Marketing Quiz 2

Market Research Process

1. Define the problem 2. Design the research 3. Collect the data 4. Analyze the data and develop insights 5. Develop and implement an action plan

Brand Licensing

A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols or characters in exchange for a negotiated fee Common for toys, apparel, accessories and entertainment products like video games Firm providing right to use brand (licensor) obtains revenues through royalty payments from firm that has obtained the right to use the brand (licensee) Pro: Can help to build brand equity Con: Dilution of equity through overexposure of brand, especially if brand used inappropriately

Brand mantra

A short, three- to five-word phrase that captures the essence of the brand positioning Helps the brand present a consistent image by ensuring all employees and external marketing partners understand what the brand most fundamentally should represent to consumers Start with brand function, then descriptive, then emotional

Brand Repositioning (rebranding)

A strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences Pros: can boost brand's fit with target segment or boost vitality of old brands Con: can be extremely expensive to make tangible and intangible changes

Brand knowledge

All the thoughts, feelings, images, experiences, and beliefs associated with the brand Ultimately, consumers' brand knowledge should cause them to choose your product over a competitor's—differentiation

Evaluation of results

Analyze performance of new product and modify Did product meet technical requirements? Did customers accept product? Did product meet financial expectations?

Components of Brand Equity (ARR)

Brand awareness- how well do you know the brand Brand recall - retrieve from memory when given product category Brand recognition - confirm prior exposure when given cue (all these contribute to a brand being in the retrieved set) Brand Image - what do you associate with the brand favorability of associations, strength of associations, competitive uniqueness of associations (all of these contribute to being in the evoked set)

Brand and Line Extensions

Brand extensions: Use of same brand name for a new product line, e.g., Colgate's addition of mouthwash product line to product mix More successful when consumers perceive fit between parent brand and extension product, parent brand has favorable associations, they receive strong advertising and promotional support Line extension: use of same brand name within same product line, e.g., additional flavors for Lay's potato chips

6 Brand Strategies

Brand ownership Naming brands and product lines Brand and line extensions Co-branding Brand licensing Brand repositioning

Secondary associations

Brands can be linked to other entities that have their own knowledge structures in minds of consumers. Because of these linkages, consumers may assume that some of the associations that characterize the other entities may also be true for the brand.

Using Market Research

Can be used to define business mission and conduct situation analysis Used for Segmentation, targeting, and positioning decisions Used to evaluate Marketing Mix Decisions (Place, product, price, promotion)

Why firms create new products

Changing customer needs Market saturation Managing risk through diversity Fashion cycles Improve business relationships

4 Factors for establishing relationship with retailers

Choosing retail partners Identifying types of retailers Developing a retail strategy Managing an omnichannel strategy

Surveys

Collecting data through questionnaire; useful if sample size is large Good because it can be relatively cheap, however questions must be simple and often times people are slow to respond to surveys Unstructured question- open ended Structured question- limited responses

Sources of secondary associations

Company - naming and extension strategies Countries and other locations- through identification of product origin Channels of distribution - through channel strategy Other brands - through co-branding Characters - through licensing Spokespersons - through celebrity or influencer promotions Events - through sponsorship Other third-party resources - Through awards or reviews

Traditional Brand Perspective

Company perspective, focus on brand elements which can be controlled A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition Marketer's implications - design and implement compelling brand elements, ensure consistent use of those elements, evolve the elements as needed

3 Product Components

Core customer value - the basic problem solving benefit that customers seek Actual product - Physical attributes of the product: brand name, quality level, packaging, features, design Associated services - nonphysical properties of a product, also known as augmented product: financing, product warranty, product support

Contemporary Brand Perspective

Customer perspective, associations that come to mind when thinking about a brand Products are made in the factory, but brands are created in the mind Marketer's implications - recognizing that brand management is actually meaning management, understanding your brand in the mind's of consumers and understanding every customer touchpoint and strengthen its reinforcement of positive brand image

Collect Data (MR)

Data collected might reveal need to collect further data Challenges - what people say they'll do isn't what they always end up doing Some respondents do not interpret questions like researchers had hoped It's challenging to know how much data is needed

Different Types of General Merchandise Retailers

Department Stores - Macy's Full line discount stores - Target Specialty stores- similar to category specialist but more specific, like Foot Locker Drug stores Category specialist stores - Toys r Us Off-price stores - TJ Maxx Extreme value - Dollar stores

Product development

Develop and test prototypes Conduct alpha test: Internal review occurring in firm's R&D department and assess if the prototype is working to design Conduct beta test: Involves potential customers in real use settings and assess prototype performance and potential problems

Projective techniques

Diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters Allows people to express thoughts without fear of judgements or social constraints, however it requires highly trained professionals, and is prone to interpretation bias

Advantages of Indirect and Direct Channels

Direct Channels: Collect valuable data on customer buying habits Build relationships with customers Avoid sharing profits with intermediaries Maintain total control over how product is marketed and distributed Indirect Channels: Avoid start up and maintenance costs for warehouses, logistics systems, trucks and delivery staff Benefit from intermediaries' experience and ongoing investment in innovation Make it easier for customers to find your products Focus on your core competencies

Channel strategies

Direct channels --> Manufacturer to consumer, no intermediary Indirect channels --> supply chains with intermediaries, whether that be wholesaler or retailer

Marketers' challenge with Brand Equity

Ensuring customers have the right types of experiences so the desired thoughts, feelings, beliefs, perceptions, opinions become linked to the brand

Pros and Cons of Naming Brands

Family Brand Pros: More efficient, less costly to manage Sub-brands benefit from increase in parent brand's reputation Customers typically more accepting of new products released under parent brand Cons: With same brand name, problems occurring with one product spread to all others Difficult to maintain one brand's identity across hundreds of brands and still keep individual brand's uniqueness intact Individual Brand Pros: More flexibility in brand positioning, communication and audience targeting: each brand can tell unique story to target market Multiple-brand portfolio are often able to command greater presence at retail, garnering more shelf, floor or digital space In event of PR meltdown, parent and sibling brands don't adversely influence each other Cons: More expensive to create, build and nurture differentiated brands Independent brands can't rely on parent brand to bolster reputation Brand cannibalization risk can occur when company offers consumers multiple brands

Focus Groups

Focus groups- moderator guides discussion of people (8-12) about issues; useful before sending out surveys and identifying consumer issues Good for getting wide range of opinions, however it is expensive, prone to bias, and its success depends on the moderator

Product Launch

Fully commercialized product: Move beyond partial launch to full-scale launch (from a few cities to regional or national rollout) Requires tremendous financial resources and extensive coordination of all aspects of marketing mix Before launch occurs, firm confirms its target markets and product positioning Timing of launch may be important, depending on product (e.g., Hollywood blockbusters in summer; new auto models in fall)

Typical research process

Gather background information - Secondary internal, secondary external free, secondary external paid Themes - Primary qualitative Specifics - Primary quantitative Deep dive - Primary qualitative (based on quantitative findings) (qual before quant)

Developing retailing strategy

How do retailers make marketing mix decisions? Product: width and depth of product assortment, inventory, sensory marketing, extent of service to customers Price: Margins, brand image portrayed by price range (Dollar stores), mark down policies (TJMaxx) Promotion: store layout, in store promotions, external ads and PR, commissions for sale personnel, unique experiences Place: location, ease of access for customers, type of store, hours of operation

6 Steps of Product Development (ICPMPE)

Idea generation Concept testing Product development Market testing Product launch Evaluation of results

Channel conflict

If a marketing channel is to run efficiently, participating members must cooperate. Often, however, supply chain members have conflicting goals, and this may result in channel conflict. Horizontal channel conflict - Members at same level of marketing channel—e.g., two competing retailers or two competing manufacturers—disagree Vertical channel conflict - Members of the same marketing channel, for example, manufacturers, wholesalers, and retailers disagree

In Depth Interviews

In depth interviews- one on one interviews with consumers; useful is issues aren't well understood, and focus groups would be difficult to conduct Good for getting in depth perceptions, however it can be expensive, not representative, and prone to bias

4 Types of Channel structures

Independent marketing channel: manufacturer --> multi-brand distributor --> multi-brand retailer Administered vertical marketing channel (power): manufacturer --> multibrand wholesaler --> dominant retailer Contractual vertical marketing channel (contract): Manufacturer --> wholesaler (exclusive to manufacturer) --> independently owned but franchised outlets Corporate vertical marketing channel (ownership): manufacturer --> manufacturer owner wholesaler --> manufacturer owned retailers

Reasons Firms Release New Products

Innovation - the process by which ideas are transformed into new products that will help firms grow

Idea generation

Internal sources of ideas: research and development, brainstorming External sources of ideas: Outsourcing - generate new ideas from the start Licensing - new ideas already generated R&D consortia Competitor's products Customer inputs

Unsought goods

Little product awareness, little knowledge, and little interest, price and distribution varies, aggressive selling Ex - life insurance

Product Life Cycle (Introduction)

Low sales, negative or low profits, consumers are innovators, almost no competition, Marketing priorities are to build awareness, encourage trial, selectively distribute, and use price penetration or skimming strategies

Challenges of Omnichannel retailing

Maintaining a consistent brand image across channels Adapting pricing to channel because of different competitors or regional pricing differences, despite customer expectations of consistency Managing different supply-chain skills and resources across channels

Brand ownership

Manufacturer brands - Brands owned and managed by the manufacturer; sold by many retailers (a.k.a. national brands) Heavy advertising is done by retailers, existing manufacturer brands can increase the prestige of retailer brand, can carry less inventory Retailer brands - Brands developed and marketed by a retailer; available only from that retailer(a.k.a. private-label brands) Can have higher profits, retain customer loyalty, can drop retailer, more STP flexibility Companies can have a mix of the two

Strategic relationships

Marketing channel members are committed to maintaining relationship over long term and investing in opportunities that are mutually beneficial Also called partnering relationships Particularly relevant to independent and administered marketing channels can achieve strategic relationships by building mutual trust, sharing key data, communicating, establishing common goals, giving credible commitments,

Channel structure

Marketing channels can be structured with differing levels of formalization and control Independent channels - Very formal, conflict more likely Vertical marketing channels - increasing formality, conflict less likely

Develop and implement action plan

Most important stage of market research Executive summaries, body of report, research objectives, methodology, detailed findings, conclusions, limitations

Multichannel vs Omnichannel Retailing

Multichannel - physical and online not integrated Customer sees product online, goes to store to buy it in person just to find out that location does not have it in stock Omnichannel - physical and online integrated Customer is able to order online and pick up in person

Packaging

Must achieve several objective: Identify brand, convey descriptive and persuasive information, facilitate product transport and protection, assist in at-home storage, aid product consumption Often the strongest associations consumers have with a brand are inspired by the look of its packaging Designers often refer to shelf impact of package—the visual effect of package at point of purchase

Types of new products

New to the world product - also referred to as a pioneer or breakthrough product (walkman, iphone) New to the company product - new product line for company, but product exists elsewhere Additions to existing product lines - line extension Improvements and revisions to existing products - existing product made better Repositioned product - Existing product targeted for new use

Product Lifecycle Caveats

Not every product follows the curve exactly; appliances have been the mature stage for a long long time and will continue to be Managers don't know the shape the curve will take nor what exact position their product is in

Observation

Observation - researchers observe purchase and consumption habits by tracking movements; useful to understand how consumers are able and fail to find products Good for observing natural behavior, yet can be very expensive, labor-intensive, and not entirely representative

Power (vertical marketing channel)

One member has the means to ability to have control over the actions of another member in a channel at a different level of distribution Reward, coercive, referent, information, expertise, legitimate

4 Characteristics for classifying retailers

Ownership arrangement: Independent retailer - owned and operated by single person or partnership and not operated part of larger retail institution Chain store - part of group of same stores owned and operated by single organization Franchise - Franchisor grants rights to franchisee Level of service: full service or self service Product assortment: Width - assortment of products offered Depth - Number of different brands offered within each assortment Price - Every day low prices, hi-low prices

Product

Per textbook - Anything that is of value to a consumer and that can be offered through a voluntary marketing exchange Per AMA - a bundle of attributes (features, functions, benefits and uses) capable of exchange or use; usually a mix of tangible and intangible forms.

Benefits of Omnichannel Retailing

Physical stores - browsing, touching and feeling, personal service, cash and credit, entertainment and social interaction, instant gratification, reduce cost associated with returns Online stores - Broader and deeper selection of products—without crowding aisles or increasing store size More, readily accessible information about products, including customer reviews Personalized offering—with customer-specific promotions Expanded market presence—not just limited to customers living nearby

Cobranding

Practice of marketing two or more brands together, on same package or promotion Can reinforce perceptions of quality between brands or "loan" from one to another Makes most sense when customers of each brand are similar

Pros and Cons of Extensions

Pros: Increase probability of consumer acceptance Enhance parent brand image Increase efficiency of promotional expenditures Cons: Can fail and hurt parent brand image Can confuse or frustrate consumers Can succeed but cannibalize sales of parent brand

Accelerating Innovation Adoption (ROTCC)

Relative advantage - It's perceived to be an improvement over competing options, including previous product generations Compatibility - It doesn't require customers to make major lifestyle changes or purchase additional products Observability- It has benefits that are easily observed Complexity - It's easy to understand how to use Trialable - It can be experimented with before purchase

Product Life Cycle (Growth)

Rising sales and profits due to economies of scale, consumers are early adopter & early majority whose preferences are more varied, leading to increased segmentation, and there's an increasing number leading to greater product variation, but start of industry shakeout Marketer's priorities are to build preference, improve features, increase number of outlets, reduce prices to expand market

Product Life Cycle (Decline)

Sales and profits decline, consumers are laggards, competition is low Marketing priorities are to reduce promotion but retain loyal customers, rationalize product range, rationalize outlets to minimize distribution costs

Product Life Cycle (Maturity)

Sales and profits peak, consumers are the late majority, competition is highest Marketer's priorities are to defend market share, add new features, expand to new markets, intensely distribute

Designing Research (MR)

Secondary Research - data that already exists, having been produced for some other purpose and by somebody else Internal - company data requiring relatively simply analysis, more complex analysis on "big data" Ex- data warehouses/data mining External - Free, syndicated, paid Ex- trade publications, government statistics, industry reports Primary Research - data collected by the firm for the first time to address specific need identified by the firm Qualitative (Exploratory) - in depth interviews, focus groups, observation, social media, projective techniques Quantitative (Precision) - surveys, experimentation, neuromarketing

Sugging

Selling under the guise of research. Marketer falsely pretends to be a researched conducting a survey, when in reality they are simply trying to sell a product

Showrooming and Webrooming

Showrooming - Customers use mobile devices in store to find better prices elsewhere Webrooming - Customers seek information online and purchase offline

Social Media

Social media - researchers track discussion of firm on blogs, virtual communities; useful for identifying emerging trends, getting wider opinions, getting consumer feedback on promotions Sentiment mining - researchers collect data on their company by consumers Good for viewing consumer's feedback about competitors, provides immediate access to input from a large number of consumers, however requires significant investment in software

Dual Roles in Channel

Some businesses, like home depot, act as both retailer and wholesaler

Neuromarketing

Studies consumers' sensorimotor, cognitive and affective responses to marketing stimuli: physiological (heartbeat, respiration rate, blood pressure), reflexes (gaze fixation, pupil dilation, face expression), EEG (track brain waves), fMRI (track blood flow) Very effective at understanding human decisions, however ethics are an issue and this type of experimentation is very expensive and inconvienent

Supply Chain

Suppliers --> Manufacturer --> Wholesalers --> Retailers --> Consumers Wholesalers and retailers are referred to as intermediaries

Experimentation

Systematically manipulates one or more variables to determine which variables have a causal effect on another variable Useful for establishing a connection between two variables and for when consumers have difficulty articulating their experiences Can be done without competitor awareness and extraneous elements can be removed to identify causes of behavior, however can be expensive

Concept testing

Test new concept among set of potential customers Develop a concept statement, a brief description of product Conduct concept testing to obtain customer reaction to concept statement Reactions determine whether or not to proceed

Market Testing

Test product in a few actual markets Move beyond prototype to fully developed product, as well as "price, place and promotion" elements (complete marketing mix) Conduct premarket test: Expose potential customers to product and other elements of marketing mix, and determine extent of product's adoption, sales estimate Conduct test marketing: Partial launch, some marketing mix, need to weigh risk of alerting competitors of marketing mix Introduce marketing mix in limited geographic area before full-scale launch

Distribution intensity (ISE)

The number of channel members to use at each level of the marketing channel Intensive - A strategy designed to get production into as many outlets as possible Selective - Lies between intensive and exclusive distribution strategies; uses a few selected retailers in a territory Exclusive - A strategy in which only selected retailers can sell a manufacturer's brand; a good option for start ups—retailers have stronger incentive to sell because less competition and price cutting

Primary package

The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use and consumption

Retailing

The set of business activities that add value to products and services sold to consumers for their personal or family use; includes products bought at stores, through catalogs, and over the Internet, as well as services such as fast-food restaurants, airlines, and hotels

Secondary package

The wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package

Considerations for choosing retail partner

To what extent do you, as manufacturer, have "power" in the marketplace? If you're smaller, less powerful, or new to the marketplace, you'll have difficulty convincing larger retailers to buy and sell your products Where would target customers expect to find your product? Is your product more suited to Dollar General or Saks Fifth Avenue, or somewhere in between or elsewhere? To what extent are you able to engage the retailer in desired manner—with or without intermediaries? Larger, more sophisticated retailers like Walmart are less likely to use intermediaries

Naming Brands and Product Lines

To what extent should the company's brand be leveraged across its product mix? Family brand - "Branded House": Consists of the corporate brand and, maybe, sub-brands Hybrid - "Asymmetrical": Consists of corporate brand, sub-brands, endorsed brands and/or independent brands Individual Brands - "House of Brands": Consists of independent brands not linked to corporate brand

Big Data (3 Vs)

Volume - amount of data generated Velocity - speed of generated data, in streams, batches or bits Variety - structured and unstructured, human vs computer generated

Define objectives/needs (MR)

What business problem needs to be solved? What information is needed to identify a solution to the problem What information can be obtained efficiently and effectively?

Changes in product line depth

Why decrease - Focus limited resources on most important products Why increase - attract buyers with different preferences, capitalize economies of scale in production and marketing, even out seasonal sales patterns

Changes in product mix depth

Why decrease - focus limited resources on most important products Why increase - diversify risk, capitalize on established reputation

Brand identity

a brand's full complement of brand elements

Supply Chain Management

activities aimed at integrating all supply chain participants, so that merchandise is produced and distributed in right quantities, to right locations, and at right time, at the minimal cost

Product mix

complete set of products offered by a firm

Types of Consumer products

convenience, shopping, specialty, unsought

Product line

groups of associated items such as those that consumers use together or think of as part of a group of similar products

Shopping products

less frequent purchases, higher customer involvement, selective distribution, higher price, deeper sale support than other products Ex - televisions, clothes, furniture

Convenience products

low price, frequent purchase, low customer involvement, widespread distribution, prominent promotions Ex - food, drink, laundry detergent

Product mix depth

number of product lines offered in a product mix

Product line depth

number of products within a product line

Specialty goods

strong brand preference and loyalty, special purchase effort, likely not to consider other options, high price, exclusive distribution, more carefully targeted promotion Ex - Luxury goods

Brand equity

the difference that a customer's knowledge of a brand has on a customer's decision whether to purchase product from that brand positive brand equity - customers react more favorably to product and its marketing when brand is identified vs when it is not negative brand equity - customers react less favorably to product and its marketing when brand is identified vs when its not

Product life cycle

the stages that product move through as they enter, get established, and ultimately, leave the market place Introduction, growth, maturity, decline

Brand elements

trademarkable devices that identify and differentiate the brand