Marketing Final
Global Marketing Mix: Product and Service Mix approaches
1. Selling same product/service in a different country 2. Similar product with minor adaptions to better suit consumers of that country 3. Completely new product/service
Services Recovery
Effective service recovery efforts can significantly increase customer satisfaction. Listen to the customer/work with them, resolve problems quickly, and provide a fair solution.
Media Mix
Paid media (advertising), Earned media (partnerships, content), Social Platforms (influencers, youtube), Owned properties (websites, blog)
Firmographic Segmentation
Segmenting based on industry.
category management
involves the extent to which different product categories can be substituted for each other
concept testing
testing new product with written description of it. customer reactions determine whether or not it goes forward. triggers market research process.
income effect
the change in the quantity demanded of a good due to changes in the consumer's income. As income increases, purchases rise and consumers buy higher-priced goods, and vice versa as income decreases.
Promotional Mix
the combination of promotional tools—including advertising, public relations, personal selling, sales promotion, social media, etc—used to reach the target market and fulfill the organization's overall goals.
Delivery gap
the difference between the firm's service standards and the actual service it provides to customers. Gap can be closed by empowering employees to exceed service standards, using tech, and providing support/incentives.
Price Fixing
the practice of colluding to control prices Horizontal price fixing- when competitors that produce and sell competing products work together to control prices, effectively taking price out of the decision process for consumers Vertical price fixing- when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) collude to control the prices passed on to consumers.
Social Entrepreneurship
the pursuit of social goals while creating a profitable business
Personal Selling
the two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision. Best way to sell anything.
Infrastructure and Technology
transportation, distribution channels, commerce, and communications
brand positioning statement
(brand) is the only (POD), (category), that (POD) for (Target Market). Ex: vitamin water is the only trendy, enhanced water that provides the widest variety of flavors for health conscious adults 17-24.
considerations in determining suitability for products and services for sale online
-"value-to-bulk" ratio should be high -absolute margin=amount of $ company can afford to spend on shipping, handling/ other costs-extent of customization/ allows customers to do most of work -willingness of customers to pay for convenience of delivery -geographic dispersal -vulnerability of inventory value loss makes it effective to ship directly through customers rather than through standard distribution channels Ex. iPhone features a relatively favorable absolute margin
Deceptive or Illegal Price Advertising
-Deceptive reference prices (can make a buyer think they are buying a good for a fair price when they're not) -Loss-leader pricing (build store traffic by setting price below the store's cost) -Bait and Switch (luring customers in with a low-priced item only to aggressively convince them to buy a high-priced one)
diversion ("gray market" goods)
-Diversion occurs when merchandise intended for one market is bought up by a distributor that then ships it to a different market (country). -Speculator will sell products to local retailers or distributors for a price slightly lower than what is being charged through the regular channel but at a price that still allows a nice profit. -Certain products sell for different prices in different countries. -gray market occurs when a product is bought in one country and exported to another where the price is generally higher. (Both Louis Vuitton suitcases and golf clubs were imported to Japan, depressing prices there)
Impact of online competition on brick-and-mortar retailers
-Established retail chains such as Walmart and Target are attempting to increase their online sales, in part to compete with Amazon and other online merchants. -For product categories that lack the needed value‐to‐bulk ratios and absolute margins, profitability is likely to be low or even negative, but an online presence is generally thought to be needed for the chain to remain competitive (and maintain bricks‐and‐clicks synergy -higher prices for online goods typically with low value‐to‐bulk ratios and/or absolute margins -a modest decline in sales volume can have a quite disproportionate impact on profit levels since fixed costs stay relatively constant
Effects of factory outlet stores and company stores
-In some cases, firms may choose to establish their own company stores (e.g., the Apple Store). Although it will usually be more expensive to operate these stores than selling through other retailers that can spread costs over a larger assortment of merchandise, company stores may help provide customers additional service (e.g., repair facilities, support, and demonstration of products which could increase the value of the brand) -if there is a focus on lower prices it could decrease value of brand (generally for factory stores not company) -factory stores are located in remote areas to reduce competitive threat -can create resentment from retailers who fear they could lose business
international issues
-In some countries, stores in outlying areas may serve both as retailers to locals and as wholesalers to small stores located farther away -Some countries—especially in Western Europe—maintain policies to protect small independent retailers from competition from major chains. This may involve restricting the extent to which products can be discounted relative to their suggested retail prices, the size of a store, and operating hours. -Regulations may limit the assortment that a particular type of retailer can carry—e.g., only pharmacies may be allowed to sell even over‐the‐counter (OTC) products such as aspirin. -In some countries, "unofficial" stores, or stores not authorized by government regulations, may exist. This can both be the case in developing countries where a large underclass may buy products in an informal setting, often avoiding sales taxes, and in more developed countries with restrictive laws that make it difficult to shop when convenient
web metrics
-evaluating sites -variables = unique visits, repeating visits, average time spent on site
parallel distribution structures (multi-channel marketing)
-products may reach consumers in different ways -Most products flow through the traditional manufacturer ‐ ‐> wholesaler/retailer ‐‐> consumer channel. -Certain large chains may, however, arrange to buy directly from the manufacturer since they believe they can provide the distribution services at a lower cost themselves. (This only works if you have enough volume to, in effect, efficiently perform the wholesaling task on your own.) In turn, of course, they want lower prices, which may anger the traditional retailers who feel that this represents unfair competition
Steps in Ethical Decision Making
1. Clarify the ethical dilemma 2. Gather additional data (legal info) and identify stakeholders 3. Brainstorm and evaluate alternatives 4. Make a decision 5. Act 6. Evaluate
Global entry strategies
1. Exporting- producing goods in one country and selling them in another (least risky) 2. Franchising- contractual agreement that allows the franchisee to operate a business using a name and format developed and supported by the franchisor 3. Strategic Alliance- 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. Direct Investment- 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 (most risky)
Buying Center Roles
1. Initiator- participant who first suggests buying the particular product or service 2. Influencer- participant whose views influence other members of the buying center in making the final decision 3. Decider- participant who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy 4. Buyer- participant who handles the paperwork of the actual purchas 5. User- person who consumes or uses the product or service purchased by the buying center 6. Gatekeeper- participant who controls information or access to decision makers and influencers
B2B Buying Situations
1. New Buy- with 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. They will proceed through all six steps of the buying process. 2. Straight Rebuy- refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased 3. Modified Rebuy- 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.
B2B Buying Process
1. need recognition- buying organization recognizes need through external/internal sources. Sellers work to prompt that recognition 2. product specification- what aspects of the product are necessary/wanted? 3. RFP process- process through which buying organizations invite alternative suppliers to bid on supplying their required components 4. proposal analysis and supplier selection- evaluation of proposals from RFP, narrow down suppliers to ones with key relationships/best characteristics 5. order specification- firm places a detailed order with specific supplier 6. vendor/performance assessment using metrics- firms analyze suppliers performance, much more formal and objective than when consumers evaluate firms
AIDA model
A common model of the series of mental stages through which consumers move as a result of marketing communications: Awareness (recognizing brand) leads to Interest (persuading consumer that brand is worth investigating), which lead to Desire (moving consumer from "i like it" to "i love it", which leads to Action (ultimate goal of a purchase)
Triple Bottom Line and Sustainability
A means to measure performance according to economic, environmental, and societal criteria, where sustainability is achieved at the conjunction of the three.
cross elasticity
A measure of the responsiveness in quantity demanded of one good to changes in the price of another good. Complementary products- products whose demands are positively related (rise and fall together, ex: mountain dew and doritos) Substitute products- products whose demands are negatively related (one rises when the other falls, ex: butter and margarine)
Locational Excellence
A method of achieving excellence by having a strong physical location and/or Internet presence. Sustainable because not easily copied.
Bundles of Value
All products or services are bundles of values elements (bain's 30 elements of value). Ex: functional= sensory appeal, saves time, reduces cost. emotional= attractiveness, wellness, rewards me. life changing= self-actualization, motivation, heirloom. Social impact= self-transcendence.
cryptocurrencies
Allow for anonymous online transactions Can be used to circumvent governments (especially oppressive ones since its anonymous like women in the Middle East can open bank accounts using crypto) Security may be enhanced under certain circumstances A few problems include facilitation of illegal activities, tools to avoid taxes, used by terrorist groups, high fluctuation rates, relies on high computing power and highly costly
Conscious Marketing
An approach to marketing that acknowledges four key principles: a higher purpose (more than just making profits), stakeholders (people who might be affected by firms actions), conscious leadership and culture (want to be conscious at all levels of business; employees, customers, marketplace, and society, to create a conscious culture), and ethics (distinguish between right and wrong in business or marketing settings)
Product positioning strategies
Attributes and Benefits Usage Product Class Product Users Competitors Brand Promise Identity/Image
Communication Objectives
Awareness (I recognize this brand) Inform/Educate (I know about this brand) Interest (I like this brand) Consider (I'll consider this brand) Desire (I want this brand) Action (I'll purchase this brand)
Relative costs in selling online, in retail settings, and combined mode
Brick and mortar only costs: retail space, retail workers, greater loss of value in inventory over time Online only costs: assembling order, packaging order, cost of shipping, greater handling of returns costs (Online sales mitigate loss of inventory value and costs from expensive real estate) -Selling online is MORE expensive than through retailer -Products with high value-to-bulk ratio and high absolute (dollar) margins tend to be better suited for online sale Ex. Amazon- electronic contents, server service (array of options)
Marketing Plan Framework Model
Business Mission Situation Analysis + SWOT Identify Opportunities (STP) Implement Marketing Mix (7 P's) Evaluate Performance using Marketing Metrics
7 P's of Service Marketing: Price
Captures value. Same as with products, but harder to set a competitive price due to intangibility of services. Can't always adjust to supply and demand due to perishability.
7 P's of Service Marketing: Place
Carries value. Like with products, convenient locations are critical for services
Potential channel structures suitable for different markets/conditions
Channel structures vary somewhat by the nature of the product (ex: Commercial jet aircraft are custom made and shipped directly to the airline) -Optimal channel length involves one intermediary -Products are shipped through a wholesaler who can more efficiently handle, and combine, products from many different suppliers. The wholesaler will take delivery of products from a number of different manufacturers, buying a large quantity from each, and sell to a number of different retailers. The wholesaler will provide each retailer with products from different manufacturers in a single delivery (consolidation), and in quantities smaller than it is convenient for the manufacturer to sell directly (bulk‐breaking). -Several layers of wholesalers may exist, depending on the product. -Occasionally, agents may also be involved. Agents usually do not handle products, but instead take care of the business aspect of negotiating with distributors, which manufacturers may feel uncomfortable or ill prepared for doing themselves.
7 P's of Service Marketing: Promotion
Communicates value. Similar to those that inform goods (ads, digital marketing, etc.)
5 C's of Pricing: Competition
Competition has a large impact on pricing strategies, and firms respond differently to the four levels of competition (monopoly, oligopolistic competition, monopolisitic competition, and pure competition)
Components of IMC
Consumers- each receiver may interpret the message differently, and senders often adjust messages according to medium used and to communicate with different consumers. Channels- for message to succeed firms must deliver the right message through the right channel to the right person. No channel is better than another, and using many in conjunction is best.
7 P's of Service Marketing: Processes
Coordinates value. Actions required to get service to consumer. If process for providing a service fails, it cannot be salvaged due to perishability.
7 P's of Service Marketing: Product
Creates value. Intangible (experience), inseparable (provider becomes part of the service), simultaneous consumption (performed as it is bought), perishability (can't be stored), variability (no two are the same), ownership (buyer doesn't own service), process based (requires interaction), experience based (defined value)
Discrepancies between manufacturer and end-customer interests
Discrepancy of quantity- manufacturer prefers to sell in large quantities, while consumer prefers to buy in small quantities. Wholesalers buy from manufacturers who sell a smaller quantity to retailers who sell to consumers. Discrepancy of assortment- manufacturer only makes a limited number of different products, but customer prefers to buy a bunch of different products from one location which can be done through intermediaries. Discrepancy of time- customers like to buy certain things at certain times (holidays) and want to buy more than manufacturers can produce at that time, so intermediaries cooperate to have items in stock.
Pricing Strategies
Everyday low pricing- a strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer High/low pricing- a strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. Attracts both the price sensitive and insensitive. Market penetration- a new product or service pricing strategy in which the initial price is set relatively low with the objective of building sales, market share, and profits quickly and to deter competition from entering the market Price skimming- a strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price-sensitive segment.
7 P's of Service Marketing: People
Executes value. More important than with goods, as expertise that the consumer does not have is needed to perform a service
5 C's of Pricing: Costs
Firms must understand their costs to determine pricing to make a profit. Consumers do not care about the firms costs when perceiving value for a good. Variable costs- the costs (primarily labor and materials) that vary with production volume. As firms produce more, variable costs increase and vice versa as firms produce less. Fixed costs- the costs that remain essentially at the same level, regardless of any changes in the volume of production.
CSR and Purchase Motivation
Gen Z wants proof of actions to prove sustainability. Hate greenwashing and feel better when buying from companies that are actually engaging in CSR and conscious marketing, however it is not a very big factor when purchasing.
Pre/Post Model to measure IMC impact
Go from current brand knowledge to desired brand knowledge through IMC and communication objectives.
Complexity of products
How the Actual Product and Associated Services reflect core customer value.
Operational Excellence
Involves a firm's focus on efficient operations, excellent supply chain management, and strong relationships with its suppliers to get product to consumers when they want it
Product Excellence
Involves a focus on achieving high-quality products; effective branding and positioning is key. Position using clear brand image.
Customer Excellence
Involves a focus on retaining loyal customers (loyalty programs) and excellent customer service
5 C's of Pricing: Channel Members
Manufacturers, wholesalers and retailers can have different perspectives on pricing strategies. They must communicate pricing goals to avoid conflict.
Digital Marketing
Marketing online through websites, blogging, social media, mobile apps, etc
Marketing vs. Communication Objectives
Marketing- problem to be solved, based on P's or C's, client develops Communication- how it is solved with IMC, based on hierarchy of effects model, agency develops
5 C's of Pricing: Customers
Once firms have their company objectives, they look to the consumer to see their reactions to different pricing. Customers want value.
Basic internet economics
Online sales are actually more costly than traditional retail: the work that customers would normally do is done by staff Exceptions: -if a customer needs a product from the back* Problem: -if customers have questions about a product eliminating intermediaries results in higher costs (add value through specialization of labor and consolidation of tasks) ^ Intermediary: a person who acts as a link between people or things Who Does the Work? Self Service: More customer than merchant Online Sale: Merchant
New product development process
Opportunity Identification, Idea Generation, Concept Testing, Product Development, Market Testing, Product Launch, Evaluation of the Results
PR/Publicity
PR is the organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media. It's free media attention. Publicity is when the company creates and releases to press
5 C's of Pricing: Company Objectives
Pricing strategies to meet goals: Profit-oriented (increase profits), sales orientation (increasing sales will increase profits), Competitor oriented (company measures themselves against their competition), customer oriented (sets pricing strategy based on how it can add value to its products)
Micro-payments—problems, opportunities, and applications
Problems: -Costly: charge per transaction fee (credit cards charge a fee of about $.30-.35 + 3.5% of the sale; very low margins) -Chicken and egg problem: merchants won't accept this payment until there are enough customers, but customers won't sign up unless they know merchants will accept it -Inconvenient: customer may not be willing to enter much info Micro-Payments are NOT for: 1. Tangible Goods (shipping = too $$ for small amounts; low absolute margin) 2. Paying Over Time (cost of cutting payments is too high given transaction fees) Opportunities -mobile technology (w active login) Applications -Opportunity to create "escrow" accounts of a prepaid amount to avoid multiple base fees -Cell phone service providers may be able to do this soon as more people switch to ordering on mobile devices
Behavioral Segmentation
Purchasing Behavior (high/low involvement, habitual), Benefits Sought, Customer Journey Stage, Usage (heavy to light), Occasion/Timing (holidays), Customer Satisfaction, Customer Loyalty, Interest Based (personalization), Engagement level, User Status
CSR (Corporate Social Responsibility)
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. (charities, working with Non Profits, adopting responsible practices). Different from Conscious Marketing as CSR is easier to do and companies often do it when not conscious marketing.
Integrated Marketing Communications (IMC)
Represents the promotion dimension of the seven Ps; encompasses a variety of communication disciplines to provide clarity, consistency, and maximum communicative impact. How consumers receive messages, how channels communicate messages, and how the results are measured. Everything communicates.
Basic Communication Model
Sender- clearly identified to audience by brand identity Encoding the Message- converting senders ideas into a message through visual or verbal displays Channel- the medium (print, broadcast, the Internet) that carries the message. must be appropriate for intended audience Receiver- person who reads, hears, or sees and processes the information contained in the message or advertisement Decoding- process by which the receiver interprets the sender's message Noise- any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium; a problem for all communications channels Feedback- allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly
Direct from manufacturer purchases by very large chains
Some very large chains (Walmart, Safeway) may be able to distribute products more efficiently than independent wholesalers. This is the exception to the rule that intermediaries make things more efficient and cost less
sustainable competitive advantage
Something the firm can persistently do better than its competitors and that is not easily copied. Uses customer, operational, product and locational excellence
7 P's of Service Marketing: Physical Evidence
Tangible Expressions of the value of the service. Critical for services due to intangible nature of services. Difficult to evaluate quality of service, so must be presented well to appeal to consumer.
Price Discrimination
The practice of selling the same product to different resellers (wholesalers, distributors, or retailers) or to the ultimate consumer at different prices; some, but not all, forms of price discrimination are illegal.
Country marketing environment analysis
To assess the viability of country market entries firms must look at: Economic Analysis Using Metrics, Infrastructure and Technology, Governmental Actions, and Sociocultural Analysis
Ethical Climate
To create an ethical climate in the workplace, the company's code of conduct, personal moral codes, and the law must work together and be in agreement. Values must be established and shared, employees must be dedicated to the rules, and there must be a form of control through reward/punishment.
collaborative filtering (recommendation systems)
Using a buyer's purchase history to compare with others who have bought the same items and predict which items will appeal to that buyer based on purchases by others Product Level: items bought together at higher rates than chance Individual Level: comparing an individual to "similar others" -Matter of "brute force" computer analysis more effective for a customer who has made numerous purchases in the past
Value capture
Value capture refers to the idea that firms can charge customers for goods and services that they desire. If a firm offers greater value than competitors—e.g., a more reliable delivery service or a more pleasant dining experience—may be able to charge a price premium
Economics of Farmer's Markets
Very inefficient because farmer has to travel a long way, carrying only his produce (as opposed to supermarkets). Customers will pay more for the higher quality of the produce. Only efficient with VERY high volume of purchases (which don't normally happen) Some farmers do it as a 'labor of love' and do not wish to be profitable
Intermediaries
Wholesalers, retailers, and others generally increase efficiency and reduce costs through specialization of labor, economies of scale (purchasing in bulk, improving tech to increase efficiency) , and by allowing the customer to do more of the work with self-service. Address discrepancies between manufacturer and consumer
distribution intensity (selectivity)
Wide- manufacturer products are widely available in many stores (usually for convenience products like soft drinks). Not obtainable for lower-tier manufacturers as retailers have preferred brands Selective- some manufacturers prefer to have their products selectively distributed (high prestige brands like Estee Lauder) Exclusive- some manufacturers prefers to have their products exclusively distributed (premium quality image brands like for high end electronics) Selective and Exclusive require considerable before and after sales service
Price elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price. Elastic- product/service is price sensitive (price elasticity <-1) Inelastic- product/service is price insensitive (price elasticity >1) Consumers are less sensitive to price increases for necessities (ex: soap)
Media Channel
a method an organization uses to communicate, such as radio, television, website, newspaper, or magazine
Advertising
a paid form of communication delivered through media from an identifiable source about an organization, product, service, or idea designed to persuade the receiver to take some action now or in the future. very effective for creating awareness and promoting interest
Successful communication
a sender's message is interpreted correctly by a receiver by choosing the correct source, developing a properly encoded message, selecting appropriate channel for target audience, and by receiving feedback
reality of online economics and competition
a. Cost of handling orders online is higher than in traditional stores b. In the long run, online selling will decrease prices due to the increase of supply and laws of supply and demand (increased demand and competition so lower prices) c. Competition is much greater for products in large markets than smaller, specialized markets d. Online merchants must compete with traditional merchants who have the cash to stay in business, and the online merchant may run out of cash before they can become profitable
Segmentation Methods
demographic (gender, age), geographic (region), psychographic (values, attitudes), behavioral (occasions, usage), benefit (needs, problems), life stages (student, parent), firmographics (industry, size)
Glocal Approach
establishing a global brand image while remaining sensitive to cultural and legal differences by using different promotional campaigns to sell the products. Global + Local. People can feel comfortable from anywhere
Economic analysis
evaluate general economic environment, market size and population growth rate, and real income
Profitability of online firms in markets where costs of selling online are lower
geographic dispersal of consumers
Alternative Marketing
guerrilla advertising, etc. (unexpected, unconventional, creative ways to generate awareness and attention) ex: humor, word of mouth, experiential marketing
Adoption Groups
innovators (buyers who want to be the first to have the product), early adopters (wait and purchase product after careful review but still in the early stages), early majority (wait until bugs are worked out for product. little risk, and few new products can be profitable until this group buys), late majority (product has achieved its full market potential by this point), laggards (avoid change and rely on traditional products until products are no longer available)
product life cycle
introduction (starts with a single firm, innovators try the new offering), growth (growing number of product adopters, rapid growth sales, increases in both competitors and product versions), maturity (adoption by late majority, intense competition for market share), decline (firms in this stage will position themselves for a niche segment or will exit the market. Laggards enter now)
Standards gap
pertains to the difference between the firm's perceptions of customers' expectations and the service standards it sets. Firms can close gap by setting appropriate service standards/going above what is expected.
Sociocultural factors (Hofstede's Dimension)
power distance- willingness to accept social inequality as natural uncertainty avoidance- the extent to which countries rely on structure masculinity- extent to which dominate values are male oriented individualism- dependence on groups indulgence- extent to which society allows for fun/suppresses it time oriented- short vs long term orientation
diffusion of innovation
process by which the use of a product or service spreads throughout a market over time and across various categories of adopters. Firms can use this to predict which types of consumers will buy their new product and how to develop effective promotion, pricing and other marketing strategies to push acceptance.
"Normal" profits in free markets
profits that sellers expect to get (supernormal are higher than normal and also short term)
Product-service continuum
ranges from pure product (ex: salt) to pure service (ex: teaching), most services are hybrids (are both a product and a service)
substitution effect
refers to consumers' ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand
Communication gap
refers to the difference between the actual service provided to customers and the service that the firm's promotion program promises. Firms can close gap by being realistic about the service they provide.
Knowledge gap
reflects the difference between customers' expectations (based on their knowledge and experience) and the firm's perception of those expectations. Firms can close this gap by determining what customers really want.
B2B Markets
resellers (resells manufactured products without significantly altering their form), institutions (hospitals, schools), government (Dept. of Defense), manufacturers/service providers (make and market their own products)
"bricks and clicks" potential
retail chains and online sales are connected -online access to store info -online order with store pickup -Retail stores that already have a reputation will be trusted by customers buying online -Seller can avoid wasting space in stores on low volume products -Items sold online can be returned in store -increased sales volumes from retail and online allow sellers more bargaining power with suppliers -Brand equity -Volume purchasing powers *benefits to operating both traditional retail chain and an online sales site together (under some circumstances)*
Direct Marketing
sales and promotional techniques that communicate directly with target customers to generate a response or transaction. Requires a call to action. Ex: email
Predatory Pricing
selling a product below cost for short period of time to drive competitors out of the market. Then raise prices to recoup losses. This is illegal.
Sales Promotion
special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays
prototypes, alpha testing and beta testing
stages in product development. Prototype= first physical form or service description of a new product, still in rough form. Alpha testing= firm determines whether product will perform according to its design and whether it satisfies the need it was intended for. Tested on firms R&D department. Beta Testing= using potential consumers who examine product prototype in a real setting to determine issues with it.
Government actions
tariffs, quotas, trade agreements, exchange control