Marketing Management Midterm 2

PRODUCT LINE

a group of closely related product items -Campbell's is a food company that is well known for the soup that it produces. However, campbell's also sells juices. -campbell's soup is an example of a product line

PRODUCT ITEM

a specific version of a product -- 1 oz. Doritos Nacho Cheese Chips (a specific version of a product)

PRODUCT MIX

all products an organization sells -2) Spalding, an American sporting goods store, manufactures sports equipment and balls of a variety of sports such as: baseball, football, basketball, gold, etc. All of the products of Spalding can be referred to as the product mix

Segmentation

dividing market into separate groups; who could we exchange with? -the process of grouping customers into relatively homogeneous sets or groups, so that customers within a segment are similar to one another in the way they respond to marketing

Consumer products

product purchased by the final consumers for personal consumption 1) convenience: relatively inexpensive product that merits little shopping effort 2) shopping: more expensive than convenience products, requiring more shopping effort 3) specialty: extensive search effort: consumer reluctant to accept substitute 4) unsought: products that the buyer does not actively seek

Evolving Retailing

"every decade there are one or two retailers that change the game and influence the entire industry" -Walmart: use of IT, supply chain, pricing -Apple: customer experience -Amazon: e-commerce

Advertising and the Promotional Mix

**Ads need laughter, drama, or at least novelty to be memorable **people watch ads to learn about products they will purchase or to reinforce good feelings they have about products already purchased-- meaning advertised products must be shown quickly, the ad campaign must have a consistent look and feel so that viewer recognize the advertiser without having to see product. ****1) ads were viewed 2) the message broke through the communication chaos and 3) the product advertiser was remembered

Marketing Channels and Customer Value

**channel member add value by increasing customer benefits (product, service, image) and by reducing costs (price, and non-price costs) **making perceived benefits (product, image, and service) greater than price 1) Product Benefits; channel members increase product benefits by enhancing product quality. For example, DuPont, produced a synthetic fiber called Kevlar. Various channel member increase the product benefit of Kevlar for the final consumer by using the synthetic fiber automotive applications, fiber optics, and cables. **also do this by BREAKING BULK--potato producers sell potatoes in bulk (thousands of pounds) so peeps can get how much they want **DuPont's indirect channel members enhance products such as Kevlar 2) Service Benefits: channel members increase service benefits by providing a variety of added-value activities: inventory, promotion, payment terms, credit, delivery, installation, training, technical support, repair, warrant, so customers can get products when they want WHERE THEY WANT TO PURCHASE THEM, AND WITH THE TERMS AND THE SUPPORT THEY WANT **IBM sales force creates added value through customer support and service 3) Image Benefits: marketers can build image by selecting channel partners that reflect or enhance the brand. For example, Brioni, an Italian company sells at Harrods creating an image for quality-conscious customers **Hartman luggage uses specialty luggage retailers to enhance brand image 5) Non-Price Costs: lower costs increase customer value, channel members create increased efficiency, and thus, lower costs of exchange by reducing the number of transactions between producers and consumers. **Dell uses a direct marketing system to lower transaction costs

Types of Channels (DIRECT)

**produces higher margins **must bear the cost of channel management **must bear all marketing costs **cannot serve as many customers as indirect or mixed marketing Direct: a direct distribution channel is used to sell products directly to consumers with no intermediaries. -Internet sales represent another example of a direct distribution channel. Ranch Horse Outfitters manufacture handmade horse saddles and tack, which they sell directly to consumers over the Internet. -For example, L.L. Bean sells the famous L.L. Bean Maine Hunting Boots using catalogs—direct distribution channel.

Indirect

**produces lower margins **provides lower channel management costs **provides lower marketing costs -an indirect distribution channel is used to sell products through intermediaries, such as distributors, wholesalers, original equipment manufactures and retailers. -why? because in many situations it is not eficient for manufacturers to sell directly to consumers -Potato farmers do not attempt to sell their potato harvest directly to consumers. They sell their harvest to distributors that sort the potatoes, bag them into different grades and sizes, and then sell them to retailers. Each intermediary plays a role in making the potatoes convenient for consumers to locate and purchase in the grade and quantity that fits their needs. -manufactuers use intermediaries to distribute goods when the intermediary can do it more efficiently than they can because 1) transport the goods to consumers less expensively 2) sell the goods to retailers more easily, and 3) sell the goods to a large group of consumers that already purchase them

The most important method of promotion for consumer goods is...

-Advertising

Swiss Colony sends out catalogs through the mail, containing colorful pictures of holiday cakes, hams, cheese, etc. Customers can send in an order form and receive their product in time for the holidays. Catalogs are an example of:

-Direct Marketing

Types of Channels (Mixed)

-because of the internet, more manufacturers are using a combination of direct and indirect sales. Any manufacturer that builds a finished product can consider selling through a combination--the danger is the consumer's ability to puchase products directly from manufacturers at lower prices than they would pay at retail store. in this case, the retail store will lose sales or be forced to lower their pirce to meet the online price

Market Channel Performance

1) Customer Reach (volume) Direct: not as big as a volume Indirect: large volume 2) Operating Efficiency (cost to serve) Direct: produces higher margins, must bear the costs of channel managment, must bear all marketing costs indirect: produces lower margins, provides lower channel management costs, provides lower marketing costs 3) Service Quality (retention) Direct channel: manufacturer controls service quality, manufacturer interfaces with customer at all contact points Indirect Channel: removes the manufacturer from the end-user customer, manufacturer is dependent of channel partners to deliver the desired level of customer service

Business/Industrial Products

1) Materials and parts: products used in the manufacturing process 2) capital items: products that aid in production 3) supplies and services: operating supplies, maintenace items, services

what are the goals of brands?

1) resonate with customers 2) differentiate from competitors 3) motivate employees ***ALSO, build awareness and distinctinctiveness, make an emotional connection

What is included in the promotion mix?

Advertising, sales promotion, personal selling, public relations, direct marketing

Product Life Cycle

Introduction: gain awareness, promote, sample, inform, and encourage trial growth: maximize market share (emphasize low cost), add features and improve quality, add channels and markets Maturity: maximize profit (harvest product loyalty, modify market and tweak marketing mix Decline: reduce expenditures, milk the brand, maintain, harvest

6 P's of the Retailing Mix

Place: location, access, convenience Product: variety, assortment, brands Pricing: EDLP, high-low, premium Promotion: Advertising, sales promotion, loyalty cards Presentation: atmospherics, signage, lighting, color, music, smell, temperature and displays Personnel: number, knowledge, courtesy, competence, responsiveness, communication, dress

Ch 11: Promotion

Promotion: the promotion mix is the combination of one or more of the communication tools to communicate value to consumers by informing, persuading and/or reminding

Hierarchical Values Analysis

product feature--product benefit--personal benefit--personal value **personal relevance bridge occurs between product benefit and personal benefit

Selective

selective distribution is defined as selling through a limited number of qualified retailers. supports high prices than intensive distribution. ex: DuPoint marketing managers positioned Stainmaster as a premium carpet. Shopping and specialty goods like Stainmaster carpets, home appliances, and perfumes use selective distribution

Unique Selling Proposition and Positioning

***the proposition must be one that the competition does not offer, the proposition must be able to generate new customers, each product must make a proposition to the customer, "buy this and you will receive this certain benefit" -developing a unique selling proposition for targeting groups then delivering it 1) make a proposition to the customer, "buy this product and you will get a specific benefit" 2) it must be unique: something the competition does not offer 3) the proposition must be strong enough to move masses, pull new customers over the product ** a USP brings a brand's positioning into focus by forcing marketing managers to answer pointed questions like: who is the customer in terms of their identity and buying situation? how does the products benefit solve a compelling pain-point the customer has? who is the main competitor and what differentiates this product making it unique? EXAMPLE of a USP: little ceasars pizza competes in the fast food category and provides (affordable, family loving, one-stop meals) to bust parents when they arelooking for a quick, filling meal that everyone enjoys. Little ceasars pizza unlike dominoes is unique because it provides two pizzas for the price of one

Advertising Objectives

**based on hierarchy of effects models, such as AIDA (attention, interest, desire, and action) 1) Cognitive: build awareness 2) Affective: gain interest and liking 3) behavorial--stimulate action **to measure effectiveness of an ad in building awareness (cognitive) and creating interest (affective) there are three questions marketing managers need to ask 1) what percentage of people can remember the ad and product being advertised? 2) what percentage of people remembering the product can also remember the brand? 3) what percentage of people remembering the product and the brand also remember the key benefit? --performance metrics such as: new purchases, repeat purchases, or responses to requested actions provide effectiveness measures for stimulating action (behavioral)

Purpose of Marketing Channels?

**distribution strategy is about selecting marketing channels to get products to customers (deliver value) in a way that maximizes sales and profits **manufacturers use intermediaries (marketing channels) to distribute goods when the intermediary can do it more efficiently than they can because the intermediary can 1) transport the good to consumer less expensively, 2) sell the goods to retailers more easily, and or 3) sell the goods to a large group of consumers already ready for purchase -create value for consumers through four utilities 1) time: making the product available at a convenient tiem 2) place: making the product available at a convenient place 3) form: making the product in the form customers desire 4) possession: transfer product ownership to customer

Sales Promotions and Promotion Mix

**sales promotions provide lower prices to price-sensitive customers who otherwise would not buy. They earn support, interest, and preferred shelf space from retailers -sales promotions are short-term incentives to encourage product trial by new customers and to increase repeat purchases by existing customers. 1) Value-added: contest, sweepstakes, self-liquidating, premium **best at building brand loyalty, defining brand personality, introducing new complementary products to brand champions 2) Price-off promotion: coupons, rebates, and buy-one-get-free specials **price promotions can undermine brand equity and trade to cause a decrease in sales margin. WORK BEST WHEN FOR PRODUCTS THAT ARE CONSUMED FASTER WHEN GREATER QUANTITIES ARE IN THE HOME: On the other hand, it is usually a bad idea to run price promotions on products that customers can easily stock up on, but use at a constant rate.

Types of Distribution

**the best channel system should achieve ideal market exposure **marketing managers consider three types of distribution for products and services: intensive, selective, and exclusive. **factors such as stage in product life cycle, product positioning, and brand personality play a role in selecting the appropriate type of distribution **for example, as products move from the growth stage to the maturity stage, the type of distribution often changes from selective to intensive. **premium products often use selective distribution whereas super-premium products use exclusive distribution **stronger the brand personality, more likely to use exclusive

Retailing Mix

**what are 6 P's of retailing? 1) product: which product categories and brand should be stocked? What should be the mix of regional, national, and private label brands? **product line breadth: number of difference product lines **number of products within a line 2) place: store location can make or break a retailer. Do customers stress convenience, or do they stress selection? 3) price: should the company adopt an everyday low pricing, high-low pricing, premium pricing, or some other pricing approach for our customers? 4) promotion: how can the company best promote store patronage and loyalty? what is the best advertising messsage? which consumer promotions will work best? 5) presentation: atmospherics consists of elements in the store's design that appeal to consumers' emotion and encourage buying. Presentation of store, in-store signage, lighting, wall decorations, color, fixtures, layout and organization, smell, termperatures-- is the presentation consistent with the products and services offered? 6) personnel: the frontline employees set the tone for retailers. they are the face of the store.

Trade Promotions (push strategy)

**when marketing managers offer buying incentives to retailers -retailers are offered reduced prices called trade allowances, as well as free product displays, free merchandise, and other incentives Examples of trade allowances are reducing unit price for 1) purchasing larger quantities 2) offering eye-level or end-of-aisle shelf space 3) highlighting the product with in-store advertising and 4) having store salepeople actively promote the product

Personnel affecting the Retail Mix

-Employee attributes that influence customers' perception of the retailer include RESPONSIVENESS, COMMUNICATION STYLE, KNOWLEDGE, COMPETENCE, COURTESY, AND CLEAN ATTIRE

First Cut Segmentation Process that is often overlooked

-LOVE, SWING, HATE -• SELL TO THE SWING GROUP THROUGH THE EYES OF THE LOVE GROUP—understand the benefits that the brand champions (Love Group) gets, then Sell to the Swing Group this way (biggest opportunity, and IGNORE the hate group

6) A segment is a homogeneous group of potential customers. What of the following is the most useful way to segment a market?

-Behavorial: grouping based on differences in the core benefits customers seek, usage situations, brand loyalty, price sensitivity)

1) You present your market segmentation research to your boss and discuss the different ways to segment your market. Which one of the following would be the best way to segment a market?

-Divide segments by the benefits they get from shopping at your store

2) Customers within a distinct ------ will respond similarly to marketing efforts directed at them

-Marketing Segment

Why does "Me too" positioning not work?

-This positioning approach does not give customers a reason to change

Product

-a bundle of attributes that satisfies consumers' wants or needs

Brands and Branding

-a name, term, design, symbol, or any other feature that identifies one seller's product or service as distinct from that of other sellers 1) branding allows marketers to distinguish their brands from others 2) branding helps consumers identify products they wish to buy again and avoid those they do now 3) branding is useful when introducing new products

1) The Canon PowerShot 2300 is a digital camera. It comes with a 2.7" color LCD, 28mm wide-angle lens, and a dedicated movie button. These would be considered part of the _____________.

-actual product

Channel Behavior

-all channel members have a common interest in selling the product -channel conflict arises when one channel member prevents another channel member from achieving its goal -A PRIMARY CAUSE OF CONFLICT IS DISTRIBUTION OF PROFITS AMONG CHANNEL MEMBERS

competitive angle

-an element of differentness that solves a problem and sparks a personal connection

Presentation affecting Retail Mix (Atmospherics)

-atmospherics: elements in the store's design that appeal to consumers' emotions and encourage buying Interior Atmospherics: lighting, wall decorations, layout, smell, temp, music, color, floors, signage.. Exterior Atmospherics: store front, display windows, entrance, accessibility Signage: price influences sales more than signs, however, if the product is on sale, pricing signage increases sales over no signs--signs dominate at both regular and sale prices -Shelf Space Effect on Sales (special display??) -Colors: warm colors entrances and impulses buyers, cool colors are more pleasant, blue is associated with feelings of serenity and trust

A banner ad on the Kindle Fire says, "enjoy your favorite magazines! Up to 87% off. Click Here." like most other banner ads, this ad's main objective

-behavioral (actionable)

Channel Members

-channel members add value by increasing customer benefits (product, service, image), by reducing cost, and by both

A commercial for a certain brand of toothpaste was aired while Amanda was watching her favorite TV show. She had never heard of this particular brand, but the commercial helped her build awareness and she was somewhat favorably disposed towards the brand. Which two objectives did this commercial accomplish?

-cognitive and affect

Non-Price Costs

-lower costs increase customer value. Channel members create increased efficiency, and thus, lower costs of exchange by reducing the number of transactions between producers and consumers.

Why do companies promote?

-companies promote to communicate value to their chosen customers, they do this by increasing demand and making consumers less price sensitive or (making demand more inelastic) -usually price and demand are inversely proportional, however, with inelastic demand (which is allowed by promotion, advertising) if the price of a commodity rises, the demand decreases very little and is said to be inelastic

Marketing Channels

-creating and communicating value to customers is important for the success of any marketing strategy, but it is NOT ENOUGH. Value also has to be delivered. Marketing managers deliver value when the right product is provided to the right customers, at the right time and place

Value-Positioning

-customers think in terms of value-- benefits vs. cost--"what are the benefits I receive for the price I pay?" using customer benefits and product price, the marketing manager can identify VALUE-POSITIONING ALTERNATIVES FOR CUSTOMERS -how can marketing managers identify value positioning alternatives for customers?? based on three levels of benefits (more, the same, fewer) and three levels of product price (higher, the same, lower) -3 alternatives can be eliminated: customers do not want to pay high prices for same benefits, pay higher prices for lower benefits, or same price for fewer benefits -"Me Too" positioning same price same benefits, doe snot give consumers reason to change -Pay lower price for more benefits? too hard to sustain 1) IM WILLING TO PAY MORE FOR MORE BENEFITS-LUXURY BRANDS 2) IM WILLING TO PAY THE SAME FOR MORE BENEFITS: 3) IM WILLING TO PAY LESS FOR SAME BENEFITS 4)IM WILLING TO PAY MUCH LESS FOR FEWER BENEFITS

Example: The Company Store sells bedding to customers through a catalog system. There is no physical store for customers to visit. They just order the items through the catalog. This is an example of what type of channel?

-direct

Direct Marketing and the Promotional Mix

-direct marketing focuses on direct communication with consumers to encourage a direct resonse to purchase, request for information, or visit to a website -direct mail, catalog, online retailing, mobile marketing, television home shopping, telemarketing -.L. Bean, a leading merchant of outdoor gear and apparel, built a very successful business on the direct marketing model. Founded in 1912 by an avid outdoorsman, Leon Leonnwood Bean, the company started a nationwide mail order business by first collecting information about Maine hunting license holders and then preparing a descriptive mailer. Although L.L. Bean still uses mailers and catalogs, the company has expanded the business by employing digital directing marketing—online retailing.

Early Majority

-early majority people consider buying products that prove to be successful in practice-- the product must complement their way of life rather than redefine it; first hand sampling is important to the early majority as observing other use the product

Early Adopters

-estimated at 13.5% of the population, early adopters are the first to follow the innovates lead. they are a well educated group og people, waiting for a green light from innovaters before pulling purchase trigger

Late Majority

-estimated the other 34 percent of population, the late majority people are more risk averse than early majority. They are skeptical of innovations and buy new products when they are the only reasonable alternative

LF USA and Authentic Brands Group recently created an apparel collection called Marilyn Monroe, which re-imagines the actress's style. The collection is set to launch in mid-March available only at 150 Macy's stores. This is an example of:

-exclusive, not selective, why? ONLY ONE RETAILER (one retailer)

Coach has introduced a new leather handbag that will only be available for purchase at Coach stores. This demonstrates which type of distribution?

-exclusive, why? only available at COACH STORES (one store)

How does marketing segmentation benefit companies?

-first, market segmentation provides an effective mean for reaching customer groups, and second, market segmentation helps with allocating marketing resources, and third market segmentation identifies market opportunities for the company

B2C vs. B2B and promotion mix

-for consumer goods, the most important part of the promotion mix is advertising -on the other hand, for B2B, personal selling is the most important part of the promotion mix

Image Brands

-image brands create value by projecting a distinct and admire image -differentiate from competitors with a better or more uniqe image -marketing mix emphasis? promotion -Consumer Needs and Involvement: social and esteem needs, moderate to high involvement

Why are product life cycles important to marketing managers?

-in the product introduction and growth stages of the product life cycle, marketing managers must transfer enthusiasm of innovators and early adapters to early majority. -how? transferring enthusiasm from innovators to early majority is challenging because diffusion is controlled by imitators not innovators (so by the early majority not the innovators)-- THE PRODUCT MUST SHOW REAL PROMISE TO GRAB THE ATTENTION OF IMITATORS.

Milk is an example of a product being sold through what type of distribution?

-intensive

Candy bars such as "Snickers" are best sold using which type of target market coverage?

-intensive distribution

Intensive:

-intensive distribution is defined as selling through as many retailers as possible. convenience goods such as candy, pop, are good candidates. One would expect strong price competition among retailers. -manufacturers may be tempted to use intensive distribution, but they also need to be prepared to offer generous trade promotions to get their product on shelves, which can cut deep into manufacturer profits

Creative Brief

-marketing managers communicate advertising strategy to advertising agency (managing the creatives) through the creative brief 1) brand legacy: 2) copy strategy: target, benefit, reason to believe 3) executional considerations: strategic goals, tactical goals, execultion tone and style 4) profiles of key customers 5) profiles of key competitors

How Do I Choose A good SEGMENTING PLAN? MADSU

-measurable: individuals can be assigned to a segment and the number of individuals in the segment can be counted -accessible: individuals in the segment can be reached through the company's promotion and distribution channels -durable: segment membership and its size is relatively constant over time -substantial: the segment is large enough to make products profitable -unique needs: the needs/and or benefits of the segment membership are homogeneous within each segment and heterogeneous across the segments

What is the most important promotion tool for B2B goods?

-personal selling

As a mid-level marketing manager for business to business company you are deciding on how to create better brand awareness for current and potential customers. Which of the following promotional mix elements would work best for you?

-personal selling **READ THE PROBLEM-- business to business

Personal Selling and The Promotional Mix

-personal selling is two-way communication between buyer and seller (push strategy) High-cost, complex products and services that require demonstration are great candidates for personal selling. Managing the Sales Force: Sales managers organize, motivate, and mange the sales force to increase sales performance for the company. 1) aptitude: consists of native abilities and enduring personal traits relevant to job performance such as mental abilities and personaility 2) personal characteristics 3) skill level: learned proficiences 4) role perceptions: of the job and expectations of role partners 5) Motivation: desire to expand effort on specific job activities 6) Organizational and environmental factors **what are the three determinants of sales performance? skill level, and aptitude, both increase performance, which leads to motivation **How do I increase the performance of my sales? I can't do much about the environment: i can change motivation, skill level, and aptitude RECRUIT, TRAIN, MOTIVATE: recruitment/selection-- what does this effect? aptitude, we can effect who we are hiring and their aptitude level, sales managers can also train which effects skill, can also supervise with role perception, and can also grant compensation and rewards to create motivation

5) Becky and Hannah decide to have a party at their apartment. They want to feed 30 people without spending very much money, so they decide to buy the cheapest frozen pizzas in the store. What kind of shoppers are Becky and Hannah?

-price shoppers

Advertising and publicity are best at creating

-product awareness and interest

4) of the four ways to segment the market which are (geographic, demographic, psychographic, and behavorial), which way is based on the personalities and lifestyles of people?

-psychographic

Public Relations and the Promotional Mix

-public relations consist of activities designed to manage the public image of a person, organization and brand -Public relations include: events, made-for-publicity television programming, and social media

A local radio station broadcasts a story about the dry-cleaners that requested coat donations. They would clean the coats and deliver them to people in need. The various addresses of the dry-cleaner chain were also broadcast so that donations could be dropped off. Since this featured business did not pay for this exposure, it is benefiting from:

-publicity

Push Strategy

-pushes products through the channel of distribution-- producers direct their marketing activities toward channel members (wholesalers and retailers) to encourage them to order and stock the product -personal selling AND trade promotions play important roles in this process -channel members then use marketing activities to push the products to final customers -For example, Pfizer, a multinational pharmaceutical company, uses a push strategy by deploying pharmaceutical representatives to call on physicians (channel members). The objective is to encourage physicians to prescribe Pfizer products for patients (final consumer)PUSH STRATEGY: 1) Producer -personal selling and trade promotions 2) Channel members (intermediates) -marketing activities 3) Final consumers ***price oriented trade promotions and price discounts are examples of push marketing. these promotional activities attract-in-store attention and push products into shopping carts. ** Push marketing stimulates immediate market results by offering low prices, free samples, and other incentives for people to take action immediately

EDS paid millions of dollars for its Super Bowl commercial about cowboys herding cats. While many consumers thought the commercial was very funny, very few could remember the company of the product afterward. Which dimension did the ad fail?

-recall ***remember: advertising effectiveness is measured by RECALL (remember the ad and the advertiser) and persuasion (remember the benefit)

Channel members (intermediaries) make the selling of products more efficient by:

-reducing the number of contacts between producers and consumers

Rebates and samples fall under which method of promotion?

-sales promotion

Functional Brands

-satisfy functional needs (wash clothes, relieve pain, close shave) -differentiate from competitors by offering SUPERIOR PERFORMANCE or SUPERIOR ECONOMY -Marketing mix emphasis? product, price, and/or place Consumer Needs and Involvement: pysiological and safety needs, relatively low involvement

Exclusive

-selling through only a few retailers. limits the total sales units of product, but provides the setting, service, and exclusivity needed to support super-premium prices. ex: Ferrari, Aston Marin, Lamborghini, Tiff and Co, Bulgari--luxurious retail spaces make their high prices more justified

Moments of Truth

-shoppers make up their minds about the product in about the time it takes to read this sentence -1st moment of truth: 3-7 seconds when the shopper notices an item on a store shelf -2nd Moment of Truth: when consumers use the product, every usage experience is a chance to delight customers **focus on IN STORE ADVERTISING AND PACKAGING

POSITIONING

-the heart of marketing strategy -the act of designing the company's offering so that it occupies a distinct and valued place in the target customer's minds -how do we want the customer to think and feel about our brand? how do we position the product in the customer's mind?

1) Perceptual maps show the judgments customer make regarding performance of brand features and benefits. Gap analysis extends the perceptual maps method by asking customers to make judgments regarding..

-the importance of brand's features and benefits to the buying decision

3) Segmentation is grouping customers into relatively homogeneous groups such that customers within a segment are similar to one another in

-the way they respond to the marketing effort directed at them

Innovators:

-these are the first to try new ideas.

Why do companies promote?

-to increase demand, to make demand more INELASTIC **TO MAKE MORE PEOPLE WANT THE PRODUCT-- INCREASE DEMAND -don't want to make demand more elastic or price sensitive

Behavorial Segmentation

-using brand sensitivity and price sensitivity, can create the following segments -brand loyal shoppers: high brand sensitivity low price sensitivity -Deal shoppers: high brand sensitivity high price sensititvity -price shoppers: low brand sensitivity, and high price sensitivity -Convenience shoppers: low brand sensitivity and low price sensitivity

Channels for Reaching Customers

-when selecting marketing channels, it is important to go with alternatives that highlight what the products and company do best. -considerations 1) customers: how and where do customers want to purchase the product? 2) product: how is this product positioned in the mind's of customers? what is the ideal market exposure for this product? what is the stage in the product life cycle?

Experiential

-while image brands focus on what the product represents, experiential brands focus on how consumers feel when interacting with the brand Differentiation basis: a unique, engaging experience -marketing mix emphasis: product and place or service and delivery Consumer Needs and Involvement: self-actualization needs, moderate to high involvement

Targeting

-who should we exchange with -In deciding whom they should exchange with, Kraft was: target marketing

Pull Strategy

-with a pull strategy, producers direct their marketing activities toward the final consumer to encourage them to ask retailers (channel members) for the product -pulled through channel of distribution by demand from final consumers -Example, Pfizer uses both push and pull strategies, Pfizer advertises products to final user to encourage them to ask their doctors for the product by name **image building mass media advertising and public relations are examples of pull marketing. These promotional activities pull potential customers into a store to seek out and purchase a product. **pull marketing builds brand preference and loyalty by emphasizing "play-to-strength" product distinctions **although marketing manager often feel tremendous pressure to product immediate and measurable results with their marketing budget, pull marketing is an important way to build brand equity and long-term competitive advantage

Benefits of Using Intermediates

1) Break bulk: buy in qualities you want 2) Provide Assortment: find a variety of products 3) Hold Inventory: get the product when you want to get it 4) offer services: promotion, delivery, warranty 5) market efficiency: buy from a few sellers instead of many

New Product Development Process

1) Idea Generation: all great products are solutions to problems. where is the pain point? can be generated from ideas from others: customers, suppliers, employees, competition 2) Idea Screening: -do not MISS the boat (type 1 error) when you reject an idea that is great -do not SINK the ship (type 2 error) when you do not reject and idea when it is false 3) Concept Testing** where the product development process usually breaks down, ideas pass through the screening phase and get additional testing with customers. THE MOST CRITICAL STAGE OF THE PROCESS (first time testing concept with potential customers) 4) Marketing Strategy: target market+marketing mix 5) Business Analysis: in this stage, marketers attempt to make the business case for the concept. project projections, forecasing, analysis, legal work 6) Product Development: to this point in the process new product remains an idea or a concept-- now product developement can begin 7) Market Testing: prior to commercialization, the product is tested in realistic (test markets) to determine the extent to which potential customers will purchase the product -- we place product in several markets (representative cities) and measure: performance -consumer products: about 2-6 cities, cities that are microcosms of larger market, length of test? long enough to observe repeat purchase rates and short if competitors are rushing into market -business products: alpha testing (testing within company), beta testing (testing with select group of customers), trade shows, distributors and dealers when do I take action leading to commercialization?? when I have HIGH trial and HIGH repurchase ******WHAT HAPPENS IF YOUR PRODUCT BREAKS DOWN AROUND CONCEPT TESTING? you have to reinvent your product: domino's example FINAL STEP IS COMMERCIALIZATION--when doe this occur?? the decision to launch the product is the final stage in the product developement process, results from the test markets provide marketing managers with information for this decision

Selecting Target Markets : What makes a Market Attractive?

1) Market Size: is the market large enough to deliver expected profits 2) Expected growth: is the market growing? 3) Competitive position: what is the level of competitive rivalry? is the differentiated product offering value by customers? 4) Cost to Reach: is the market economically stable? THE OBJECTIVE: SELECT SEGMENTS THAT MAXIMIZE PROFITS

Product Development and Innovation

1) any business enterprise only has two basic functions: marketing and innovation, the rest is detail 2) innovation is the lifeblood of the organizations, new products are a key source of growth

What are the three levels of product?

1) core product: personal benefit--is the intangible part of product. Or in other words, it is the personal benefit that makes it valuable to the buyer 2) Actual product: bundle of attributes: the tangible part of the product, or the bundle of tangible characteristics and features that define a product and sets it apart from competitors 3) Augmented product: complementary services the services that complements the actual product and the core product, that is, complementary product like warranties, service contracts,

How do we segment?

1) geographic segmentation: grouping based on differences in geographic regions, population density, population size, and climate. 2) demographic segmentation: grouping based on differences in age, gender, income, level of education, social class, family composition, religion, and ethnicity 3) psycholographic segmentation: grouping based on differences in personality, motives, or lifestyle 4) Behavorial Segmentation: grouping based on differences in core benefits customers seek, usage situations, brand loyalty, usage rate, and price sensitivity. using brand sensitivity and price sensitivity can create other segments

Ways to Position

1) how you are just as good as competition 2) how you beat all the competition 3) how you are loved by popular people 4) how you fit consumers lifestyles 5) how you deliver what is most valued

Sharpening Competitive Angle

1) need to believe: which significant pain-point does this product address that is personally relevant to the target audience? -REMEMBER: big problem=big company 2) Reason to believe: how effective is the demonstration of the product's problem-solving benefits when capturing the imagination of your target audience? -different from NTB and RTB where NTB is about finding a product that addresses a real problem, RTB is about showing that a product solves a problem "my mama always said, seeing is believing" 3) Dominate Situations (blows away expecations): which usage situations or buying situations does the product dominate in a way that delivers superior value? -which usage situations or buying situations does the product dominate in a way that delivers superior value -dominate the situation to "nail" the need 4) Quantifiable support: what are the relevant facts and figures that are used to support or enhance product claims? 5) unique product claim: how is the product distinctly different, better at solving problems, and more memorable than its closest competitor?

Brand Equity

Brand equity is the additional market share/ and or profits a product earns over comparable products because of strength of the brand "all my products are apple!" -in order to develop brand equity, marketers first build brand awareness, brand image, brand loyalty and then brand equity 1) Brand awareness: consumers know about brand 2) Brand image: consumers have a definite impression about the brand 3) Brand loyalty: consumers purchase only their favorite brand 4) Brand equity: i will purchase new product offered by my favorite brand

Laggards:

estimated at 16% of the population, laggards are skeptical of innovations. Resist chang. Buy new products only then all of their favorite alternatives are not longer available