MKT 111 Final Exam

Moderate customer participation

Consumer inputs are required for service creation - clients input customizes a standard service - requires customer purchase - participation is necessary for adequate outcomes

Research objectives (step 1)

Exploratory research Descriptive research Casual research

Step 2: Idea screening

General formula: (probability of technical completion) x (probability of X commercialization) x (probability of economic success) = Attractiveness of Opportunity

Market Channeling

Intermediaries so manufacturers and households don't have to go to each other but through a middle man

Step 1: Idea generation

Major Idea sources: Internal: company's owners, management, employees External: sources outside the company (ex: customers, competitors, distributers

Informing

Pioneering- new product- new uses how it works where it can be found

Interpreting the results of concept testing

Q = M x A x P Q= sales M= market sales A= awareness x availability P= probability of purchasing

Three types of advertising

R.I.P

Introduction stage

Sales-slow growth profits- negative customers- visionaries competitors- few

Late majority

Skeptical, adopt because most others have adopted - pressure to conform - Older, below average income and education

Five Steps of New Product Development

Step: 1. Idea generation 2. Idea screening 3. Idea evaluation a. Concept development and testing b. Marketing strategy and development c. Business analysis 4. Development a. Product development b. Test Market 5. Commercialization

Product life cycle

The course that a products sales and profits take over its lifetime. The PLC has 5 stages

Exploratory research

define the problem and suggest hypothesis ex: ask what people want from a bike

Cons of surveys

difficult with wording/placing questions cheating difficult to collect sensitive info

three types of cost

fixed cost variable cost total cost

Pros of surverys

flexible, good for understanding people's knowledge, attitudes

Five research methods

focus groups, depth interviews, surveys, experiments, observational research

exclusive distribution

giving limited number of dealers the exclusive right to distribute the company's products in their territory

Pros of observational research

good for information that cant be obtained by simply asking a Q or that people are unwilling to provide

Channel conflicts

horizontal conflict vertical conflict disintermediation

Laggards

independent, tradition- bound - decisions made in terms of past - by time adopt, most often innovation is rendered obsolete - Lowest socio-economic status

how channeling members add value

information promotion contact matching negotiation

sales promotion

short term incentive to encourage a purchase - discounts - coupons - contests

Research plan (step 2)

specify constraints identify data needed for marketing actions

secondary data

data already exists somewhere, collected for another purpose

Collect data (step 3)

data collected by the company or outside sources

Steps of marketing research

1. define the problem 2. develop the research plan 3. collect relevant information 4. develop findings 5. take marketing actions

Development stage

...being made?

Step 3a. Concept Development and Testing

An opportunity or idea converted to a testable version of the product Describes/ shows the new product and its positioning

Six steps in developing an effective communication plan

1. Identifying Target Audience 2. Determine communications objectives 3. Designing the message 4. Choosing media 5. Selecting message source 6. Collect feedback

Customers as competitors

"compete" with the service provider

Classifying social media

- Media richness: degree of contact between two communication parties - self-disclosure: about a person's thoughts, feelings, likes and dislikes

Customer participation in the marketing mix

- Product development: Nike designing own shoes - Product design/ customization: personalize M&Ms - Service production and delivery: pick up your own meds at CVS - Customer pricing: name your own price - Promotion: sharing on social media, Gerber baby contest - more in slides

Three types of customer roles in service delivery

- Productive resources - Contributors to service quality and satisfaction - Competitors

Customers are productive resources

- considered "partial employees" bc they contribute time and effort - using customers as a resource for productivity ex: product testers

Low customer participation

- consumer presence is not always required - products are standardized - service is provided regardless- watching a show - payment may be the only customer participation

Early adopters

Adopt early in product life cycle - more reliant on group norms and values than innovators - strongest opinion leaders

Early majority

Deliberate carefully before adopting - collect info, evaluate brand alternatives

Innovators

Eager to try new ideas: - higher income, better educated, more cosmopolitan

retailers

a business whose sales come primarily from retailing

vertical marketing system

a channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate corporate vs. contractual

conventional distribution channel

a channeling consisting of one or more independent producers, wholesalers, and retailers, each separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole

channel level

a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer

indirect marketing channel

a marketing channel containing one or more intermediary levels

direct marketing channel

a marketing channel that has no intermediary levels

competition-based pricing

above, at, or below the market pricing

retailing

all activities involved in selling goods or services, directly to final consumers for their personal, nonbusiness use

Advertising

any paid form of non-personal presentation and promotion of ideas, goods, or services by and identified sponsor

Customers as contributors to service quality and satisfaction

asking questions, taking responsibility if it is their fault, complaining if it isnt

horizontal conflict

between firms at the same level or function within the channel

vertical conflict

between successive or sequential levels within the channel

Cons for experiments

cant be easily generalized

persuading

competitive- why your product is better- growth product- brand reference

social media

computer- mediated tools that allow people to create, share, or exchange information, career, interests, ideas, and pictures/videos

Why IMC?

conflicting messages from different sources or promotional approached can confuse company or brand images: stride advertisement

primary data

consist of information for the specific purpose at hand

Pros for experiments

control factors casual relationships

Pros of secondary data

cost, speed, could not get data otherwise

three general pricing approaches

cost-based competition-based value-based

Cons of secondary data

current, relevant, accurate, impartial

High customer participation

customer co-creates the service product - active participation guides the customized service - cant be created without customer participation - customer inputs are mandatory

channel choice consideration (Target market coverage)

intensive distribution exclusive distribution selective distribution

Step 3c. Business analysis

involves a review of the sales, costs, and profit projections to find out whether they satisfy the company's objectives

multichannel marketing

involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining and building relationships with customers who shop and buy in traditional intermediaries and online

Step 4a. Product development

involves the creation and testing of one or more physical versions by the R&D or engineering departments

Cost-based pricing

let's recover our costs and make a profit adding a standard mark up to cost

Three levels of customer participation

low, moderate, high

Cons of observational research

not good for feelings, attitudes or motives

cost-based pricing

setting high prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's efforts and risk

disintermediation

occurs when product or service producers cut out intermediaries or displace traditional resellers with radical new types of intermediaries ex: selling cars online and in the dealership upsets customers

Reminding

reinforcement- mature product: top of mind

Growth stage

sales- fast growth profts- rising customers- early adopters competitors- appear, start to enter and grow

Maturity stage

sales- peak profits- flat/decline customers- majorty competitors- well established

Decline stage

sales/profits- decline customers- people who have not adopted the replacement competitors- exit market

intensive distribution

stocking the product in as many outlets as possible

Descriptive research

study consumer attitudes. describe market potential, demographics, etc

Casual research

test hypothesis about cause and effect relationship ex: how consumers react to a 10% price increase

Pricing

the amount of money charged for a product or service

Integrated marketing communications (IMC)

the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

fixed cost

the costs that do not vary with production or sales levels

variable cost

the costs that vary with the level of production

Customer participation

the degree to which customers are involved in the service production and delivery process - cooperating with service providers - self-serving - it is inevitable

Step 5. Commcercialization

the introduction of the new product - when to introduce - when to launch - to whom - how: an action plan

Diffusion of Innovation

the process by which an innovation is communicated through certain channels over time among the member of a social system

Step 4b. Test market

the product and entire marketing program program are introduced into more realistic marketing settings

total cost

the sum of fixed and variable costs for any given level of production

Marketing research

the systematic design collection, analysis, and reporting of data relevant to a specific marketing situation facing and organization

selective distribution

the use of more than one but fewer than all of the intermediaries who are willing to carry the company's products

Step 3b. Marketing Strategy development

this refers to the initial marketing strategy for introducing the product to the market and includes: - environment assessment - Target market and value proposition - Marketing mix - Long-run sales and profit goals

horizontal marketing system

two or more companies at one level join together to follow a new marketing opportunity

shopper market

use point of sale promotions and advertising to extend brand equity to the "last mile" and encourage favorable in-store purchase decisions

value-based pricing

uses buyers perceptions of value rather than sellers costs to set price