MKTG 301 final

7) Promotions: a. List the five elements of the promotion mix

Advertising Sales/Price Promotions Personal Selling Public Relations (PR) Direct Marketing

e. Understand the concept of Indirect Inference

Ask indirectly (projection). For example, ask respondents to guess the portion of the population that uses illegal drugs

3. Customer Relationships: a. Define CLV and generally understand how it is affected by profit margin, purchase frequency, and retention

CLV: the sum of all cash flows attributed to a customer over the lifetime of the customer relationship

ii. Identify potential drawbacks

Challenges that come with it is to make sure that prices directed at one segment cannot be taken advantage of by the other, fairness and blowback, and legal restrictions

e. Be familiar with the concept of Experience Co-Creation and provide examples

Co-creation refers to the fact that customers help to create a good (or bad) customer experience. Single Customer: communicating needs, choosing/customizing products, asking for help, being in the right mood or mindset to enjoy experience Other Customers: Crowd at a concert, other plane passengers, other social media users, other shoppers in a store Experience depends not just on what marketers do, but also on what customers do.

ii. Recognize examples of product bundling

Combining several products and offering the bundle at a reduced price (e.g., fast food combo meals). Also like Netflix, Comcast Xfinity, Spotify

2) Pricing: a. Cost-based vs. value-based pricing and the role of each

Cost-based pricing: Set the floor for the price the company can charge. Important element in Pricing Strategy. Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk, Value based pricing: Total amount of perceived value the product creates for the customer.• Maximum "ceiling" for potential price.• Measure willingness-to-pay, estimate value over alternative (especially for B2B customers)

d. Be familiar with the concept of Network Effects and be able to identify businesses where they will be important vs. minimal (hints: interactive products, user-generated content, 2-sided platforms, data flywheel)

Definition: each additional customer makes the product more valuable to other customers This produces organic WOM, exponential growth, and stronger first-mover advantage Four common business models with major network effects: Customers use the product with each other (WhatsApp, Venmo, Dropbox, Fortnite) Product relies on user-generated content (UGC) (Pinterest, Wikipedia, YouTube) Two-sided platforms bringing together customers and providers (Amazon, Uber, Etsy) Data flywheel where customers provide extremely valuable data to improve the product (machine learning, voice recognition, self-driving cars)

4. Channels: a. **Direct vs. indirect channels: i. Identify and define both types; also define "intermediaries"

Direct channels: Apple, Starbucks, H&M, Indirect channels: traditional retailers, franchises, home selling, price clubs/wholesale clubs, online retailers. Like Walmart, Amazon, McDonald's, Costco, Intermediaries: Wholesaler, Retailer (part of indirect channels)

d. Be familiar with the concepts of Order Effects, Double-Barreled Questions, Social Desirability Effects, and Demand Effects in survey question design; be able to recognize examples

Double-barreled questions: questions that ask about two separate pieces of information at the same time, making interpretation difficult or impossible. Demand effects: respondents often feel pressure to answer questions in a way that they think the asker wants to hear. (politiness). Like the dentist, flossing.

ii. Understand the roles of fit and profitability in product assortment decisions

Fit with other products and with the store. Functional (level of service needed, target customers, buying occasions). Symbolic (brand associations, status) Profitability: Popularity, Profit margin, Store (vs. manufacturer) profit share. Does offering this product help me sell more of my other products? Customer traffic, Complements and captive products, Framing effects (compromise effect, etc.), "Loss leaders" Product Assortment Example: Peloton Dick's Sporting Goods launching a higher-end store, Richard's Fitness Boutique Deciding whether to sell Peloton bikes, $2500 purchase price (+ monthly subscription); wholesale $2400, Very popular with urban professionals, Mostly sold online, not available in other nearby stores. Should they do it? Why or why not?

e. **Major communication media and the characteristics/advantages of each: i. Be able to categorize advertising examples as Mass Media, Online, or Direct communication

Mass Media: Television, Radio, & Print: Traditional ads, "Native" print advertising, TV "advertisement", Product placement Online Advertising: Examples: Banner ads, search ads, pop-ups, social media (posts, ads, "influencer marketing"), traditional ads in online media Direct communication: Mail, Email, text/SMS, Personal Selling

iii. Know the main aspects of Targeting that vary across mediums and be able to apply them to different media examples

Reach: How much of your target audience can this medium reach? TV vs. Youtube vs. Snapchat Frequency: How often will each person be exposed to your message? Billboards and subway ads (daily), Google search ads (auction for single view) Precision & Control: How well can you reach "only" your target audience, and how much can you "choose" or "change" the audience? Like Direct mail vs. TV ads, HGTV vs. NBC (precision), HGTV vs. Facebook ads (control)

c. Branding Strategies (alternatives to brand extensions)

1. Brand Licensing: Leverages fit of customers, reputation, and/or brand associations. Doesn't require fit with firm capabilities. Examples include Star Wars oranges, Trump steaks, Madden NFL, UW apparel. 2. Co-Branding: Using the established brand names of two different companies on the same product. An advantage to this is broader consumer appeal and greater brand equity. Leverages fit of customers, reputation, and/or associations. Connects you to partner's customers, reputation, and associations. Draws on capabilities of both firms. Requires trust, coordination, and complex contracts. Examples include Nike+Apple, Lily Pulitzer + Target 3. Component Branding: Creates brand equity for traditionally "industrial" products. Product brand can leverage reputation of component supplier. Boosts negotiating power of supplier. Product brand may be reluctant to give up credit and control. Examples include Intel, Dolby, GoreTex 4. New Brands: Leverages fit of firm capabilities and knowledge. Doesn't require fit with existing brand. Doesn't benefit from brand equity. Avoids diluting brand and prevents clashing associations or segments. Builds a "house of brands". Useful when none of a company's current brand names are appropriate. Examples include Lexus, Scion, TK Maxx 5. Multibrands: Different brands produced in the same product category by the same manufacturer. Competing brands in a category with same owner. Target different segments, increase market share. Can be used to fill shelf space and block out other competitors. High risk of cannibalizing and limits brand equity. Example is Head and Shoulders 6. Sub-Brands: Compromise between pure brand extension and all-new brand. Still leverages fit of firm capabilities and knowledge. Partially leverages( and requires) fit with main brand and current customers, but allows some separation. Builds a "branded house". Examples include GAP kids, and Pottery Barn lineup

b. Types of Product Line Extensions

1. Upward stretching: Upgrade current customers, add brand prestige, target premium segment, increase margins. Examples include the Starbucks Reserve locations, iPad Pro / Macbook Pro, Banana Republic 2. Downward Stretching: Create customer on-ramp, cash in on brand equity in broader market, plug a hole to prevent competitor entry, target larger or faster-growing segment. Examples include Seattle's best coffee, Target, iPhone 5C, Mercedes CLA 3. Filling: Add items within the present range of the line, "between" other offerings. It can improve fit with customer needs, use up excess capacity, plug holes to prevent competitor entry, or position company as a one-stop option or full-line market leader

d. Distinguish between Affective vs. Cognitive vs. Conative appeals

Affective(Emotional): Influencing feelings Positive Affect, Humor, Warmth, Excitement but also Negative affect like fear Cognitive (Rational, informative): Influencing thoughts, beliefs, and knowledge Rational arguments to persuade you to prefer/buy product. Changing knowledge/beliefs about attributes. For example, comparative advertising Conative (Behavioral): Driving or influencing action Influencing Behavior: Typical methods: encourage inquiries Induce trial, Purchase, and Repurchase Inform about Purchase Options/Locations Encourage Word of Mouth

9) Sustainability Marketing: a. Understand the issues of observability, greenwashing, and brand trust in the success of sustainability-based marketing

Ambiguity. Defining sustainability is complicated and multifaceted (health, pollution, carbon emissions, water and energy costs, labor ethics, social justice) Observability. Nearly all sustainability-related attributes are invisible when buying/using the product How much water and energy went into this? How much pollution was generated creating and shipping this? Are there chemicals in this that will affect my health decades from now? Were the people who made this paid fairly and working in safe conditions? Are the profits from this going to people who share my values? Why sustainability is a difficult value proposition? Ambiguous definition, many different components Non-observable attributes Psychological distance Solution aversion

5) Retailing and Customer Experience: a. **Understand the four major decisions involved in retailing: i. Understand why retailers often cluster their locations

Complementary offerings. Why cluster? Shared customers and usage occasions. Concentrate/share traffic Competing, differentiated products. Why cluster? Convenient for shoppers (travel costs, information search, maybe near complements). For example, dealerships Competing commodity products. Why cluster? Fighting for customers (if you're less convenient, you lose). For example gas stations and Hotelling's Law

ii. Know the main Content Features that vary across mediums and be able to apply them to different media examples

Complexity: What can you do in this medium? (senses, size, duration, etc.) Example, Google search ads vs. TV ads, Instagram ads vs. Billboards Engagement: How do people connect with content/ads in this medium? (impact, interaction, intrusiveness) Example, Instagram, Podcasts, Super Bowl (high impact) Tweets vs. TV ads Google search ads vs. Pop-up ads Associations & Context: What will get associated with your ad/brand? (context, nearby content, history/norms of the medium) Examples, Facebook ads vs. Super Bowl ads (legitimacy), TV ads vs. Youtube ads (nearby content), Junk mail/pop-up ad links Social Medi

f. Brand Equity

Consumer value of a product due to brand name over and above other aspects of the product offering. For example it's how much more consumers love Tropicana, and how much they are willing to pay more, relative to an orange juice with exact same taste and texture. The dollar amount attributed to the value of the brand, based on the intangible qualities that create that value

b. Be able to identify Vertical Marketing Systems and distinguish between the three types

Corporate VMS: Combines successive stages of production and distribution under single ownership. Like Versace, Prada, Sunglasses Hut Administered VMS: Leadership is assumed through the size and power of one or a few dominant channel members. Related concepts: Monopoly (one dominant seller) and Monopsony (one dominant buyer). Like Walmart, P&G, Kraft Contractual VMS: Channel members are no co-owned but they contract together to coordinate like a single entity. Most common version is franchising, Manufacturer Sponsored Retailer (Ford dealership), Manufacturer Sponsored Wholesaler (Coke bottler/distributor), Service-Firm Sponsored Retailer (restaurant franchises)

iv. Be familiar with the concept of Experiential Retail

Curated atmosphere and holistic experience. Non-shopping activities that reinforce brand. "Instagrammable". Flagship stores (LL Bean, REI, Nike), Pop-up stores (NBA All-Star Weekend). Examples: LL Bean Flagship, REI Flagship, Restoration Hardware, Glossier Flagship, Major Apple Stores

b. Be familiar with the concepts of the Customer Journey and Touchpoints

Customer Experience: Holistic, not just product quality (augmented product). Source of sustainable competitive advantage!( Builds brand, Adds customer value, Difficult to replicate). Due to complexity, can be hard to fully understand and manage. Understanding the Customer Journey: Entire timeline of things that contribute to customer experience is known as a "customer journey". Events along the journey are known as touch points (ad impression, website visit, store visit, service call, etc.). Journey extends beyond the point of purchase. Touch points are not always in the firm's control, and may not even involve the firm like Conversations about the product/brand, Product research through third parties, Post-purchase product experiences, Competing or complementary product experiences

d. Product Life Cycle and customer groups (Diffusions of Innovation Model)

Customers can be segmented based on when they adopt new products. Five categories 1. Innovators 2.5% 2. Early Adopters 13.5% 3. Early Majority 34% 4. Late Majority 34% 5. Laggards 16%

c. Recognize the concept of Disintermediation

Cutting out existing intermediaries to be replaced with a direct channel or with radically new intermediaries. Direct: Why now? easier shipping, micro-targeted ads, cheap communications, geographically dispersed customers (esp. niche products) Radically new: Online platforms (Amazon, Etsy Alibaba, Youtube) Example is Fortnite, launched by Epic Games, which previously made back-end software used in other companies' games. Fortnite was originally available on PC and major gaming consoles; no direct distribution. Company launched independent "Epic Store" in Dec.2018 (vs. stream store 30% commission). The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries. This occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones. Example like iTunes, Netflix,

b. Recognize basic examples of Greenwashing in packaging, labels, or promotions

Definition: presenting a product as sustainable or "green" in a way that misleads consumers, either implicitly or explicitly. Using green-sounding terms that are not legally protected or certified (e.g., eco-friendly, farm fresh, natural feeling) Seemingly independent certification labels from made-up organizations Applying green-sounding trademark names to irrelevant ingredients or features ("OrganiOils," "EcoPower") Highlighting that a product is made "with" natural or organic ingredients when they are a small percentage of total ingredients Mimicking label or package design of sustainable brands (green, plants, natural design theme)

f. Recognize basic examples of Dark Patterns in product design

Design features of a user interface (UI) that deliberately work poorly but benefit the company Unsubscribing or closing an account Opting out of sharing contacts, joining email lists, enabling notifications, location tracking, upgrading, etc.

ii. Know the key advantages of each type

Direct channel advantages: Quality control: Manage whole customer journey, Design and manage retail environment, Hire and train all staff Customer Contact: Own the relationship, Captures insights, feedback, and customer data, Build strong relationship and loyalty No Channel Conflict: No fighting over profit margin split, Price cuts passed on to customers, Automatically share information, Automatically carry whatever the producer wants (and no competitors' products) Indirect channel advantages: Contact Efficiency, Intermediaries create greater efficiency in making goods available to target markets. Channel members offer the firm more than it can achieve on its own in terms of: contacts, experience, specialization, scale of operation. Scale: Economies of scale (pooling multiple producers). Reach far more customers. Convenient for customers (distribution intensity). Often ends up cheaper. Specialization: Much less investment for producer. Distribution and delivery infrastructure. Sales and service ( value-added retailers). Intermediaries have deep experience in their roles

iv. Interpret different media characteristics/advantages to argue which medium is best for a given product

Examples: Television Content: complex (audio, video, text), limited engagement Targeting: broad reach, limited precision or control Pricing: pay per impression, large overall cost Monitoring: poor tracking, no interactions, hard to measure sales effect Online Video Advertising Content: same as TV Targeting: moderate reach, high precision and control Pricing: pay per impression, moderate overall cost Monitoring: good tracking (exact impressions, view/skip behavior), hard to measure sales effect Direct Mail Content: moderately complex (text + images), negative associations (junk-mail), slightly intrusive Targeting: moderate reach, high precision and control Pricing: pay per "impression," moderate overall cost Monitoring: poor tracking (opened/read mail), moderately hard to measure sales effect Search Advertising Content: very simple and limited, slightly intrusive Targeting: narrow reach, extreme precision and control Pricing: pay per click, low overall cost Monitoring: great tracking (exact impressions, click-through behavior), easy to measure sales effect

b. Fixed costs, variable costs, and breakeven analysis

Fixed costs are unaffected by production volume like rent and appliances in a restaurant factories and R&D for iPhones variable costs(vary with production volume (more unit sales = more costs) like ingredients in a restaurant and metal and glass in iPhones Breakeven analysis: "At this price, what level of sales is required to cover costs?"

c. Know the four general uses of "listening" on social media

Follow cultural trends and events Track brand-related discussions and attitudes (sentiment analysis) Identify individuals' attitudes, emotions, etc. (for targeting) Get feedback, provide service

c. Distinguish between Informing vs. Persuading vs. Reminding objectives and identify where each is most useful in the Product Life Cycle

Inform: Tell the market about a new product Describe attributes, benefits, uses, etc. Persuade: Create/strengthen positive associations Weaken negative associations Remind: Remind current customers to purchase again/more Keep product in consumers' mind during "off season" Product Life Cycle: Introduction: Inform Growth: Persuade Maturity: Remind Decline: Minimal ads if any Common Advertising Objectives: Short-run: inform, persuade, and remind customers of the product (transactional, tangible benefits)

b. Understand the concept of market-based assets and how they can both increase cash flows and lower costs

Marketing often treated as a "cost center," but many marketing activities create intangible assets. These are primarily market-based assets, meaning that they exist at the intersection of the company and other market participants. Customer relationships, supplier and channel relationships, brand (Awareness, Associations) Increased cash flows (customer base, higher WTP, cross-selling) Lower costs (research, churn/acquisition, WOM, service, communications) Faster cash flows (new product adoption)

iii. Recognize key characteristics/advantages of mobile, voice, and VR as marketing channels

Mobile: Quick response to activated need (on the go) Small screen Hard to gather/compare complex info Touch-based interface (more tangible, impulsive and less precise than mouse) Voice: Audio-based interface Very hard to gather/compare more than minimal info; first search result dominates Interface takes effort and time; activates "social' psychology Virtual Reality: Very rich experience Gather/compare large amounts of information Allows product exploration and testing (3-D, interactive) Augmented reality: simulate product in real context (clothing, furniture

i. Identify the major advantages and disadvantages of each primary research method

Observation Pros: yields the kinds of details that just don' t emerge from traditional research questions or focus groups Cons: some things cannot be observed, such as attitudes, motives, or private behavior. Long term or infrequent behavior is also difficult to observe. Observations can be very difficult to interpret Focus Groups Pros: Group Interaction, Spontaneity, Richness, Easily understandable "customer" language, Fast, Flexible Cons: Lack of Generalizability, Groupthink and Conformity, Social Desirability(sensitive topics), Moderator Influence Survey Research: Pro: flexibility, it can be used to obtain many different kinds of information in many different situations. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, online, or in person. Cons:Lots of issues to consider for effective question design. People are unable to answer survey questions because they cannot remember or have never thought about what they do and why they do it. People may be unwilling to respond to unknown interviewers or about things they consider private. Respondents ma answer survey questions even when they do not know the answer just to appear smarter or more informed. Busy people may not take the time, or they might resent the intrusion into their privacy. Experimental research:

c. **Understand the four main methods of primary research and their general characteristics, and be able to recognize examples of each

Observation: Involves watching and interpreting people's behavior with minimal interaction or intervention. Great for exploratory research and for finding unarticulated needs. Example: McDonald's milkshakes: People were buying milkshakes early in the morning. Buyers were often adults eating alone. Insight: People wanted these milkshakes while they were stuck in traffic on their commute Marketing decisions: Design to last longer, design for straw vs. spoon, list on breakfast menu, morning price promotions, shift McCafe products to meet this need Interviews and Focus Groups: Conversation with (potential) customers to directly ask them about their thoughts and feelings. Focus group is an interview with multiple people at once, led by a moderator. Have a lot of interaction and can be guided by an expert interviewer/moderator. Fairly unstructured and anecdotal, so more useful for exploratory research than for making final decisions or generalizing to all customers. Focuses on articulated needs. Applications: Understanding Consumers, like perceptions, options, and behaviors for products & services Product Planning: generating ideas about, or evaluating new products Advertising: develop creative concepts and evaluate ads or messages Survey Research: More structured than interviews or observation, More consistent and comparable data across respondents, Greater up-front cost to design survey, lower marginal cost to get responses (esp. online). Experiments: Casual Research Experimentation involves the deliberate manipulation of one or more variables by the experimenter in such a way that its effect on other variables can be measured. The Variable being manipulated is called the independent variable(a.k.a. cause). A variable that will reflect the impact of the independent variable is called a dependent variable (a.k.a. effect) By assigning manipulations in a way that is not related to any other relevant factors (randomization), experiments can rule out anything else as a potential cause of the observed outcome

c. Identify and define Showrooming and Webrooming

Omnichannel Experience: Showrooming: Definition: Visit retail store but purchase on website. Insight: Customer values in-person service, hands-on trial, etc. Webrooming: Definition: Visit website but purchase in retail store. Insight: Customer dislikes in-person service, or can't find/compare the right information easily in store

f. Distinguish between Paid, Earned, and Owned media and know the basic characteristics/advantages of each (PESO model)

Paid media: traditional ads Earned media: Get people talking Shared media: Get people to share your message Owned media: Do the talking yourself

8) Digital and Media Marketing: a. Be familiar with Paid Search and SEO as the two types of search engine marketing

Paid search: Advertisers pay to show up as search results Google sells keywords in automated real-time auctions Advertiser pays Google whenever someone clicks through (CPC) Why is this so appealing to advertisers? Target people specifically based on interest in your (or competitor's) product Influence people who are actively looking to make a purchase. For example undergraduate business program vs. executive MBA program SEO: involves designing the content of a website to increase its likelihood of showing up in desired organic (non-paid) search results. Keywords and phrases, links (to and from) other reputable and relevant sites, using easily searchable headlines/brandnames/etc. Voice-based search (Alexa): being first result will become life-or-death, and brands will have to make sure their names are unambiguous when spoken out loud

c. Price discrimination: i. Understand basic definition/purpose and recognize examples

Price discrimination: charge consumers with high WTP more than consumers with low WTP. Examples include

ii. Define price-quality inferences

Price is used as an indicator of quality when other info or experience is limited. This often means that higher prices can make a product more appealing (increase demand)

f. **New product pricing strategies: skimming vs. penetration: i. Identify and define both strategies

Price skimming: involves setting a high initial price and (possibly) reducing it over time. Why do it? Because there are bigger profit margins, first adopters are often more passionate and higher income (higher WTP), costs tend to be higher at first (economies of scale), fewer competitors at first, starting with high-end customers helps build brand prestige, sets high reference price for future customers When? Very innovative product (targeting innovators, minimal competition, high R&D costs to cover), prestige brand positioning, high variable costs to produce, limited economies of scale Example of price skimming: Impossible burger Penetration Pricing: Setting a low price for a new product in order to attract a large number of buyers and a large market share. Why? Captures market share quickly, discourages competitors, builds customer relationships and brand awareness, captures economies of scale quickly, accelerates firm learning, builds capabilities. When? High switching costs or customer lock-in, strong threat of competitor entry, low variable costs to produce, significant economies of scale, also selling captive products or complements, significant network effects. Example Uber

b. Distinguish between Primary and Secondary Data, including the research goals they work well for and their general characteristics/advantages

Primary Data: Data that did not exist prior to this specific research effort and must be created by the marketer. (Most helpful for decision support research)(the 4 Ps) Advantages: Allows investigation of a specific issue of interest, Often more relevant outcomes than secondary data, Can look at causality and what-if scenarios Disadvantages: Expensive, Time-consuming, Many potential biases Secondary Data: Data that already exists somewhere (prior to this specific research effort) and was collected for another purpose. It can be external or internal to the company. Examples: Transaction data (e.g. scanners), Panel Data/3rd Party Data, Online browsing data, User Generated Content (Twitter, etc.), Census or pre-existing survey data. Most helpful for situational marketing research (the 3 Cs)

iii. Understand and apply principles of typical retail store layout

Principles: Make a decompression zone at the entrance. Use high visibility spaces to show off and build your brand (power wall). Give people space to move (4' standard aisles; butt-brush effect). Planned purchases can require effort, but impulse purchases need to be quick and easy. Get people to spend more time and see more items in the store Customer paths at IKEA Store Layout: Shelf Design Appealing and profitable items at eye level. High-demand items in the middle of an aisle to "pull" people down the aisle. Organize complicated shelves clearly (labels, colors; horizontal and vertical groups). Frame the decision process.

e. Product mix pricing strategies: i. Recognize examples of product-line, optional-product, and captive-product pricing

Product Line Pricing: Setting price steps between various products in a line based on cost differences, customer evaluations of features, and competitors' prices. Setting price steps between various products in a line ( based on costs or customer value). Enables price discrimination (different product forms). Also enables framing effects ( compromise effect, reference prices). For example iPhone 7 at $449, iPhone 8 $599, iPhone X at $749 Optional Product Pricing: Pricing optional or accessory products sold with the main product (e.g., cars, laptops, cruises and resorts). Takes advantage of "diminishing sensitivity". Essentially makes a more flexible, customized product line. For example GPS navigation system with a card. Must decide what to offer as base and what to offer as options. Captive Product Pricing: Pricing products that must be used with the main product (e.g., razor blades, printer ink cartridges, Keurig pods). Also called: two-part pricing because the price of the service is broken down into a fixed fee plus a variable usage rate. Main product often works as a leader that opens the door to more profitable future sales. Increasingly common in tech: platform-specific software, branded "ecosystems" of compatible products, in-app purchases, free-to-play games

b. Recognize examples of push vs. pull strategies

Pull refers to the practice of creating demand for the company's offering by promoting the offering to end users, who demand the offering from intermediaries, and pull it through the channel. Push strategy refers to incentivizing channel members, who push the product downstream to end users. E.g. offer high margins on products so retailers have an interest in selling them, or educate salesforce in benefits of the product

d. **Psychological pricing: i. Recognize examples of reference prices, left-digit bias, and roundness (or deliberate non-roundness) in practice

Reference prices: Seller draws attention to an alternative price for the same product ("was" or "MSRP" price labels for sale items; "$129 value" etc. on informercials), or to a price for the same item elsewhere ("compare at" price labels). For example a Northwoods Hunting Jacket price was $79 and now it is at $49.95 Left-digit bias: People tend to overweight the left-most digit(s) of a price, subconsciously rounding down. Marketers take advantage of this by pricing just below the next dollar value ( or other round number)- everything ends in 99! Roundness: Round numbers can signal prestige/luxury Non-round numbers seem more precise, math-y, and potentially fair (less arbitrary)

6) Marketing Research: a. Distinguish between Situational Research and Decision Support Research goals

Situational Research: To identify Opportunities/Threats, To Assess Strengths/Weaknesses, 3 C's Decision Support Research: Strategic: Segmentation, Targeting, Positioning Tactical: Product, Price, Place, Promotion

ii. Identify and explain situations where eCommerce is likely to work well

The Death of (Brick-and-Mortar) Retail: Department stores, big-box stores struggling vs. online retail eCommerce taking over new categories (Zappos, Instacart) Clicks to Bricks: Popular online-only brands opening dedicated retail stores Examples: Warby Parker, Allbirds, Glossier, Casper, Amazon, Google Immersive experiential retail; service-intensive showrooms

ii. Understand the importance of causal inferences and randomization in experimental research

The objective of casual research is to test hypotheses about cause-and-effect relationships. For example, would a 10 percent decrease in tuition at a private college result in an enrollment increase sufficient to offset the reduced tuition?

d. Recognize the definition of an Extended Delivery Network and distinguish between customer-coordinated and firm-coordinated networks

The whole set of products and services that shape a given experience is the Extended Delivery Network Your customer's experience often depends on the contributions of other products and services

e. Recognize the main monetization strategies for digital products. Be familiar with the pros and cons of Advertising vs. Transactions as monetization strategies

TransactionsOne-time charge for purchase of digital goods. Most similar to traditional goods and services. Examples: iTunes, Amazon Video, Kindle e-books Pros: High revenue per purchase Cons: One off(low retention) Fighting against "online = free" norm Subscriptions Recurring charge for ongoing access to digital goods within a set period of time. Examples: Netflix, Kindle Unlimited, Spotify, New York Times Pros: Recurring revenue (predictable, high-retention) Lower cost salience to customer (autopay) Cons: Higher bar for initial conversion Fighting against "online = free" norm Advertising Product/content draws attention, advertiser pays content creator, consumers (eventually) buy from advertiser. Examples: Facebook, Instagram, Google, YouTube, Pinterest, Spotify (free version), Podcasts Pros: Low cost salience to consumer Low bar for acquiring and keeping consumers Cons: Compromise customer value to favor advertisers (censorship, manipulation, violating privacy)

d. **eCommerce vs. brick-and-mortar: i. Know the characteristics/advantages of each

eCommerce: When is eCommerce Effective? High value-to-ratio (size, weight, fragility, perishability, hazards). Large absolute margins. Don't need hands-on testing. No convenient offline options. Low sensitivity to delayed delivery, or high WTP for fast delivery. Customers geographically dispersed. Brick-and-Mortar: Retail employee interaction (help, suggestions, service, selling). Ability to test/try product. Involvement of multiple senses(immersive shopping environment). Customer does the manual labor: collect items in cart, transport them home