Exam 3 Study Guide

Model of Buyer Behavior

** How do consumers make their purchase decisions? Companies intentionally target the buy. The buyer has his own internal view of the world. The Marketing and other stimuli are filtered through the Buyer's black box and creates a set of Buyer Responses. ** ( Think of a product that you have recently purchased. What signals was the company sending out. What were your own issues you were thinking of as those signals hit you. And how did you respond? ) @ Marketing and other stimuli - the 4P's (price, product, place, promotion) other - Economic, Social, Technological, Cultural, political @Buyer's Black Box: 1. Buyer's characteristics 2. Buyer's decision process - The marketing and other stimuli influence buyer characteristics and the buyer decision process - customers have her/his own way of making decisions - You need to think about what's in the consumer's head (you don't have the decisions made with this black box, we don't know how they make certain decisions) @Buyer's Responses: - Product choices, brand choice, dealer choice, purchase timing, purchase amount we are concerned with choices (1. Buying attitudes and preferences 2. Purchase behavior: what the buyer buys, when they buy, where the buyer buys, and how much the buyer buys 3. Brand and company relationship behavior)

Key Customer Markets

*Consumer markets - (B2C - Business to Consumer) *Business markets - (B2B - Business to Business) *Global markets - most markets are global ex: We import a lot from China, US selling to Canada/Mexico *Nonprofit & governmental markets - Gov buying airplanes to protect us from invasion, Gov buying healthcare from doctors

New Direct Marketing Model

-used as a supplementary channel or medium -constitutes a complete model for doing business today @ Most companies still use direct marketing as a supplementary channel or medium. @ For many companies today, direct and digital marketing constitute a complete model for doing business. -- As a supplemental medium for some firms -- As the only approach for some firms. -- As the new marketing model of the next millennium. Biscotti doesn't go bad, easy to ship, good thing to sell around the holidays, couldn't attract any business, could only be online, was shut down

EPRG Framework

. @Ethnocentric - you do not adapt to the needs and wants of your consumers. Ex: general electrics sent washers to Germany even though Germany didn't want them and don't like vertical opening washing machines because they have so much space @Polycentric - companies attempt to spread out the appeal of their products or services among multiple countries. It occurs when a business decides to broaden its operations and focus on sales outside of its home country. It sell products in those markets based on the characteristics of those markets. depends on regions, ex: sell coconut milk in Philippines and Coca Cola in US Small cars sell better in (Europe, Japan) vs big cars (US) @Regiocentric - using Spanish vs English US broadcaster does casts in Spanish b/c Spanish markets understand Spanish so it's easier for them to listen. @Geocentric - product will sell if you sell it in a favorable place, positive association. Ex: hamburgers wouldn't work in India but could work in Germany because they like sausages/meat

What are the essential elements of a marketing research process?

1. Define the problem and research objectives - there's a problem out there in the world that could be solved with a specific product/service 2. Develop the research plan - get an OK by your boss once you have this method, get a budget 3. Implement the research plan - start collecting and analyzing the data 4.Interpret and report the findings

Buyer Decision Process

1. Need recognition - (buying process starts when buyer recognizes a need) 2. Information search - to look for alternatives 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior - All stuff marketers want to know about - you want to know the mind of the consumer You want to know where and how are they getting this information ex: Ex: You need a car, need to transport in suburbs and NYC, go online and looks through car magazines, newspapers with research. You search for data to figure out what you need and what the possibilities aer. After evaluating the baskets of alternatives you arrive at a decision. Now the company has to delight you in order to have you recommend its cars to others and to coax you into buying a new car when the time is right.

Marketing Process

1. Understand marketplace/ customers' needs and wants 2. Marketing strategy 3. Marketing program 4. Get and make strong profitable relationships 5. Capture value

Major Decisions in Advertising

1. objectives setting - communication and sales objectives: What do you want to do with product? § Where do you want to aim this product? 2. budget decisions - Affordable Approach - Percent of Sales - Competitive Parity : how much do my competitors pay - Objective and Task 3. message decisions -- Message Decisions: Message Strategy, Message Execution -What kind of message do you want to present/prove? 4. media decisions -- How much do you want to present in the media? Reach, frequency, impact - How much do you want to reach out to your consumers? Major Media Types Specific Media Vehicles Media Timing - When do you want to do this? And how much will it cost you? Ex: winter, summer, spring clothing line Ex: blouse - targeting young girls on instagram/media oriented - focused more than on NYT 5. campaign evaluation --communication and sales impact

Brand

@ A name, term, sign, symbol or design, or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. @ Worth a lot of money @ Creating strong demand is essential for extracting value from the consumer. Brands also add to the intangible equity of a company that is represented on the balance sheet of a company @ As consumers we put a lot of trust in the brand name

Strategies for Obtaining New-Product Ideas

@ Acquisition of: Companies, Patents, Licenses @ New Products: Original Products, Improvements, Modifications - In recent years, drug companies have grown largely through acquisitions and licenses. It's much more expensive to develop new products. Acquisition Pharmaceuticals require/need independent companies to get the drugs. They then distribute the drugs - Patents - samsung goes to apple and apple can license some of their products, Samsung and Apple might buy off of eachother - Kodak went bankrupt had a huge number of patents and they put it to auction

the elements of integrated marketing communications (e.g. advertising, etc.)

@ Advertising - what kind of advertising? Ex: press media (newspapers), digital media, direct marketing @ Sales Promotion -- Consistent, clear and compelling company brand messages Ex: BOGO, 2 for 1 sale for 2 weeks, mass media, facebook, 75% off, you've seen these promos in NYC, pop up stores @ Public Relations - Sells the image of a company @ Personal Selling- Door-to door § Where you want to sell your product which department stores · Macys · Tj maxx @ Direct Marketing - Can be through brochures put on windshields § Can be ads put through mass media ·Ads on google

pull strategy

@ Advertising and Promotion can "Pull You" to the shelf to purchase the product @ Product is marketed without human intervention in various ways @ Demand is created through marketing strategy @Pull Strategy ex: If you want to buy M&M's - you know where to buy it, you don't need a salesman to come and lecture you about the product, demand is generated through marketing strategies without a whole lot of human intervention. Selling Lucky Charms cereal - Producers and retailers buy television time to advertise directly to children on morning cartoon shows who will nag their parents to buy them the boxes of cereal. A Lucky Charms purchase decision does not require the same sophistication as a locomotive purchase decision -- Mr. Clean: Advertising and Promotion can "Pull You" to the shelf to purchase the product, No one will sit with you explaining why you should buy this, you just know

Volume (scale)

@ As the phrase implies, Big Data includes, simply, a lot of data. @ Individual companies have access to a lot of it, with terabytes, petabytes, and soon zetabytes being stored and collected. @ Terabytes is the amount of data stored by the average company today

business intelligence (BI)

@ BI helps find answers to the questions you know - what someone bought in the last few months @ BI requires loading structured data from transactional systems and other sources - you know what to w/ date and use it to see how many of a product you should have. @Data captured at the user transaction level - relies data at hand such as looking at credit card history

Personnel Differentiation: Singapore Airlines

@ Became the most pop. airline by differentiating service - good meals, good care of customers, slightly higher prices than competitors, pick up market share, business traveler that's sensitive to price @ Airlines can differentiate themselves in many ways. Here, Singapore differentiates itself by the friendly flight attendants who take care of passengers on their flights.

variety (complexity)

@ Big Data comes from many different sources and includes many different types of information. @ Sets of data typically can't be simply compared to one another using traditional tools. @ Data from various sources - Social media data - Mobile data - Machine to machine systems (GPS, logs, RFID, sensors, etc.) - Database systems - SG network - refrigerator

Big Data

@ Big Data helps find the questions you don't know you want to ask @ Unstructured data is fed from various sources into that system where it's accessed by Big Data applications @ Big data will show you correlations that you didn't see before ex: women buying chocolates, other things that correlate to pregnancy Advertisements in facebook take your search history, who you're friends with, etc. @ Data captured at the user interaction level

Big Data and Marketing Analytics (cont.)

@ Big data : Major players - Walmart, Amazon, Apple Marketing analytics @ Analyze big data for marketing strategy, new product development, product positioning, etc. Oracle, IBM, SAS @The world is awash in data. In recent years, computers have been large enough to process that data and draw interesting conclusions. @You've probably heard of Watson at IBM. Watson is a massive computer that seems very intelligent. It takes large amounts of data, analyzes it, and draws conclusions. @ Highly sought after looking for employees

branding a place

@ Brands can be intangible as well. Ex: Sydney Australia - opera house NY - big apple brand and I love NYC - great place to come and visit. Was developed in the 70s when NY was about to go bankrupt

The Internet: the great disrupter (1989)

@ Brick and mortar → "Click and mortar" companies ex: Macys - a classic "brick and mortar company" is being disrupted by the "Click Only" companies like Amazon. Macys is desperately trying to become a "Click-and-Mortar" company that does business through both its website and its "Brick and Mortar" Bed bath and beyond struggles Sears, JCPenney, Barnes and Nobles disrupted —-> by Amazon and online companies and led to kindles, e-books, and audio books @ "Click only" companies News / business catalogs have collapsed Companies like Facebook, Twitter, and Linked in are online only @ B2B e-commerce - Rapid growth in b2b transactions online @Social network - c2c ( eBay and Facebook, Linkedin and Twitter ) , p2p The size of the effects of these changes are still happening @Network Externality Things are sold on the network now, CD and DVD markets have collapsed Vinyl record to cds- dvds to internet/ streaming (Apple Music and Spotify and Amazon Music has changed relationships between record labels and the services) Apple ties you to the Apple iOS system. If you have all your music stored on iTunes and all your information backed up in the cloud, the "switching costs" of moving to Samsung, LG, or others is huge. You've become embedded in the iOS infrastructure.

public relations

@ Building good relations with the company's various publics by obtaining favorable publicity @Building up a good corporate image - a company people want to buy products from @ Handling or heading off unfavorable rumors, stories, and events. Boeing has had problems with PR b/c of 737 Max. companies hire crisis managers to help fix their image and situation. All companies will do it when they face economic crisis. PR still used to maintain a company's positive image Trump using rep party to help manage the prices, issues could negatively affect company and relations @Public relations is trying to build an image for your company that doesn't necessarily translate into revenue, an image for people to want to buy products from (teachers incorporating an image of classrooms) Ex: NYC Marathon - a great locale for public relations Companies are trying to get their name out there and show that they are associated with the positive image of the NYC marathon Want to show that they're an ethical/environmentally good company No immediate tangible benefits

Security - Importance of securing information assets - Understanding different sources of threats - Ways to address security vulnerabilities

@ Chinese govt. accused of stealing US technology @ We need to protect our radars, don't want to receive foriegn threats, let them know of our cyber techniques that protect secret data @ On corporate level, companies wanted to maintain their competitiveness @ Dark web- where people hold companies even governments for ransom ($50K-$100K)

Image differentiation: Coach and DD

@ Coach By creating brand and image, Coach has been able to capture significant value from the consumer's wallet. They created an image of a high quality handbag for those who can't afford LV Louis Vuitton service Starts at about $1000 @ Dunkin' Donuts' - They differentiate from Starbucks and other stores with cheaper coffee, a broad selection of donuts, and other items on the menu - everyday coffee shop while people may only want to go to starbucks maybe once a week

Corporate VMS (high control)

@ Common Ownership at Different Levels of the Channel (Ace Hardware) @ combines successive stages of production and distribution (manufacturing, wholesaling, and retailing) under single ownership/firm Ace hardware - owned locally by mom and pop ("Mom-and-pop" is a term used to describe a small, family-owned or independent business. A common charge against big chains is that they put mom-and-pop stores out of business, but new businesses often cause the demise of old ones.) More purchasing powers to offer high quality at low prices and pass that to consumers to help fight competitors like Home Depot Shoprite - small independent markets worked together to form a pricing power, successful strategy

New-Product Development and Product Life-Cycle Strategies

@ Companies have to consider new products and product life cycles to effectively compete and surprise. ex: 3M @ dominates the market for scotch tape, post-it notes @ Post its originally came in one size and were yellow — branched out into new colors and sizes (differentiation) @ They were developed because inventor wanted to stick something on refrigerator @ Emphasizes New Product Development. @ 3M is a very innovative company always coming up with new ideas @*1/3 of their sales are from products that have been developed over the last five years!

Positioning map

@ Company wants to create a new product/reposition one - they look at this and ask where are the opportunities (large luxury SUVs) @Companies decide where they want to "position" their products. @In this chart, we look at luxury SUVs by auto brand. Y-axis is price; X axis is Orientation (Luxury vs Performance). The size of each bubble represents the number of cards sold in each brand.

Contractual VMS

@ Contractual Agreements Among Channel Members (Auto companies and auto dealers) @a vertical marketing system in which cooperation is enforced by contracts (legal agreements) that spell out each member's rights and responsibilities and how they will cooperate Ford - Ford does not own distribution center but ford dealers are the distribution members and sell to consumers with the permission of the parent Ford Motor company

Types of Vertical Marketing Systems

@ Corporate VMS (ACE hardware) @ Contractual VMS (auto companies and auto dealers) @ Administered VMS (Kraft)

Cosmetics

@ Cosmetics are some of the most profitable products sold today. They capture value by selling the intangible "hope" @ Operating profit 80-90% @ Costs almost nothing to make. Lots of the value goes into packaging = made to make women look beautiful and that is why it is priced so high @ other ex: Nutrition drinks cost nothing to make but sell for very high prices or yogurts or high protein products. A lot of it goes into the packaging.

If you want to be global, you should have a

@ Customized strategy- what foods are going to sell in a British, French, etc market @ Standardized strategy @ Global strategy - selling fast foods **Think global, act local** - have a strategy that can be implemented into daily routine

market segmentation

@ Cutting market up - divide the market into segments of customers @ Identify bases for segmenting the market @ Develop segment profiles @ Ex: (appeal to audience differently) - age - gender - college versus high school graduates to get the best outcome - class

example of market STP - DWTS

@ DWTS - ABC @they are targeting the 18 - 49 age segment @ they don't care about people under 18 because they don't have any money (Cereal might) @ Only for viewers with the time and interest in their type of products Different demographics among different companies

describe marketing environmental forces

@ Demographic - Ex: Genova ham - Saudi Arabia has a strong political-economic system with a lot of people but they don't eat pork (neither does India) so not a good environment, unlike Germany, etc. Young populations have different purchasing profiles than older populations @Economic - poor countries tend to have different buying patterns than wealthy countries. The market for Tiffany diamond rings is larger in Malaysia than in Myanmar @Socio-cultural Beer will sell better in Germany where there is a culture of beer drinking than in Saudi Arabia where alcohol is prohibited @Technological be aware of wifi, cell phone products iPads sell better in countries where the internet is widely available such as South Korea compared to where it is rare as in North Korea @Political - Legal Political legal system does not allow us to sell to North Korea and Cuba. Google will do much better in the US where broadband search is permitted than in China where broadband search is largely restricted @Natural - Are u selling in an area that is prone to disasters? Floods? Ski equipment will sell better in Switzerland where there are mountains with snow than Sudan where there is desert

direct marketing

@ Direct connections with targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. Fliers and magazines in the mail o Newspapers about groceries and random stuff o Junk mail o Nothing you can do to get rid of it o Most of it you throw out o Facebook uses cookies to advertise to you what you most probably like o Supplemental approach for most companies § However, for some companies it's the only way to advertise ·Like mom and pop shops @ Circulars/junk mail, 99% are not relevant or even looked at Facebook targets the advertisements to make them relevant to you, 60% of facebook advertisements are relevant and made to click it open 2% Response Rate - "good job" for mom and pop stores, it is the only way to advertise

big data applications

@ Education Improving student performance indicators such as graduation rates, faster completion, etc. @ Healthcare Improving diagnosis accuracy, public health, identifying new drugs, controlling outbreaks and diseases @ Financial services identifying customers churn, segmenting by profitability, volume, and length of engagement. Analyzing internal and market data such as internal emails or volatility index measures for risk management such as rogue trading and market volatility Understanding your customers, manage their portfolios, reach out w/ prods they're likely to buy Billy Bean EX: First instances of big data -> MoneyBall Movie/Book - Billie Dean put data together in a successful and rational way for baseball used big data to analyze each player to improve his baseball team, the Oakland Athletics, performance.

positioning differentiation

@ Effective positioning begins with differentiating the company's marketing offer so that it gives consumers more value. @ At the end of the day, you are trying to focus on the group that will provide the most value to your product

a new advertising challenge

@ Ex: DirecTV - over the air cable @ Read carefully the "copy" of this advertisement. Each word is carefully crafted to have the maximum impact to help generate a "call to action" that will hopefully result in sales. These ads look simple, but they may take hundreds of hours to craft @ Direct TV has other competitions + three types of receivers into their packages, Sun Rising image= "up in space" @LONG marketing messages (1-2 pages long) - better sales outcome than ones with 1-2 paragraphs length Spending time crafting messages for better outcomes (We craft our own messages to promote ourselves)

Increasing Vulnerability of Information Resources

@ Interconnected, interdependent, wirelessly-networked business environment @ Smaller, faster, cheaper computers and storage devices @ Decreasing skills necessary to be a hacker - @ Organized crime taking over cybercrime - groups in Eastern Europe hold companies up for ransom unless they pay or give up their store, major problem, used to be individual lone guys @ Organized syndicates @ Lack of management support - makes it easy to hack since management doesn't understand these issues. Companies need a lot of resources to combat hackers EX: Imagine the havoc we would have if someone hacked into the traffic system, national security grid is very vulnerable to the system, power plants could be shut off on the grid, stop hackers from getting in

the internet and its pricing effects

@ Internet gives us access to lots of information we can work with @ Lots of price discrepancies @ Companies want to make sure they can extract as much a consumer wants @ Buyers can - Get more access to instant price comparisons from vendors - Name their price and have it met (have you compared prices to Amazon's while shopping?) @ Sellers can: - Monitor customer behavior and tailor offers to individuals. - Giver certain customers access to special prices (have you received discount coupons online from your favorite stores?) Ex: Best buy - works with the companies and sells a different model and so when customers come in, Best Buy will have the better deal. - Best Buy matches online prices so that when a consumer wants to buy they can satisfy their needs Ex: Formula 401 - kitchen cleaner. They had another competitor so they did a 2 for 1 and sold it for 50% of the price of 1. They exacerbated the other competitor and picked up market share.

J & J positioning differentiation

@ J&J increased the sales of their baby products by modifying not 4Ps but by targeting the adult market in pink bottles baby product (image) @ Their baby product was reused and redesigned to sell for women even though it was the same product by putting it in pink bottles @They repositioned an existing product to get more women to buy this product Johnson and johnson had a good reputation so just by changing the design made j and j profitable @Company could create a new product, or simply modify a new product by repositioning it other ex: Toyota - they repositioned the Toyota Camry to make it sportier and added horsepower, higher price, cheaper than a Lexus, discontinued after 5 years

challenges of Big Data

@ Lack of skilled staff - but huge job growth @ Data governance issues - will facebook be allowed to do what they do with that data @ Organizational readiness @security threats

examples of market intermediaries

@ Macys is the intermediary between manufacturers and the people Assume you are Coach and Michael Kors - two large handbag competitors. Women know these companies. Men may not.The companies buy their assembled handbags from various factories in Asia. Each company has them sewn to its own design so that a Coach bag looks slightly different than a MK bag. Each company sells through intermediaries - for example through Macys and Bloomingdales. But they also sell through their own Coach and MK stores. They compete against each other fiercely for share of the woman's wallet for handbags - and even for some of the men's wallet for gifts to women @ Amazon - doesn't go through intermediary, directly to consumers. Many companies that sell through Amazon so Amazon in this case is the intermediary You can pay for a smartphone that is 1000 vs 500 on amazon @ Ford - Ford manufactures but the car dealers are the intermediaries to sell it to the people; gets hands on consumers with dealers and franchises

idea funnel

@ Maybe you have 1000 ideas but only 5 make it out of the funnel as being reasonable and successful @ Pharmaceutical companies have all sort of drug ideas and only a small percentage are used

the four levels of micro marketing Ex:enterprise cars

@ Micro marketing - four level - Segments - Niches - identifying small but profitable market shares/designs or find products for them - Local areas - local newspapers, local retailers, currently a lot of political ads - Individuals - everyone is advertising for their own markets The new technology allows you to do your own marketing Ex: Enterprise (image) Enterprise Rent-a-Car targets the insurance-replacement market to avoid direct competition with Hertz, Avis, National, and others. They develop a niche strategy Specialty is using people that have car accidents, works with car insurances (easier if you have to rent a car) People at the airport - larger demand - they price it higher They can price these a little higher by focusing on the niche market Toyota Scion targets Gen Y consumers (image) 31 - 40 - Carefully segmented that market - Lower costs but nice looking cars compared to Lexus, Scion is more for lower class/ poor people, Toyota has an upper line

Objective of marketing / Value and Satisfaction

@ Objective : Delight customer + Meet and even exceed customers' expectations. If performance is lower than expectations, satisfaction is low. @ We want to avoid Post - purchase dissonance - when the customer's state of the mind and perception is quite uneasy after purchasing the product or service offering of the brand. @Your product might not live up to what you expected or your customers didn't want it - you may have unhappy customers and failure to pick up market share in market place **The successful marketing program will result in one that "delights" customers. You should think about how you can exceed customers' expectations and ways that you can delight them** - If you buy a product and it breaks the first week, you are not happy. What can the company do to offset the bad will and delight you? Maybe replace the product and give you a refund? Or replace it with a bigger or better product?

Encryption

@ Process of converting readable data into unreadable characters to prevent unauthorized access. @ Scrambling data using a code or formula, known as a cipher, such that it is hidden from those who do not have the unlocking key. @ Key - Code that unlocks encryption @ Public key encryption - Two key system used for securing electronic transmissions @ Certificate authority - Trusted third party that provides authentication services in public key encryption schemes

Disintermediation

@ Product and service producers are bypassing intermediaries and going directly to final buyers largely due to the internet @ *OCCURS WHEN a manufacturer sells directly to consumers bypassing retailers* @ Radically new types of channel intermediaries are emerging to displace traditional ones. Ex: You used to have to call your travel agent and it would take days to get a ticket but now you can bypass travel agency by booking flights directly online. This decimated the travel agency industry. Expedia, Travelocity, Priceline, Hotels.com, and Orbitz vs traditional travel agents. Ex: Bookstores and hardware stores have also disappeared

individual product design - aspects that go into marketing tactics

@ Product attributes - think about what kind of attributes you need/want? @Branding - how are you gonna brand? Do you want it to be luxury or cheap/accessible to the general public? @Packaging - should you make packaging fancy or simple/elegant or put it in plastic bags and ship it? @Labeling - is actually a very complex aspect. You are trying to figure out how to psychologically impact the minds of the consumers when they buy the product. ex: colors, shapes, photos Ex: apple iphone - white box - implies that the phone is so simple to use. This was all designed by steve jobs @Product support services - is the customer able to return a product to a store? Will it have a warranty? everything provides a service. some products don't need (ex: TJ Maxx, McDonalds App, hardware store)

Major Considerations in Setting Price - trying to maximize profitability in the long run

@ Product costs - can't sell anything below these costs (dumping) - **price floor - no profits below this price** --Cost based pricing - cost plus pricing. adding a standard markup to the cost of the product. break even pricing (target profit pricing) @Competitors' prices and other internal/external factors -- Competition based pricing - setting the ceiling of what you can price. ex: Bananas stand - if your competitors has lower prices for bananas then you are forced to lower your prices so you can sell @Consumer perceptions of value -- Price ceiling - no demand above this price - Value based pricing - where you created an image and where your competitors are irrelevant, maximize profits Ex: Take cars. Today, no US auto company can sell an equipped vehicle at less than $15,000 and make a profit. No consumer is willing to pay $150,000 for an American-made car. In between those extremes is where we'll find prices. What about $10,000 Birkin bags that are the ultimate expression of luxury for women. Ex: lexus vs rolls royce Other notes: Burka bags sold for 500 each Rolls Royce does not cost the same as a Lexus to manufacture Lexus has lots of competition from Cadillac, Buick, BMW, Benz, Jaguar

product quality leadership

@ Quality is hard to quantify and come across @Companies need to cultivate an image of quality @Perceived luxury is reflected in high profit margins as companies extract value from consumers Ritz carlton vs holiday inn - is it that much nicer? If marketed appropriately, you can convince the consumer that you are getting good mattresses at the Holiday Inn. Four Seasons starts with very high-quality service—"we await you with the perfect sanctuary." It then charges a price to match.

push strategy

@ Sales person intensive @ Product that is kinda complex to sell Ex: Boeing - Requires intense personal effort to "Push" an airline to buy a Boeing instead of an Airbus They hire salespeople to buy their airplanes - very time consuming Has to push the products into the hands of the buyers @ Salespeople in push strategy can make a lot of money, can be paid even more than CEO, paid on commission, has a very good position - salesperson for locomotives, Best Buy will talk about the merits of the product and why you should buy it compared to another store, Boeing higher commission than them, knowledgeable people (successful cars salesman, engineers) Push strategy ex: Locomotives- very complex products - are sold by General Electric to various sophisticated railroad executives around the world. It is a long sales process that requires a good deal of technical support

Line Extensions - Morton Salt (and other ex)

@ Salt- the ultimate commodity @ Morton salt has been able to extract value from the consumer by extending its line beyond the regular table salt sold in the familiar blue container. @ Morton sells an entire line of salts and seasonings for every occasion @Known for making table salt and rock salt for roads/snow Has a good name and reputation @ Margins on the commodity are narrow @ Wanted brand equity so they differentiated products. People will say that differentiating products will be higher evaluated products @ Morton went into kosher salt that became profitable, and also light salt - had less sodium which helped people and gave alternatives to those who had health problems. @ Others are: Natural seasoning Popcorn salt Salt and pepper shakers @ *They took their name and reputation to relatable kinds of products with high profit margins. Costs them not more than 25 cents to make but they sell it for $1.50* other: Amazon - from books to everything Hershey - chocolate bars to everything Coca cola - cherry cola, diet cola Pepsi Cola - went into foods Kellogg's - corn flakes to making all these flavorful cereals Disney - from cartoons —> bought pixar, marvel, star wars, amusement parks

technology threats - malware

@ Seeks to compromise a computing system without permission @ Methods of infection: -- Viruses - Infect other software or files -- Worms - Take advantage of security vulnerability to automatically spread -- Trojans - Attempt to sneak in by masquerading as something they're not @ Malicious adware - open up something and ex; you find out it's not actually from Best Buy @ Spyware - taking money out bank accounts 2% right now because 15% credit card interest rates 15% vs 25 writing off check because of fraud @ Keylogger & Screen capture

sales promotion

@ Short-term incentives to encourage the purchase or sale of a product or service @ @ To generate immediate sales, the major forms of sales promotion are: --Consumer -- Business -- Trade --Sales force promotions Ex: if you know a business is selling soon, you might have a 2 for 1 sale or something to steal their thunder and pick up their market share. Attempt to increase sales immediately (Ex: Blouse company: big competitor will come out with a line of inexpensive clothes and does buy1 get 1 free) @ Rapid growth in the industry and companies are doing this because: -- There's more pressure to increase their current sales (Ex: If you're a salesperson, if you sell 50 locomotives, we will send your family to the Caribbeans, these are the kinds of promotions to increase current sales, keep shareholders and employers happy, consumers are at a more powerful position than seen before) -- More competition -- Declining advertising efficiency - Too much overload of messages so company will make promotions in their messages so people will remember --More deal-oriented consumers. As consumers, we can easily compare prices and analyze promotions to understand whats the better deal

Market Targeting

@ Target - target the audience accurately, once you target market, you can get a good market share @ Develop measure of segment attractiveness @ You select the segment you want to hone in on/ cultivate Ex: (brands like Gucci) high class vs low class Women - makeup

other ex. of line filling and stretching

@ Tesla is stretching - went from the top with new models, introducing more SUVs and trucks @ Apple is talking about introducing cheaper phone prices - talking about $500 phones, more streaming of music, apps = want to further their customer relationship. Apple is moving from a product model to a service model, over the next 10 years -> primarily service @ Microsoft Office - entire family can use it for $90/year . More service and getting $200 for 90 people

examples of sales promotion

@ Thanksgiving - Black Friday (day for promos, won't last long) @ Companies offer huge sales incentives to help shareholders, may not make a lot of money will be helpful getting that attention (with BIG FONTS) and their products out there, build up excitement @ Macy's - Super Sale - Super Sunday for Super Bowl, traditional holidays have sales @ CVS - $5 Extra Bucks Rewards Every week CVS gives sales promotions, generating revenue to the company the different sales promotions at WalMart or Amazon

Share of Wallet

@ The amount an existing customer spends regularly on a particular brand rather than buying from competing brands. Benefits from increasing a client's share of wallet include added revenue, improved client retention, customer satisfaction, and brand loyalty.

concept of brand equity

@ The differential effect that brand knowledge has on consumer response to the marketing of that brand @ ex: Coca Cola has huge brand equity, allowing it to be the world's #1 soft drink company. The ingredients themselves cost next to nothing. It's the brand that adds all the value. @ Building brand plays into the consumer's psychographic and behavioral space and extracts value from the consumer's wallet. @ Brand equity is an intangible good that acquiring companies are prepared to pay for. Action Cola or Coca Cola sitting on a shelf next to each other? Which one will you buy? - Disney: mouse ears - easily recognizable and is able to take the mouse ears and apply it to all sorts of problems, Coca Cola, McDonald's - For pharmaceutical companies, brand is important because there are a lot of competitors and drugs are cheap to make - Kelloggs - Starbucks - has a tremendous amount of brand equity - costs a couple of cents for dollars prices, Expanded products (food ad music)

velocity (speed)

@ The interconnectivity of people and things via technology is generating data continuously, and businesses are attempting to capture and analyze it in real time. @Need to process real-time live data as it is generated in huge volumes and variety going through system daily @Late decisions -> missing opportunities Ex: Searching Twitter posts, Analyzing video streams, Image recognition, Sound analysis, Text analysis Companies will analyze texts, video streams and Alexa knows what you need to buy just like other companies (social media) Based on your current location, purchase history, liking --> send promotions now for a store near you Target because young women willing to buy specific products were pregnant People interested in buying cars or vacations = there's all sorts of evidence

line filling BMW Should BMW stretch its line product?

@ There are holes in BMW's product line - can they get a market share, profitability to fill up these holes? Do they need to build another factory to do so? They're deciding not to fill the holes for now. Would have gotten more market share if they decided not to come in earlier. If they were to stretch- a whole new category of cars. They could maybe put electric cars to fill these holes and establish a market share in the electric cars industry @Should be considered by the managers on a daily basis about if they should stretch its product line. Must always look at where your company's holes are

product-service continuum

@ There is a broad range of goods and services purchased by the consumers. Note this example ranges from low- value-added commodities like sugar to high value-added services like education @ First determine whether you are looking at a product or service - Sugar- Most pure tangible good - College education- most pure service - Restaurant- in between pure tangible good and pure service Apple Computers - products manufactured Apple provides services w/ classes of how to use the computers McDonalds - you get a product through a service such as the app and the employees at the store

the tasks of a sales force

@ Two-way personal communication between salespeople and customers. @ Salespeople try to establish a relationship ex: through lunch, interactive activity @Salespeople can probe customers to learn about problems @ Adjust marketing offers to fit special needs @ Negotiate terms of sales @ Build long-term personal relationships @ Critical link between company and customers @Represent the company to the customers @ Goal = customer satisfaction / DELIGHTING CUSTOMER + EXCEEDING THEIR EXPECTATIONS, increase sales/profits @Can often make more money than CEO Make sure you hire good salespeople -A good example is Krueger's investment manager career Salesperson talks about issues that the clients might be bothered about (color selection of blouses) b/c it gets reflected back on the company

A Distributor Reduces the Number of Channel Transaction

@ You have a manufacturer that wants to sell to as many consumers as he can @Retail Store Distribution: -- Distribution network will sell it to the stores -- Many manufacturers will sell products to a distribution member and then they will sell it to a store (Amazon made 100K units shipped) -- Amazon products will be in the distribution warehouse @ Intensive - ex: or Amazon- focuses on goods to stores @ Selective - ex: department stores, JCP, dept stores use distribution members @Exclusive - ex: Nordstroms, they have a limited number of distribution centers

Franchise organization

@ a contractual VMS in which a channel member, called a franchisor, links several stages in the production-distribution process TYPES: @ Manufacturer-sponsored retailer franchise system (automobile industry) - -- Ford and its independent franchised dealers - ford makes the cars and sells products through franchise distributors @ Manufacturer-sponsored wholesaler franchise system (soft-drink industry) -- Coca cola's licensed bottlers -- Coca cola makes syrup and sells syrup into independent companies @ Service-firm-sponsored retailer franchise system (auto-rentals, fast food, hotels business) -- McDonald's, Avis, Holiday Inn Mcdonalds - service

administered distribution system

@ a distribution system in which producers manage all of the marketing functions at the retail level @Producers manage marketing functions at the retail level They go to the stores because they know how the products sell and they come and stock the shelves

market skimming

@ a few units at a very high price, comp is limited, cheating the system, new prods have high prices Set a high price for a new product to "skim" revenues layer by layer from the market. @ Company makes fewer, but more profitable sales. Ex: Birkin Bags are Hermes way of skimming the market. Artificially reducing the supply of the bags and creating demand from a certain niche of women allows them to sell these bags at over $10,000 each. They cultivated an image of quality and luxury

Stock Keeping Unit (SKU)

@ a number assigned to a product by a retail store to identify the price, product options and manufacturer of the merchandise. A SKU is used to track inventory in your retail store. @The smallest unit available for keeping inventory control. In soft goods merchandise, an SKU usually means a size, color, and style.

Administered VMS

@ a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties @ Leadership Assumed by One or a Few Dominant Members (Kraft) Kraft - takes responsibility for handling their products. Makes sure stores are stocked with their products and can understand how they are selling, see if they are doing good

types of marketing channels/ system

@ conventional marketing channel @ vertical marketing system @ direct marketing system

applying the market research process

@ flip phones - define problem - You go to find and develop a research plan with help from colleagues, you get budget, ... - You collect and interpret data - And then you report the findings "Putting your ideas in the funnel" @ice cream - Is there a market for ice cream infused with wine? What is the research objective? Find out if there enough of a market in the New York City area to make a profit selling ice cream with wine. - Develop the research plan. Who is going to provide the information. What kind of information do you want. Why is this the right type of information to make a decision. Where will the research be done. When will it be done. Show the timeline. - Go out and pound the pavement. Implement the research plan. Collect and analyze the data. - Then interpret and prepare a report with findings and conclusions

Amazon as a disrupter

@ from B2C (We used to have phone books sent out with all the products and businesses, Now everything is online) to B2B @they started selling services and has become Amazon's most profitable business - cyber criminals. Amazon has tested this because they are the consumers @Amazon - if you have built up a large Kindle library, you know it is only compatible with Amazon products, so you are less likely to jump to a competitor and lose your library. If you pay Amazon Prime for the extended services, you are likely to frequently purchase through their website. @Pentagon handled a $10 million contract with Microsoft. Amazon is expected to fight the Pentagon's decision. They didn't get the 10 mill because they are the owners of the WSJ that trump is against @ We didn't understand digital content 10 years ago. Digital content is everywhere. (no smartphones, watches, photo backups in past) @ Everything is very new - creates interesting opportunities Creates opportunities but also challenges

market penetration

@ have an initial low price to build sales but then later on raise prices, pricing prods low to attract more buyers, stop the companies from competing @Set a low initial price in order to "penetrate" the market quickly and deeply. @ Can attract a large number of buyers quickly and win a large market share. Ex: -- Tech companies do this -- Cable company - gives you 50 dollars a month for a year and gives you services , then later raises the price sharply to 85 -- Prior to 2008, people would buy homes at 1 1/2 percent a year and mortgage companies were making a lot of loans greatly contributed to the financial crisis. Gave people who were unqualified the ability to take loans -- EDLP - everyday low price - like Burlington

veracity

@ how do you know the data is good? Is it real? How do you know someone isn't using a diff identity? @ Data uncertainty and reliability issues Imprecision of data (e.g. interpreting unstructured data such as text data) @ Different level of data quality and structuredness @ Technical data quality issues (timeliness, completeness, consistency, reliability, etc.) @With so much data from different sources being collected, there can be a lot of doubt about the accuracy and consistency of that data. @In order to get actual value from Big Data, it's important to have tools and processes in place to verify and clean up the data. @ Fake data can be as problematic for businesses as fake news is for politics

corporate distribution system

@ one firm owns all the organizations in the channel of distribution @ Manufacturer owns Retail Distributors @ Sherwin Williams - owns their own stores, They don't sell products anywhere else except for in their stores (McDonalds franchises sell McDonalds prods and others)

Self-Reference Criterion (SRC)

@ people's unconscious tendency to resort to their own cultural experience and value systems to interpret a given business situation and make decisions @We perceive products differently compared to other cultures An acceptable product here can be different in russia or china. Products sell well here in U.S. but not in Russia Ex: Germans think our GE washing machines is crap. They would have no interest in the GE washing machines. Germans think they're breaking all the time - Nissan's Moco green car - moco stands for booger in spanish - Exxon - there are two xs in the world because it was acceptable around the world

Types of Big Data

@ structured - Relational Data (Tables/Transaction/Legacy Data) - Machine logs - what purchases you made on a specific date and place and time @ semi structured -Text Data (Web) - Graph Data @ unstructured - Social Network - tweets, FB posts

direct marketing channel

@ the manufacturer sells directly to the buyer @ Manufacturer can go all around the world to sell directly to consumer Such as making sure that supermarket aisles are good Ex: Coca Cola will take responsibility and make sure supermarket has products on their shelves Apple buying their phones online Sears selling Alexa or Apple to consumers with Apple Store

big data analytics

@ the process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information, trying to figure out what it means, how can you reach the conclusions, Massive increase in the amount of data available, Sending out cookies and they know who you are and you're benefiting from that @ new hot deal, high paying field, fairly new, things being done today didn't exist 5-10 years ago

Global Marketing

@A marketing strategy that consciously addresses customers, markets, and competition throughout the world. @Global marketers need to adapt and become sensitive to cultural biases that influence their thinking, behavior, and decision making. ex: Coca Cola is a constant everywhere Since WW2, there has been an increase in global markets

Mothers Against Drunk Driving

@Advertised through TV: Friends don't let friends drive drunk @Tax deductions to run these ads @Emotional appeal to not drive drunk **Marketing often means powerful images to influence "consumers"**

Sales

@Already completed strategy - you've already had a marketing strategy and you're selling existing products @Ex: Buckets of nails that all look alike - you have to try to sell those nails to the people despite other competitors. You can go around or go online to help with sales. You need to sell to your general customers.

New marketing landscape

@As the world changes + becomes smaller and customers become more sophisticated, the marketing landscape is becoming more complex. No one could conceive apple phones being shipped from China. Now a French wine company can have an individual relationship with you through its Facebook page or Twitter account. Customers - especially Millennials - often want to be sure that the companies they buy from are ethical and socially responsible @Rapid globalization @Not for profit marketing - big thing now, hard to find any not for profits in the past Ex: Salvation Army, YMCA, online colleges Nonprofit can even make more $ than for profit - improve the good of people without profit @ New world of marketing relationships ex: Linkedin - thrives on building connections and relationships @ Ethics and social responsibility

the product life cycle

@As you have more and more products, overtime products start to get old and tired and sales go into a decline and then profits do too **The profitability peaks early in the maturity cycle not the growth cycle and you don't want to buy when the cycle starts to decline** The PLC represents an important tool managers use to plan their marketing activities. These follow the quintessential "S-Curve" (Tesla is losing money in this early phase of its life cycle. Amazon is just beginning to make money. Apple, which is in early maturity, is at the most profitable point in its life cycle. Kellogg's Corn Flakes is in decline and is having difficulty showing improved profits.) Michael dell - ran into that problem, shareholders were very angry then extended profit lines The profitability peaks early in the maturity and then starts to decline Great s curve is where you want to buy

Customer Perceived Value (CPV)

@Customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. @Delight your customer - Promise an 8 but give them a 10! You want your customers to view your relationship as superior to the ones they have with other vendors. @What can you do to delight them- to give them superior customer value and satisfaction? Examples? What does Louis Vuitton, the French fashion company, do so well to have a huge amount of customer perceived value over its competitors? Why is Apple's IOS system generally considered to offer superior value to Android systems?

examples of different tastes in different cultures

@Different markets have different demands/desires @Vegemite - a specific product to Australia and few areas but many find it distasteful @Marmite - British @Jello Gelatin - a popular US dessert Many people abroad don't like it - Jello wouldn't sell very well ex: in Taiwanese market

categories of new products - doesn't always have to be brand new

@New-to-the-world @More profitable products with the same price @New product lines - Can be improved as a new product (New and improved toothpaste) @Additions @Improvements @Repositioning - ex: J&J @Cost reductions - as you gain experience and figure out how to manufacture less expensively

Levels of a Product

@Note that there is "more to the product than the product" - A smartphone is a smartphone. Apple designs, packages, and brands its product to capture value from the consumer. Then it delights the consumer with its after-service Applecare and easy updates of its software @Core Product - You start with a core product/service Ex: Blouse - a manufactured good You get it shipped to put into inventory @Actual Product- Then for the actual product, you consider things such as packaging, brand name, the quality, design, features The blouse is then put into the process of design, quality check, etc. Will it have a brand name? Brand equity How is it packaged and merchandised** such as in a high end store vs a discount store Ex: tj maxx vs macys What features does it have? Waterproof? workout gear? @Augmented product - For the augmented product, you consider the installation, delivery, warranty, after - sale service for the product ** Augmented product - what are the other things that you get from the blouse besides the actual product? You may want the blouse warranted maybe you can have it delivered to people's homes **Start from the core and work your way out. Always try to delight and exceed customer expectations**

the differences between primary and secondary data used for research and the benefits of each

@Primary data collection- from own source - Info collected for addressing the problem at hand - Must be relevant, accurate, current, and unbiased data that isn't readily available - Go out and look for people - Ex: 20 people in a room and you show various styles of jeans and you ask them to comment on the styles of holes, zippers, buttons, you go around school and ask people to fill out a survey @Secondary data - from another source, already exists somewhere out there - ex: libraries, internet databases, commercial data services, gov sources - secondary data much *cheaper and easily available* while for primary data, you must do it yourself and can be costly and timely - Must be relevant, accurate, current, and impartial Ex: If you are working on a research project for a not-for-profit organization, you will rely on publicly available data (secondary) but you can also interviewed various stakeholders in the non-profit to obtain first-hand information and insights not available elsewhere (primary)

elements of a modern marketing system

@Supplier - A good relationship with suppliers is a vital part of business success. Suppliers not only provide you with the goods and services you need to run your business - they can also be an important source of information, advice and trade credit. @Company (marketer) - can work with various market intermediaries or can work directly with the final consumers. , Your competitors meanwhile are selling from the same intermediaries or working directly with the consumers (Macys - various manufacturers selling to the dept) @Market intermediaries - group of businesses that will have direct contact with the customers @Final consumers

Promotion (Advertising)

@TV, online, print ad, air blimps, banners etc. @how can you create exposure for your product? @Personal selling - ex: Avon ladies would come to your door and sell, exists in China, personal selling effort @Sales promotion bargains - holiday sales, Black Friday @Public relations- where you are not selling the product but selling the idea. Ex: Johnson and Johnson

Major Stages in New Product Development

@Very few products pass through the filter that goes from idea generation to commercialization. 1. Idea Generation: what kind of products can we develop/ can we create? This is the process of brainstorming and generating any new product ideas, even crazy ones 2: Idea Screening: testing the idea and asking people their thoughts on the product/ service, it may be very helpful or harmful depends on the person 3. Concept development and testing: test the best ideas, ask friends neighbors if they sell 4. Marketing strategy development 5. Business Analysis 6. Product development 7. Test marketing 8. Commercialization

Placement (distribution)

@Where are you gonna sell it? Through what channel? Online, CVS, Macys, Door to Door .. @Locations - drug store East coast vs west coast, (sunflower seeds only made on west coast) ex: Hellmans Mayo is best. East of the market is only Hellman. @ Inventory - small amount, you keep a lot of the products on hand, difficult/dangerous for jewelry companies b/c of break-ins - Keep JIC or JIT ( The just in case (JIC) inventory strategy is much different than the newer "just in time" (JIT) strategy, where companies try to minimize inventory costs by producing the goods after the orders have come in. The older 'just in case' strategy is used by companies that have trouble forecasting demand ) @Transportation- big cars, trucks, microchips in a jet airplane @Logistics - how do you get product to the market (Apple orders shipped from China through plane) @Coverage @Assortments- all kinds of colors/flavors, how broadly sold can this be ex: oreos and its new floors

Marketing goods - ex: Buying tvs at Best Buy

@You need good salespeople to help customers make a decision of what to buy/not buy @Part of the marketing program relies on the people who are marketing and selling the product

Customer Relationship Management (CRM)

@a company-wide business strategy designed to optimize profitability, revenue, customer satisfaction and loyalty by focusing on highly defined and precise customer groups. @Building and maintaining lifelong and profitable customer relationships @ Delight and satisfy customers for long term relationships (Lifetime)

Customer Lifetime Value (CLV)

@approximate worth of a customer to a company in economic terms; overall profitability of an individual consumer / represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. @ The entire stream of purchases that the customer would make over a lifetime of patronage @ COMPANIES PUT LOTS OF EFFORT TO MAXIMIZE the Customer Lifetime Value Ex: Toyota's relationship with kruger. Toyota has a profitable relationship with Toyota owners or if the service was bad, they wouldn't be buying any more, subjective - Buick wants you to purchase Buicks for the rest of your life - Apple wants you to buy iPhones as long as you live - Coke wants you to be their favorite soft drink forever.

Product / Service

@based on your research/intuition @Variety - ex. 7 diff iPhone models @Quality - ex. high or low @Design @Features - ex. ios @Brand name - brand equity @Packaging @Services - ex. computers/ iphone, you don't really need a service for books

customer satisfaction

@customers' evaluation of a good or service in terms of whether it has met their needs and expectations @Companies want to delight and satisfy customers for long term relationships (Lifetime)

Channel Differentiation

@differentiation through the way they design their channel's coverage, expertise, and performance @Channel for which you sell your product. Some companies may only sell through their own channels @ Ex:Amazon sells online Nordstrom - only through certain retailers @People have to eat, people are very busy and don't have time to go shopping, not accessible especially in the city People will go on the internet, and pick the products they want and have it delivered, very successful in pioneering this new home delivering Disrupted the traditional supermarkets. @Fresh Direct serves a niche (addressing a need for a product or service that is not being addressed by mainstream providers) - home delivery of groceries. It has clearly differentiated itself by offering the consumer the ability to order food online and have it delivered to their homes. It offers a new channel of delivery to consumers who otherwise would have to trudge to the traditional markets.

Price (Cost)

@figure whether you should put a high or low price ex: Cars - nobody pays list price, consumers will say it's an anchor List price @Discounts @Allowances - sell your car and get some income @Payment period - you can pay in installments or all at one @Credit terms

Market Segmentation (cont.)

@global @Geographic - dividing the market by cities, states, regions @Demographic- age, income, education ex: 18-49 - sell to a Jewish company - Vegemite - mayo @Psychographic - dividing market by group values, interests, and opinions Ex: things sold for women - pink vs men - blue things sold to men and women are advertising @Behavioral - Smoking cigarettes, marijuana - online because it will be more legal and many people enjoy it people who tend to smoke cigarettes and people who are smoking (become legal in more places, and they'll target whoever wants to buy

Marketing

@more intellectual input, you want to create a good marketing strategy to sell final goods to consumer @creation of new products/services @The marketing concept has more horsepower because you need to understand what is the best way to make everyone happy (you and your boss) @ you have to understand what your customers needs are @The marketing concept is also more sophisticated and focuses more on extracting share of wallet and customer value than a targeted sales concept. @ rather than sales, you are developing more of a relationship with your consumers, trying to understand and delight them @Over time, a market - concept focused company should show higher profit margins than one which focuses only on sales. The exception are those "Selling" companies which have virtual monopolies or oligopolies on goods that are purchased in such quantities that those companies have lowered the manufacturing costs below their competitors' . Examples might be companies in Thailand that supply simple electronic components for computers and cell phones -- Customer orientation - finding what a customer wants -- Service orientation - customer service -- Profit orientation - make sure profit is being seeked and made

Product Line Classification

@specialty stores - - ex: apparel, bodywash, etc like GAP or the Body Shop @department stores - general merchandise. ex: Macys vs TJ Maxx but both serve the same function @convenience stores - located strategically in highly populated units, fewer SKUs stock keeping units ex: 7Eleven @supermarket @category killers - going to a community and disrupting what's going on Amazon - they disrupted and wipeout communities - brick and mortar Home Depot - wiped out hardware industry

trademark

A brand that has exclusive legal protection for both its brand name and its design

vertical marketing system

Alternative Vertical Manufacturer can sell directly sell to wholesaler or retailer @ Manufacturers needed wholesalers maybe cuz of location differences and needed someone to represent and create access for more people Ex: Sears - had a huge catalog and customers could order from Sears was a major disrupter to the wholesaler (distribution center) and sold a lot of goods. Now it's bankrupt

Marketing analytics

Analyze big data for marketing strategy, new product development, product positioning, etc

Stages of Product Life Cycle

At each stage of the life cycle, the marketing mix elements change in response to the marketplace. A new aircraft (eg. the Boeing 777) can take a decade or longer before it becomes profitable. Amazon is still in the very early phase of showing profitability despite the fact it has been in business for twenty years. 1. Introduction - Sales are low - Profits are low or negative - The typical consumers are innovators - One or few competitors 2. Growth Sales are rising Profits are rising The consumers are early adopters and early majority There are few but increasing competitors 3. Maturity Sales are at its peak Profits are peak then start to decline The consumers are the late majority High number of competitors and competitive products 4. Decline Sales and profits are declining Consumers are laggards Low number of competitors and products Wework - losing tons of money after building a lot of real estate. People who lease from WeWork are considered innovators and they have few competitors (introduction phase) As a company grows, the public will be more aware and the company will face pressure from its competitors As you get more and more competitors, pressure on prices and all sorts of real estate companies doing the exact same thing Many competitors will later leave industry when it is no longer profitable (decline) Ex: Oil shell business - saudi arabia dominates

5th step in marketing process

Capture value from customers to create profits and customer equity they have a "wallet" for buying things. You have to take share from some other vendor selling or who might sell to the customer, unless the size of this wallet is expanding. When you buy an iPhone, you are not buying a Galaxy phone.

3rd step in marketing process

Construct an integrated marketing program that delivers superior value. **The successful marketing program will result in one that "delights" customers. You should think about how you can exceed customers' expectations and ways that you can delight them**

Difference between a conventional and vertical marketing system

Conventional : goes from manufacturer wholesaler retailer and then consumer Vertical has alternatives including the conventional . In the vertical , manufacturers can work directly with retailers or the wholesalers

Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for ______, ________, ________, and __________ offerings that have value for customers, clients, partners, and society at large.

Creating, Communicating, Delivering, and Exchanging

4th step in marketing process

Engage customers, build profitable relationships, and create customer delight

diffusion of innovation

Ex: First quantum computers - very pricey 5K for a colored TB @ Innovators- 2.5% @Early Adopters- 13.5% @Early majority (34%) - becomes very popular among the people @Late majority (34%) - where the price will be lowered and most people start to have it during this time price of computer is now only $1K dollars @Laggards (16%) - really late people who buy, now the price is really low national security agency involvement other ex: TiVo has been around for about 10 years, it is probably in the early or late majority stages Cable television, on the other hand, is now appealing to laggards Tesla is still appealing to innovators and early adopters.

how do the 4P's apply to a marketing strategy

First you need to understand customer needs. This takes a lot of research (Steve Jobs was spot on w/ his intuition and was able to research what his customers needed). Then you can develop around the marketing mix so customers will want to come back Product and price target customers: What price? Promotion and place intend positioning: How can you promote the product for the most impact and expose it to the people you want it to? There are various ways to sell too, so you have to decide that.

The four factors influencing market segmentation

Geographic demographic psychographic and behavioral

ex of value and satisfaction - Ford and the Edsel

In the 1950s, Henry Ford thought everyone would like it and the performance of the product. Car buyers didn't want to buy Edsel, because it was a bad/ugly car. They didn't buy it because it didn't live up to the expectations the company created in the prior months with the epic advertising campaign. It was not what the market was looking for In the 1920s, he was still making the Black model T4 but people began buying different color cars and the market moved on He lost market share and the company almost went broke. Finally, he released his stubbornness and decided to delight the customers

inbound marketing

Marketing activities that draw the attention of customers through blogs, Twitter, LinkedIn, and other online sources, rather than using more traditional activities that require having to go out to get customers' attention, such as making a sales call.

differentiated strategy- two way stretch

Price vs quality Fairfield - low price and economic quality, little services provided Mariott grew by increasing the number of marriotts around. They also explored the demands for cheaper hotels. That's why they set up fairfield marriott All their hotels range from different services provided like breakfast, wifi Trying to go after the low middle and high end customers to extract profit They are trying to go to different categories - The concept of stretching and filling More services = more different price points, differentiation Courtyard Mariott - gives you free breakfast Mariott Marquis- conference rooms for business meetings, superior Limit to the number of times can accept ? Fairfield Marriott- free WiFi, free breakfast

4P's of Marketing ("Marketing Mix")

Product, Price, Place, Promotion

Product as an idea - non-profit marketing

Products don't have to be physical objects like books or surfboards Products can be services and ideas

*sales and marketing concept contrasted*

Sales vs Marketing @Starting Point : factory vs market @Focus: existing products vs consumers @ Means: selling and promoting vs integrated marketing @ Ends: profit through sales volume vs profits through customer satisfaction

concept of Customer Delight

The successful marketing program will result in one that "delights" customers. You should think about how you can exceed customers' expectations and ways that you can delight them If you buy a product and it breaks the first week, you are not happy. What can the company do to offset the bad will and delight you? Maybe replace the product and give you a refund? Or replace it with a bigger or better product?

difference between a conventional distribution system and a vertical distribution system

The vertical system allows for the conventional system, but has other alternatives, as well. A wholesales is simply a distributor to the retailers. Specialty products are often sold by manufacturers to specialized distributors who have the know how and resources to sell to retailers. ex: decorative fabrics for sofas - many mills around the world produce these products and rely on distributors to get their fabrics into the hands of specialty distributors who can sell them to furniture manufacturers, home decorators, and the retail channels.

Which one of the following phrases reflects the marketing concept?

This is what I want, won't you please make it?

One of the key tasks of marketers is ____________ and to create consumer perceptions that the product is worth purchasing.

To differentiate their products from those of competitors

Outbound Marketing

Traditional approach using mass media advertising to grab consumers attention

Describe 1st step in marketing process

Understand the marketplace and customer needs and wants First you need to know what the customer needs and wants are - sometimes before they even know it You can understand more about the marketplace through research or intuition Ex: @Steve Jobs knew that customers needed an iPhone even before they did. He needed to create a marketplace awareness about the smartphone. As a result, he was able to create the ios system and made Apple one of the most profitable companies today. He defined what the consumer wanted, developed hugely profitable relationships with customers, something that didn't exist before and created a market. @Henry Ford - did a similar thing with manufacturing automobiles, very successful in automobile industry, manufactured inexpensive cars @Heinz brothers - ketchup that can last w/o refrigeration @Coca Cola was the same thing, developed a marking strategy and program

the 4 V' s in big data

Volume, Velocity, Variety, Veracity

who has best distribution center

Walmart / amazon

Which one of the following statements by a company chairman BEST reflects the marketing concept?

We have organized our business to satisfy the customer needs

contractual distribution system

a distribution system in which members are bound to cooperate through contractual agreements - manufacturers and retailers

conventional marketing system

a multiple-level distribution channel in which channel members work independently of one another @Around since US was founded @ Manufacturer wants to reach as many people @ But first needs to sell to wholesalers, people from all over the country @ Then the wholesalers goes to sell product to retailers @ Retailers then sell to customers

hackers

a person who uses computers to gain unauthorized access to data. @ White hat hackers - Good Guys! - Uncovers computer weaknesses without exploiting them - Improves system security - try to hack in and recover any entries that they code might have from the bad guys @ Black hat hackers - Bad guys! - Computer criminals who exploit a system's weakness for personal gain - malicious and creates all sorts of problems

supply chain

a set of firms that make and deliver a given set of goods and services to the ultimate consumer

non profit marketing

activities and strategies that spread the message of the organization, as well as to solicit donations and call for volunteers. Nonprofit marketing involves the creation of logos, slogans, and copy, as well as the development of a media campaign to expose the organization to an outside audience.

A(n) _____ product exceeds customer expectations.

augmented

Holistic marketers achieve profitable growth by expanding customer share, ________, and capturing customer lifetime value

building customer loyalty

Mr. Lopez buys goods and services for use in the production of products that are sold and supplied to others. Mr. Lopez is involved in ________.

business buyer behavior

________ markets are made up of members of the distribution chain.

channel

The basic role of promotion is _____.

communication

Buying and selling of mass consumer goods and services comes under which of the following markets?

consumer markets

Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image in markets called ________

consumer markets

Advertising appropriations are largest for which type of product?

convienence goods

Product planners need to think about products and services on three levels. Each level adds more customer value. Which one of the following is the most basic level that addresses the question, "What is the buyer really buying?"

core benefit

The most basic level of a product is called the

core product

What is marketing?

creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. You want to create a product of some kind, of some value and actually deliver it to the customer

Marketing managers should adapt the marketing mix to ___________________ and constantly monitor value changes and differences in both domestic and global markets.

cultural values

The task of any business is to deliver ________ at a profit.

customer value

______________________ is defined as the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.

customer value

If actual performance exceeds the expected performance of the product, Then customer is ___________________

delighted

environmental forces that impact marketing - you must be aware of what's going on

demographic economic socio-cultural technological political- legal natural

The factors such as the buyer's age, life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept that influences buyer's decisions refers to which one of the following characteristic?

demographics

Whether to sell via intermediaries or directly to consumers, how many outlets to sell through, and whether to control or cooperate with other channel members are examples of decisions marketers must make about

distribution

The ________ refers to the various companies that are involved in moving a product from its manufacturer into the hands of its buyer

distribution chain

Listing alternatives that will solve the problem at hand and determining the characteristics of each occurs during which stage of the final consumer's decision process?

evaluation of alternatives

It is more costly to retain current customers by satisfying their needs, than to get new customers by taking them away from a competitor.

false

Merchant wholesalers sell goods and services directly to final consumers for their personal, nonbusiness use.

false

Often, the best way to improve customer value, and beat the competition, is to be first to satisfy a need that others have not even considered.

false

unsought goods

goods that the consumer does not know about or does not normally think of buying, and the purchase of which arises due to danger or the fear of danger and lack of desire. The classic examples of known but unsought goods are funeral services, encyclopedias, fire extinguishers and reference books.

product line decisions - product line length

group of products that are physically similar or intended for a similar market Ex: skittles, sweet, sour, different colors @ Product Line Length - number of items in the product line - You don't want to just sell one of a product but many - Lengthen within current range through colors, designs, etc. ex: different color blouses, skirts, dresses @Stretching - Lengthen beyond current range - want to have blouses of diff colors/sizes and want to expand to other prods - Can be: Downward , Upward , Both Directions @ Filling - Lengthen within current range Honda went from selling motorcycles to small cars to luxury cars at it "lengthened" its range. It filled its luxury Acura brand by offering more vehicles under the Acura nameplate. Today they now make corporate jets. Ex: You don't just want to sell one blouse. You can go into outerwear, dresses, pants, shirts, go upward in price/go downward in price Coach - wants to make it cheap and accessible in the outlet malls but it'll be more expensive at the actual coach stories

merchant wholesalers

independently owned firms that take title to the merchandise/goods they handle They are two types; - Full service wholesalers perform all distribution functions - Limited function wholesalers perform only selected distribution functions - About 80% of wholesalers are merchant

________ markets include a wide variety of profit and nonprofit organizations, such as hospitals, government agencies, and schools, which provide goods and services for the benefit of society.

institutional

the employment opportunities for students thinking about data analysis as a career

jobs are growing and opportunities are unlimited the talent gap in the field means there is more demand than supply for these positions. That means high starting salaries and more upside opportunities - Jobs in analytics are growing because many are not trained in this field. Opportunities are unlimited - According to the WSJ, the biggest opportunities in data analysis heavily involve marketing analytics. - Marketing Analytics is used in 3 out of 4 opportunities listed by WSJ for the next growth in big data -- Consumer traffic patterns using camera surveillance -- Social Media -- And Consumer Images

In ________ consumers may share a strong need that cannot be satisfied by an existing product.

latent demand

In relationship marketing firms focus on __________ relationships with __________.

long-term; customers and suppliers

ex: Blouses (levels of a product)

manufactured product, has various features (more = more differentiable), does it have an interesting design that you can differentiate? Is it high quality or cheapest thing from cheap mills? Are the buttons cheap or from exotic woods? Does it have a brand name or does it have brand equity to add value? How is it managed (warehouse in Iraq?) or fancy place in Nordstrom? Maybe it's waterproof or designed for formal activity or party activity? You don't need installation on a blouse. Are they delivering to your home or do they give you 90 days credit when you buy it? Is it returnable? - wasn't always easy to send back items in the past Objective: to exceed customers' expectations and delight a client = successful = good sale = good long term market relationship Ex: McDonalds App - service Another way of providing extra services to customers to delight the customers. They get that life time relationship with you.

Which of the following is NOT considered a type of reseller?

manufacturer

Which of the following firms emphasis on product's benefits to the customers rather than on product attributes.

market oriented

Which of the following firms emphasizes on product's benefits to the customers rather product attributes?

market oriented

________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share.

market penetration

____________ is defined as communication with large numbers of customers at the same time.

mass selling

The solution to price competition is to develop a differentiated:

offer, delivery, and image

Niche Marketing

plan wherein a firm specializes in serving one market segment with particularly unique demand characteristics Identifies small but profitable market segments and designs or finds products for them.

What is the last stage of the consumer decision process?

post purchase behavior

The buying process starts when the buyer recognizes a _________.

problem or need

The ________ concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

product

Newsletters, catalogues, and invitations to organisation-sponsored events are most closely associated with the marketing mix activity of:

promotion

A person's ________ consist(s) of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior.

reference groups

A consumer contest is an example of _____.

sales promotion

If performance meets consumer expectations, the consumer is ________.

satisfied

the various ways of differentiating markets

segment niches channels

The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization's products

selling

The ________ is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots.

selling concept

everyday low pricing (EDLP)

setting prices lower than competitors and then not having any special sales

market positioning

the ability to influence consumer perception. Competitive advantages allow a company to achieve regarding a brand or product relative to competitors. The objective of market positioning is to establish the image or identity of a brand @ Positioning - figure where it should be sold with best positions for product @ Develop positioning for target segments @ Develop a marketing mix for each segment

marketing analytics

the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance @ Spending on data analytics -- Firms are increasingly spending more and more on data analytics - with analytics in marketing and product development at the forefront -- At Baruch, marketing analytics teaches students to: - Use analytics to better target customers - Use analytics and models to develop products and services - Covering 67% of the firm's requirements! @ Demand for "Big Data" is expanding rapidly. All of the cash register receipts flow into a retailers' home office. With that they can analyze who is buying, how much they are spending, and what they are buying. @ Target had so much consumer data that they were able to analyze when a woman was pregnant often before her family even suspected. @ Big data is replacing "intuition" or "gut feeling"

brand loyalty

the degree to which consumers are satisfied and are committed to further purchases Ex: Apple - people want iPhones

channel of distribution

the route a product follows and the businesses involved in moving a product from the producer to the final consumer

How is the Apple TV + an example of marketing?

they created a new product, they are still in the process of creating/communicating it, there's lots of advertisements. As of November 1st, they began to deliver the product and maintain customer relationships

A channel of distribution is any series of firms (or individuals) who participate in the flow of products to final user or customer.

true

Auction sites, such as eBay, QXL are examples of Consumer-to-Consumer (C2C) channels.

true

Convenience products usually have intensive distribution because sales of these products tend to have a direct relationship to availability

true

Marketing Mix is the most visible part of the marketing strategy of an organization.

true

The primary purpose of marketing activities is to facilitate and encourage exchange transactions with potential customers.

true

In marketing theory, every contribution from the supply chain adds ________ to the product.

value

Describe 2nd step in marketing process

you have to have a plan - the marketing strategy - which is executed through the marketing program