Marketing 201 Final

AMA Ethics

Ethical Norms • Do no harm • Foster trust in the marketing system • Embrace ethical values Ethical Values • Honesty • Responsibility • Fairness • Respect • Transparency • Citizenship

Market-entry strategy and commitment

Firms consider four steps when determining whether or not to go global. Which of the following is the third step in the process?

Straight extension strategy

If a firm retains the same product for domestic and foreign markets, the company is demonstrating which type of product strategy?

Logistics

Implementation • Logistics is the process of designing, managing, and improving the movement of products through a supply chain. --• Inbound (e.g., raw materials, parts, components, and supplies) --• Outbound (e.g., finished products) • Reverse logistics= includes product returns, recycling, and material reuse, and waste disposal --• Closely related to sustainability Functions -Order processing --enterprise resource planning (ERP) system = software solution that integrates information from across the entire company, including finance, order fulfillment, manufacturing, and transportation -Warehousing = storing goods in anticipation of sale or transfer to another member of the channel of distribution -Material handling = moving of products into, within, and out of warehouses. -Transportation -Inventory control =developing and implementing a process to ensure that the firm always has sufficient quantities of goods available to meet customers' demands --radio frequency identification (RFID) = firms tag products with tiny chips that contain information about the item's content, origin, and destination

Adoption Pyramid

(from bottom to top) • Awareness - Customers see that innovation exists. - Media blitz --Massive advertising • Interest - Customers see how the product satisfies a need. - Seek out information --May use teaser advertising • Evaluation - Costs and benefits - Impulse purchase --Provide info to customers to how a product can benefit them • Trial - Actually experience or use the product -- Demonstrations, samples, trial-sized packages • Adoption - Purchase is made --Make product available --Provide product use info • Confirmation - Expected versus actual benefits and costs --Reinforce customer's choice through advertising, sales promotions, and other communications

Mar-tech

-Short for "marketing technology," - this term is commonly used to denote the fusion of marketing and technology. -A particular focus is placed on the application of marketing through digital technologies.

Promotion Mix

-the communication elements that the marketer controls. -The elements of the traditional promotion mix include: -- advertising --sales promotion --public relations --personal selling --direct marketing

SWOT analysis

In step 2 of the strategic planning process, a firm analyzes its strengths and weaknesses and the opportunities and threat sin its internal and external environment. What is this analysis called?

situation analysis

In step 2 of the strategic planning process, a firm engages in a(n) ________ to assess its internal and external environments.

Bottom of Pyramid (BOP) Markets

4 billion+ consumers, living on less than $2 daily, but have $5 billion+ in collective spending power

knockoff

A _____ is a new product that copies, with slight modification, the design of an original product.

Awareness

A company is likely going to use a media blitz in which step of the adoption pyramid?

Key Types of Intermediaries

Agents or Brokers • Channel intermediaries may use brokers and agents in marketing their products. • No title or legal possession of the goods --• ex) food, real estates, insurance, fashion, etc. Distributors •Distributors frequently have a business (and, mostly exclusive) relationship with manufacturers that they represent. •The distributor becomes the manufacturer's direct point of contact. --ex) corona beer --> republic national distributing company Wholesalers • They buy merchandise in large quantities from manufacturers, process and store that merchandise, and sell it to retailers & others. -- Independent (ex: BJ's, Sam's Club) vs. Manufacturer-owned (ex: Ferguson--> show rooms for intermediaries) Retailers •Retailers consist of small and large for-profit businesses that sell products directly to consumers. --Ex) Target, Whole Foods, Macy's

Evaluation of alternatives

In which step in the consumer-decision making process will a consumer narrow down choices deciding on feasibility, and comparing the pros and cons of each remaining option?

Recession

An economy experiencing falling demand, employment, and income is in which stage of the business cycle?

Competitive Advantage

An edge over its competitor that allows it to have higher sales, higher profits, more customers, and great success year after year.

portfolio analysis

As part of the strategic planning process, step 4 includes conducting a ________, which evaluates a firm's business mix and assesses the potential of an organization's strategic business units.

Technical development

At what phase of the new product development process is a firm likely to create a prototype of the product?

Decline stage

At what stage of the product life cycle is the goal to remain profitable and decide whether to keep or phase out the product?

Information search

At what step in the consumer decision-making process is a marketer likely to utilize search marketing techniques such as search engine optimization (SEO), sponsored search ads, and shopbots to help consumers find and learn more about their products?

Business Markets: Buying and Selling When the Customer is Business

Business-to-business (B2B) markets (also called organizational markets) include: - Manufacturers and producers- --> Buy raw materials, components, or parts --> Manufacture their own goods - Resellers (retailers and wholesalers) -->Buy finished products for the purpose of reselling or leasing to customers or other business - Government and not-for-profit institutions -->Government Market = Federal, state, county, and local governments -->Not-for-profit organizations = Education, charity, community, and other public service organizations Business-to-business demand: • It differs from consumer demand. • "Derived" Demand -- It stems directly or indirectly from consumer demand for another good/service • Inelastic demand = occurs when changes in price have little or no effect on quantity sought. --> E.g., NFL • Fluctuating demand = small changes in consumer demand create large changes in business demand. --> E.g., rising fuel price --> canceling air travel --> airlines • Joint demand = occurs for two or more goods that are used together to create a product. --> Gilette shaving kits // printer + print materials

Cross-sectional vs. longitudinal designs

C.S.: A study in which data are collected at only on point in time. Long.: A study in which date are collected that can be ordered in time; also defined as research in which date are collected at two or more points in time.

Future of Services

Changing demographics: -population ages, service industries that meet the needs of older consumers will see dramatic growth. -Companies that offer recreational opportunities, health care, and living assistance for seniors will be in demand. Technology: - explosion of the sharing economy that uses technology to allow everyday people to provide as well as consume services. - major survey reported that 44 percent of U.S. adults (more than 90 million people) have participated in the sharing economy, playing the roles of lenders and borrowers, drivers and riders, hosts and guests. Globalization: -The globalization of business will increase the need for logistics and distribution services to move goods around the world - accounting and legal services that facilitate these global exchanges. -global deregulation will affect the delivery of services by banks, brokerages, insurance, and other financial service industries because globalization means greater competition. Proliferation of Information:

differential benefit

Differential benefits set products apart from competitors' products by providing something unique that customers want, that is a competitive advantage. -Ex) Southwest Airlines --> Appeals to budget-conscious consumers

Branding Strategies

Individual vs. Family Brands • Individual brand strategy uses separate, unique brand for each item in the product line -->Ex) L'Oreal • Family brand strategy is when product items share a common brand name. -->Ex) Campbell's National and Store Brands • National brands = produced and marketed by a manufacturer. • Store (or private label) brands = offered by a retail store or chain under an exclusive trade name. --> Kirkland = Costco Generic Brands • Generic brands is a strategy in which products are not branded and are sold at lowest price possible. Licensing • Licensing is when one firm sells to another firm the right to use a brand name for a specific purpose for a specific period of time. Cobranding • Also called brand partnership • When 2 brands form an alliance to work together. --• Ingredient branding: branded materials becomes "component parts" of other products

Influences on Consumer Decisions

Internal Factors: • Perception • Motivation • Learning • Attitudes • Personality • Age Groups • Lifestyle External Factors: • Situational Influences --Physical environment --Time • Social Influences --Culture (subculture & microculture) --Social Class --Group Memberships --Opinion Leaders --Gender Roles

Maintenance, repair, and operating (MRO) products

Light bulbs, mops, and cleaning supplies are products business customers consume in a relatively short time. Which product category best fits these products?

beta

Many innovative technology products are released as a(n) _____ test to allow usage and feedback from a small number ofusers who are willing to test the product under normal, everyday conditions of use.

Marketing People, Places, and Ideas

Marketing People • Politicians, athletes, and celebrities are commonly marketed. --• Consultants "package" celebrities --• Name changes and rebranding are common --1)The pure selling approach = An agent presents a client's qualifications to potential "buyers" until he or she finds one who is willing to act as an intermediary. --Ex) sold to record companies, talk-shows, talent agents, etc. --2)The product improvement approach = An agent works with the client to modify certain characteristics that will increase his or her market value. -- Ex) new name, genre, image, skill lessons, plastic surgery, etc. --3) The market fulfillment approach = An agent scans the market to identify unmet needs. Agent then finds a person or a group that meets a set of minimum qualifications and develops a new "product." --Ex) looking for market opening, develop new product for unmet need / market Marketing Places • Place marketing strategies treat a city, state, country, or other locale as a brand. Marketing Ideas • Idea marketing -- Gaining market share for a concept, philosophy, belief, or issue

My focus is on the customer who buys our products.

NOT comprise an internal customer mind-set

20; 80

One rule of marketing is that _____% of purchasers account for _____% of a product's sales.

intranet

Organizations can utilize a(n) ________ as an internal corporate communication network that uses Internet technology to link company departments, employees, and databases.

Internal Influences on Consumers' Decisions

Perception: • The process by which we select, organize, and interpret information from the outside world. --> Schema • Three factors are necessary for perception to occur: - Exposure: capable of registering a stimulus --> Ex) brand logo - Attention: mental processing activity - Interpretation: assigning meaning Motivation: • Motivation is an internal state that drives us to satisfy needs by activating goal-oriented behavior. • Hierarchy of needs= categorizes motives according to five levels of importance, the more basic physical needs being on the bottom and the higher spiritual and psychological needs at the top. - The hierarchy suggests that before a person can meet needs at a given level, he or she must first meet the lower level's needs -->physicological (water, sleep, food) --> safety (security, shelter, protection) --> belongingness (love, friendship, acceptance) --> ego needs (prestige, status, accomplishment) --> self-actualization (self-fulfillment, enriching experiences) •Gamification= Applying a game design technique to marketing--> awarding points or badges --It satisfies needs for prestige/status/accomplishment --It enables customers to participate in loyalty programs and promote products in a fun and entertaining way Learning: • a relatively permanent change in behavior caused by information or experience. • Behavioral learning = learning occurs as the result of experience and the connections we form between events. • Cognitive learning = people as problem solvers who learn as they proactively absorb new information -->occurs when consumers make a connection between ideas or by observing things in their environment. • Observational learning = when people watch the actions of others and note what happens to them as a result--> store these observations in memory and at some later point use the information to guide their own behavior. Attitudes: • Represent favorable/unfavorable evaluations of a person, object, or issue. • Three components of attitude: (ABC Theory of Attitudes) -- Cognition (knowing): beliefs or knowledge -- Affect (feeling): emotional response -- Behavior (doing): intention to do something Personality: • Personality is the set of unique psychological characteristics that consistently influence the way a person responds to situations in the environment. - Self concept = attitude toward himself or herself. A mixture of beliefs about one's abilities and observations of one's own behavior and feelings (both positive and negative) about one's personal attributes -Self Esteem = how positive a person's self-concept is Age: • Goods and services often appeal to individuals within a certain age group. - Purchases are often associated with a particular stage in the family life cycle--> the stages through which family members pass as they grow older. Lifestyle: • Reflects a pattern of living. - Marketers seek to describe people according to activities, interests, and opinions. - Psychographics groups people according to psychological and behavioral similarities.

Return on Marketing Investment (ROMI)

Return on marketing investment - Revenue (or profit) generated by investment in a given marketing program divided by the cost of the program at a given level of risk - For instance, if: --• Revenue from Marketing Investment = $150,000 --• Cost of Marketing Program = $30,000 --• ROMI = 5.0

promotion mix (marketing communications mix)

Sales Promotion • Sales promotions are programs designed to build interest in or encourage purchase of a good or service during a specified period. • How do SPs compare to advertising? --• Both are paid promotional activities with identifiable sponsors --• Differ in that sales promotions typically have a more immediate short-term objective. Types of Consumer Sales Promotion: • Priced-Based Promotions --Coupons --Price deals --Rebates --Frequency (or loyalty) Program --Special/bonus packs • Attention-Getting Promotion --Contests and sweepstakes --Premiums --Sampling Types of Trade Sales Promotion: • Discount Promotions -- e.g., merchandising allowance, case allowance -- Forwarding buying/diverting • Co-op Advertising (ex: Home Depot + Behr Paint) Other Sales Promotion to Increase Industry Visibility: •Trade shows •Promotional products •Point-of-purchase displays •Incentive programs Direct Marketing • Direct communication to a customer designed to generate a response (e.g., an order, an inquiry, or a visit) Mail Order: • Mail order comes in two forms: -- Catalog: a collection of products offered in book form -- Direct mail: a brochure/pamphlet offering a specific good or service at one point in time Telemarketing: • The use of the telephone to sell directly to consumers and business customers. -• Profitable way for B2B marketers to keep in touch with small clients. -• FTC established the National Do Not Call Registry to allow consumers to limit number of telemarketing calls they receive. Direct Response Advertising • Direct-response advertising allows consumer to respond by immediately contacting the provider with questions or an order. - -- Informercials -- Direct-response TV (DRTV): QVC, HSN, etc. M-Commerce: • Promotional and other e-commerce activities transmitted over mobile devices. -- Short-messaging system (SMS)/location- or weather-based marketing. Personal Selling • Personal selling occurs when a company rep interacts directly with a customer or prospective customer to communicate about a good or service. -• "Personal touch": Far more intimate form of promotion compared to mass-media material -• Salespeople are the eyes and ears of firm. Role of Personal Selling: • One-to-one marketing communications is essential for certain product types and business markets Technology and Personal Selling • Technology makes it easier for salespeople to do their jobs. --•Customer relationship management (CRM) software (e.g., Salesforce.com) --•Partner relationship management (PRM)= a new generation system that links information between selling and buying firms. --•VoIP systems (e.g., Skype, GoToMeeting, etc.) Two Approaches: -Transactional Selling: --Approach that focuses on making an immediate sale with little concern for developing a long-term relationship with the customer. --Completing sales transactions Relationship selling Process: -- by which a salesperson secures, develops, and maintains longterm, profitable customer relationships. -- Building mutual relationships The Creative Selling Process: • Every customer, every sales call, and every salesperson is unique. • Successful salespeople engage in a series of activities to create win-win sales encounters. • Seeking out potential customers, analyzing needs, determining how product attributes might provide benefits for the customer and then communicating that information. PS: Advantages: • Dealing directly with buyer • Can search and select potential buyers • Can choose the style and appeal -- Example, demonstration, information, etc. & Disadvantages: • High cost • Limited # of potential buyers and offer same time Public Relations • The communication function that seeks to build good relationships with an organization's publics (e.g., consumers, stockholders, legislators, etc.) --•When placed successfully, PR messages (or publicity: unpaid media exposure) are more credible than advertising. --•Crisis management= the process of managing a firm's reputation when a negative event threatens the organization's image Objectives and Tactics of Public Relations: • A public relations campaign is a coordinated effort to communicate with the firm's public(s) Guerrilla Marketing: •Guerrilla marketing = involves "ambushing" consumers with promotional content in places they don't expect to encounter such messages. --• Ex) Ambient advertising, "flash mobs" Buzz Marketing: • Buzz: word-of-mouth communication that customers view as authentic. • Buzz marketing: marketing activities designed to create conversation, excitement and enthusiasm about a brand. --• Makes PR a more important part of the promotion mix Viral Marketing • A popular form of buzz building • Marketing activities aimed at increasing brand awareness or sales by consumers passing a message along to other consumers. Ethical Problems in Buzz Marketing • Buzz marketing efforts create potential for ethically questionable behaviors. -• Activities designed to deceive consumers -•Directing buzz marketing at children or teens -• Buzz marketing activities that damage property --• Ex) Sock puppeting and paid influencer programs

Target Marketing

Select and Enter a Market: • Marketing --> understand and satisfy customer needs • Understanding needs is getting complex due to market fragmentation = creation of many consumer groups due to a diversity of distinct needs and wants in society -• Technological and cultural advances have fueled growing fragmentation of markets. -• Reduced effectiveness of mass marketing efforts

steps of Advertising Campaign

Step 6) Evaluating the Advertising: -Posttesting =conducting research on consumers' responses to advertising messages they have seen or heard -Unaided recall = tests by telephone survey or personal interview whether a person remembers seeing an ad during a specified period without giving the person the name of the brand. -Aided recall = tests use the name of the brand and sometimes other clues to prompt answers. -Attitudinal measures = probe a bit more deeply by testing consumers' beliefs or feelings about a product before and after they are exposed to messages about it.

Steps in the Target Marketing Process

Step 1: Segmentation: • Segmentation is the process of dividing a larger market into smaller pieces based on meaningful, shared characteristics. -- Useful in both consumer and B2B contexts -- Many different dimensions, or segmentation variables, that marketers can utilize • Segmentation variables --> demographics, psychographics, behavior -Demographics (age, gender, income, social class) -->Gen Z -->Millennial -->Gen X -->Baby Boomers -->Silent Generation --Family life cycle = Family needs and expenditures change over time-->As families move through stages, different product categories ascend or descend in importance. --Ethnicity= U.S. ethnic and cultural diversity is increasing --> African Americans, Hispanic Americans and Asian Americans are largest groups and growing. --Geodemography = Combines demographics with geography --> Nielsen Claritas --> PRIZM Premier: consumer behaviors, shopping patterns & media preferences --> P$YCLE: financial/investment behaviors --> ConneXions: technology adoption likelihood --Geotargeting = Geographically customized online ads --> Ex) paid search ads on Google --Psychographics = Uses psychological, sociological, and anthropological factors to categorize customers. --> Best known system is VALS -Behavior = Categorizes consumers based upon how they act toward, feel about, or use a product -- User status -- 80/20 rule = 20 percent of purchasers account for 80 percent of the product's sales -- Usage occasions -- Universal vs. Regular Personal vs. Rare Personal • Segmenting B2B Markets -- Segmentation also useful for B2B firms! -- Helps B2B companies understand needs and characteristics of potential customers - Firms can be categorized based on: -- Organizational demographics (i.e. size, industry category, etc.) -- NAICS or SIC -- Technologies used (e.g., ERP Software: SAP vs. Oracle) -- User/Non-user Step 2: Targeting: • The next step is targeting, marketers evaluate each potential segment and decide upon which groups of customers they will invest marketing resources. -- Selected groups are known as target markets • Phase 1. Evaluation of Market Segments -- A viable market segment should: -- have members with similar wants and needs that are different from those in other segments. -- have needs the marketer can address. -- be measurable in size and purchasing power. -- be large enough to be profitable. -- be reachable by marketing communications • Phase 2. Develop Segment Profiles -- After segments are identified, marketers should develop profiles or descriptions of the typical customers within a segment (i.e., buyer's persona) . -- Segment profiles might include demographic, location, lifestyle and product-usage characteristics. • Phase 3. Choosing a Targeting Strategy --undifferentiated marketing = unchanged for all --differentiated marketing = multiple groups, diff communications --concentrated marketing = one group, focused comm. marketing --customized (1-2-1) marketing = individuals, specialized marketing per consumer Step 3: Positioning • Positioning is the process by which marketers develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition. • The combination of 4Ps --Ex) Gap Inc. (Old Navy vs. Gap vs. Banana Republic) • Brand Personality = A distinctive image that captures a brand's character and benefits. --Brand anthropomorphism = Assigning human characteristics and qualities to a brand • Repositioning = establishes a new position in response to market changes. --• Commonly used to change the brand image --• Repositioning can breathe life into "retro" brands. -->Successful brand positioning should align clearly with the company's competitive advantage(s)

Price Planning

Step 1: Set Pricing Objectives • Must support the broader objectives of the firm as well as overall marketing objectives. -Pricing Objectives - Profit: --• Setting prices for products that will guarantee money on each sale --• You determine your cost for manufacturing each product, then add a percentage for profit. (e.g., Fad products) -Pricing Strategy - Sales or Market Share: --• Seeking to boost volume or market share (e.g., price war) -Pricing Objective - Competitive Effect: --• To dilute the competition's marketing efforts --competitive-effect pricing/ market-based pricing --a firm may deliberately try to preempt or reduce the impact of a rival's pricing changes -Pricing Objective - Customer Satisfaction: --• Customers are satisfied with what they have paid for. But, satisfaction is based on customer expectations. --•( E.g., Walmart - "Save Money. Live Better") -Pricing Objective - Image Enhancement: --• Consumer use price to make inferences about the quality of a product. (e.g. Whole Foods, Luxury Brands) Step 2: Estimate Demand • Demand refers to customers' desire for a product. • The law of demand: As price goes up, quantity demanded goes down. -Shifts in Demand • Upward vs. downward shift • Marketers can stimulate shifts through effective marketing. • Price elasticity of demand= (the percentage change in unit sales / the percentage change in price.) -Cross-Elasticity of Demand -• Changes in the price of one product may affect the other product's demand. --• Positive: an increase in the price of one will increase demand for the other --> products are substitutes (ex: apple vs android) --• Negative: an increase in the price of one will decrease demand for another --> products are complements (ex: bread & butter) Step 3: Determine Costs • In order to ensure that product price will cover costs, marketers must determine - Variable Costs: --Per-unit costs of production that will fluctuate depending on how many units a firm produces (tied to volume) --ex) product materials, shipping/ delivery costs -- Fixed Costs: Costs that do not vary with the number of units produced (don't change with volume) --ex) salaries, rent/ leases, insurance -Break-Even Analysis -- tells marketers how many units must be sold in order to cover all costs --Contribution per unit = Sales Price per unit - Variable Costs per unit -Markups and Margins: Pricing through the Channel --• Markup is an amount added to the cost of the product to create a price at which the channel member will sell the product. -- Gross margin --> Includes retailer and/or wholesaler margin -- List price or manufacturer's suggested retail price (MSRP) -Vertical integration --> retail chains have their own distribution centers and move products to stores in their own trucks, saving money while maintaining greater control over the availability and delivery of products to their stores. Step 4: Pricing Environment -Economy • Consumers become more/less price sensitive when economic conditions appear bleak/positive. • Marketers must factor broad macroeconomic trends into pricing decisions. --• Economic growth: Recession, Inflation --• Consumer confidence -Other Factors • Competition --• The type of industry structure: monopoly, oligopoly, monopolistic, or perfect competition • Government regulation --• E.g., The Credit Card Responsibility & Disclosure Act (2009) - limiting credit card rates & fees • Consumer trends --• E.g., organic/locally grown foods, sharing economy • International environment --• Big Mac Index --• Bottom of Pyramid pricing Step 5: Pricing Strategies -Cost-Based Price Strategies: • Cost-plus pricing: very common --• Easy to calculate --• Relatively risk free • Cost-based approaches do not factor in key considerations, such as nature of target market and competitors. -Demand-Based Price Strategies: • Firm bases selling price on an estimate of volume it can sell in different markets at different prices. --• Target costing --• Yield management -Price Segmentation: • Practice of charging different prices to different market segments for the same product (e.g., early bird special, matinee, 10% discount for seniors) --• Peak load pricing or Surge pricing -Competition-Based Price Strategies: • Near, at, above, or below the competition's prices --• Price leadership strategy -Customer Needs-Based Price Strategies: • Value or everyday low pricing (EDLP) • High/low or promo pricing -New Product Pricing: • New products present unique pricing challenges! • In absence of reliable demand estimates and pricing norms... --• Skimming price: high --• Penetration pricing: low --• Trial pricing: limited time Step. 6: Develop Pricing Tactics -Individual Products • Two-part pricing --> a fixed fee + a "variable" charge • Payment pricing • Decoy pricing --> having a small value change, convincing for higher purchase (ex: small medium large popcorn simulation) -Multiple Products • Price bundling --> bundled prod. w/ lower prices of products (ex: Mcdonalds meal) • Captive pricing --> have to buy certain (other) products to utilize initial product (ex: printers) -Distribution-Based Pricing: • Distribution-based pricing for end-users -- F.O.B. (free on board) origin pricing -- F.O.B delivered pricing --> shipping -- Uniform delivered pricing -- Freight absorption pricing -Discounting for Channel Members • When setting prices for channel members, marketers may also use -- Trade or functional discounts -- Reduction from a list price that can vary for wholesalers, retailers, and customers. -- Quantity discounts -- Cash discounts (2% 10 days net 30) -- Seasonal discounts -Pricing and Electronic Commerce • Online environment provides even more pricing options. -- Dynamic pricing --> the seller can quickly and easily adjust prices to meet changes in the marketplace. -- Internet price discrimination -- Online auctions -- "Freemium" pricing models -- E.g., Spotify -Psychological Issues in Setting Prices • Consumers form expectations of what is fair prices for products, based on (1) internal reference prices and (2) price-quality inferences. --• Price too high = Bad deal --• Price too low = Suspect quality -Psychological Pricing Strategies • Odd-even pricing --> odd= cheaper (ex: Walmart) even= high-class (ex: fancy restaurant) • Price lining --> pricing tiers based off product • Prestige or premium pricing --> extreme prices based off luxury name Legal and Ethical Considerations in B2C Pricing • Bait-and-switch is illegal --• Advertise very low-priced item to lure customers to store (bait) --• Arriving customers find product is out of stock and are offered more expensive item (switch) • Loss-leader pricing --• Use very low prices to get customers into the store --• Making up the "loss" through sale of other products --• Some states have "unfair sales acts" forbidding lossleader pricing. Legal Issues in B2B Pricing: • Illegal B2B price discrimination --• Firms sell products to channel members at different prices in a way that "lessens competition." • Price-fixing (or Collusion) --• Two or more companies conspire to keep prices at a certain level. • Predatory pricing (undercutting) --• Firm sets very low price for purpose of driving rival out of business

shopping product

Tablet computers are an example of a(n) ________ because the consumer spends considerable time and effort gathering information and comparing alternatives before making a purchase.

BCG Growth-Share Matrix

The Boston Consulting Group planning tool that evaluates business units in terms of their growth potential and market share. -Cash cows--> large market share, market isn't moving quickly, $ generator -Star--> market moving fast, share is large -Dog--> slow market, little share / profit -Question mark--> growing market, small market share

case study

The _____ is a research method with primary data that becomes a comprehensive examination of a particular firm or organization.

product line length

The _____ is determined by the number of separate items within the same category. It is typically reflected in the number of stock-keeping units (SKUs).

Customer Insights

The collection, deployment, & interpretation of information that allows a business to acquire, develop, and retain its customers.

Business Buying Situations

The degree of effort a firm needs to collect information and make a business-related purchasing decision Business Buying Situations: -Straight Rebuy = refers to the routine purchase of items that a B2B customer regularly needs. -Modified Rebuy =when a firm decides to shop around for suppliers with better prices, quality, or delivery times. -New Task-buy = A first-time purchase A buyclass framework identifies the degree of effort required of the firm's personnel to collect information and make a purchase decision. -These classes, which apply to three different buying situations, are straight rebuys, modified rebuys, and new-task buys.

Social Media Marketing and Other Communication Tools

Trends • Marketers no longer are the only ones who talk about their products. -- Millions of consumers have the ability and desire to spread good (or bad) news about products. -- The many-to-many communication model is based on consumers talking to one another about goods, services, and organizations (i.e., groundswell) Social Media • Internet-based platforms that allow users to create their own content and share it with others who access these sites

brand dilution

When considering brand extensions, there is a risk of _____, in which the contrast between the brand extension's less positive characteristics and the more positive characteristics of the brand can lead to a shift in how consumers perceive the brand.

operant

When people learn that their actions result in rewards or punishments, the type of behavioral learning that occurs is _____conditioning.

Services

Which of the following make up intangibles such as efforts, acts, or performances without the transfer of ownership rights?

Augmented product

Which of the following product layers might include a warranty, credit, delivery, installation, and repair service after the sale because marketers know that adding these supporting features to a product is an effective way for a company to stand out from the crowd?

Product life cycle

Which of the following refers to a concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline?

Opinion leader

Which of the following refers to a person who influences others' attitudes or behaviors because they believe that he possesses expertise about the product?

expropriation

a government seizes a foreign company's assets and reimburses the company owners (often not for the full value).

Stakeholders

buyers, sellers, or investors in a company; community residents; and even citizens of the nations where goods and services are made or sold—in other words, any person or organization that has a "stake" in the outcome

business cycle

describes the overall pattern of changes or fluctuations in an economy. - Prosperity - Recession • Depression - Recovery • Inflation

Value Proposition

including the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself.

Agile Marketing

refers to using data and analytics to continuously source promising opportunities or solutions to problems in real time, deploying tests quickly, evaluating the results, and rapidly iterating (doing it over and over).

counter trade

the practice of using barter rather than money for making global sales

Consumer Behavior

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

Distribution Strategy

Choose a Distribution Strategy: • The number of levels in the distribution channel --• Direct vs. Indirect (how many levels?) • Choice of channel relationships: -• Conventional vs. Vertical vs. Horizontal marketing system -• Distribution intensity: # of intermediaries at each level Conventional Marketing System • Multilevel distribution channel in which members work independently -• Relationships limited to buying and selling from each other. -• Each recognizes self-interest is best served by fair dealing. Vertical Marketing Systems (VMS) • Administered VMS= Independent channel members voluntarily work together due to power of a dominant channel member. • Contractual VMS= Channel member cooperation enforced by contracts that spell out rights and responsibilities of each member. (e.g., franchising) • Corporate VMS= A single firm owns manufacturing, wholesaling, and retailing operations. (e.g., Apple) Horizontal Marketing System • Two or more firms at the same channel level agree to work together to get their product to the customer. --Ex) Target + Starbucks Intensive, Selective, or Exclusive Distribution • Intensive distribution= Maximize coverage by selling through as many outlets as possible. --• Ex) convenience products • Selective distribution= Seeks to strike a balance between intensive and exclusive distribution. -- Ex) Ralph Lauren --> department stores, own retail, etc. • Exclusive distribution= Limit distribution to a single outlet in a particular region. --• Ex) luxury or specialty products Dual or Multiple Distribution Systems - A system where producers, dealers, wholesalers, retailers, and customers participate in more than one type of channel hybrid marketing system = Instead of serving a target market with a single channel, some companies combine channels—direct sales, distributors, retail sales, and direct mail

subliminal

If an advertiser uses hidden messages in its product commercial, or hides messages in the product itself (such as baking words into the tops of crackers), the advertiser is using _____ advertising.

Packaging

Packages and Labels: • package = the covering or container for a product. • Serves both functional and communication purposes -- UPC (Universal Product Code) --> the set of black bars or lines printed on the side or bottom of most items --> It assigns each product a unique 10-digit number. -- Branding • Effective packaging design entails many decisions -- How are other products in category packaged and displayed? -- Copycat packaging • Effective packaging also considers: -- Choice of packaging material and the image it projects -- Environmental impact of packaging -- Shape and color influences on image -- Graphic information to be portrayed Branding and Packaging: Management • Branding and packaging decisions play an essential role in shaping how consumers view a product. • In larger firms, various types of managers may be involved in the process: -- Brand managers = coordinates all marketing activities for a brand; these duties include positioning, identifying target markets, research, distribution, sales promotion, packaging, and evaluating the success of these decisions. -- Product category managers = coordinates the mix of product lines within the more general product category and who considers the addition of new product lines based on client needs. -- Market managers (e.g., McDonald's) = different people focus on specific customer groups rather than on the products the company makes. --Venture Teams = focus exclusively on the new product development effort.

External Influences on Consumers' Decisions

Situational Influences on Consumers' Decisions: • Situational factors often shape purchase behaviors. - Sensory marketing= appeals to consumers' five senses: taste, sight, touch, smell, and hearing. --> Physical environment --> Time poverty Social Influences on Consumer Decisions: • Individualistic but influence through groups that affect purchasing behavior - Many social influences on consumer decision making, for instance: -- Culture and subcultures = the values, beliefs, customs, and tastes a group of people produces or practices -- Social class = the overall rank of people in a society. Same class tend to exhibit similarities in occupation, education, and income level, and they often have similar tastes in clothing, decorating styles, and leisure activities. -- Reference groups and opinion leaders = a set of people that a consumer wants to please or imitate. Consumers refer to these groups when they decide what to wear, where they hang out, and what brands they buy. -- Gender Roles Culture: • Culture represents the shared values, beliefs, customs, and tastes produced or practiced by a group of people. - Marketers tailor products to cultural values -- Subculture (e.g., ethnic groups) = a group that coexists with other groups in a larger culture but whose members share a distinctive set of beliefs or characteristics, such as members of a religious organization or an ethnic group. Social Class: • Social class is the overall social standing of groups of people within a society, according to factors such as: -- Family background, Occupation, Education, Income, etc. • Luxury products serve as status symbols. Reference Groups: • An actual or imaginary individual or group that has a significant effect on an individual's evaluations, aspirations, or behavior Opinion Leaders • Opinion leaders frequently influence the attitudes and behaviors of others. (Influencers) • Such individuals typically share several characteristics: -- High interest in a given product category -- Update product category knowledge by reading, talking with salespeople, etc. -- Impart both positive and negative information -- Are among the first to buy goods Gender Roles: • Gender roles relate to society's expectations regarding appropriate attitudes, behaviors, and opportunities for men and women. -- Consumers often associate gender-stereotyped products. -- Gender roles are constantly evolving

How Do Consumers Buy Products

• Marketers also classify products based on where and how consumers buy the product. -- Similar to the levels of decision making (habitual vs. limited vs. extended problem solving) • Convenience products = typically nondurable goods or services bought with minimal effort. • Consumers expect convenience products to be low priced and widely available. -- Staples (e.g., milk, bread, gas) -- Impulse products -- Emergency products • Shopping products = goods and services for which consumers will spend time and effort to gather information on price, product attributes, and product quality. -- Consumers are likely to compare alternatives before they buy. --> Ex) Computers, TVs, Appliances, etc. • Specialty products = unique characteristics that are important to buyers at almost any price. -- Generally, it requires an extended problemsolving purchase. -- Customers tend to be very loyal. --> High-end cars, designer clothes, etc. • Unsought products = goods and services for which a consumer has little awareness or interest until a need arises. --> Retirement plans/Life insurance/Preventive medical tests, etc. • Often require a good deal of advertising or personal selling to stimulate consumers' interest

Price Elasticity of Demand

• Marketers need to know how customers are likely to react to a price change • Price elasticity of demand= (the percentage change in unit sales / the percentage change in price.) • Elastic demand-->when changes in price have large effects on the amount demanded (i.e., greater than 1 ). •Inelastic demand -->when changes in price have little or no effect on the amount demanded. • Price Change: $10 to $9 • Percent Price Change = ($1/$10) x 100 = 10% • Demand Change: 3000 units to 3600 units •Percent Demand Change = (600 units/3000 units) x 100 = 20% • Price Elasticity of Demand = 20%/10% = 2

Integrated Marketing Communications (IMC)

• Marketers unify all marketing communication tools to deliver a consistent message for the purpose of generating synergy effects. • Must use a multichannel promotion strategy which combines traditional, social media and other online activities.

Adoption and Diffusion of New Products

• Product adoption is the process by which a consumer or business customer begins to buy and use a new good, service, or idea. --• Micro level • Diffusion is the process by which the use of a product or innovation spreads throughout a population. --• Macro level

Marketing Communication Models

The One-to-Many Model • Mass Communication • Some elements of the promotion mix include messages intended to reach many prospective customers at the same time. --• Advertising --• Consumer sales promotion --• Public relations The One-to-One Model • Personal communication • Marketers may sometimes prefer to communicate on a personal level. --• Personal selling --• Direct mail --• Telemarketing --• Direct marketing Many-to-Many Model •Consumer looks to each other for information and recommendation. --Word-of-mouth communication --Buzz Building --Social Media (e.g., brand communities, product review sites, and social networking sites) Outbound marketing = It refers to messages that come from the organization and are intended for those who have agreed to receive them Inbound marketing = refers to linkages that come to the organization from others outside.

brand anthropomorphism

The Pillsbury Doughboy is an example of _____ in which his friendly demeanor and the trademark giggle he lets out when poked in the belly help shape consumer perceptions of the brand.

Digital Media Ads

Types of Digital Media Ads • Website Ads • Email Ads • Social Media Ads • Search Ads • Mobile Ads • Video Sharing Ethical Issues in Digital Media Ads • Ad fraud/Click fraud: -- The use of automated browsers to falsify the number of views/click-throughs that the advertisers must pay for. -- Mobile hijacking: zombie apps → running ads in the background • Ad blocking -- Google's own ad blocker vs. 3rd party ad blockers

Straight rebuy

Which of the following business-to-business terms refers to the routine purchase of items that a B2B customer regularly needs?

Analyze the competitors' position

Which of the following is the first stage in the positioning process?

Targeting

Which of the following is the second step in the target marketing process?

Brand

Which of the following refers to a name, a term, a symbol, or any other unique element of a product that identifies one firm's product(s) and sets it apart from the competition?

Customer relationship management (CRM)

Which of the following refers to a systematic tracking of consumers' preferences and behaviors over time in order to tail or the value proposition as closely as possible to each individual's unique wants and needs?

Differentiated targeting strategy

Which of the following refers to an approach of developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace?

Market manager

Which of the following refers to an individual who is responsible for developing and implementing the marketing plans forproducts sold to a particular customer group?

Inelastic demand

Which of the following refers to demand in which changes in price have little or no effect on the amount demanded?

Demographics

Which of the following refers to statistics that measure observable aspects of a population, including size, age, gender,ethnic group, income, education, occupation, and family structure?

Perishability

Which of the following refers to the characteristic of a service that makes it impossible to store for later sale or consumption?

Inseparability

Which of the following refers to the characteristic of a service that means that it is impossible to detach the production of a service from the consumption of that service?

Cannibalization

Which of the following refers to the loss of sales of an existing brand when a new item or product family is introduced?

Evaluation

Which of the following refers to the stage of the product adoption pyramid in which consumers weigh the costs and benefits of the new product?

Undifferentiated targeting strategy

Which of the following requires a company to be willing to bet that people have similar needs so the same product and message will appeal to many customers?

Maturity stage

Which of the following stages of the product life cycle is likely to utilize reminder advertising for marketing communications as profit margins narrow?

Target market

Which of the following terms refers to the market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts?

Market strategy development

Which phase of the new product development process involves identifying the target market, estimating its size, and determining how the company can effectively position the product to address the target market's needs?

Segmenting by ethnicity

Which segment is a marketer appealing to by recognizing that a consumer's national origin is often a strong indicator of preferences for specific magazines or TV shows, foods, apparel, and leisure activities?

Joint venture

Which term refers to a market entry strategy involving two or more firms creating a new entity, allowing the partners to pool their resources for common goals?

Gray market goods

Which term refers to items that are imported without the consent of the trademark holder?

Marketing analytics

____ comprises a group of technologies and processes that enable marketers to collect, measure, analyze, and assess the effectiveness of marketing efforts.

Variability

____ means that over time, even the same service that the same individual performs for the same customer changes—even only in minor ways.

A data scientist

____ searches through multiple, disparate data sources in order to discover hidden insights that will provide a competitive advantage.

Brand equity

_______ provides a competitive advantage because it gives the brand the power to capture and hold onto a larger share of the market and to sell at prices with higher profit margins.

market segment

a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market.

product specification

a written description of the quality, size, weight, color, features, quantity, training, warranty, service terms, and delivery requirements for the purchase.

competitve advantage

an edge over their competitors that allows them to have higher sales, higher profits, more customers -comes from either a cost advantage or a differential advantage -Ex) Coca-Cola --> has more than 50 percent of the world soft-drink market.

Price (CH.10)

the assignment of value, or the amount the consumer must exchange to receive the offering. - Includes money, goods, services, favors, votes, or anything else that has value to the other party - Opportunity costs must also be considered

marketing decision support system (MDSS)

the data, analysis software, and interactive software that allow managers to conduct analyses and find the information they need To make good decisions, marketing managers need timely access to quality information! - A firm's MIS stores and analyzes data from a variety of sources - A firm's MDSS makes it easier to access the MIS and find answers to specific "what-if" questions

ROI (Return on Investment)

the direct financial impact of a firm's expenditure of a resource, such as time or money

Utility

the usefulness or benefit we receive when we use a good or service. -Form utility -->the benefit marketing provides by transforming raw materials into finished products -Place utility -->the benefit marketing provides by making products available where customers want them -Time utility--> the benefit marketing provides by storing products until they are needed. -Possession utility -->the benefit marketing provides by allowing the consumer to own, use, and enjoy the product.

Branding and Packaging

• A "good" brand name: -- maintains relationships with customers. -- positions a product by: -- (1) portraying an image or --(2) describing how the product works. -- is easy to say, spell, read, and remember. -- fits the target market, product benefits, customer's culture, and legal requirements. Trademarks • the legal term for a brand name, brand mark, or trade character. -- ® is the trademark symbol in the U.S. -- Common-law protection Brand Equity • A brand's value to its organization over and above the value of the generic version of the product. -- Brand equity provides competitive advantage. -- Brand equity results in brand loyal consumers and attachment. Brand Meaning • Strong brands forge lasting bonds with customers based on brand meaning. -- Brand meaning encompasses the beliefs and associations a consumer has about the brand. • Today, brand meaning builds virally as people spread its story online. -- Brand storytelling = engage consumers with compelling stories about brands Brand Extensions and Sub-Branding • Products with strong brand equity provide exciting opportunities for marketers. -- Brand extensions = firm leveraging brand equity to sell new products using the same brand name. -- Sub-branding = firm creates a secondary brand to help differentiate a product line.

Media Scheduling

• A media schedule is a plan that specifies exact media to use and when to use it. --Reach is the percentage of the target market that will be exposed to the media vehicle. --Frequency is the average number of times a person in the target group will be exposed to a message. --Gross rating points (GRPs) = compare effectiveness of different media vehicles. --Cost per thousand (CPM) = the cost to deliver a message to 1,000 people or homes. • A continuous schedule = maintains a steady stream of advertising throughout the campaign period. • Flighting = runs advertising in short bursts with periods of little or no activity. • Pulsing schedule = combines flighting and continuous scheduling by using a low advertising all year round and heavy advertising when products are likely to be in demand.

Layers of the Product Concept

• A product represents all that a customer receives in an exchange. • Marketers distinguish among three distinct "layers" of the product: -- Core product = ex) Starbucks --> to wake u up -->Not the tangible physical product --> Core benefit that makes it valuable to consumers -- Actual product = ex) Starbucks --> coffee -->Tangible, physical parts of the product --> What average consumers would think of under the concept of 'product' -- Augmented product = ex) Starbucks --> status symbol -->Non-physical parts of the product -->Consist of added values -->The features of augmented products can be converted into benefits for individuals.

Social Networks

• It connect people with other people. • Marketers can listen and learn. --• Influencer marketing (e.g, Fyre Festival) • Brand community --• Howard Shultz's interview Location-Based Social Networks • Location-based social networks integrate sophisticated GPS technology that enables users to alert friends of their exact whereabouts via their mobile phone (e.g., Foursquare's Swarm). Product Review Sites • Product review sites: Social media sites that enable people to post stories about their experiences with goods and services. Augmented Reality (AR) -a live direct or indirect view of a physical, real-world environment whose elements are augmented by computer-generated sensory input. Virtual Worlds • Highly engaging digital environments where avatars "live" and interact with other avatars in real time -• Over $38 billion a year to buy virtual goods (2017) --•Ex) Second Life, Disney's Club Penguin, Roblox, etc. The Internet of Things •Network of physical things, vehicles, buildings, devices which have embedded sensors, electronics, and network connectivity that can collect data and communicate it to each other—the many-to-many of things.

How Do Organizations Use Products?

• Knowledge how business customers use products helps: - improve product designs. - craft an appropriate marketing mix. (using starbucks example) • Equipment = the products are used in daily operations --Ex) cash register, POS system • Maintenance, repair, and operating (MRO) goods= consumed relatively quickly. --Ex) mop, toilet paper • Raw materials = products of fishing, lumber, agricultural, and mining industries used to in the final product. --Ex) coffee beans, heavy cream • Processed materials = produced by firms when they transform raw materials from their original state --Ex) coffee, whipped cream • Specialized services = services which are essential to the organization but are not a part of the actual production of a product --Ex) starbucks barista • Component parts = manufactured goods or sub-assemblies of finished items an organizations needs to complete their own goods --Ex) straw, cup

Distribution Planning

-process of developing distribution objectives, evaluating internal and external environmental influences on distribution, and choosing a distribution strategy. Step 1: Develop Distribution Objectives -develop objectives that support the organization's overall marketing goals. --the overall objective of any distribution plan is to make a firm's product available when, where, and in the quantities, customers want at the minimum cost. Step 2: Evaluate Internal and External Environmental Influences -consider their internal and external environments to develop the best channel structure. -Short channels with selective distribution = perishable products because getting the product to the final user quickly is a priority. -longer channels with more intensive distribution = best for inexpensive, standardized consumer goods that need to be distributed broadly and that require little technical expertise. Step 3: Choose a Distribution Strategy -decisions about the number of levels in the distribution channel. -distribution strategies also involve two additional decisions about channel relationships: (1) whether a conventional system or a highly integrated system will work best (2) the proper distribution intensity,--> the number of intermediaries at each level of the channel. Step 4: Develop Distribution Tactics -tactics for distribution necessary to implement the distribution strategy. --> the type of distribution system to use, such as a direct or an indirect channel or a conventional or an integrated channel. -Distribution tactics relate to two aspects of the implementation of these strategies: (1) how to select individual channel members (2) how to manage the channel.

Share of Customer

-the percentage of an individual customer's purchase of a product over time that is the same brand.

C-Suite

-the top executive teams of firms so-named because they are composed of all the "chief" officer roles, like CEO (chief executive officer), COO (chief operating officer), CFO (chief financial officer), CIO (chief information officer), CMO (chief marketing officer), and sometimes others Chief customer officer (CCO) - The CCO is a firm's leading voice of all things customer-related.

Promotional Plan

Step 1: Identify the Target Audience(s) •Must communicate with members of the target market & other stakeholders influence the target market -•Consumers learn about products/services from --•News media --•Friends and family --•Producers of competitive products Step 2: Establish the Communication Objectives • Messages are designed to move the consumer closer to purchase, and hopefully, loyalty through a series of steps known as the hierarchy of effects Step 3: Determine the Marketing Communication Budget • Top-down budgeting techniques = managers establish the overall amount that the organization will allocate to promotion activities. --• Percentage-of-Sales method = budget is based on last year's sales or on estimates for the present year's sales --• Competitive-parity method = match whatever competitors spend • Bottom-up budgeting techniques =Identify promotion objectives and allocate enough money to accomplish them. --• Objective-task method = first defines the specific communication goals it hopes to achieve, then tries to figure out how much advertising it will take to meet that goal. • Push vs. Pull strategies --Push = company wants to move its products by convincing channel members to offer them and entice their customers to select these items --Pull =counting on creating consumer demand for its products with marketing communication aimed at the consumers. Step 4: Design the Promotion Mix • Designing the promotion mix involves: -- Determining communication tools to be used -- Specifying message to be communicated -- Determining the communication channels to be used. Step 5: Evaluate the Effectiveness of the Communication Program • A variety of ways to monitor and evaluate the company's communication efforts. • Various types of sales promotion are the easiest to evaluate as they often occur over a fixed, short period. • Advertising has lagged or delayed effects, more difficult to clearly link to sales. --• Measure brand awareness, recall of product benefits communicated, and image of the brand before and after an ad campaign.

Advertising

• Advertising is non-personal communication from an identified sponsor using mass media. • Changes in media landscape have slowed growth of traditional advertising ... --• But mass communications remains the way to reach a large audience --• "TV everywhere" (also known as authenticated streaming) Product Advertising: • Advertising messages that focus on a specific good or service. --E.x) Pass the Heinz Institutional Advertising -Promotes activities, personality, or point of view of an organization --Corporate advertising, Advocacy advertising, and Public service advertisements (PSAs) Retail and Local Advertising - Advertising that informs consumers about store hours, location, and products that are available or on sale. Who Creates Advertising? • Most brands hire outside agencies. -•Limited- vs. Full-service agency -• In executing ad campaigns, agencies pool services of many different groups of people. --• Account management --> Account executive & Account planner -• Creative services -• Research and marketing services -• Media planning/buying = problem-solving process that gets a message to a target audience in the most effective way --> electing the medium to deliver the message User-Generated Advertising Content • (UGC) includes the millions of product-related comments, reviews, photos, images, and videos posted online by consumers. Ethical Issues in Advertising • Advertising, more than any other aspect of marketing, has been criticized as unethical. •Advertising --> is manipulative and causes people to buy things they don't really need. --• is deceptive and untruthful, --• is offensive and in bad taste.

How Marketers Classify Products

• Based on how consumers feel about, purchase, and use products • Durable goods are consumer products that provide benefits over a period of months, years, or even decades. -- Cars -- Furniture -- Appliances • Non-durable goods are consumed over the short term. -- food -- newspapers -- Sushi

Break-Even Analysis

• Break-even analysis tells marketers how many units must be sold in order to cover all costs. • Contribution per unit = (Sales Price per unit - Variable Costs per unit)

Major Types of Channels of Distribution

• Channels differ by the number of members who participate • Choice influenced by market size, purchase frequency and intermediary availability Disintermediation • If intermediaries fail to provide unique value, they are at risk of disintermediation. -• Removing some layers of the channel of distribution -• New types of channel members displace traditional ones -->Ex) Kayak, Uber, Airbnb Online Distribution • The Internet has rendered some channel members obsolete and changed how channel members coordinate supply chains. -Challenges faced: • Use of the Internet as a distribution channel poses some challenges --•Online distribution piracy (e.g., thepiratebay.org) Ethics in the Distribution Channel •Slotting allowances= a fee in exchange for agreeing to place a marketer's products on retailers' premium shelf space. •Product diversion= the distribution of a product through one or more channels not authorized for use by the manufacturer of the product. --Diverter = the manufacturer's customers that purposefully overbuys product when it is offered at special promotional prices, holds it in inventory until the promotion is over, and then sells the product within the channel •Size of intermediaries= ((ex) Wal-Mart) can have detrimental effects on smaller retailers.

Functions of Distribution Channels

• Distribution channels: - Provide time, place, and possession utility - Provide logistics and/or physical distribution= the activities that move finished goods from manufacturers to final customers. -- Transportation and storage -- Facilitating functions =make the purchase process easier for customers and manufacturers (customer service) -- Risk-taking function = The chance retailers take when they buy from manufacturers, even if a product might sit on shelves -- Communication and transaction function = channel members develop and execute both promotional and other types of communication among members of the channel. - Create efficiencies by reducing the number of transactions -- Breaking bulk = Wholesalers and retailers purchase large quantities of goods from manufacturers but sell only one or a few at a time to many different customers. --creating assortment = provide a variety of products in one location so that customers can conveniently buy many different items from one seller at one time.

Distribution Tactics

• Distribution tactics relate to 2 key aspects of strategy implementation: 1. Selecting channel partners 2. Managing the channel 1) Channel Member Selections • In general, the greater intensity of distribution, the less emphasis on selection -- Ex., Intensive distribution --> based on the probability of paying the bills • Selective distribution -- Marketing Research -- Finding prospective channel members -- Applying the selection criteria (i.e., economic, competitive, relationship, and sustainability factors) -- Securing the prospective channel members 2) Channel Management • A process where marketers administer existing channels to secure the cooperation of channel members in achieving the distribution objectives. -• Chanel conflict management: training program, co-op advertising, expert advice etc.

Categories of Adopters

• Innovators -- Extremely adventurous -- Risk takers -- Well-educated • Early Adopters -- Concerned about social acceptance -- Heavy media users • Early Majority -- Avoid being first or last -- Middle class -- Deliberate and cautious • Late Majority -- Older -- Conservative -- Lower than average education and income • Laggards -- Lower education and income -- Bound by tradition

Product Management

• Effective product planning is guided by a continuous process of product management Develop Product Objectives: • Clearly stated product objectives provide focus and direction. -- Should support broader marketing objectives of business unit -- Should be consistent with the firm's overall mission •SMART Objectives Design Product Strategies: • Strategies for individual products: -- New products : successful introduction -- Regional products: national expansion -- Mature products: increasing consumer interest/enthusiasm • Multiple products: --Product line= firm's total product offering to satisfy a group of target customers. --> Product line length is determined by the number of stock-keeping units (SKUs). -Product line strategies: -- Full-line vs. limited-line strategies -- Stretching: Upward (higher quality), downward (cheaper options), or two-way line stretch -- Filling-out (adding more items into present range) -- Contracting (Reducing a product line) -- Cannibalization is a risk (new product "eating" the success of other products inline) Product Mix Strategies: • A product mix is the total set of products a firm offers for sale. • Product mix strategies -- Determines how many product lines would be supported by a firm -- Width of product mix • Product quality is often a key objective. --•> E.g., Galaxy Note 7, Samsung's response • A philosophy of total quality management (TQM) can help companies achieve quality objectives. --TQM is a business philosophy that calls for company-wide dedication to the development, maintenance, and continuous improvement of all aspects of the company's operations.

the Creative Selling Process

• Every customer, every sales call, and every salesperson is unique. • Successful salespeople engage in a series of activities to create win-win sales encounters. • Seeking out potential customers, analyzing needs, determining how product attributes might provide benefits for the customer and then communicating that information. • The creative selling process details a sequence of seven steps. --•Begins with prospecting (i.e., identifying and qualifying leads) --•Ends with closing the sale and follow-up • Effective salespeople skillfully handle objections to move customers to a decision stage. Step 1: Prospect and Qualify • Prospecting is the process by which salespeople identify and develop prospect lists. --•Sources include: Directories and commercial databases, Web search engines, customer referrals, trade shows, and cold calling • Once prospects are identified, salesperson must then qualify leads Step 2: Preapproach • In the preapproach stage, salespeople develop information about prospective customers and plan the sales interview. -•Customer websites can provide rich information about a prospect's likely needs. -•Informal sources may include non-competing salespeople and the company's service employees. Step 3: Approach • Once preapproach is done, time to approach, or contact, the prospect • Several key events occur within first minutes: --• Salesperson tries to learn more about customer. --• Create a positive first impression. --• Build rapport. Step 4: Sales Presentation • The part of the selling process in which the salesperson directly communicates the value proposition to the customer and invites twoway communication. -• Lays out benefits of product and advantages over alternatives, including rivals. -• Focus should be on ways salesperson and their company can add value to the customer. Step 5: Handle Objections • Rarely does a prospect accept everything put forth by the salesperson without question. • Objections are reasons why a prospect is reluctant to make a commitment. --• Effective salespeople anticipate objections, and are prepared to respond with information or persuasive arguments. Steps 6 and 7: Close the Sale and Follow-Up • If salesperson has done earlier steps well, closing the sale is a natural conclusion to the dialogue. • Follow-up after the sale includes arranging for delivery, payment, and purchase terms. --Input measures= "effort" measures—things that go into selling ---such as the number and type of sales calls, expense account management, and a variety of non-selling activities, such as customer follow-up work and client service. --Output measures= the results of the salesperson's efforts --- include sales volume but also include things like the number of orders, size of orders, number of new accounts, level of repeat business, customer satisfaction, and quantity of particular key products sold.

Advertising Execution Format

• Execution format describes the basic structure of the message. --• Comparison =explicitly names one or more competitors --> best for brands that have a smaller share of the market and for firms that can focus on a specific feature that makes them superior to a major brand. --• Demonstration = shows a product "in action" to prove that it performs as claimed --• Brand Storytelling = like 30-second movies with plots that involve the product in a more peripheral way. --• Testimonial = shows people telling about their experience with a product. --• Slice of Life = includes a celebrity, an expert, or a "man on the street" stating the product's effectiveness. --• Lifestyle = shows a person or persons attractive to the target market in an appealing setting Tonality • Tonality refers to the mood or attitude the message conveys: --•Straightforward --•Humor --•Dramatic --•Romantic/Sexy --•Fearful Creative Tactics and Techniques: -Animation and art -Celebrities -Jingles -Slogans

The Process of Innovation

• For marketers, innovation is anything customers perceive as new or different. -- May be a minor or game-changing alteration to an existing good or service -- May be a brand new product entirely Continuous Innovation: • Continuous innovation is a modification to an existing product. -- Customer doesn't have to learn anything new --> Ex) new Coke flavors Dynamically Continuous Innovation: • Dynamically continuous innovation is a pronounced modification to an existing product. -- Requires a modest amount of learning for consumers to use -->Ex) music (vinyl to cassettes to streaming apps) Discontinuous Innovation: • To qualify as a discontinuous innovation, the product must create major change in the way people live. -- Consumers have to learn a great deal in order to be able to effectively use the product -->Ex) cellphone, car, etc.

Advertising Appeals

•Emotional Appeals try to influence emotions •Informational Appeals satisfies consumers' practical need for information -- A Unique Selling Proposition (USP) focuses on one clear reason why a product is superior

the Customer Experience: Services

• Services = acts, efforts, or performances exchanged from producer to user without ownership rights. • Target both consumers and organizations. • Service industry account for 4 out of every jobs in U.S., and nearly 80% of GDP. --•Marketing careers: consulting, advertising, research, sale, retail etc. Intangibility: • Most services cannot be seen, touched, held, or put on a shelf Perishability •Most services cannot be stored for later sale or consumption. •Capacity management = the process organizations adjust their services in an attempt to match supply with demand. --may mean adjusting the product, or it may mean adjusting the price. Inseparability • Impossible to separate the production and consumption of a service Variability •Service can vary •Difficult to standardize the quality of its service performance The Service Encounter • A service encounter = when customer comes into contact with the organization. --• Social contact dimension (food service, advertising pitch etc.) --• Physical dimension (i.e., servicescapes) --servicescapes = The actual physical facility where the service is performed, delivered, and consumed. --• Customer also plays a role in service experiences (e.g., doctor's appointment). Service Quality • Customers are satisfied with what they have paid for. • But, satisfaction is based on customer expectations. --•Not all customers expect the same level of service • SERVQUAL = a multi-item scale used to measure service quality across categories of tangibles, reliability, responsiveness, assurance, empathy

Product Factors That Affect the Rate of Adoption

• The degree to which a new product has each of these characteristics affects the speed of diffusion. - Relative advantage -- The degree to which a consumer perceives a new product as offering superior benefits. -- Greater relative advantage means faster adoption - Compatibility -- The extent to which an innovation is consistent with existing cultural values, customs, practices, and norms. --Lack of perceived compatibility slows adoption - Complexity --The degree to which consumers perceive a new product as difficult to understand and use. --Higher the degree of perceived complexity, the slower the rate of adoption. - Trialability -- The ease of sampling a new product and its benefits. --Lower costs associated with trial usage can speed rate of adoption. - Observability --The degree to which others can see the new product and the benefits it provides. --An innovation that is more visible will drive more word-of-mouth communication.

New Product Development

• The new product development model is based on categories of R&D expenditures. • In most organizations, this process is well-defined and systematic. • R&D investment is a central metric for measuring an organization's commitment to innovation relative to its rivals. Phase 1: Idea generation (Ideation) - Marketers use a variety of sources to come up with ideas for new products. - Value co-creation via collaboration with customers, salespeople, service personnel, and other stakeholders Phase 2: Product-concept development and screening - Product ideas are tested for technical and commercial success. Phase 3: Marketing strategy development - Developing a plan including identifying the target market and developing strategies for the 4Ps. Phase 4: Business analysis - The product's commercial viability is assessed. Phase 5: Technical development - Engineers work to develop and refine a working prototype. - Firm may need to apply for a patent. Phase 6: Test Marketing - The complete marketing plan is tested in a small geographic area similar to the larger market or via a simulated market test. Phase 7: Commercialization - The new product is launched into the market. - Full-scale production, distribution, advertising, and sales promotion are begun.

channel of distribution (CH. 11)

• The process and partners that move a product from the producer to the customer • Direct vs. Indirect - Channel intermediaries (also known as place, channel distribution, distribution, and marketing)

Marketing through Product Life Cycle

• The product life cycle (PLC) is a useful way to explain how market response and marketing activities change over the life of a product. Introduction Phase of PLC: • Many products never make it out of the introduction phase due to low awareness. -- As many as 95% of new products ultimately fail! -- Offshoots of well-known brands have an advantage. -- Effective advertising and promotion are essential. Growth • The product is accepted and sales rapidly increase. -- Add product variations -- Attract new market segments -- Product preference campaign Maturity • Typically longest phase • Sales peak while profit margins narrow. --Market modification --> increase usage rate and users --Marketing Mix modification Decline • Sales decrease as customer needs change. •Decision to keep or dump the product -- Phase-out -- Simple dump

The Marketing Channel Creates the Utility of

• Time = When • Place = Where • Possession = Access • Information = Communication

Roles of Marketing Communication

• informs consumers about products/services • reminds consumers to use certain brands • persuades consumers to choose one brand over others • builds relationships with customers

What the Ads Will Say

•Advertisers try to minimize mistakes by getting reactions to ad messages before they actually place them •Data from pretesting research may come from either quantitative (e.g., surveys) or qualitative (e.g., focus groups) sources --E.g., A/B testing Traditional Mass Media: • TV- often the medium of choice, but is expensive • Radio- flexible but is declining in use • Newspapers- excellent for local ads • Magazines- varied in scope and can target local markets with selective binding Support Media • Directory advertising is information-focused advertising such as the Yellow Pages • Out-of-home media • Place-based media transmits messages to captive audiences in public places (e.g., airports, stores, gyms, etc.) Branded Entertainment • A form of ad in which marketers integrate products into entertainment venues. --Advergaming is brand placements in games --Native advertising is an execution strategy that mimics the content of the website (i.e., MSN, buzzfeed) where the message appears

Product-Market growth matrix

characterizes different types of growth strategies based on market and product types Market penetration strategies - seek to increase sales of existing products to existing markets, such as current users, nonusers, and users of competing brands within a market. Market development strategies - introduce existing products to new markets. - expanding into a new geographic area, or it may mean reaching new customer segments within an existing geographic market. Product development strategies - create growth by selling new products in existing markets. -Product development may mean extending the firm's product line by developing new variations of the item, or it may mean altering or improving the product to provide enhanced performance. Diversification strategies - emphasize both new products and new markets to achieve growth.

Perceived risk

level of uncertainty regarding the outcomes of a purchase decision • Functional, financial, social, physical, time, etc.

branded content

marketing communication developed by a brand to provide educational or entertainment value rather than to sell the brand in order to develop a relationship with consumers; may indicate the brand is the sponsor

Metrics

measurements or "scorecards" that marketers use to identify the effectiveness of different strategies or tactics

marketing dashboard

-A marketing dashboard is a comprehensive display and access system providing company personnel with up-to-the-minute information necessary to make decisions. - Marketing dashboards include: --data on actual sales versus forecasts -- progress on marketing plan objectives -- distribution channel effectiveness --current price competition -- other metrics and information are uniquely relevant to the particular employee's role in the firm.

Customer Lifetime Value (CLV)

-represents how much profit a firm expects to make from a particular customer, including each and every purchase he or she will make from them now and in the future. -describes the potential profit that a single customer's purchase of a firm's products generates over the customer's lifetime. -It's much more profitable to retain an existing customer than to acquire a new one. CLV ($)= Margin ($)/[1+Discount Rate (%)−Retention Rate (%)]−Acquisition Cost ($)

Big Data

Big data is a popular term to describe the exponential growth of structured and unstructured data. Sources of Big Data: -Social media sources- -->Sentiment analysis -->a process of identifying a follower's attitude toward a product or brand by assessing the context or emotion of comments they post -->analyzing and mapping millions of posts on Facebook, Twitter, and other social media platforms to track what people say about their experiences with products and services. -Corporate IT sources- -> sources of data within the organization that might include CRM databases, web analytic databases, enterprise resource planning (ERP) databases, and accounting-related databases. -Government and organization sources- -->U.S. Census results to data on the economic conditions in developing countries that allow marketers to better understand the demographics of consumers at home and the opportunities for global expansion. -Commercial entity sources- --> Many companies collect data in large quantities to sell to organizations that can derive value from them. -->Scanner Data -->data derived from all those items you scan at the cash register when you check out with card -Partner Database Sources- -->producer of a product that is sold by a large retailer such as Walmart, access to the consumer information that Walmart gathers from its interactions with shoppers in its stores. - Internet data can be hard to analyze using traditional approaches. - Internet of Things ---> Everyday objects are connected to the Internet and communicate information •"Data that is so large and complex it has outgrown the ability to aggregate and process it using traditional database techniques." -Volume: The Global Data likely to Grow at 41% -Variety: 80% of Data Existing is Unstructured Data -Velocity: Big Data will Enable Real-Time Analytics -->Digital marketing channels such as mobile phones, emails, social networking has increased the rate of information flows Big Data can provide competitive advantages: - Identifying new opportunities - Transforming insights into better products - Communicating more efficiently and effectively

74%

Digital marketing has become an increasingly important element of the marketer's toolbox. According to a survey conducted by Pew Research Center, ________ of Americans use at least one social networking site.

one-to-one marketing

One-to-one marketing includes several steps: - Identify customers and get to know them in as much detail as possible. - Differentiate among these customers in terms of both their needs and their value to the company. - Interact with customers and find ways to improve cost efficiency and the effectiveness of the interaction. -Customize some aspect of goods or services offered to each customer.

Problem-Solving Continuum

Habitual Decision Making: -Low Involvement -Frequently Purchased -Inexpensive -Little Perceived Risk -Little Information --Needed marketing actions -->Provide environmental cues Limited Problem Solving: Extended Problem Solving: -High Involvement -Infrequently Purchased -Expensive -High Perceived Risk -Much Information Desired --Needed marketing actions -->Provide information & Educate consumers to product/brand benefits

Marketing Information System (MIS)

Internal Company Data • Information generated from within the company -- Used to produce reports on sales and marketing activities -- Commonly accessed via secure intranets Market Intelligence • All the information that companies need about their environment • Market Intelligence System • Everyday sources: news articles, company websites, industry trade pub., field observations • Discussion with salespeople Market Research • The process of collecting, analyzing, and interpreting data about customers, rivals, and the business environment -- Syndicated research (e.g., celebrity endorsement, TV program ratings, etc.) -- Custom/Ad-hoc research Acquired Databases • Externally sourced databases can be used to collect various types of useful information -- Noncompeting businesses (e.g., NextMark) -- Government databases • Misuse of databases can be problematic -->"do-not-call" lists and anti-spamming laws -A firm's MIS stores and analyzes data from a variety of sources - A firm's MDSS makes it easier to access the MIS and find answers to specific "what-if" questions

Customer insights

Which of the following refers to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain its customers?

Market development

Which of the following strategies are utilized to introduce existing products to new markets?

Mission statement

Which of the following terms refers to a formal statement in an organization's strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources?

Marketing Mix (4 P's)

Product, Price, Place, Promotion -Marketing Mix Strategies: --Product Strat. --> Straight extension (same prod. diff. market) --> Product adaptation (complete diff. prod. adapting) --> Product invention/Backward invention (making new prod. / adapt to inferior prod.) --Price Strat. --> Is it more expensive to manufacture a product in a foreign market? --> Free trade zones --> High price in one country--> Gray markets --> Dumping: unethical & illegal practice --Price Strat. -->Place / Distribution decisions -->supply chain management

Evolution of Marketing

Production Era: • Industrial Revolution to 1920s • Companies focus on producing/distributing things in cost-effective manners (production orientation) Sales Era • Post-World War II, production capacity exceeded demand. - Led businesses to focus on one-time sales of goods (i.e., acquisition) rather than repeat business (i.e., retention) • Dominated by selling orientation - Emphasis on aggressive promotional activities such as sales promotion, ads, personal selling Relationship Era • U.S. faced inflation (70s) and an economic recession (80s) and realized the importance of adopting 'consumer orientation' • Resulted in various initiatives to improve customer experience --> Total Quality Management (TQM) • Focused on carefully identifying customers, gaining a deep understanding of their needs, and creating a favorable long-term relationship with the firm. Triple Bottom Line Era Marketers now seek to maximize (1) financial, (2) social, and (3) environmental bottom lines. • Financial: delivering profits to shareholders • Social: doing good for the communities in which they operate --> (e.g., Tyson's Hunger Relief, NFL's Play 60) • Environmental: focus on sustainability --> Green Marketing

Business planning

Which of the following terms refers to an ongoing process of making decisions that guide the firm both in the short term and for the long term?

Custom research

Which of the following types of research refers to research conducted for a single firm to provide specific information its managers need?

Decision Process to Enter global Markets

Step 1- whether to go global - Consider conditions and growth opportunities of domestic and global markets Step 2- Which markets to enter -Understanding the external environment- PESTEL Environment: -->Political (political state/ stability) -->Economic (economy health/development, stage in the business cycle) -->Sociocultural (demographics, social norms, ethnocentrism) -->Technological (affects marketing activities) -->Enviornment (competition in micro/ macro market) -->Legal (state/ national laws + regulations) Step 3- Level of commitment • The trade-off between risk & control • Exporting (Firms make the products at home) --> Export merchants are intermediaries a firm uses to represent it in other countries. • Contractual Agreement --> In a licensing agreement, one firm [the licensor] gives another [the licensee] the right to produce and market its product in a specific country. -->Franchising is a form of licensing in which the franchisee obtains the right to adopt an entire way of doing business. • Strategic Alliances -->allow companies to pool resources for common goals. (Joint venture) -->Ex) Starbucks + Target • Direct Investment -->a firm expands internationally through ownership. Step 4- How to adapt marketing mix strategies -localize VS. standardize -->Will the same product appeal to people there/ Will it have to be priced differently/ To what extent will company need to adapt marketing to local market/ How will the company get the product into people's hand -Marketing Mix Strategies: --Product Strat. --> Straight extension (same prod. diff. market) --> Product adaptation (complete diff. prod. adapting) --> Product invention/Backward invention (making new prod. / adapt to inferior prod.) --Price Strat. --> Is it more expensive to manufacture a product in a foreign market? -->ethnocentric pricing (single price globally) -->polycentric pricing (the global distributors set their own prices based on their understanding of their market environment without concern for the coordination of prices) -->establishes a global minimum for product but recognizes that unique local market conditions must be considered in setting the price in each market). --> Free trade zones --> High price in one country--> Gray markets --> Dumping: unethical & illegal practice --Price Strat. -->Place / Distribution decisions -->supply chain managment

One-to-one marketing

Which of the following utilizes the four steps: identify, differentiate, interact, and customize to facilitate a relationship with consumers?

Strategic Planning

Step 1: Define the Mission • A mission statement is a formal document that describes the firm's overall purpose and what it hopes to achieve in terms of its customers, products, and resources. Step 2: Evaluate the Enviornment • Examination of internal and external environments --Internal environment--> consists of controllable elements within firm. --External environment--> consists of factors outside the firm which that could positively or negatively impact operations. ---> Largely beyond direct management control, so planning is critical • Managers often synthesize environmental analysis of into a format known as SWOT analysis. Step 3: Set Organizational or SBU Objectives • Organizational goals and objectives should be direct outgrowth of the mission statement. --Taking into account internal and external environmental factors • Objectives should be Specific, Measurable, Attainable, Realistic, Timed--> S.M.A.R.T Goals Step 4: Establish Business Portfolio • A business portfolio represents the range of different businesses that a large firm operates. - The items in the business portfolio -->SBUs ---Ex) Disney operates multiple lines of business, including movie studios, theme parks, cruises, etc. • Portfolio analysis -- Assesses the growth potential for a firm's SBUs and product lines -- BCG Growth-Share Matrix Step 5: Develop Growth Strategies • Product-Market growth matrix -- Characterizes different types of growth strategies based on market and product types.

The Market Research Process

Step 1: Define the Research Problem • Place the problem in an environmental context -- What factors in the firm's internal and external business environment might influence the situation? • Specify the research objectives -- What questions will the research attempt to answer? • Identify the consumer population of interest Step 2: Determine the Research Design • Once the problem is isolated, the next step is to determine a 'plan of attack' -- A research design is a plan that specifies what information marketers will collect and what type of study they will do • Research designs fall into two categories: -- Secondary data --> pre-existing data from past studies (internal & external resources) -- Primary data --> Data collected from firm to address specific question -->Exploratory useful for: - Gaining better understanding of problem - Identifying new opportunities -->Customer Interview, Focus groups, Market research online community (MROC), Case studies, Ethnographic studies -->Descriptive research - Who, What, When, Where, and How questions - Results expressed in quantitative terms - Cross-sectional vs. longitudinal designs -->Causal Research - Attempts to identify cause-and-effect - Often involves experiments - Independent (subject to change) and dependent variables (changes depending on indep.) Step 3: Choose the Method to Collect Primary Data • Primary data collection falls into two broad categories -- Survey & observation --->survey methods: face-to-face interview, mail survey, telephone survey. online --->observational methods: researcher records consumer behaviors, often without their knowledge • Use of new technologies -- Neuromarketing -- Virtual stores Step 4: Design the Sample • Probability sampling -- Each member of the population has some known chance of being included -- Simple random sample --> (population / sample #) -- Systematic sampling procedure -- Stratified sample • Nonprobability sampling --> A sample in which personal judgment is used to select respondents (i.e., surveying SJU students when targeting college students) -- Convenience sample -- Quota sample Step 5: Collect the Data • The quality of research conclusions is only as good as the data used to generate them • Data/Measurement Quality --> Validity, Reliability, Representativeness Step 6: Analyze and Interpret the Data • Data must be analyzed and interpreted to be meaningful! • Tabulation - Arranging data in a table or other summary form to get a broad picture of overall response • Cross-tabulation - Exploring data by sub-groups in order to see how results vary across categories Step 7: Prepare the Research Report • Research reports typically include the following sections: -- Executive summary -- Description of research methods -- Discussion of study results -- Limitations of study -- Conclusions and recommendations

The Consumer Decision-Making Process

Step 1: Problem Recognition: - Occurs whenever a consumer sees a difference between current state and desired/ideal state Step 2: Information Search: • Consumers search internal (i.e., memory) and/or external information to make good decisions. -- Top of mind • Evoked set (all options of brands/products in the market) vs. Consideration set (options that consumer is considering to buy from) -- Online search (e.g., search engines, comparison shopping agents) Step 3: Evaluation of Alternatives: • Identifying a small number of products for closer consideration -- Determinant attributes: most distinguishable features -- Evaluative criteria: the dimensions consumers use to compare competing product alternatives Step 4: Product Choice: • Consumers often rely on mental shortcuts, or heuristics, in making decisions. • Heuristics= rules of thumb used by individuals to arrive at good decision with less mental effort: -- Price equals quality -- Brand loyalty -- Country of origin (e.g., Made in China vs. Made in U.S.) • Compensatory decision rules= information about attributes of competing products to be averaged in some way. Step 5: Postpurchase Evaluation: • Consumer satisfaction/dissatisfaction following purchase of product is critical. -- Level of satisfaction is influenced by whether or not expectations of quality are met or exceeded. -- Cognitive dissonance (or buyers' remorse) is common. -- Marketing communications must create accurate expectations for the product. Summary: • Decision-making effort varies based on levels of perceived importance (i.e., involvement) and risk. • Marketing can trigger problem recognition and facilitate consumer progression through decision process. -ZMOT= "zero moment of truth". ZMOT occurs on mobile phones, laptops, and any other type of wired device. -hyperchoice= where a large number of available options forces us to make repeated choices that drain psychological energy and diminish our ability to make smart decisions

Unstructured Data VS Structured Data

Structured Data: -Resides in formal data stores -Data Warehouses/repositories; grouped in the form of rows or columns - Easily accessible - Accounts for ~20% of the total data existing currently Unstructured Data: -Comprises data formats which cannot be stored in row/ column format like audio files, video, clickstream data, social media interactions -More difficult to drive meaning -Accounts for ~80% of the total data existing currently

Structured data

Which of the following refers to data that is typically numeric or categorical; can be organized and formatted in way that is easy for computers to read, organize, and understand; and can be inserted into a database in a seamless fashion?

data mining

Which of the following refers to sophisticated analysis techniques to take advantage of the massive amount of transaction information now available?

Marketing Ethics

Unethical marketing action cannot establish long-term relationships. - Consequences of low ethical standards can be damaging to firms and managers. - Stockholders may lose investment. - Jobs may be lost. - Confidence in the economy suffers. -Bribery occurs when someone voluntarily offers payment to get an illegal advantage. • E.g., Guanxi in Chinese business culture Business ethics are basic values that guide a firm's behavior. • What constitutes ethical behavior is often different for different people. • A code of ethics is a written standard to which everyone in the organization must subscribe.

Product strategies

What part of the sustainable marketing mix involves producing more environmentally friendly products, such as electric automobiles?

Monopolistic competition

Which competitive macroenvironment do many athletic shoe manufacturers, including Nike, New Balance, Adidas, and more recently, Under Armour, vigorously compete with one another for consumers?

Monopolistic competition

Which competitive macroenvironment do many athletic shoe manufacturers, including Nike, New Balance, Adidas, andmore recently, Under Armour, vigorously compete with one another for consumers?

Canada, Mexico, and the United States

Which of the following countries make up the economic community known as NAFTA?

Exploratory research

Which of the following describes a type of primary research involving a technique marketers use to generate insights for future, more rigorous studies?

Search engine optimization (SEO)

Which of the following digital marketing methods refers to a systematic process of ensuring that your firm comes up at or near the top of lists of typical search phrases related to your business?

Pollutant (greenhouse gas) emissions

Which of the following is a sustainability metric that refers to pounds of pollutants emitted in the process of creating organizational output?

Longitudinal design

Which of the following is a type of descriptive research that involves tracking the responses of the same sample of respondents over time?

Marketing plan

Which of the following is the document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy?

Cross-sectional design

Which of the following refers to a descriptive technique involving the systematic collection of quantitative information across different groups?

Strategic planning

Which of the following refers to a managerial decision process that matches an organization's resources and capabilities to its market opportunities for long-term growth and survival?

Conversion

Which of the following refers to a marketing metric that signifies an event that occurs on a Web page that indicates the meeting of a predefined goal associated with the consumer's interaction with that page?

Marketing information system (MIS)

Which of the following refers to a process that first determines what information marketing managers need and then gathers, sorts, analyzes, stores, and distributes relevant and timely marketing information to system users?

Database

Which of the following refers to an organized collection (often electronic) of data that can be searched and queried to provide information about contacts, products, customers, inventory, and more?

Emotion analysis

____ can analyze the content of social media communications within the context of a specific brand or product and determine what emotional category the communication fits within.

BCG growth market share matrix

____ is a portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that a firm can then use to invest in new products.

value proposition

a marketplace offering that accurately sums up the value that the customer will realize if he or she purchases the product. - includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself.

mass market

all possible customers in a market, regardless of the differences in their specific needs and wants

level of involvement

amount of importance attached to the purchase

Business Planning

an ongoing process of making decisions that guides the firm both in the short term and in the long term Strategic planning: -the managerial process that matches firms resources and capabilities to market opportunities. -- Top management defines firm's purpose, sets long-term objectives, & determines growth strategies -- SBUs (strategic business units) --> ex: Disney w/ parks, internet, media networks, etc. *see more under "strategic planning"* Functional (or Market) Planning • Functional -- Planning done by functional level management • Effective implementation of the 4Ps requires a great deal of planning. • Steps are similar to those in strategic planning -- Key difference relates to focus on issues relating to marketing mix. *see more under "functional planning* Operational Planning • First-line managers focus on day-to-day execution of marketing plan. -- Cover a shorter period of time than strategic and functional plans • Annual, semi-annual, or even quarterly action plans to guide marketing plan implementation • Include detailed instructions for activities, specifies responsibilities, and provides timelines -- Use of marketing metrics to monitor performance -- Often falls to lower-level managers Action Plans/Setting a Budget • Who will be responsible for carrying out each part of the marketing plan? • Often portrayed in flowchart • Each cost element of the action plan should link to a budget item. -- Increases accountability for all parties involved with implementing the marketing plan

touchpoint

any point of direct interface between customers and a company (online, by phone, or in person)

Cultural Values

collectivist cultures: --Venezuela, Pakistan, Taiwan, Thailand, Turkey, Greece, and Portugal --people tend to subordinate their personal goals to those of a stable community. individualist cultures: --United States, Australia, Great Britain, Canada, and the Netherlands -- attach more importance to personal goals, and people are more likely to change memberships when the demands of the group become too costly

Microenvironment

consumer decision making levels - Competition for discretionary income -->the amount of money people have left after they pay for necessities such as housing, utilities, food, and clothing. - Product competition -->where other organizations offer different ways to satisfy the same consumers' needs and wants. - Brand competition -->where competitors offer similar goods or services, vying for consumer dollars, euros, or pounds.

Digital Marketing

cost-per-click basis - the cost of the advertisement is charged only each time an individual clicks the advertisement and is directed to the web page placed in the advertisement. -This method of charging for advertisements is common for online vendors of advertisement space. cost-per-impression - in which the cost of the advertisement is charged each time the advertisement shows up on a page that the user views. landing page -which is a single page on a website that is built for a particular direct marketing opportunity. -designed to include specific information that is logically connected to the content of the marketing communication that led the user to the page. anticipatory shipping - This is a data-driven system of delivering products to customers before they place an order, utilizing predictive analytics to determine what customers want and then shipping the products automatically. click-through rate (CTR) - is a metric that indicates the percentage of users (viewers of the advertisement or the page that the link is on) who have decided to click the advertisement in order to visit the website or Web page associated with the advertisement: conversion rate -used to look at the effectiveness of digital marketing which is expressed as a percentage. -A conversion based on a consumer's interaction with a web page might be the purchase of a product or a service (or multiple purchases in one sitting), the choice to sign up for a mailing list, or the decision to become a follower of the company via social media.

protected trade

foreign exchange rates -- also referred to as forex rates. Exchange rates are simply the price of one currency in terms of another currency. protectionism --enforced rules on foreign firms to give home companies an advantage embargo --an extreme quota that prohibits commerce and trade with a specified country altogether.

Customer relationship management (CRM)

involves systematic tracking of consumers preferences and behaviors over time in order to tailor individualized value propositions. Share of Customer • It's easier and less expensive to keep a current customer than it is to acquire a new one. --• Share of customer (or Customer Share): -->The percentage of a given customer's purchases of the same brand in a category over time. --• Share of market (or Market Share): -->The percentage of total sales volume in a category captured by a brand, product, or company. Customer Lifetime Value • Lifetime value of a customer is how much profit a firm will make on a customer. Customer Prioritization • Not all customers are equal ... at least, not in terms of profitability! • 80/20 Rule • CRM systems enable marketers to identify priority customers and customize communications & special offers accordingly.--> personal selling for contacting high-volume customers vs. direct mail for low-volume customers.

Macroenvironment

overall industry structure - Monopoly (one company) -Oligopoly (several companies) -Monopolistic competition (# of companies trying to control market share) - Perfect competition (same product, diff. brands)

Action Plan

support the various marketing objectives and strategies within the plan. The best way to use action plans is to include a separate action plan for each important element involved in implementing the marketing plan. -Also known as marketing program Leading indicators VS. Lagging indicators Leading indicators: - provide insight into the performance of current efforts in a way that allows a marketer to adjust relevant marketing activities resulting in performance improvements against the current action plan. Lagging indicators: -reflect the performance of an action plan based on outcomes realized. -Lagging indicators provide a basis for review and analysis of the action plan with implications for improvement that are focused beyond the scope of the current action plan itself.

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Nationalization

the domestic government seizes private assets, usually declaring the assets the property of the state. It happens without any reimbursement and the country typically justifies this action as being in the best interest of the country or state.

Marketing Concept

the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goals

Marketing Offerings

• Consumer goods/services • Business-to-business goods/services • Not-for-profit marketing • Idea, place, and people (e.g., micro-celebrity), etc.

Marketing Plan

• Describes the marketing environment • Outlines the marketing objectives and strategy • Identifies who will carry out each strategy

Functional (Market) Planning

• Functional - Planning done by functional level management • Effective implementation of the 4Ps requires a great deal of planning. • Steps are similar to those in strategic planning -- Key difference relates to focus on issues relating to marketing mix. Step 1: Perform Situational Analysis • Analyze the marketing environment • Conduct SWOT analysis Step 2: Set Marketing Objectives • Specific to the firm's marketing mix related elements • Marketing objectives help achieve the overall organizational (or business) objectives. Step 3: Develop Marketing Strategies • Identify target market(s) • Adjust marketing mix for each target market -- Product --->decisions on product design, packaging, branding, support services and maintenance, upgrades, product variations (e.g., iPhones) -- Price --->how much a firm charges for a product. -->Price bundling (prod. combos and offer discounted price) -->Debundling (stripping services/bonuses from product for cheaper price) -->Rebundling (re-attaching services/bonuses from debundled basic prod. for modified price) -- Promotion ---> how marketers comm. prod.'s value proposition to a target market --advertising, sales, promotion, PR, direct mark., personal sales -- Place (Distribution) ---> the outline of where, when, how the firm will make product available to customers --- Sell directly to the final customer or work through wholesalers and retailers? Step 4: Implement and Control the Marketing Plan • During implementation/control stage, firms follow formal process to determine progress toward marketing objectives. -- Select right metrics and measure actual performance (e.g., digital marketing) -- Compare performance to established objectives -- Make adjustments to objectives or strategies based on this analysis

Data Mining

• The biggest challenge for many firms is determining what to do with 'Big Data'! • Data mining refers to process by which analysts sift through Big Data to identify unique patterns of behavior.

Marketing Analytics

• include technologies and processes that enable marketers to collect, measure, analyze, and assess marketing effectiveness. -- Validating prior investments and understanding current performance. Predictive Analytics • Use large quantities of data to more accurately predict future outcomes • Marketing metrics enable firms to assess performance of current/past initiatives. • Predictive analytics help marketers predict the success of future initiatives