CE Test #2 - Marketing Side

SUMMARY: STRATEGIC MANAGEMENT DURING THE PLC (bookmark!)

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Not all decisions are the same! Name the 3 types of problem-solving we use to make decisions:

(look at photo) -On a continuum 1) Habitual Problem Solving (Autopilot decision making) -Out of habit -Auto pilot mode 2) Limited Problem Solving (middle ground) 3) Extended Problem Solving (Make decisions very carefully) Thinking very carefully

Laddering: Attributes to Values

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Outcomes of Strong Brand Equity:

-Ability to command price premiums -Less price sensitivity among customers -Greater market share -Supplier & distribution advantages -More extension (diversification) opportunities -Greater purchase frequency and loyalty -Acts as a barriers to entry for competitors

Evaluation of Alternatives (Step #3 of the Consumer Decision Making Process)

-After consumers search for info, they start narrowing down their choices into a consideration set. (set they are seriously considering) -They weigh the pros and cons of each option and use evaluative criteria to compare each option in the consideration set. -Ex: You realize you need a new car (problem recognition) and you've done research online about various available cars (information search). What next? Do you sit down and evaluate every available car? (no) -Ex #2: What evaluative criteria might customers use when choosing a gym or fitness program? -Smoothie shop, look of gym, Price, type of equipment, proximity to house, options for classes, etc. -Lifetime Kids (childcare at the gym), Planet Fitness → leave egos here. Planet fitness is not fancy or clean, but it excels in identifying the evaluative criteria of its customers. No judging. -Very important to learn the POV of your target customers! Don't assume that your evaluative criteria will be shared by your customers. This highlights the importance of marketing research to substantiate your views.

Describe the class video example on Product Concept & Technical Development (phase 2):

-After going to schools and playground to talk with children, they spoke with them and learned how important social interaction was. For example, multi player games over one person + not listening to music while running so they could talk to people. (Shows important of marketing research) -Shows it is NOT a linear path like in textbooks. We might have to iterate and return again. Also, might have to go back to the drawing board a few times.

Information Search (Step #2 of the Consumer Decision Making Process)

-After the first step, then research and search for information. -External Search -Internal Search -Read about in the textbook!

Mercedes Example - Line Filling

-After, they didn't want to continue stretching. (Usually start with stretching then fill) -Then, they wanted to add to the gaps with more variety in the same price point. -Example: Cars that are different but same price point. (G-wagon, GLE Coup, GLC Coup, etc.) Goal is NOT to make it more or less accessible like in stretching, this goal/benefit is targeting different audiences with different sizes (maybe families/demographics). All about preferences NOT affordability. Giving people mroe variety.

Summary of the Diffusion of Innovation:

-Analogy that represents the diffusion of innovation and the difficulty of crossing the chasm: dancing video Who do these people represent in the context of diffusion of innovation model? -First 2 guys: Innovators -Few young women who join a bit later: Early Adopters -People sitting around at the end NOT dancing: Laggards

Sales peak out during the maturity phase, but more likely than not, your profitability is dying down even though your sales are higher than ever before. What accounts for profits declining?

-Average selling price is lower because of more competition, hype/craze is not there anymore, also we do have a huge chunk of customers that haven't bought this product before (late majority), and costs could be increasing. (examples are shelf space, advertising, and supplier power) -From a diffusion of innovation perspective, who is buying during this phase? Late majority (usually less affluent, less risky)

Qualities of Strong Brands:

-Brand excels at delivering value -Brand stays relevant -Brand is consistent -Brand coordinates every aspect of the marketing mix to achieve desired positioning -Brand managers understand what the brand means to consumers from their POV

Product Choice (Step #4 of the Consumer Decision Making Process)

-Compensatory Decision Rules: Carefully compare and contrast options in the consideration set, using various evaluative criteria -Heuristics: Use mental shortcuts or a "rule of thumb" to make decisions

Briefly describe consumer decision making:

-Consumers don't always make careful, thoughtful choices -Understand consumer decision-making from your customer's point of view! Consumer decision making can be impacted by: -Internal factors such as motivation -External factors such as atmospheric and sensory cues and culture

Where do we derive cultural values from?

-Families, friends, schools -Our cultural values are usually passed to us INFORMALLY -When you behave positively, you are rewarded, and when you do something "wrong," you are punished, so you get used to knowing what is right and wrong according to your culture. -Most cultural norms aren't explicitly communicated, they're implicit. (unstated rules)

Diffusion of Innovation (video)

-How does an innovative product diffuse (spread) through society? - Video about guy dancing -Diffusion is a process by which the use of a product or an innovation spreads through a society through a population. -Some consumers are really eager to try a new innovation while some may take a wait and watch attitude. Some may be skeptical of a new offering. Different people adopt innovations at different times! -How do marketing activities change across a product's life cycle? -No product "lives forever" → You have to think that far -After a successful launch, products have to be careful managed to extend their "lives"

House of Brands (aka individual brands) - Benefits + Drawbacks

-If the Branded House is the brady bunch, then the house of brands is the Kardashians (aka individual brands + maintaining their last names/individual identities)! Benefits: -allows them to target different kinds of customers Drawbacks: -Don't know proctor and gamble products (less brand name recognition) -Requires a lot more resources (money and time)

Crossing the "Chasm" is difficult! (from video)

-Innovators and early adopters represent "The Early Market." They are enthusiastic about trying the product, therefore, they are the easy people to capture. Easiest to convince innovators because they want to get their hands on new technology. Then Early Adopters because they want the shiny new thing to improve their status/show off and be trendsetters. Both are pretty easy to market to. -The hurdle that marketers face is crossing the chasm - the gap between The Early Market and The Mainstream Market. The remaining 95% of the population! -Not easy to convince mainstream customers to adopt a new product. The extent to which you understand the barriers to new product adoptions (factors you can get right or factors if you don't understand can help/harm how a product diffuses through society). -In particular, this is why it is so important to drive observability of your product. Observability and visibility of your product being used by the right group of people for endorsements and so on. This helps products cross the chasm! People witness this product being used and enjoyed by the right group of people.

Remittances

-Money migrants send back to family and friends in their home countries, often in cash, forming an important part of the economy in many poorer countries -Ex: The world bank was shocked by how much money Indians abroad send home

Product Management

-Most large companies don't sell just one product but a set of related products. -Product management involves developing product line and product mix strategies.

Why do marketers make cultural mistakes?

-Not informed -Unconsciously only think of themselves -Sometimes they only look at the data and don't question "why is this happening?"

Branded House (aka family/umbrella brand) - Benefits + Drawbacks

-One corporate brand across all your products regardless of what that product is -Example: Canon → DSLR camera, binoculars, cartegridges, printers, etc. (all branded as Canon) -Kind of like the Brady Bunch! (Everyone is all a brady, despite differences) Benefits: -The name can earn respect (positive brand carryover effect) -Establishes credibility - new products will earn automatic loyalty -Enhances brand recognition + positive spillover effect Drawbacks: -If you have one bad product → you might now want to buy anymore from this brand (Negative spillover effect) -A brand might only be known for one of their most popular products and not be seen for their other products

Why is it important to understand our customers' cultural values?

-People are very different so they won't be attracted by the same things, which impacts your business products -Some things can be offensive -One reason is to avoid mistakes: Ex: Financial Crisis of 2008, DOJ wanted to make an example of the banks after many bad loans were given out. -In particular, they went after ABACUS (east Asian clients in NYC). Most of the people were first generation Asian immigrants or Asian Americans. -Interesting thing that happened: the DOJ said ABACUS was committing fraud. Lots of couples were approved for loans they shouldn't have been. Also, many Asian couples noted things called "gift money." DOJ thought this meant fraud. -In Chinese culture, the line between a gift or a loan is very slim. There was a big misunderstanding due to differences in culture. -Ex #2: In Islam, it is considered a sin to charge an interest on a loan.

Describe rituals and consumption:

-Rituals are patterns of behavior tied to events that we consider important in our lives. -Some rituals are special (like bar mitzvahs, communions, quinceañeras, etc.) and others are more common (like gift-giving) -These give you insight into the unspoken rules of a culture.

What are some obstacles to cultural understanding?

-Sometimes there is a conscious bias: ethnocentrism. (Believes that my way of doing things and my cultural values are more important or better or correct than others') Most of the times it is NOT this, but an innocent mistake/unconscious. -Other times, it's an unconscious tendency: self-reference criterion. (Reference yourself and your own biases. Ask yourself "what would I do?" and think that everyone would agree)

Why is it a bad idea for companies to cling to a declining product?

-Take away resources that could make new products that may be more successful -Expensive -Waste of time Customer benefit?

What business would be impacted by knowing that Asian Americans are more family-oriented?

-The way financial accounts are set up (retiring vs. college fund) Also, if they pay for your college and help you throughout your life, there is a cultural code where the kids have to take care of their parents. -Education is very important. -Restaurant atmosphere can be very different. (Hibachi, Korean BBQ → very family style!)

4 Hidden Marketing Techniques you Probably Don't Notice (Video 2)

-Think of the most memorable advertising and marketing campaigns of our time and chances are there's a lot of science behind it. That science has led to some techniques marketers are using that you probably didn't even notice. -Brands use sight, smell, taste, touch, and sound to make their products memorable and engaging. 4 Techniques: 1) Physical placement of words in an ad -rational/health messages work best at the top -emotional messages work best at the bottom 2) Logo design has a big impact -logo designs that have a sense of motion result in better attitudes towards the brand (Nike) -Has to be consistent with the brands' identity -Colors also have an impact. 3) Smell plays an important role -Smell is one of the most powerful senses in terms of triggering memories and associations -Many years ago lemons were used to clean dishes for their acidic properties. That's why we associate lemon scent with cleanliness. 4) Sound can make the invisible visible -Intel sound makes it recognizable -Because of the sound, consumers can feel the presence -The use of sound, motion, smell, and all aspects of our five aspects are part of sensory marketing! -Once a consumer gets attached to the sensory aspect of a product, they are much less likely to give that product up. -Sensory marketing is an evolving field and researchers are discovering new ways to use the senses to improve engagement. Also has broader applications as well (ex: road signs to attract attention and avoid accidents).

What kind of Marketing outcomes did scent impact? (Video 1)

-Traditional marketing attacks your eyes and ears. This is through your nose. Scent marketing is the idea of using scent and incorporating to all the touch points of the customer experience. -Very subconscious (not like a logo). Not everybody sees it the same way. Can be dependent on someone's upbringing and experiences. This makes it more emotional. -Combining scent with a visual strengthens our memory of it in the long term in a physical way. -Scents have associations. Ex: A coffee scent can evoke alertness, lemon can emulate cleanliness, etc. -Scent is associated with memories. It is hardwired. -Having a scent makes you linger longer in a store because it lifts your mood → charge higher price premiums -Ex: Casinos started pumping smells in the air to negate the cigarette scent and then slot machine usage doubled. People feel more comfortable/warm/invited. Scent marketing is all about creating an amazing experience for customers. -Museums have added gunpowder scent to civil war exhibit and hospitals add scent to make people feel more welcomed. -But scent marketing is about using one scent for the WHOLE experience. -Billboard scenting: what Hollister has used. It is the most extreme form of scent marketing. Every store smells the same regardless of location and the scent is overpowering (like an oversized billboard). With Hollister, the scent matches their visual branding of almost naked models/intimate setting. -To market with scent you must learn a lot about the brand, their target demographic, and understanding their aspirational attributes and capturing those qualities and turning them into a scent. -In most cases the scent is carefully diffused through the store because overpowering people with aroma isn't a good thing generally. This is why in most places you don't even realize there is a smell! -In the same way that scent marketing can generate a positive experience, when the aroma doesn't match the demographic, location, or brand identity, the public reaction is often negative. (ex: got milk ads with cookie strips at bus stops + Starbucks sandwich smell ruining the coffee smell) -Once you start to be conscious of it, you'll notice it everywhere. -If working properly, it creates a positive experience for both the business and the customer. -Most people are unaware of the impact scent has on them.

Describe the class video example on Test Marketing (phase 6) :

-Wendy's example: Tested the burger in Columbus, Ohio first. They were finetuning it even as it was on the menu when test marketing until it goes national. -Every aspect of the marketing mix they are trying out. -Chose Columbus, Ohio because it is a popular testing ground (very diverse, lots of universities, international students) Lots of product testing happens here. This relates to representativeness (wants a similar group of people to their target market).

Problem Recognition (Step #1 of the Consumer Decision Making Process)

-What you have (current state) -What you want (ideal state) -Only motivated to make a change if the gap between what you have and what you want is BIG enough -Example: Honda to range rover (maybe gap is small so you know you want the range rover but you live with the Honda, if its big, you buy the range rover) -Example #2: Is your picky eater getting the nutrition she needs? Ad for better baby food. → Marketers want to show you there is a better solution out there.

Post-Purchase Evaluation (Step #5 of the Consumer Decision Making Process)

-Why is satisfaction important? -Read in the book.

5 Types of the Adopters

1. Innovators 2. Early Adopters 3. Early Majority 4. Late Majority 5. Laggards

A "Product" Encompasses more than you realize! What are they 3 layers?

3 Layers: Core product, Actual product, and Augmented Product. (look at photo) Core Product: at the most basic level. What is the customer buying? What are the benefits customers are looking for? (convenience, status, mobility, performance, etc.) -Ex with Cars: Safety -Ex with iPads: Versatility + Mobility Actual Product: Process in which they determine how we bring these benefits to life. What will our product have to make this feature? How do I take that benefit and bring it to life with attributes + features? -Ex with Cars: Seatbelts, Airbags, Blind spot recognition, automatic breaking, cameras -Ex with iPads: All the apps you could download (versatile), Size and lightweight/sleek design (mobility Augmented Product: Goes one step ahead and questions what we need to enhance the core benefit. In addition to the product benefits, what else do I need? Enhance! -Ex with Cars: Good deals on repair and maintenance after you buy it, -Ex with iPads: Accessories for the iPad (Versatility), Apple Support services/Genius Bar. You can get help from online 24/7. (Mobility)

After companies invest in NPD (new product development), the hope is that customers will ______

Adopt the innovative market. They want it to diffuse it through society.

After a successful launch, products have to be carefully managed to extend their...

After a successful launch, products have to be carefully managed to extend their "lives."

What were some of the Best Global Brands of 2021? What do they have in common despite their varying industries?

Apple, Mercedes, Coca Cola, Disney What feels the same? -Great quality -Very well-known -Good customer experience - not just the product -Stay the best in the industry They all have a sustainable competitive advantage which is maintained by them... -Continuing to innovate! and -Continuing to grow as customer needs change.

Why are companies "in the red" for most of the introduction phase?

Because: 1) lots of high production costs + R & D costs so they can't recoup yet, 2) high promotion costs to get word out asap

What type of problem solving do most people use?

Brains are hardwired to go the path of least resistance so most people buy their stuff on a habitual or limited problem solving decision level.

Brand extensions

Brand extensions: taking an existing brand into a new product category. -Example: Crest: takes the crest brand name associated with toothpaste and extends it to whitening strips, mouth wash, floss, etc.

How are brands extended?

Brand extensions: taking an existing brand into a new product category. What impacts a brand's ability to extend? -Quality? -Level of fit? -Prototypicality? -Concrete attributes vs. benefit/value-based positioning? Ex: -Colgate could not extend to a food line. -LazyBoy had a hard time extending because its product is positioned among concrete attributes -Nike successfully extended because their brand is associated with a lifestyle. (companies who are valued for this have an easier time extending)

Name that extension!

Brand or Line? Snickers chocolates- line extension - line filling (variety) Snickers ice cream - brand extension (new market: ice cream) Dairy milk with new expensive chocolate - line extension line stretching upward

Brands: What's in a name?

Brand: A name, term, symbol or any other unique element of a product that identifies one firm's products and set its apart from competition.

Customers don't just buy products, they buy....

Brands

How can we learn about the values and beliefs of other cultures?

By observing the culture's rituals.

Marketing Strategy in the Maturity Phase:

Competition: Initially intensifies further; later starts leveling off Product: Further (usually minor) modifications made to products; complementary offerings introduced. Tweaking a product that is already mature. Also, think about augmented ___. Advertising: While goal is still to stress brand differences, ads focus on reminding customers to continue buying & using the product; heavy sales promotions to maintain brand share -iPad example: remind people that already have an iPad that the new one is way better. Also, the first ad was more benefits focused while this was more Distribution: As competition increases, companies try to further increase distribution outlets for their products. Price: Remains same or drops further due to competition

Marketing Strategy in the Introduction Phase:

Competition: Very little; perhaps a single brand (ex: Apple iPad) Product: Very few product variations, basic product (maybe one variation because it is early on, ex: iPad came in 2 colors) Advertising: Goal is to build awareness of product category among customers and distributors/retailers; to inform people about the product and its benefits. Heavy sales promotions may be used to induce trial. Distribution: Companies start with selective distribution networks; must find retailers willing to sell the product. Price: Either priced high to recover costs or low to quickly gain market share + penetrate market -Innovators and early adopters are the only ones buying at first

Early Adopters (Types of Adopters)

Early Adopters: those who adopt an innovation early in its introduction; among the first but after innovators -Tend to be younger/wealthier/educated like innovators. -But where they differ is that they don't tend to buy the products because they are so enthusiastic about them but because they want to have the latest and greatest new gadgets to seem cool and distinct. They want the shiny new toy/status. -Unlike innovators who don't care about perfection, they demand a more refined product with more highly qualified sales + support. They aren't willing to accept an unrefined product. -More concerned about social acceptance, tend to be heavy media users. -Marketers target early adopters more so than even innovators for influence. It is the early adopters who are the real influencers/opinion leaders. They informally influence the actions/attitudes of others. Innovators are too small a population or not as well regarded for marketers to target. They don't have influence or followers. -People you knew in high school reference: Mean Girls - cool kids everyone looks to, they set trends

Early Majority (Types of Adopters)

Early Majority: neither the first nor the last to try a product -Typically middle-class & above-average education -By the time the early majority starts using a product, it's no longer "new." -Tends to seek confirmation from trusted sources before buying the product. Want a more refined product and more risk averse so they buy the third versions of the product. Wait for others to try it. They are right in the middle -People you knew in high school reference: average American teen. Typical high school student. Middle America in terms of income and education.

Crest Example for Brand Extension vs Line Extension

Ex: Crest introduced a brand extension when it introduced new products with the same name (floss, wash). - Existing brand name + new product category With product lines, Crest introduced new varieties of toothpaste. - New product + same product category

Example about why we need to understand the values and beliefs of another culture:

Example: San Francisco stores can sell 3 pack balls for more money than 4 packs and 8 packs for more than 10 packs. Why? -High Chinese population in SF + Chinese people are very superstitious about the number 4, which is an unlucky number to them. 8 is considered a very lucky number. → What kind of marketing decisions would this cultural superstition impact? 1) Price → can charge more but also don't price things with a 4. 2) Place → avoiding storefronts or names with 4 3) Product → not selling things in 4s -Ex: Coke bottles references 888ml instead of 1 liter -Ex: Boston's Super 88 Market 4) Promotion -Ex: promotion: use the lucky numbers and avoid the unlucky numbers

How are brands organized?

Exists on a continuum (look at photo) -House of Brands: P&G's Tide, Cheer, All, Ariel, Purex (Many independent brands) -Nothing is called proctor and gamble, each product category has its own brand -Hybrid: Marriot's hotels -Branded House: GE's engines, lightbulbs, appliances (Single umbrella brand) -Each and every product category and line regardless of the different products all have the name GE

Most companies use a _______ approach:

Hybrid! Some names will have a different brand name and some will carry their corporate brand name Ex: Hershey's - hershey chocolate, but they also have skinny pop, ice breakers, twizzlers, etc.

What functional area is the product life cycle an important concept for?

Important concept for EVERY functional area (including HR, Finance, etc.)

What part of the Marketing mix do we always start with?

Product! Then the others are down-streamed from there.

Innovators (Types of Adopters)

Innovators: the very first segment of a population to adopt a new product ‣ -Tend to be risk-taking, younger, well-educated, financially well-off -Tech/product enthusiasts who are really into a product category -Willing to tolerate problems because they are very enthusiastic and eager to try the product even if its flawed/not perfect -May even want to help find a solution to improve it. -This category is the smallest % of the model. -Not very price conscious so will buy it even if it is expensive. (by any means necessary) -People you knew in high school reference: young Bill Gates - nerdy tech kids

What are factors that influence the consumer decision making process?

Internal factors: -Perception -Motivation (important one) -Learning -Attitudes -Personality -Age group -Lifestyle External factors: 1) Situational Influences: -Physical environment -Time 2) Social Influences: -Culture -Subculture -Social class -Group memberships -Opinion leaders -Gender roles

Laggards (Types of Adopters)

Laggards: last in a population to adopt a new product. -Typically lower education and income than all other categories of adopters -Will only buy it if their current alternative doesn't work anymore or might never buy the innovative new product -Very risk averse -Tend to resist innovation. Doesn't believe the new product will improve their life significantly. -By the time a laggard adopts a product, the rest of society has already moved on to the next big thing. So this product may have already been replaced by something else. -Usually what prompts a laggard to adopt a product is extreme social pressure or the fact that their current alternative just don't exist anymore. And EVEN then, they may never adopt the product. They may say "fine" I can live without it. -People you knew in high school reference: Librarian from high school (world has moved on to using online and this lady is still using a paper card system for books)

Late Majority (Types of Adopters)

Late Majority: adopters who are willing to try a new product when there is little or no risk associated with the purchase, when there's a necessity to buy it, or when there's a lot of social pressure to buy it. -Typically older, more conservative, and lower than average education and income levels, risk-averse, price sensitive -Late Majority wakes up and realizes maybe I should buy this product. They don't want the frills or fancy version they want the basic one to get the job done. They want a bulletproof/contested product that is easy to use and no frills, which makes sense because their income and education tends to be lower. -Sometimes by the time a product makes it to the late majority, marketers develop a lighter or user friendly version for these customers. -People you knew in high school reference: Kid in high school who consistently slept through classes. He then asks for others to give him their notes for final exams.

Mercedes Example - Line Stretching

Line Stretching: Upward: -First they had the Original SUV -Then they created a new version that was more expensive Downward: -Made smaller cars with a lower price point -stretching the price downward with cheaper versions of the same product category Two way stretch: stretch in both directions

Which do you think is more common (brand extensions or line extensions)? Why?

Line extensions! Less risky. Just tweaking/adding

How are product lines extended?

Line extensions: Introducing a new product in the same (existing) product category. Two types of line extensions: -Line stretching -Line filling -Has the same brand name.

Marketing Managers

Marketing managers grow their product portfolio through brand extensions and line extensions.

What is the longest phase of a product's life cycle?

Maturity phase

Coming back to the INTERNAL factors that impact the consumer decision making process, describe motivation.

Motivation (only internal aspect that we talk about) -Maslow's Hierarchy of Needs: All humans are motivated by a hierarchy of needs- from more basic ones to more complex needs. (look at photo) -Ex: What needs does a winter jacket fulfill?, Coat vs. Moncler or Canada goose. -As a marketer, you want to position your product beyond the basic (lower) needs on Maslow's hierarchy of needs. You want to increase personal and social connection. -Mercedes Benz ex: Most people say they buy it because it is safe. Not really accurate, it is more about the social benefit + aesthetic. (G-Eazy and janis joplin song)

Brands are more than just...

Names. A brand... -Is a promise -Conveys value and quality (or lack thereof) -Helps position products

Types of Brands:

National/Manufacturer's Brand: Brand name is owned by the company that makes the product. (Chobani and Heinz) Store/Private Brand: Brand name is owned by a wholesaler or retailer; they contract to make the product. (365 and Good and Gather)

How are new products developed? What are the 7 phases?

New Product Development: The process by which companies develop new products. (look at photo) 1st Phase - Idea Generation: Where do ideas for new products come from? -(Maybe from customers, unresolved issues in the organization or world, look at what your competitors are doing, look at marketplace trends, etc.) -Most of the ideas are not from within the company, but instead the outside. This is why many companies invite in customers or other stakeholders to share their ideas. 2nd Phase - Product concept development: Refining ideas; describing features & benefits 3rd Phase - Marketing Strategy Development: read in book 4th Phase - Business Analysis: read in book 5th Phase - Technical development: Producing a refined version of a product. 6th Phase - Test Marketing: Test the complete product & marketing strategy in a smaller geographic area. -Test the waters to see how people react. 7th Phase - Commercialization: read in book

It's important to understand how the different brands at a company manufactures are...

Organized

Line Filling

Product line filling: Adding more items to the present range in the product line within the same price range -Filling and adding more varieties but keeping the price the same -Ex: Add sizes, modified packaging,

Line Stretching

Product line stretching: When a company lengthens its product line beyond its current range by adding higher- and lower-end varieties of the same offering. -Stretch downward -Stretch upward -Two-way stretch

Product Line vs. Mix

Product line: A group of closely related products sold by the same company that are related to each other by function, customer group, or price range. Product mix: The total set of products a firm offers for sale. This includes all the product lines that a particular company offers for sale. Ex: LVMH → Marc Jacobs

Situational Influences on Consumers' Decisions

Sensory marketing: linking a direct sensory experience with a particular product or service

What are the steps of the Consumer Decision Making Process?

Steps: (look at photo) 1) Problem recognition → 2) Information search → 3) Evaluation of alternatives → 4) Product choice → 5) Post-purchase evaluation

What is the hardest phase to get to?

The Growth phase! It is estimated that 90-95% introduced fail within the first year which means they never make it out of the introduction phase.

What are those choices you think very carefully about before you make a decision?

The amount of effort depends on: 1) Level of involvement, and 2) Perceived risk (of negative consequences) -Financial risk, safety risk, social risk, etc.

Consumer Behavior

The process individuals or groups go through to select, purchase, use and dispose of products in order to satisfy their wants and needs.

The Product Life Cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market. 4 Stages: introduction, growth, maturity, decline

Brand Equity

The value of a brand over and above the value of the generic version of the product.

Brand Architecture

The way a firm's brands are organized and how they relate to each other.

Marketing Strategy in the Growth Phase (all about brand loyalty + differentiation):

What target marketing strategies are likely to emerge in this stage of the PLC? - Differentiated marketing strategy Competition: Intensifies rapidly Product: New product variations are introduced; enhanced product features. Advertising: Goal is to stress feature differences between brand differences and encourage brand loyalty; sales promotions used to enhance brand share (emphasize why the apple tablet is better/superior) Distribution: As competition increases, companies try to further increase distribution outlets for their products. (Apple tablets now sold at many places other than the apple store which it was originally only sold) Price: May initially increase but usually stabilizes or drops (toward end) due to competition -Early majority is buying in the growth phase. They wait for early adopters to signal it is a good product.

When is a Brand Important to you?

Which products do you buy where the brand is very important (i.e. you would neve consider a private-label brand)? -medicine, maybe specific food you prefer, maybe clothing Which products do you buy where the brand is not important at all (i.e. you would seriously consider a private-label brand)? -Stuff that if the one you want wasn't at the store then you wouldn't wait to buy it and instead just get the store brand, ex: tissues

Concerns in Product Line Extensions

With both strategies (line filling and line stretching), managers must be careful not to cannibalize existing products! A new product could lead to decrease in sales of an existing product. (Not what you want!) You want the new product to generate new sales and capture a new segment of customers. All decisions have to be supported by data!