely for higher involvement products. Note that temporary involvement can be very high while it takes place. A very important decision may have to be made even if the product is not particularly interesting to the consumer. The point is that once an important decision has been made, interest—and further information search—tends to end

3-5 Recognize and understand the components of a digital marketing strategy.

Listen: systemic monitoring; utilizing social media monitoring tools - Sentiment analysis: a technique that allows marketers to analyze data from social media sites to collect consumer comments about companies and their products Analyze: Amount of traffic- Who are they? Where do they come from? - hits; page views; bounce rate; click path (Shows how users proceed through the information on a website—not unlike how grocery stores try to track the way shoppers move through their aisles.); conversion rate (measures the frequency that someone who clicks on an ad makes a purchase, "likes" a site, or takes some other action desired by the advertiser); keyword analysis Do: Use data for personalized offers; aggregate data to understand trends -Identify strategy and goals -Identify target audience -develop budget -develop campaign--experience and engage -monitor and change

Week 3 "Context" as part of the 5Cs Conscious Marketing, Corporate Social Responsibility and Ethics: When considering an ethical decision, distinguish among moral, manipulative and deceptive ethical influences. Identify how redemptive knowledge and redemptive value relate to decisions.

Manipulation -Intentionally/knowingly impacting a buyer's decision-making ability based on insecurities or weaknesses. Often practices by stretching the truth and using emotive persuasion. Deception -Act of causing someone to accept as true or valid what is false or invalid. Can be done by misrepresenting or omitting information...or by lying. Moral: above "the line"; Seller is given full and legitimate reasons to buy redemptive value and knowledge: what the customer gets out of the product or service outweighs the influence of manipulative or deceptive marketing techniques to the point that it's less ethically problematic (potential mitigating factor to deception/manipulation)

7-1 Describe the ways in which B2B firms segment their markets (covered during week 6. Module 6-4).

Manufacturers: buy raw materials, components, and parts that allow them to make and market their own ancillary services resellers: marketing intermediaries that resell manufactured products without significantly altering their form wholesaler: Firm engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users. distributor: A type of reseller or marketing intermediary that resells manufactured products without significantly altering their form. Distributors often buy from manufacturers and sell to other businesses like retailers in a B2B transaction. Institutional purchases: hospitals, schools Government purchases: goods/services ex: working with cybersecurity firms

2-2 Describe the elements of a marketing plan.

Marketing plan: A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements. three major phases: planning, implementation, and control planning phase: The part of the strategic marketing planning process when marketing executives, in conjunction with other top managers, (1) define the mission or vision of the business and (2) evaluate the situation by assessing how various players, both in and outside the organization, affect the firm's potential for success. implementation phase: the part of the strategic marketing planning process when marketing managers (1) identify and evaluate different opportunities by engaging in segmentation, targeting, and positioning and (2) implement the marketing mix using the four Ps control: the part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take any necessary corrective actions

(Lecture Module 6-1) Identify benefits a firm gains by understanding and targeting a specific customer group(s), also known as a market segment(s)

Marketing segment: A relatively homogeneous customer group that will react similarly to a particular marketing mix. Why segment? -Use marketing resources in a more efficient/beneficial way You can't serve all customers equally well. There are potential customers with zero or little interest in your product. Rare to have one offering that will make everyone happy. You can make more money by serving some segments well, rather than the whole market poorly.

6-6 Describe how involvement influences the consumer decision process.

Message--high involvement= greater attention, deeper processing=develops strong attitudes and purchase intentions Message--low involvement= less attention, peripheral processing= generates weak attitudes and increases use of cues extended problem solving: a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk limited problem solving: occurs during a purchase decision that calls for, at most, a moderate amount of effort and time impulse buying: A buying decision made by customers on the spot when they see the merchandise habitual decision making: a purchase decision process in which consumers engage with little conscious effort

3-4 Understand various motivations for using mobile apps.

Mobile apps are ways that consumers directly make purchases or look for information on goods/serves that they may invest in. Continually growing market. 1. Me time: Seeking relaxation or entertainment 2. Socializing: interacting with other people 3. Shopping: seeking a product or service 4. Accomplishing: managing finances, health, productivity 5. Preparation: planning for upcoming activities 6. Discovery: seeking news and information 7. Self-expression: participating in hobbies and interests

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify consumer motivations for purchase choices.

Motives: In general, lower level needs have to be addressed before higher level ones can be pursued (Maslow's Hierarchy of Needs: physiological, safety, love, esteem, self-actualization) • Attitudes: - Beliefs - Can be positive, negative, or neutral - May or may not be accurate • E.g., healthiness of food, effectiveness of hand "sanitizers," characteristics of "organic" food items - May contradict other beliefs held by the other person • -Affect - May be positive or negative - May take on specific dimension (e.g., pleasure, disgust) • -Behavioral Intentions - An individual's plan or expectations of what he or she will do - May appear inconsistent with beliefs - May not predict well what the individual will do in reality • Perceptions: Generating Beliefs Through Advertising • Statements must be - Perceived - Comprehended - Remembered - Believed (at least in part) • Learning and memory: Purchase situation • Sensory situation - Visual - Auditory - Olfactory - Tactile - Taste • Temporal state • Lifestyle

In Class LO (1-1---2-7):Weigh positive and negative aspects of a customer-centric approach.

Negatives: 1. Development of truly breakthrough products & services can be difficult b/c customers can only respond to what they know. 2. Market opportunities can pass during the over analysis of customer needs Positives: - Very focused on understanding of customer need, which helps with customer relationship managment; could potentially be less risky because you can flop by telling customers what they need/should be interested in.

8-3 Differentiate and identify the various market entry strategies.

Planning Foreign engagement Alternative I: internationalization by coincidence Alternative II: Rational planning of the foreign market engagement by ways of evaluating components of a country market assessment investment and Management; whether in home country or host country Approaches: Export (Direct and indirect) -lowest form of internalization -Indirect: Exporter in home country helping to internationalize; not directly abroad; local intermediary helps sell the product -Direct: the exporting company takes care of directly sending product across the border to a foreign country (easiest way to set up); When a firm maintains 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. 2. Franchising: A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor. 3. Strategic Alliance: a collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another 4. Joint Venture: formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared 5. Foreign direct investment (highest form)

9-5 Define positioning and describe how firms do it.

Positioning: firms position products and services based on different methods such as value proposition, salient attributes, symbols, and competition -Value is a popular positioning method because the relationship of price to quality is among the most important considerations for consumers when making a purchasing decision; in the eye of the beholder (EX: some people like KIND bars over PowerBars b/c natural ingredients, taste, and conscious marketing. BUT ppl that are really into exercising might still prefer PowerBars because they need the protein replenishment) -Salient attributes: another common positioning strategy that focuses on the product attributes that are most important to the target market (EX: Subaru positioning its all-wheel-drive by focusing on safety and handling vs Audi's focus on performance and handling) -Symbols: positioning based on a well-known symbol (EX: Gerber baby; Nike swoosh) -Competition: positioning against a certain specific competitor or an entire product/service classification; (EX: although certain luggage companies focus on lightweight/functional design, Saddleback Leather has chosen to focus on rugged durability and classic look."Offering a 100-year guarantee on its products, the owner Dave positions his bags as something "they'll fight over when you're dead."36 This craftsmanship comes at a cost—its suitcases sell for more than $1,000." Dominoes marketing by comparing against Papa Johns) Marketers have to be careful to not position too close to competitors; if packaging or logo looks too similar, they could be opening themselves up to a trademark infringement lawsuit. Ex. McDonalds sues anyone who uses the "Mc" prefix Positioning using Perceptual Mapping: -perceptual map: displays, in two or more dimensions, the position of products or brands in the consumer's mind -ideal point: the position at which a particular market segment's ideal product would lie on a perceptual map To derive a perceptual map, marketers must follow 6 steps: 1. Determine customer's perceptions and evaluations of the product/service in relation to the competitor's product/service 2. Identify the market's ideal points and size 3. Identify competitors' positions 4. Determine consumer preferences 5. Select the position 6. Monitor the positioning strategy

Marketing Mix (4 P's)

Product, Price, Place, Promotion

1-3 Describe how marketers create value for a product or service.

Product: Creating Value The fundamental purpose of Marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. Includes: quality, features, brand name, guarantees/warranty, service, options, packaging, services/spare parts marketing analytics: a group of technologies and processes that enable marketers to collect, measure, analyze, and assess the effectiveness of marketing efforts; uses big data/cloud technologies social and mobile marketing helps to better connect with customers and serve their needs more effectively ethical and social dilemma (pg 20)

1-2 Detail the role of marketing over time

Production-oriented era: around the turn of the 20th century, most firms were production-oriented and believed that a good product would sell itself Sales-Oriented Era: btwn 1920-1950 (WWII and Great Depression) customers conditioned to consume less or manufacture items themselves; Firms found an answer to their overproduction by becoming sales-oriented: depended on heavy doses of personal selling and advertising market-oriented era: after World War II, manufacturers turned from focusing on the war effort toward making consumer products. The USA entered a buyers' market - the customer became king! When consumers again had choices, they were able to make purchasing decisions on the basis of factors such as quality, convenience, and price. Manufacturers and retailers began to focus on what consumers wanted and needed before they designed, made, or attempted to sell their products and services. It was during this period that firms discovered marketing Value-Based Marketing Era: most successful firms today are market-oriented, meaning they generally have transcended a production or selling orientation and attempt to discover and satisfy their customers' needs and wants. Before the turn of the 21st century, better marketing firms recognized that there was more to good marketing than simply discovering and providing what consumers wanted and needed; to compete successfully they would have to give their customers greater value than their competitors did. value: reflects the relationship of benefits to cost, or what the customer gets from what they give Value cocreation refers to a: mutual creation of value by both customer and service provider value: reflects the relationship of benefits to cost, or what the customer gets from what they give Value cocreation refers to a: mutual creation of value by both customer and service provider CRM: Customer realtionship management (CRM) business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firms' most valued customers 1. Customer satisfaction; 2. Customer loyalty; 3. Lifetime value of a customer relational orientation: a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship

2-4 Describe how a firm chooses which customer group(s) to pursue with its marketing efforts

STP: firms use these processes to identify and evaluate opportunities for increasing sales and profits market segment: a group of consumers who respond similarly to a firm's marketing efforts market segmentation: the process of dividing the market into groups of customers with different needs, wants, or characteristics---who therefore might appreciate products or services geared towards them targeting: the process of evaluating each market segment's attractiveness and selecting one or more segments to enter market positioning: The process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

2-3 Analyze a marketing situation using SWOT analysis

SWOT analysis: A method of conducting a situation analysis within a marketing plan in which both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats are examined. situational analysis: second step in market plan

Week 3 "Context" as part of the 5Cs Conscious Marketing, Corporate Social Responsibility and Ethics: Relating to Consumer Behavior in Week 4 Identify 3 shifts in a "post-connectivity" version of consumer decision-making.

Shift 1: Emphasis is on the individual's own attitudes about different brands......to a potential buyer's desire for different brands based on input from the "community" Shift 2: From loyalty emphasizing retention and repurchases to including a willingness to advocate for a brand Shift #3: An Ask and Advocate dynamic develops where customers routinely interact with information sharing occurring freely

HOFSTEDE'S CULTURAL DIMENSIONS

Socio-cultural environment of intended region for expansion impacts market strategy 1. Power distance 2. Uncertainty avoidance 3. Individualism 4. Masculinity 5. Time orientation 6. Indulgence

9-1 Outline the different methods of segmenting a market.

Step 1: Establish the overall strategy or objectives -articulate the vision or objectives of the company's market strategy clearly; must be consistent with or derived from the firm's mission or objectives as well as its current situation (i.e. SWOT) Step 2: Segmentation Methods -Geographic segmentation: the grouping of customers on the basis of a combination of geographic, demographic, and lifestyle characteristics (ex: what grocery stores stock in different regions of the country) -Demographic segmentation: the grouping of customers according to easily measured, objective characteristics such as age, gender, income, and education (ex: gendered LEGOs, types of cereal [Lucky Charms for kids; Raisin Bran for adults]) -Psychographic segmentation: a method of segmenting customers based on how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live; delves into how customers describe themselves; rather than marketers determining where an individual customer falls, this approach allows the customer to self-select. (Ex: Buzzfeed's niche or fringe segment, individual marketing approach) (i.e. psychographics: Used in segmentation; delves into how consumers describe themselves; allows people to describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices. Involves knowing and understanding self-values, self-concept, and lifestyles) - Benefit segmentation: The grouping of customers on the basis of the benefits they derive from products or services (ex: Hollywood/movies attending to specific emotions for audiences) -Behavioral segmentation: A segmentation method that divides customers into groups based on how they use the product or service. Some common behavioral measures include occasion and loyalty. Occasion behavioral segmentation: a type of behavioral segmentation based on when a product or service is purchased or consumed Loyalty behavioral segmentation: strategy of investing in loyalty initiatives to retain the firm's most profitable customers

Class LO Module 6-5: Differentiate between concentrated and differentiated targeting strategies. Identify common criteria used to select a target market.

Target market: The set(s) of buyers sharing common needs or characteristics that an organization decides to serve. -Single-Segment Strategy (concentrated) -Multiple-Segment Strategy (differentiated) --marketing mix Criteria for Selecting Target Market Size / profit potential Forecasted growth Match with core competencies Ability to reach Competitive intensity Customer satisfaction levels with existing choices Barriers to entry Ex: Facebook gathers data that contributes wholly or partially to a range of segmentation variables (using AudienceInsights tool).

9-3 Articulate the differences among targeting strategies: undifferentiated, differentiated, concentrated, and micro-marketing

Undifferentiated: a marketing strategy a firm can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups Differentiated: A marketing strategy through which a firm targets several market segments with a different offering for each Concentrated: a marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market's needs Micro-marketing/one-to-one marketing: an extreme form of segmentation that tailors a product or service to suit an individual customer's wants or needs

Ch 3 In class LO: Identify elements of product bulk and associated costs.

Value generally refers to market price in this context • Bulk involves anything making it difficult and/or costly to ship: - Large volume - Heavy object - Oddly shaped object - Perishable object - Fragile object - Hazardous object High value, low weight/volume items can be more readily handled and shipped.

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify the implications of differences in associative networks among people.

brands and concepts trigger other "associated" brands and concepts involuntary; cannot control what images conjure for each individual consumer based on past experiences can't eliminate the potential of conjuring a negative association brands can use to create positive associations can also be used as an analytic tool

Week 3 "Context" as part of the 5Cs Conscious Marketing, Corporate Social Responsibility and Ethics: Relating to Consumer Behavior in Week 4 Differentiate how "Jobs to Be Done" may take functional, emotional, and social forms.

deeper form of benefits benefit correlates with purchase behavior "people aren't buying the drill, they're buying the hole" depending on what need must be fulfilled--functional, social, emotional Jobs Theory vs. Benefits Sought Possible for both to do the same thing, but jobs theory provides a better chance of accomplishing the following: • Uncovering broader customer usage dimensions to consider... functional, emotional and social • Identifying opportunities with "non-consumers," those who do not currently see an acceptable solution • Considering the "how" and "why" reasons which motivate customers to use your products.

6-2 Describe the differences between functional and Psychological needs

functional need: pertain to the performance of a product or service Psychological needs: pertain to the personal gratification consumers associate with a product or service

8-4 Highlight the similarities and differences between a domestic marketing strategy and global marketing strategy.

global product or service strategies "There are three potential global product strategies: (1) sell the same product or service in both the home-country market and the host country, referred to as glocalization; (2) sell a product or service similar to that sold in the home country but include minor adaptations; and (3) sell totally new products or services. The strategy a firm chooses depends on the needs of the target market." "Global segmentation, targeting, and positioning (STP) are more complicated than domestic STP for several reasons. First, firms considering a global expansion have much more difficulty understanding the cultural nuances of other countries. Second, subcultures within each country also must be considered. Third, consumers often view products and their role as consumers differently in different countries.58 A product, service, or even a retailer often must be positioned differently in different markets."

2-1 Define a marketing strategy

identifies (1) a firm's target market(s), (2) a related marketing mix (its four Ps), and (3) the bases on which the firm plans to build a sustainable competitive advantage

3-3 Understand the drivers of social media engagement

information effect: With regard to the Wheel of Social Media Engagement, the information effect is the outcome of social media in which relevant information is spread by firms or individuals to other members of its social network. Impact depends on context and receiver. Marketers make info contextually relevant ex. interjecting a funny in an ad where ppl engage in that kind of sharing of content (Twitter) connected effect: With regard to the Wheel of Social Media Engagement, the connected effect is an outcome of social media that satisfies humans' innate need to connect with other people. network effect: With regard to the Wheel of Social Media Engagement, the network effect is the outcome of social media engagement in which every time a firm or person posts information, it is transferred to the poster's vast connections across social media, causing the information to spread instantaneously. dynamic effect: With regard to the Wheel of Social Media Engagement, the dynamic effect describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. It also expands the impact of the network effect by examining how people flow in and out of networked communities as their interests change (see network effect.) timeliness effect: With regard to the Wheel of Social Media Engagement, the timeliness effect of social media engagement is concerned with the firm being able to engage with the customer at the right place/time—their ability to do so 24/7 from any location.

6-3 Describe factor that influence information search

internal info search: When consumers use their past experiences with items from the same brand or product class as sources of information. external info search: When consumers seek information beyond their personal knowledge and experience to support them in their buying decision. -perceived benefit vs perceived cost of search, locus of control, perceived risk (performance, financial, social, psychological, safety) internal locus of control: refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities external locus of control: refers to when consumers believe that fate or other external factors control all outcomes

5-2 Explain why marketers must consider macro-environment when making decisions

macroenvironmental factors: aspects of the external environment that affect a company's business, such as the culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment country culture: Similar to culture in general, but at a country level. Entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and subtler aspects, which are trickier to identify. regional culture: Similar to culture in general, but at a regional level. The influence of the area within a country in which people live. demographics: information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education generational cohort: A group of people of the same generation—typically have similar purchase behaviors because they have shared experiences and are in the same stage of life.

2-7 Describe how firms grow their business.

market penetration strategy: a growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers market development strategy: a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international product development strategy: a growth strategy that offers a new product or service to a firm's current target market diversification strategy: a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve/add new product lines; expand into unrelated businesses (riskiest) unrelated diversification: a growth strategy whereby a new business lacks any common elements with the present business (riskiest marketing strategy) related diversification: a growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity

9-4 Determine the value proposition

market positioning: The process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. The positioning strategy can help communicate the firm's/product's value proposition. Value proposition: the unique value that a product or service provides to its customers and how it is better than and different from those of competitors. The main value proposition components are (1) Target market, (2) Offering name or brand, (3) Product/service category or concept, (4) Unique point of difference/benefits

Ch 3 In class LO: Distinguish between a mission statement and a business objective.

mission statement: a statement of the organization's purpose - what it wants to accomplish in the larger environment. Why do we exist? business objective: in individual goal for the business that is not necessarily integrated into the fabric of what the firm wants to accomplish in the larger environment. A mission statement is the lens/focus through which the business objectives are executed. A business objective can change. A mission statement typically doesn't

7-5 Detail different buying situations.

new buy: In a B2B setting, a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item. modified rebuy: In a B2B setting, refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, and so forth. straight rebuy: In a B2B setting, refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased.

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify how "framing" can impact the way a question or statement is perceived by the consumer

the way an issue is posed; how an issue is framed can significantly affect decisions and judgments. Slide: Equivalent outcomes can be stated in different ways - $35 per month vs. "about a dollar a day" - Airfare of "$350 each way" even though return ticket purchase is required for that price - "Regular garbage" vs. "landfill destination" - Beef that is "80% lean" vs. "20% fat

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify extent to which consumers are influenced by subliminal messages.

thought or behavior that is influenced by stimuli that a person cannot consciously report perceiving (illegal in US) Subliminal messages in ads are effectively illegal in U.S. • Almost certainly not a useful method to sell products - At most one or two syllables can be "registered" or understood - Complex messages cannot be processed subliminally Subliminal messages more than two syllables have no impact on consumers!

Ch 3 In class LO: Use 5Cs as framework for organizing market analysis.

{?} 1. Company: mission statement--why do we exist? basic needs the strategic business unit needs to fill in the marketplace (brief general description) 2. Collaboration (or strategic alliance): any arrangement in which 2+ firms combine resources outside of the market to accomplish a set of tasks 3. Customers (look at previous definition of customers) 4. Competition: any entity that competes for customers, resources, revenue, and/or future revenue (e.g. cloud computing space) -Points of parity: Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands; table stakes/consideration to meet criteria of a certain market -Points of difference: those characteristics of a product that make it superior to competitive substitutes POD can become POPs as things evolve to become a "new norm" Context: environment/purpose for market entry; what need are you fulfilling and why Understand 5Cs(+ 4 Ps): company, collaborators, customers, competition, and context Plan: marketing obj, value proposition, target market; positioning; resource requirements; forecasted financials Implement: 4Ps /Tactics Follow-Up: Control--performance vs obj performance vs resources used; lessons learned; adjustments circular process; always changing and adjusting

Week 4 "Consumer Behavior" and "Organizational Buying Behavior" Perner: Identify influences on the extent of search done for a particular decision.

• Benefits vs. cost - How much is at stake? - How much alternatives (brand) differ? • Locus of control: How confident is the consumer that his or her efforts will bring about a better decision? • Perceived risk •-Performance • -Financial • -Social • -Physiological • -Psychological

Ch 3 In class LO: Explain the implications of economic forces that limit profitability to "normal" levels in the long run.

• In economics, the profit levels that you would expect for a given level of investment and risk are known as normal profits. In a free market, in the long run, competition drives down profits to these normal levels. If firms in an industry are making "supernormal" profits—higher than the normal profits that would be expected—other firms will enter the market to take advantage of this opportunity for high prices. This entry will continue until profits have been driven down to "normal" levels. • Online competition is likely to be intense since a firm is now competing at least at the national level, and quite possibly at the international level. Basic Internet Economics • In most markets, online merchants often have HIGHER costs than do conventional retailers • Intermediaries usually add value through specialization of labor and consolidation of tasks. Eliminating intermediaries often results in higher costs. • Customers do a lot of the work when they select, aggregate, bring for check-out, and carry away their products. Employees of e-commerce companies and their transportation services have to be paid to do this work! • When going online, competition usually becomes at least national—and possibly international—in scope.

Ch 3 In class LO: Identify sources of "bricks and clicks" efficiencies and synergies.

• Traditional retail chains and online presence tend to have synergy - Online access to store information—hours, locations, directions - Checking on "in stock" status on local stores - Online orders with store pickup - Online orders with delivery; store return option • Brand equity • Volume purchasing power • Inventory assortment warranted by combined store and online sales