Principles of Marketing Quiz 2
There are three methods of determining advertising budgets - % of sales, competitive-parity and objective/ task method. How do they vary in approach?
% of sales views sales as the cause of promotion rather than the effect of promotion, you get a certain % of sales for your budget. Competitive-parity- setting the promotion budget to match competitors based on their analysis of competitors' advertisements. Objective/task method- developing the promotion budget by (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, (3) estimating the costs of performing these tasks.
Of the ten different "execution styles" of advertising, what do you think are the three best?
(totally opinion here...I'll give 4 and what they are): 1. Slice of Life - showing one or more "typical" people using the product in a normal setting 2. Scientific Evidence - presents survey or scientific evidence that the brand is better or more liked than other brands 3. Musical - People or cartoon characters singing about the product 4. Personality Symbol - Creating a character that represents the product...GEICO Gecko, Pillsbury Doughboy, etc.
A "Promotional Price" is set but there are often restrictions on them... what are they?
*Promotional Pricing*: temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales -Restrictions: special-event only sales, limited time offers, must pay in cash, etc
A Manufacturer likes setting a "Reference price" as a psychological marker. How do they use it?
*Reference Price*: prices that buyers carry in their minds and refer to when they look at a given product -influence reference price by selling expensive products that do not sell as well to make their less expensive products seem like a steal
When a company adopts "High/ Low" pricing (JC Penney) and battles against EDLP pricing (Walmart) how do they compete?
-Hi-low price: High-low pricing (or hi-low pricing) is a type of pricing strategy adopted by companies, usually small- and medium-sized retail firms, where a firm charges a high price for an item and later sells it to customers by giving discounts or through clearance sales. -Everyday low price (EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
Apple Pay is a potential dis-intermediator? How are they offering change?
-It is a digital wallet that contains all credit card and other payment forms info. -This means people will be able to ditch their thick wallets when going out. -It means that consumers are less likely to forget their wallets/money at home because most already bring their phone with them everywhere. -*Apple Pay makes its consumers' lives easier*
What are the different considerations when one changes, increase or decreases prices from the customer? From the competition? What is the purpose of the "low-price fighter brand"? How are "store brands" used to serve this function?
-*From the Customer*: though this often coincides with lowered sales, price increases make their products seem more exclusive/premium from the buyers p.o.v. Price cuts make the products seem as though they have lost quality and brands image may be tarnished -*From Competition*: interprets price cuts as the company trying to grab a larger market share, that it's doing poorly/trying to boost sales, or that they are trying to cause entire industry to cut prices. -*Purpose of Low Price Fighter Brand*: to adda lower-price item to the line or create a operate low-price brand in response to competitors price changes in order to compete -*Store Brands are used to serve this function* by giving low price fighter brand credibility it needs to be competitive in the industry
How are geographic and shipping costs used as a tactic to pass along price discounts or increases? Example might be FOB-origin pricing, Uniform-delivered pricing, zone pricing, basing-point pricing or freight-absorption pricing.
-*Geographic Pricing*: setting prices for customers located in different parts of the country or world -use geographic and shipping costs to pass along price discounts and increased by charging all customers shipping fees regardless of their proximity to the factory or the weight of there packages. -Examples are all just different versions of how to do this
What is Omni-channel retailing? Why is it so important in today's environment for retailer to survive?
-*Omni-Channel Retailing* is integrating all available shopping channels and devices into a seamless customer shopping experience -*Important* because it allows consumers to buy wherever and whenever it is most convenient for them to. In turn, their experience is bettered and their loyalty to the retailer increases -Also *important* because physical brick and mortar stores are often going out of business so they need a new channel to sell products
Psychological pricing is used when a store practices "even / odd pricing". What do they do?
-*Psychological Pricing*: pricing that considers the psychology of prices and not simply the economics; the price is used to say something abut the product -This method involves setting a price in odd numbers (just under round even numbers) such as $49.95 instead of $50.00
How does a consumer use "Showrooming" to get the best price? Why do retailers hate the practice?
-*Showrooming*: the practice of checking out merchandise in stores, then buying it online
Is "web-casing" (web-rooming) or "show-rooming" a better strategy to sell products?
-*Webrooming*: the practice of first checking out merchandise online, then buying it in traditional stores -*Showrooming*: the practice of checking out merchandise in stores, then buying it online
What is the role and the future of a "shopping center" and a "lifestyle center"? What is "retail convergence" and why is it so highly competitive?
-A shopping center is a group of retail business built on a site that is planned, developed, owned, and managed as a unit. -Lifestyle centers are smaller, open-air malls with upscale stores, convenient locations, and non retail activities such as playground, hotel, movie theatre, etc. -Retail convergence is the merging of consumers, products prices, and retailers. This means great competition between places that were mutually exclusive before like sears and Best Buy, which makes it hard to differentiate a certain company.
Name the five types of activities in the "Promotion Mix" and what roles do they play as they execute a Marketing program?
-Advertising- Form of mass communication to promote goods or services. -Public relations or publicity- Also a way of mass communication. It is not a paid form of mass communication that involves getting favorable response of buyers by placing commercially significant news in mass media. -Sales promotion- Covers those marketing activities other than advertising, publicity, and personal selling that stimulate consumer purchasing and dealer effectiveness. Sales promotion mainly involves short-term and non-routine incentives, offered to dealers as well consumers. -Direct marketing- Form of advertising that allows businesses and nonprofits to communicate directly to the customer, with methods such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising -Personal selling- Personal selling includes face-to-face personal communication and presentation with prospects for the purpose of selling the products.
What is a "corporate" chain, franchise chain and a "voluntary" chain in retail?
-Corporate- Two or more outlets that have common ownership and control, centralized buying and merchandising operations, and similar lines of merchandise are considered corporate chain stores. -Franchise- Franchise arrangements are characterized by a contractual relationship between a franchiser (a manufacturer, wholesaler, or service organization) and franchisees (independent entrepreneurs who purchase the right to own and operate any number of units in the franchise systems). -Voluntary- These are associations of independent retailers, unlike corporate chains. Wholesaler-sponsored voluntary chains of retailers who engage in bulk buying and collective merchandising are prevalent in many countries. One example is True Value hardware stores.
What is a "Limited- service Wholesaler" and give three examples like rack jobber, drop shippers?
-Limited-service wholesaler is one who offers less than a full-service wholesaler. -Cash and Carry Wholesaler- carry limited line of fast moving goods and sell to small retailers for cash without delivering. -Truck Wholesalers- primarily a selling and delivery function. Carry limited line of semi perishable items and sell for cash to supermarkets, hotels, schools, etc. -Rack Jobbers- Serve drug and grocery retailers, mostly in non food items. They send delivery trucks to stores and pick up goods which they price, keep fresh, setup point of purchase displays, and record inventory.
Describe the seven different types of Retail Store models and what they focus on as their business models? (Specialty, Department, Supermarket, Convenience, Discount, Off-price and Superstore).
-Specialty- offers specific products with expert knowledge about the specific product. -Department- the most complex offering a wide range of products and can appear as a collection of smaller retail stores managed by one company. The department store retailers offer products at various pricing levels. This type of retailer adds high levels of customer service by adding convenience. -Supermarket-Supermarkets have significant buying power and therefore often retail goods at low prices. Usually offer food and drink but have recently diversified (home, electrical, fashion, etc) -Convenience- Located in residential areas this type of retailer offers a limited range of products at premium prices due to the added value of convenience -Discount- This type of retailer offers a variety of discounted products. They offer low prices on less fashionable branded products from a range of suppliers. (Think TJ-maxx, etc) -Off-price- retailers who provide high quality goods at cheap prices. They usually sell second-hand goods, off-the-season items etc. -Superstore- Offer a wide variety of all types of products at low prices to get everything you need from one store.
Laws prohibit "retail price maintenance" - where a manufacturer requires a dealer price a product at a certain level, creating MSRP. What is MSRP and what is Price Discrimination with channels?
-The manufacturer's suggested retail price (MSRP) is the amount of money the producer of a product recommends the product be sold for in retail stores -
Why are "International Prices" hard to determine and what are the factors that go into setting them?
-They are hard to determine because they price a company should charge for its product sin different countries depends on many factors including: economic condition, competitive situations, laws and regulations, and the nature of wholesaling/retailing systems -Factors: costs, customer perceptions and preferences, targeting middle class
Why is the choice of a channel critical in maintaining your brand image / essence?
A company's channel decisions directly affect every other marketing decision. Pricing depends on whether the company works with discount chains or high-quality speciality stores. The firm's sales force decisions depend on how much persuasion and support its channel partners need.
What is a Marketing Channel? Give some examples of types of channels used by markets.
A marketing channel is a distribution channel that is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Some examples are Enterprise that revolutionized the car-rental business by having off-airport rental offices, Apple started selling music for the iPod via the internet on iTunes. FedEx in the express package delivery. Amazon.com selling everything with no physical stores.
What is a "customer value delivery network" and how do marketing channels play a key role in satisfying consumer needs?
A network composed of the company, suppliers, distributers, and customers who partner with each other to improve the performance of the entire system in delivering customer value. A marketing channel is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer.
What is a "category killer" in retailing?
A retail chain store that is dominant in its product category.
Apple Computer gets a strong premium price for their product and rarely discounts. Their competitors like Xiaomi have created a cheaper alternative for their phone. How should Apple counter this type of competition?
Apple counters this type of competition by focusing on the user experience. While companies may produce similar products that cost a lot less, consumers aren't paying for the physical product, but instead for the better quality and simplicity that Apple provides. By doing so, Apple can afford to price their goods at a premium.
What are the six stages of Buyer - Readiness"?
Awareness --> Knowledge --> Liking --> Preference --> Conviction --> Purchase.
Marketers are often asked about the "return on advertising investment". What is the problem and why is this important to track?
Because sales and profits are based on things like product features, price, and availability. These are not direct effects of advertising so it is hard to know. Advertising mainly increases brand awareness and brand preference.
Describe the current strategies of Amazon and Walmart in their current Price War for Online Supremacy? What approach and competitive strategy are each one using?
Both are competing with each other from a low-pricing strategy standpoint. Amazon is ahead because of their online interface that is more friendly to online consumers. Their distribution networks are more efficient and they offer a wider variety of products. Walmart is able to use the pluck and ship method which has the potential to provide faster delivery (even in 30 minutes). Walmart can also offer more convenient pick up and return.
What are the latest trends in wholesaling as technology changes and disintermediation occurs?
Both wholesalers and retailers have begun to cut one another out. Wholesalers have opened up their own retail divisions, and retailers have become massive wholesalers. As technology advances, wholesalers need to take advantage of the new efficient tools that come out and keep them ahead of the curve. They also need to continue to offer more services like advertising and marketing so retailers will continue to buy from them.
What are Target-Profit Pricing and Break-Even Analysis and how are they used to determine price?
Break Even pricing is setting price to break even on the costs of making Target Profit Pricing marketing a product or setting price to make a target return
Guerilla Marketing and Buzz Marketing Campaigns have a unique but effective design. How do they work?
Buzz Marketing involves cultivating opinion leaders and getting them to spread information about a product or service (Netflix recruits people with a large Instagram following to post). Guerilla Marketing is like what was done to Lego/Shell, and is characterized by low-costs and being very unconventional.
Give some examples of "channel conflict" and how do "power" relationships play in channel management. What is "horizontal" conflict and "vertical" conflict?
CHANNEL CONFLICTS- disagreements among marketing channel members on goals, roles, and rewards. HORIZONTAL CONFLICT - occurs among firms at the same level of the channel. Ex: Ford dealers competing. VERTICAL CONFLICT - conflict between different levels of the same channel. Ex: problems between McDonald's corporate and McDonald's franchisees
What is Vertical Integration of your channels, "Corporate VMS"? Describe the issues of Direct versus Indirect channel management.
CORPORATE VMS - integrates successive stages of production and distribution under single ownership. VERTICAL INTEGRATION - consists of producers, wholesalers, and retailers acting as a united system. One channel member owns the others. DIRECT CHANNEL - the company sells directly to consumers INDIRECT CHANNELS - the company uses one or more levels of intermediaries to help bring its products to final buyers
Why was the ad campaign, "CVS quits" launched in a very high profile manner?
CVS made this campaign so visual to show their customers that they are adhering to their brand mission: "helping people on their path to better health." People felt more inclined to shop at CVS because they knew that CVS was taking care of their health and truly cared. Although they lost billions in tobacco sales, people trusted them and were more inclined to shop there.
Why did Bass Pro Shop succeed where Cabela's failed? Was it a good idea to buy them?
Cabela's failed because they fell victim to intense competition from online vendors and Bass Pro Shops did not. It was a good idea to buy them because Bass Pro was second to Cabela's and more successful so combining the two companies would make a super company that would be successful. It was also a good idea for Bass Pro Shop to buy Cabela's because* they were able to do the merging acquisition at a cheap price because Cabela's was failing and their synergies lined up. Cabela's was modeled after Bass Pro Shop anyways
Printer Manufacturers, Amazon Kindle and shaving companies often use "captive" pricing to make profits. How does it work?
Captive pricing is setting a price for something that must be used with the main product (i.e. razor blades, printer ink). Set high mark-ups on the supplies, but keep main product low. Amazon makes Kindles cheap so they make money off of people buying stuff on the Kindle, not with the actual technology. 77% of Keurig sales come from single serve cups, not the actual coffee maker. Two part pricing=Fixed fee (The Keurig)+Variable use fee (individual cups)
What is a "service retailer" and what is their role or mission?
Service retailer refers to a retailer whose product line is actually a service, including hotels and motels, banks, airlines, colleges, hospitals, movie theaters, etc. Their mission is to provide a specialized service for the customer.
When would you use "Price-Bundling" prices and what are the good and bad points?
Combine several products to get a certain price (i.e. Combo meal at McDonald's). Can promote sales of all items in the bundle, but might deter people from buying the entire bundle if the price is too high.
Why is a company constantly re-evaluating their channel strategy? Economics, Control and Adaptability all play a role.
Companies are constantly re-evaluating their channel strategy because external factors are constantly changing. An example is that in an economic downturn, producers want to distribute their goods in the most economical way. A company's strategy must also be feasible given its size and financial situation. Consumer demands are also changing so company's must choose a strategy that best meets their demands.
How does a franchise represent a marketing channel for a company and what is good and bad about it as a way of doing business? What is the difference between manufactured- sponsored retailer, wholesalers and service-firm-sponsored retailers?
Companies that set up distribution channels through contracts with franchisees, they cannot readily replace these channels with company-owned stores or internet sites if the conditions change. Management needs to design its channels carefully, paying attention to today's selling environment and tomorrow's too.
Why is a "comparative" advertising tactic effective and what problems can it cause? How did Microsoft use it against Apple?
Comparative advertising allows consumers to compare two products. It provides reasons why your product is better than a competitors. Consumers might be learning this information for the first time. It causes problems when the ads come off as more hateful than informative. Microsoft used comparative advertising to show how Microsoft products were used by regular everyday people and that Apple was too expensive and out-of-touch.
Why is "Competition-based pricing" often preferred by the sales function? What are the pros and cons?
Competition based pricing is preferred by the sales function as it is a good measure of how much value customers perceive in your product compared to that of one's competitors. It is also a good means by which to measure competition in one's industry. Unfortunately, this can also be used as a means by which to exterminate competition by pricing at margins that smaller companies cannot compete with
The discipline of "Content Marketing" requires many creative people to build the new messaging communication method. They must succeed over "paid, owned, earned and shared communication channels. How do they do this?
Content Marketing - creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels. They do so through both traditional and new media and through controlled and not controlled marketing...they map the customer journey and work them through each step.
Converse lets the customer be involved in creating the ad campaign. What do they do?
Converse realized that their primary value proposition to consumers had morphed into a blank canvas from which to express themselves. Recognizing this, they initiated the "Made By You" campaign, which provided a focus point for the thousands of social media pictures of people's customized Chucks and which illustrated Converse as an instrument of self-expression.
Customer Value-based pricing is best determined in what way?
Customer value based pricing involves setting price based on buyer's perception of value rather than on seller's cost. This means that the marketer cannot design a product and marketing program and then set the price. The price must instead be determined with all other marketing mix variables before the program is set
What is the difference between passing along discounts or rewarding allowances?
Discount=Price reduction to those who pay their bills promptly; decrease to those who buy in high quantities; seasonal discount to those who buy a product out of season Allowance=Price reduction for bringing in an old product, "trading-up"
"Disintermediation" is the constant concern of players in the marketing channel? When does it occur and give some examples of how companies fight it.
Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones. To fight it, companies must continue to innovate to avoid being swept aside.
Pharma pricing model is often criticized. What are the two sides of the argument for why Pharma prices are set the way they are? What is Predatory Pricing? Price fixing?
Drug companies are promoting and pricing products beyond the reach of many people who ned them. They are increasing the prices at a drastic rate, much more than inflation, and often household can not afford the treatment. One example was that an AID's medication was increased from $13.50 per pill to $750 per pill when it only costs about $1 to make it. The company perspective is that the high cost of drugs is justified due to the high expenses that these companies infer. In order to put a drug on the market, years of research and develop needs to occur which is extremely costly. In addition, even if a drug does make it to the market, about 70% of them never generate enough revenue to recover the cost of development.Predatory pricing (also undercutting) is a risky and dubious pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. Theoretically if competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. Price fixing is when all company's agree to keep a product around the same price.
What is "Dynamic pricing" and how does Amazon implement it?
Dynamic pricing is the idea of continuously adjusting prices to meet the needs of people in different areas/situations. Amazon used DP on Thanksgiving day to meet the prices of retailers like Best Buy. They constantly match prices to their competitors.
Name several types of new retail store models?
E-tailers, dollar stores, warehouse stores, mom and pop stores.
Logistics Information Management is critical to making a large enterprise run efficiently. What is ERP - Enterprise Resource Planning and how does it help a company replenish their products?
ERP is the integrated management of core business processes, often in real-time and mediated by software and technology.ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll.
Describe the difference between an exclusive, selective or intensive distributor.
EXCLUSIVE - giving a limited number of dealers the exclusive right to distribute the company's products in their territories. SELECTIVE - the use of more than one but fewer than all of the intermediaries that are willing to carry the company's products. INTENSIVE - stocking the product in as many outlets as possible
Why is your channel strategy so important in developing an International marketing program?
Each country has its own unique distribution system that has evolved over time and changes very slowly. These channel systems can vary widely from country to country. Thus, global marketers must adapt their channel strategies to the existing structures within each country.
What is Informative, Persuasive and Reminder advertising methods?
Informative: suggesting new uses for a product informing the market of a price change, Describing available services and support, Correcting false impressions, Communicating customer value, Building a brand and company image, Telling the market about a new product
Bass Pros Shop and Jungle Jim's are two Retail business models that represent "experiential retailing" shopping. Is this a trend and the way of the future for stores or is it VR?
Experiential retailing is useful to a company to attract people who wouldn't normally enter the store, but VR could be a new wave of experiential retailing that could put the old model of massive, museum like stores such as Bass Pro out of business.
Gavina Coffee uses 11 different types of channels to help them grow. What are the variety that they use in the 20 states they sell their products?
Gavin uses a couple of different channels to sell their coffee. The company uses retailers, wholesale stores, food suppliers, and even small shops to sell its coffee. These different channels have allowed it to reach different markets. Gavin's largest channel is McDonald's.
Bill Rossiter in his talk to the class gave create to the "Geek Squad" in the survival of Best Buy. What did they do for the company
Geek squad revived Best Buy by offering a Tech squad of employees that could diagnose and fix problems with the various electronics that Best Buy offers. Geek Squad fulfills the need for customers who purchase expensive, elaborate electronics but don't know how to set them up or troubleshoot when things go wrong. Thus, by focusing on the customer and what tech products would best suit them and their specific needs, Geek Squad allows Best Buy to be a turnkey solution to electronics.
Holiday Inn Express used Fallon Agency to help them develop the "I stayed at a Holiday Inn Last Night" campaign. what was their target marketing and approach that made it so effective?
Holiday Inn Express targeted business travelers with their clever ads. The ads depicted people who had stayed at Holiday Inn performing incredible feats despite having no experience other than staying at a Holiday Inn. The ads were effective because it demonstrated how staying at a Holiday Inn Express was going to make you into a more effective employee.
How does Home Depot partner with their suppliers on shared projects and add value?
Home Depot allows key suppliers to use its stores as a testing ground for new merchandising programs. The suppliers spend time at Home Depot stores watching how their product sell and how customers relate to it. They then create programs specially tailored to Home Depot and its customers.
How does the IMC of Lowe's solidify around the slogan, "Never Stop Improving" for their employees and customers and business?
IMC (Integrated Marketing Communications) - Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products. Lowe's uses television commercials with this slogan, have used 6-second vines to show how to fix home-improvement problems, YouTube videos for DIY fixes, as well as a similar presence on Facebook and Twitter.
How is your Brand effected - If you are using a "prestige product" strategy? If you are use "comparison" pricing strategy? If you use a "technical or innovation selling" strategy?
If you use prestige product, you are seen as the highest-quality producer in the industry. You are able to charge more for your products and you become a status symbol. If you use comparison pricing, you compare your low prices to competitors. You are seen as the cheapest producer and your products are affordable for everyone. If you use innovation selling, you are seen as the most innovative producer. Your products are on the cutting-edge in technological advancement.
What new role has Public Relations Departments had to take with the development of Social Media? What is a Social Media Command Center?
It's a PR department's responsibility to build and maintain national or local community relationships. Now with social media, PR uses websites, blogs, and social media (You Tube, FB, Insta, Snapchat) to connect with their customer base. PR has now had to make sure these sites don't have negative content, and they portray the brand's unified identity. Command Centers are where make sure that a brand's marketing exposure is positive. People who work here respond to inquires and requests as fast as possible to make sure that the customer base is being taken care of and so they do not complain on a public platform. The PR Department has become assimilated into the Social Media department as a result of the quick response time necessary for social media accusations and opportunities.
JC Penney made a major mistake in changing their price philosophy. What did they do?
JC Penny took away their circular ads in newspapers and coupon systems that allowed customers to hunt for deals. Since coupons were such an enormous part of their brand image for such a long time, they lost customers who no longer wanted to shop at JC Penny. Customers didn't care much about the everyday low prices, they just wanted their coupons back.
Lululemon takes prestige pricing to the limits. What do they do to get value and such high price products?
Lululemon focused on creating high-quality clothing. They used really nice and expensive fabric in manufacturing their clothing. They also focused on using innovative fabrics and creating a unique style. Lululemon also built itself into a status symbol. Women who wear it want to be seen as spiritual, healthy, very flexible, and for whom money is no object.
Give some examples of "Non-personal" communications and what is their role in the Mix?
Non-personal communication channels carry messages without personal contact or feedback, including major media, atmospheres, and events. For example, grand openings, shows and exhibits, public tours, and other events of the like.
Who within an organization should set price? Product Developers, Finance, Sale, Marketing?
Management must decide who within an organization. Depending on the industry, it might make more sense for a variety of positions to determine price. In large companies pricing is typically handled by divisional or product managers. In industrial markets, salespeople my be allowed to negotiate with customers within certain set price ranges. Even so, top management sets the pricing objective and policies, and it often approves the prices propose by lower level management or salespeople. Other companies have pricing departments which help set the price of products
New Product Pricing is very tricky. When a company practices "market - skimming" what are they doing?
Market skimming pricing is the practice of setting a high price for a new product to skim maximum layer by layer from the segments willing to pay the high price, the company makes fewer but more profitable sales. Company's product and image must be good; competitors should not be able to enter the market and underprice stocks easily
In "The Old Rules of Marketing Are Dead" the author said "channels choice can make you or break you". Why is that true?
Marketers must know their audience as well as they know their brand and then identify and effectively exploit the channels that are used by and important to these target audiences. The channels chosen should strengthen, not weaken, a brand's positioning.
Netflix is seen as a disrupter because they have not been afraid of "disintermediating" many companies business models and roles in the marketing chain. They believe in "disintermediating" themselves. What does that mean?
Netflix is already one of the most innovative companies in the world. They are on the cutting edge and leading the industry. Rather than be content though, Netflix continues to innovate. They strive to displace their current business model
How does New Balance shoes track their product requirements for their stores and what advantages does it provide?
New Balance tracks what kind of shoes are selling the best. New Balance then focuses their efforts on producing more of these and ensuring that their stores always have them in stock. This tracking allows New Balance to know what kind of shoes are the most popular. They can then focus on making and selling those shoes and not waste time and resources on less popular shoe-types.
How does one practice Cost-Based Pricing and what is the advantage and disadvantage of this method? What is Cost-Plus method of pricing?
One practices cost based pricing by setting prices based on the costs of producing, distributing and selling the product plus a fair rate of return for effort and risk. Advantages are that one can work to be a low cost provider and focus on selling more or keep costs high and use this as justification for charging more. The disadvantage of this model is that it does not focus on adding value to the consumer experience, which can be dangerous. Cost-Plus pricing is a method by which the price is determined by adding a standard markup for profit to the cost of the product.
When selecting advertising media, companies are no longer happy with being told how many have viewed their commercial but what is the "consumer expressions". Why?
People who react and engage with an advertisement are more likely to actively pursue a product. Since it can now be done with social media, companies care what people are saying and how they are reacting to their ads.
How does Amazon and P&G work together in their Vendor-flex program.
The Vendor-flex program means that Amazon and P&G co-locate "in the same tent." Amazon reduces the costs of storing bulky items in its own distribution centers. P&G saves money by cutting out the costs of transporting goods to Amazons's fulfillment centers.
How is a "Price" created for each product and how is it validated by the marketplace?
Price is created for each product based on the amount of value a customer is willing to give up (in terms of $) in order to obtain the value found in the product. Thus, if the price is less than or equal to the value that a customer perceives in a product, said customer will buy the product. This is how price is validated by the marketplace
Price is one of the biggest headaches for Executive management but also the biggest opportunity to improve profitability. Why do executives not want to deal with it?
Pricing is difficult, because one has to balance between charging too low a price (and unnecessarily forfeiting portions of one's margin) versus charging too high a price and loosing market share/customers
How does the product line under the brand Method benefit from the new media mix?
Product lines benefit from the new media mix because the marketing material is more specific and targeted at certain groups. Messages are now more personalized which helps the product line.
"Segmented pricing" is used to pass along lower prices by segment, geography, demographic, age group or sex. Is this fair and why do they do it?
Segmented pricing is when companies sell the products at different prices. For example, state universities charge higher rates for out-of-state students. Price demands might be different in different areas. Women might be willing to pay more for shampoo, even though the ingredients are the same as men's shampoo.
How does "RFID" technology make an integrated logistics management supply system simpler and inventory management more accurate?
RFID is a technology where small transmitter chips are embedded in or placed on products and packaging. It allows companies to know exactly where a product is located physically within the supply chain.
How did the Ritchie Brothers establish price for their used Machinery and what did they do to increase that price? What is the advantage for the Seller when they use "auction-pricing"
Ritchie Brothers uses an auction system by which they let customers bid on a piece of equipment on certain auction days. They let customers compete with one another to increase the price. The advantage of this system is that the seller is getting the most that any customer is willing to pay for an item.
What has changed and is new in today's "Marketing Communication Mix" that requires companies to adopt new tactics and strategies?
Several factors have changed. First consumers are changing constantly because they are much more informed at all times. Second, marketing strategies are changing, going away from mass markets to micro markets. Finally, digital technology has caused changes in the communication between customers and firms.
How did Snicker's bars use Digital Media to enhance their IMC campaign of "You're not you when you're Hungry"
Snicker's bars used digital media to communicate their campaign on multiple platforms across all sorts of devices in different ways, shapes, and forms. Thet used social media, televison, print, etc.
Why would a copy advertise with "Doing Good" or being a Responsible Steward of the environment? What do they hope to gain? Examples are AT&T's "It Can Wait" or Dove's "For Real Beauty" or P&G's "Like a Girl" campaigns?
Social responsibility is an important part of many corporate missions today. This is because many companies have recognized that they are inexorably linked to the welfare of their customers and the world around them...AT&T's anti-texting while driving campaign, P&G challenges gender roles, Dove talks about breaking down societal norms in accordance with beauty.
The airline industry pricing practices and the Spirit Airline strategy has many aggressive features in it? Describe Spirit's practices and different approaches that are used, like ala carte or auctions?
Spirit practices extreme good-value pricing, by which they charge extra for everything from a bottle of water to a pillow or blanket. They do not pride themselves on customer service but instead on the money they save customers. They also offer auction seating with no set prices on some flights
Describe how a Supply chain management works in delivering marketing value?
Supply chain management is the managing of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.
Taco Bell uses price as a weapon to compete. What is their method and how does target marketing contribute to their strategy of what to charge?
Taco Bell uses the customer value-based pricing strategy in order to sell a lot of items for a low price. Since customers see this low price, they are more prone to buying items from Taco Bell, as they feel they are getting a good deal on the meal. Taco Bell understands that it is competing for customers in a market that is looking for good value when it comes to price. They try to cater to this by offering their products at values which will match customers' perceived value.
What is the difference between "push' and "pull" strategies for advertising campaigns?
The "Push" advertising strategy involves pushing the products to resellers, who then push those products to the consumer. The "Pull" advertising strategy calls for spending a lot on consumer advertising and promotion to indue final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel.
What is the role of a "sales agent" in the marketing value chain? How do they become more powerful and vital for a business?
The "sales agent" is part of the primary marketing value chain. They are responsible for creating, communicating, delivering, and exchanging offerings that have value for customers They become more powerful and vital for a business when they are able to sell large amounts of a product.
Why must the Price Demand curve be studied before any strategy or decisions are made on price?
The price demand curve must be studied before any pricing decisions are made because there is a different amount of demand for each price level. Therefore, companies must evaluate if the extra revenue they earn per sale is greater than the number of sales they will be losing due to higher prices.
Why is the shopper at the Whole Foods store willing to use a different type of pricing philosophy at that store and what is their main criteria for shopping there?
The pricing philosophy used by the shopper at Whole Foods is that they are getting the highest quality food and are therefore willing to pay more for more value. The main criteria for shopping at Whole Foods is therefore quality (and health), as customers are willing to pay more knowing they are getting the best possible product.
Why has the warehouse retailer model been so success, like COSTCO and SAM's Club?
The warehouse retail model has been so successful because they only minimally markup offerings, they pass along lower costs to customers, and they provide "differentiated and high quality" products. They are also convenient and provide a wide variety of materials in one centralized location.
What are the elements of a good advertising strategy?
There are two major elements of a good advertising strategy: creating advertising messages and selecting advertising media.
What are the major advertising decisions a firm has to make?
They have to decide on the following major decisions: objective setting, budget decisions, message decisions, media decisions, and advertising evaluation.
GEICO pounds away with one, simple message. Why was this effective and how did they move up to second place with double-digit revenue growth?
They have used their "15 minutes could save you 15 percent or more on car insurance" slogan for 20 years and that has led to their increased revenue growth because the ads are said to be "unskippable" because of how short, to the point, and funny they are.
What is Third-Party logistics (3PL) and why have these companies mushroomed over the past 20 years?
Third-party logistics providers are independent logistics providers that perform any or all of the functions required to get a client's product to market. They've mushroomed because many companies hate doing logistics "grunt work." (bundling, loading, unloading, sorting, storing, etc.)
Trader Joe's has a new Pricing Mix and marketing strategy that changes the nature of pricing decisions. How do they price? Good-Value pricing or value-added pricing?
Trader Joe's practices good-value pricing, as it cuts most amenities to the bare bones. Instead, it focuses on saving consumers money on higher quality products by cutting down on amenities like large parking spaces and lots of brand options.
Volvo Trucks IMC required great synergy in working with the many different ways to advertise. What did they do? How did they use "Live Tests"?
Volo used 6 different YouTube videos that were very unique and in-depth that allowed them to show off the many features of the trucks without having to explicitly state what was great about the trucks. For example, one video showed steering precision by barely avoiding killing a ballerina.
How does the selling models of Volvo and Tesla threaten the existing car industry marketing channel strategy? What is the advantage and the disadvantage?
Volvo and Tesla have begun selling their cars directly online. An advantage of this is that it will boost sales. A disadvantage is that it could alienate independent dealers.
An aggressive approach to eliminate competition is "Market-penetration pricing". What is the goal and objective of this strategy?
When companies set a low price to enter the market quickly and deeply. Market must be price-sensitive so low-prices product more growth; production costs must decrease as sales increase; and low-prices must be maintained
What decisions do you have to make when you globalize your product and have to promote it in other countries? What decision did the Oreo product manager make as they moved into China?
When you globalize your product you have to pay attention to trends and wants in other countries. Words don't always mean the same thing and some brands might be more respected than others. In China, for example, the Oreo product manager realized that they don't have the same desire for sweets as the United States, so they had to lower sugar content. Also, Oreo noticed that wafers were more popular than the cookies, so they entered the wafer market. Finally, they had to have the kids teach their parents in advertisements because the older generation didn't know how to "Twist, Lick, Dunk"
What is a Wholesaler and what vital role do they play in the economy?
Wholesalers are firms who sell goods and services to those who are buying them for resale or business use. They play a vital role in the economy because they supply the various items to different companies throughout the world that we use every day.
Define WOM marketing and when is it most effective?
Word-of-mouth is the impact of the personal words and recommendations of trusted friends, family associates, and other customers on buying behavior. WOM Marketing works best for products that are expensive, risky, or highly visible.