Marketing Cumulative Review
Mission Statements
- 1st step of marketing planning process - Includes what business they are in, what they value, what they are good at, why it matters (versus how and what - Simon Sinek video), why they exist
Nike Video
- 3 main teams: developer, marketing, designers - product is king - no leader but each team takes on more so that leader role at their step in the development process - 18 month process
IMC elements/tools
- Advertising: create awareness and interest, controlled messages through a paid channel' - Public Relations (PR): programs influence stakeholders, free media attention and social shares - Sales promotion: incentives, consumer and trade - Personal selling: most expensive form of IMC, good for complex/high-end products. Common in B2B - Direct marketing: mail, e-mail, mobile, utilizes CRM and databases
Retailing definition
- All the activities directly related to the sales of goods and services to the ultimate consumer for personal, non-business use - Not what, but where we buy and from whom - Major types: hard/soft goods, service (tech)
E-commerce driving retail growth *
- Amazon has 50% - least popular in food/alcohol but has grown fourfold
Market opportunity analysis
- Assess market and segments for growth potential - Estimate share given value provided - Size/predict market potential - Critical for resource allocation
Promotional Mix
- Characteristics of target market - Nature of product, stage in PLC of category (ex: introductory needs more advertising) - Type of buying decision (ex: B2B) - Push and pull (trade partners and consumers), channel policies - Resources/promo funds
Push versus pull strategy *
- Companies can do both push and pull especially w/ convenience products - Push: manu. promotes to wholesaler (like trade partners), wholesaler promotes to retailer and orders to manu, retailer promotes to consumer, consumer buys from retailer - Pull: manu promotes to consumer, consumer demands product from retailer, retailer demands product from wholesaler, wholesaler demands and orders product from manu
Integrated Marketing Communications definition and examples
- Definition: tangible representation of brand and identity - note: promotion SUPPORTS pricing, distribution, price, product problems, does not solve them - Examples: how you paint trucks, packaging, logos, website, print materials, retail atmosphere, CRM, ads/sponsorship/product placement, grapevine, social media platforms, reviews, blogs, community involvement
Persuasive promotion
- Encourage brand switching - Change customer's perceptions of product attributes/use - Influence immediate buying decision - Persuade customers to call/visit website/go to store - Good during growth stage of PLC - ex: Sabra Hummus (many demographics all love)
Social media 4E framework
- Excitement: immediacy, offers, ads, stories, news personalization - Educate: products, trends, safety, care - Experience: simulate experiences, hear testimony (ex: games) - Engage: loyalty, apps, blogs, stories
Corporate social responsibility *
- Firms have responsibilities to society/stakeholders, want to achieve triple bottom line: economic, social, environmental performance - Controversial industries can do CSR but not be conscious due to the ethical component (ex: tobacco)
Connect promotion
- Form relationships through social media - Download app for freebies/offers - Encourage transparent info exchange - Customers become brand advocates - Loyalty programs/membership - ex: Sephora VIB program
Marketing definition
- Formal: Activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have VALUE for customers, clients, partners, and society - process, value creation (provide more value than competitors), 4 P's
Functional vs. Psychological Needs
- Functional - can be satisfied by most basic thing - Psychological - concerned with status (visible to you and others) and more personal gratification in addition to satisfying the basic desire, involves more social and financial risk - many companies try to satisfy both - ex: you are thirsty - any drink can satisfy functional need, but wanting a Starbucks iced mocha is psychological
Analyze & Measure social media
- Hits (ex: likes on a post) - Page views - Bounce rate (how long they stayed) - Click paths - Conversion rates (get them to the site?) - Keyword analysis
Informative promotion
- Increase awareness - Explain how product works - Suggest new uses - Build company image - Upcoming event - Early in PLC - ex: Bubly promo
Wheel of social media engagement *
- Information: spread relevant info to members - Connected: satisfy innate need to connect - Network: spread post instantaneously - Dynamic: back-and-forth communication, people leave/enter communities with changing interests - Timeliness: engage with customer at right place and time (ex: GPS tracking)
Advertising appeals - informational and emotional *
- Informational: benefits, profit/affordability/price, green/environmentally friendly, convenience, event info - Emotional: fear/safety, humor, status/affluence, happiness/comfort, love/sex appeal, nostalgia
Institutional vs. Product Advertising *
- Institutional: enhances company's image rather than touting specific product. Ex: GE catch the wind promo - Product: tout benefits of existing product. Ex: GE color run promo (can get out stains)
Business products *
- KEY is intended use - used to make other products - become part of another product - aid normal operations of organization (ex: airplanes need many parts in order to actually operate) - acquired for resale without changing its form - note: can be services, too (ex: consulting)
Consumer journey
- Need recognition, search, evaluate and buy, post-purchase behavior - awareness, consideration (more personalized), purchase, retention, advocacy (WOM)
Types of buys
- New buy: most time consuming - Modified rebuy: wants/needs change in original good service (ex: need would be with a required software update changing things) - Straight rebuy: reorder, least time consuming
Consumer behavior - need recognition
- Not satisfied with self-concept and lifestyle determined by external influences (culture, demographics, reference groups, etc.) and internal influences (motives, emotions, attitudes) - imbalance between actual and desired state - first stage in decision making process
Marketing as a process
- Nothing happens in business until it is sold - Product, pricing, place, then promotion - Combo of art and science - Starts and ends with consumer (potential market, needs, product development, product launched
Advertising *
- Paid, controlled communication from sponsor, manu, retailer, or organization - Through a variety of media channels - Media strategy: dispersion challenging for mass appeal (like Coke) but good for niche, relevance and point in customer journey - Creative strategy (message): informational, emotional, sell benefits or solutions the product provides - Expenditures continue to rise (6.2% increase, $672 bill) - Channels shifting (ex: newspapers dying)
Factors affecting search process
- Perceived benefits/costs - Risks: financial, social, performance (ex: clothes shrink), physiological (safety), psychological (how people feel about image they convey) - Time
External factors impacting business/marketing - culture *
- Pervasive, dynamic, functional (order), learned (passed down to learn) - Subcultures by region
Customer relationship management
- Process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction - Leverage customer data for the acquisition/retention Ex: rewards, Amazon Prime fast shipping, freebies
Triple Bottom Line
- Profits, people, planet - Achieve for long-term success - can be achieved through CSR
Media selection criteria
- Reach: % of target exposed to message, gross rating points (GRP's) - Frequency: how many times - Cost per contact or cost per click - Media flexibility (ex: weather sensitive) - Noise level (can they see it, ad blockers) - Metrics and measurement: determine impact and ROI, often audited - Media scheduling: continuous, flighting, pulsing
Reminder promotion
- Remind customers that product may be needed - Remind customers where to buy - Maintain customer awareness - Good for mature categories, cash cows - Remind of benefits and great past experience - ex: Reese's (always use orange), Office Depot (pens gifted)
Business buyers
- Reseller: wholesale, retail, distributors - Manufacturers, OEM (original equip. manufacturer), producer - Government - Institution: ex: school, hospital
Target Market
- Segment based on similar needs and benefits sought, analyze market based on attractiveness of the market segments, then select - Basis of determining the 4 P's
Promotions and brand association management
- Sports marketing and sponsorships: need to make sense with your brand - Cause-related marketing: proceeds go to a cause - Philanthropy: ex: P&G clean water, Swiffer gives to breast cancer research - Social responsibility: especially important with Gen Z and conscious marketing
Paradox of choice
- Too many choices leads to escalation of expectations, self-blame, more regret/anticipated regret - companies need to simplify for customers - Maximizers: spend lots of time evaluating choices, often have more regret - Satisficers: spend less time making decision, usually less regret
Traditional (non digital) and non-traditional/digital media placement options
- Traditional: TV, radio, newspapers, magazines, books, direct mail, billboards, transit cards, subway tunnels, shopping carts, airports - Non-traditional/digital: AdWords, banner ads, social media ads, re-targeting (follows on webpages you visit next), e-mail, sponsorships, product placement, naming rights, sports venues, events, athletes
Decision support systems and data warehouses
- Used for ongoing operations and intelligence and to make data-driven decisions - tied to sales data and environmental factors - generally internal secondary data - auto-collected, mine the data in different ways - ex: look at regional performance
Walmart vs Amazon *
- Walmart: EDLP, omni-channel services, store locations, higher inventory efficiency and cash flow model, biggest retailer in US - Amazon: #1 in e-commerce, ever adapting business, competitive distribution, e-commerce optimization, higher return on equity, returns are a challenge
Prospecting/generating leads
- advertising - publicity - direct mail/telemarketing - referrals - internet web site - cold calling - networking - trade shows/conventions - company records
CLV Netflix Video
- approximates amount of money customer will spend from the moment they sign up - guides Netflix budget on customer acquisition and retention - analyzes churn: how often people cancel - justify spending millions on original content
Private label (retailer/distributor) brands *
- becoming more popular - retailer contracts manufacturing (increased) - build differential advantage and channel power - provides superior margins - retailer product loyalty - development of private label retail concepts (like Trader Joe's) - result of disintermediation
Research - benchmarking vs. task *
- benchmarking/trend: INTERVALS, collect service perception, awareness, share data, attitudes, needs, category data (may be syndicated secondary - ex: Walmart sells data to IRI back to manufacturer) - task oriented: address specific decisions, like new products, geographic expansion, advertising effectiveness - ex: can test 2 ads to see which is perceived better)
Ritz Video
- bring into new category to add incremental volume - retain some qualities to keep current customers - perception of chips differ (by age, season to eat, etc.) - kept similar flavor profile - used focus groups to decide on name - decided to use current shelf presence - focused on packaging and decided to use bags - was a success
What we want promotional effort to do *
- center: target audience - Reminding: maintain awareness, reinforce learning, where to buy, stimulate needs - Persuading: encourage switching, change perceptions, influence immediate buying, call/visit website now - Connecting: relationships via social media, loyalty programs, visit website, transparent exchange - Informing: awareness, new uses for product, event, image enhancement
Omni channel challenges
- centralized customer database/data warehouse - consistent brand image across all channels - assortment decisions: more online? - price: same as store or dynamic? - high quality photo resources and product descriptions - distribution infrastructure: DC or ship from store? - fast delivery expectations - provide great experience and close sale - reverse logistics (returns)
5 Cs of pricing
- competition (parity, status quo, higher/lower) - costs - company objectives (price in sync with product/company) - customers (valuation of benefits) - channel members (like partners, who you sell to/through, who buy from)
Packaging functions
- contain and protect - promote, list features and benefits, brand markings - facilitate storage, use, and convenience - facilitate sustainability concerns - ex: Heinz Dip & Squeeze Ketchup provides convenient way to use
Product development step *
- create prototype - sketch marketing strategy (positioning) - packaging, branding, labeling - promotion, price, distribution - manufacturing feasibility - financial feasibility - can be rapid (ex: food) or slow (ex: John Deere)
Marketing channels add value
- create time, place, and exchange utility - reduce number of transactions: broad assortment (ex: Amazon) - increase value for consumers: more convenience - more efficient and effective
Data analysis - targeting and promotion
- customer segmentation (ex: remind at busy times) - recency-frequency-monetary analysis: who to send catalog to, offers, BEP - lifetime value analysis - predictive modeling
Making presentation and overcoming objections
- customize to audience and their needs - solve their problems - anticipate objections/reservations - view objections as a request for info - be sure you are expert on competitors and the industry - ask for the order
Benefits of omni channel retailing *
- deeper and broader selection: not bound by physical constraints of the store (ex: 3rd party sellers) - personalization: personalized customer service and offering, use data to know customer - expanded market presence: increased share of wallet from category, constant connectivity
Price strategy
- define unit of consumption - perishability or fluctuating demand (ex: more popular in summer) - yield management systems and variable pricing (ex: airline tickets, price based on availability) - bundle or price separately
Factors in determine price *
- demand & WTP (willingness to pay) - costs (need to cover to get more than break even) - competition
Advantages of personal selling
- detailed explanation/demo of product - message can be varied according to motivations of each customer - can be directed only to qualified prospects - can purchase personal selling in small increments - most effective promotion form in obtaining sale and satisfying customer - great for higher risk/large purchases
Designing marketing channels *
- direct channel: manu to customer - direct channel, 1 intermediary: manu to retailer to customer - direct channel, 2 intermediaries: manu to wholesaler to retailer to customer (usually involves smaller retailer or manu when wholesaler is involved) - ex: Apple
CRM
- easier to maintain existing customers - help w/ CLV - data mining - centered on the customer - program creation
Criteria for good loyalty program
- easy to understand, transparency - tiered rewards/levels - choices of rewards - reward all transactions - exist strategy: hard to change
Idea screening *
- eliminate ideas inconsistent with strategy - ex: Pepsi screened out alcohol
Following up
- ensure delivery schedules are met, goods or services perform as promised (and they know how to use it), buyer's employees are properly trained to use the product - service quality dimensions: reliable, responsive, provide assurance, have empathy, stress the tangibles
Marketing Overview *
- entails processes that focus on delivering value and benefits to customers, not just selling goods/services - involves processes of developing need-satisfying products and services, delivering value through pricing strategy, convenient access via distribution, and integrated communication to targeted buyers
Concept test *
- evaluate IDEA with target customers - brief visual/written description - successful for line extensions - triggers research process
Consultative salesperson *
- expect expertise - salesperson needs to know everything about: product/service, customers, competition, industry
Challenges with loyalty programs (CRM) *
- expensive to offer - intensive to manage - challenging to change once a customer is well vested - impact on loyalty is not clearly defined - easily copied: not sustainable competitive advantage
Consumer behavior decision-making model *
- external influences: culture, subculture, demographics, social status, reference groups, family, marketing activities - internal influences: perception, learning, memory, motives, personality, emotions, attitudes - self-concept and lifestyle leads to recognizing needs and desires - decision process: problem recognition, info search, alternative evaluation and selection, outlet selection and purchase, post-purchase processes
Approaching customer and probing needs
- first impressions are long-lasting so this is a critical step - relationship with the prospect must be created - ask a lot of questions - make it about them
Varying supply chain systems *
- food: experts (Tyson/Perdue example), develop product, specification, manufacturing plants approved (more than 1), use pull ordering (freshness), logistics, staple product, domestically produced - fun meal toys/premiums: deal with brands/movie, approved suppliers, designers, brokers (find factories), factories, logistics, financing, push distribution, seasonal/fad
Benefits of trade promotions
- gain new distributors/retailers and persuade to promote your brand: shelf space - obtain channel support for consumer sales promotions - neutralize store brands (ex: P&G gives Hyvee incentive to limit private labels; Quaker oats cheaper than Walmart brand) - build/reduce dealer inventories and yours - improve trade relations
Price skimming *
- go in high - inelastic (unchanging) demand - patent/legal protection - difficult to copy - market leader's innovation - ex: technology, Tesla
Market penetration pricing *
- go in low - try to block competition - gain early share - danger of low price perception established - desire trial period - supply side and capacity issues - good for low-price goods
Private label growth
- growing nearly 8x that of national brands - power of retailers: they have the data - retailer loyalty - unique offerings - vertically integrated companies & processes - more seamless SCM - types: copycats, premiums (ex: Trader Joes), benefit based (ex: organic)
Frito Lay Video
- have culinary innovation center for product discovery - well-integrated teams: chefs, food science, etc. all work together for 360 experience - learned: powerful, consistent brand allows product designing to transcend all areas of store and food service marketplace
Point-of-purchase promotion
- help make a decision - offers captive audience in retail stores - impulse buys 70% of all grocery unplanned and decide at store - need proper positioning in store
AIDA model
- helps decide which tools to use, look to customer journey and stage of product life cycle - can be all at once or longer term - Awareness: think - Interest: feel - Desire: feel - Action: do
Channel conflict *
- horizontal, vertical (ex: Goodyear tires) - exacerbated with private label - manu drive for favorable arrangements in distribution - retailers need margins and consumer traffic - where power lies in supply chain: ex: Coke and Pepsi Kroger scenario
Customer Relationship Management (CRM)
- identify best customers - leverage customer info - identify customer relationships - understand interactions with current customer base - capture data based on transactions - store and integrate customer data using IT
Types of vertical marketing channel systems
- independent & administered vertical marketing system: most common, ex: Walmart (driven by power in channel structure) - contractual vertical marketing system (franchising) - corporate vertical marketing system: existing systems (car dealers, bottlers) - power through: reward, coercive, referent, expertise, information, legitimate
Services vs. tangible goods *
- intangible: no physical object makes harder to communicate benefits - inseparable: production/consumption are simultaneous so consumer is involved in production (ex: haircut) - inconsistency: service quality depends on employees - perishable: services can't be saved, challenge to synchronize supply and demand
Level of distribution intensity - MFG POV *
- intensive: achieve mass market selling, convenience goods, many intermediaries - selective: work with selected intermediaries, shopping and some specialty goods, several intermediaries - exclusive: work with single intermediary, specialty goods and industrial equipment, one intermediary
Data mining
- internal secondary data - customer segmentation strategies (ex: segment and advertise based on previous purchases) - promotion effectiveness (ex: when to hold a sale) - product/price - associated purchases
Data warehouses
- internal secondary data - sales and costs by product, region, stores, etc. - call reports - ongoing syndicated reporting - customer data and purchase history (important for B2B)
Diffusion and product life cycle
- introduction: innovators (2.5%) and early adopters (13.5%) - growth: early majority (34%) - maturity: late majority (34%) - decline: laggards (16% - kinda also for maturity)
Promotion ok?
- is it deceptive? - increase prices? - create needs? - encourage materialism - should/shouldn't be advertised (ex: smoking)
Premiums & sweepstakes
- know the laws - vary by states - licensing (ex: basketballs) - can be costly and hard to manage - giveaway or self-liquidating - usually not in core competencies
Closing the sale (ABC- always be closing)
- look for customer signals (ex: head nods) - keep an open mind - negotiate - tailor to each market
Benefits of effective supply chain and marketing channel management *
- lower inventory, transportation, warehouse, and packaging costs - improved customer service - higher revenues - increased performance and profitability - greater supply chain flexibility - no stock outs
Sales promotion
- marketing communication activities, other than advertising, personal selling, and PR, in which a SHORT-TERM INCENTIVE motivates a purchase from consumers or dealers - ex: Village Inn pie rush Wednesday - consumer sales promo: target ultimate consumer (pull) - trade sales promo: target marketing channel member like a wholesaler or retailer (push) - increased due to: growing power of retailers, brand proliferation, increased competition, declines in brand loyalty, advertising clutter, short-term sales needs (usually tied to a specific tactic, cause and effect), measurability (can uncouple from "branding") - ex: Ikea
Price definition
- modifier of value, not absolute measure - relates directly to quantity and revenue (price x quantity = revenue) - changeable - symbolic value - prestige pricing
Segmentation benefits
- more accurate marketing objectives - improved resource allocation - better marketing results - improved ROI (more profitability)
Price discrimination, yield management, and dynamic pricing
- more common with online buying and service sector - price grows with more real-time demand (ex: Uber) - moving into tangible goods - good promotional strategy for low demand time periods (ex: early bird special, seasonal discounts)
Lead qualifying
- need - budget (ability to buy?) - authority - timing
Manufacturing brands
- not as common as before - manufacturer invests in distribution and promotion (they control marketing strategy) - stimulates consumer demand - sell in multiple outlets (usually for higher cost) - ex: Ralph Lauren
CPG/Discounts/Trade Promotion
- ongoing quantity discounts and allowances - promotional allowances - specific loader discounts: tied to oversupply or a consumer promotion - tools for sales staff - sales incentives for salesman and retailer sales staff - ex: State Farm annual trip
Questionnaire design
- open-ended question: unaided awareness - closed-ended question: select from limited list of responses, aided awareness - scaled-response question: closed-ended designed to measure intensity of answer (ex: rate on 1 to 5 scale)
Product strategies for services
- people & possession processing, mental stimulus information (ex: entertainment) - core and supplementary - service mix - customization or standardization
Observational research *
- people watching people - people watching activity - machines watching people - machines watching activity (ex: how long user stayed on a website)
Rebates & Rewards
- perception of value, low execution of amounts under $10 - slippage: don't execute so profit is better - ex: Kohl's cash of $10 for every $50 spent - airline miles largest world currency
Public relations "PR" *
- performance recognized: understand where you stand and what to change - element in mix that: evaluates public attitudes of key stakeholders, identifies issues of public concern, executes programs to gain public acceptance - create programs & communication for multiple stakeholders about areas of interest of the organization/product - internal (employees, shareholders) & external - owned and earned media, usually not paid - ex: Apple iPad chip, Glaxo Smith Kline video, P&G Hurricane Sandy, P&G clean water
Product placement & sponsorship *
- placement at $56 bil - sports sponsorship $75 bil: event signage, promotions, naming of portions of game, course, stadium, teams, associate with winners, local favorites, male audience - naming rights
Consumer sales promotion *
- price promotion (sales) - coupons & rebates - premiums (give away) - loyalty programs - contests & sweepstakes - sampling - point of purchase - ex: McDonald's Monopoly
Retail format/mix *
- pricing: MSRP, HiLo, EDLP, discount, markdown, value or luxury? - presentation: atmosphere, layout, site design - promotion: promotional strategy - advertising/SEA, partnerships, price promotions, goal: traffic - place/distribution: location, hours, channel strategy - personnel: customer service, personal selling - product: merchandise width/depth, manu vs private label (ex: Walmart has width but not depth)
Reasons IMC is growing
- proliferation of media/new channels for niche goods - fragmentation of mass market - mature, saturated markets - sheer excess of goods & services, desire for increased share and loyalty - need for measurable results (direct marketing, sales promotions, loyalty programs - CRM)
Google Video
- prototype: experimental model of idea to determine value by putting in front of people - Iterative: rapid, repeat - sketch and paper: initial ideas outline steps, show wireframe (basic structure), quick - paper: simulate interactions by recording/take pics, explore color/shadows/elevation
Value added by personal selling
- provide info and advice - salespeople save time and simplify buying - salespeople build relationships
PR tools
- publicity corp & prod news - digital media: owned and earned - corporate identity materials, website/annual reports - philanthropy employee engagement - event sponsorships, cause related
Advantages of digital/mobile research
- rapid, real-time reporting (ex: Uber driver rating) - reduced cost - personalized - location specific - improved response rates - web communities - online focus groups
Benefits of JIT "Just in Time" or quick response systems *
- reduce lead time - increased product availability and lower inventory investment - technology and systems involved: UPC, RFID, EDI, VMI
Value of information *
- reduces risk - improves decision making quality - trace problems - focus on existing customers - understand marketplace/competition - alert to important trends - gauge value and level of customer satisfaction - helps allocate resources properly
Dimensions of service quality *
- reliability: perform promised service dependably/accurately (ex: flight on time) - tangibles: appearance of physical facilities, people, equip, communication materials (ex: airplane clean) - responsiveness: willing/promptly help customers (ex: flight attendants answer questions) - assurance: knowledge/courtesy of employees who convey trust and confidence (ex: flight attendants know what to do) - empathy: caring, individualized attention (ex: special seating, transfer needs)
Methods of sampling
- retail store demo/giveaway - direct mail - door-to-door delivery - packaging with another product - expensive but effective, can get new customers - ex: Sephora VIB
Channel intermediaries
- retailer: sells mainly to consumers, takes title to goods - wholesaler: institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them to retailers - can be both: ex: Costco
Creative content = benefits sought *
- sell benefits, not it's attributes (ex: sell sizzle, not the steak) - benefit answer: "What's in it for me" - ask "So?" to determine if advertising offers attributes or benefits (ex: Propel)
Services definition
- services involve human/machine effort and are intangible - can be more service (ex: doc) or product dominant (ex: grocery store) in the service sector with most in the middle
Media Types - Digital *
- shift from 1 to masses to 1 to 1 - loss of control - co-creation - Owned media: websites, blogs, social media presence - Paid media: banner ads, sponsored posts, search engine advertising - Earned media: media coverage, SEO, social media posts, word of mouth (WOM)
CRM and loyalty programs - sales promotion & management
- started with travel, now pervasive in retail and B2B - provides marketer with helpful data for segmenting, promotion, and product development - vesting helps from start (ex: American Airlines mentions their program at start of every flight) - CRM very important in B2B: value of each customer is greater - lack of differentiation: does it make us loyal or just cost $, try to reduce churn
Cost drivers of each channel *
- stores: brick and mortar, salespeople, attract customers to store, pricy location, distribution centers, restocking returned merchandise - web: building and refreshing site, attract customers to site, picking/packing/mailing small orders to home, restocking returned merchandise, no low cost of entry, 4-5 times more returns - mobile: location enabled tech, apps, same as web for goods, mobile sites, integration with social media, services that are app critical (like tickets, notifications), beacons
Promotion strategy
- stress tangible cues - use reviews for credibility - create strong organization image (ex: gecko for Geico) - engage in post-purchase to ensure satisfaction/deal with issues
Evaluate target market attractiveness
- substantial: is market big enough or just niche? - reachable: distribution structure to reach far? Good communication methods so they know product exists and how to buy it? - identifiable: identify needs they seek from the product - responsive: require different strategies for different target markets? - profitable
Targeting schemas *
- undifferentiated: 1 product and strategy as everyone seen as potential customer - concentrated: 1 segment strategy/mix, many products but specialized, small market - differentiated: many segments and strategies, can be 1 product with different strategies or many products, most popular - micro targeting: CRM, B2B, digital, focus on one consumer at a time (ex: personalized messaging through a company's app)
Brand/line extensions
- utilize family branding when appropriate - compete more broadly - don't overextend/dilute/cannibalize brand
Nike Shin Guard Video
- wanted insights onto what they're doing well and can do better - used elite players who know game and requirements - designing for style of player, not just one specific player
Marketing strategy development *
1. Identify market and target market segments - segment market based on groups with similar characteristics - analyze market based on attractiveness of market segments - select 1 or more target markets 2. Determine appropriate marketing mix - product: create value, benefit bundle - price: capture value, WTP - place: deliver value - promotion: communicate value 3. Determine sources of sustainable competitive advantage - customer service and satisfaction excellence - operational and supply chain excellence - product development and innovation excellence - locational excellence
How to develop new product *
1. Mission/product strategy 2. Idea generation 3. Concept testing - test IDEA among set of potential customers, iterative 4. Product development - prototypes and product, iterative 5. Market testing - testing actual products in few markets 6. Product launch - full-scale commercialization 7. Evaluation of results - analyze, make necessary modifications
Business buying process
1. Need recognition 2. Product specs (ex: space, cleaning required, electricity needed) 3. RFP process: request for proposal, a written doc asking for bids on supplying 4. Proposal analysis/negotiation 5. Order specs: (place order, establish terms) 6. Vendor assessment: (rebuy from them?)
STP process
1. establish strategy/goals (which market?) - derived from mission, consistent with SWOT 2. segmentation criteria/methods 3. evaluate attractiveness of each segment 4. select target market 5. develop positioning strategy
LTV calculations *
1. estimate total revenue (for past and future estimate of years) 2. subtract cost to serve and acquire = LTV
Steps in the selling process *
1. generate & qualify leads (figure out who people are) 2. pre-approach: probe needs, use CRM 3. develop solutions (special for the customer) 4. present and handle objections 5. close the sale 6. follow up - impacted by: e-business, wide array of ways to reach clients and company (texts, emails, etc)
Distribution center *
1. managing inbound transportation 2. receiving and checking using UPC or RFID 3. storing and cross-docking 4. getting merchandise floor-ready 5. preparing to ship 6. shipping to store
Big Data majority factors
80%: - social media scanning - online surveying most common type
Value definition
= Perceived benefits/costs Value delivered by what you sense Value can be different for each person
BEP
= fixed costs/unit cost
Target market definition *
A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges
Universal set
All possible choices
Portfolio analysis
Allocate resources according to which products are expected to be most profitable - performed at SBU or product line level (groups of products used together)
Mousetraps
An example of satisfying customer needs well and sustaining value creation, one type has 80%+ of market share and meets needs by being disposable, cheap, etc.
SWOT analysis
Assess opportunities/uncertainties due to changes in cultural, demographic, social, technological, economic, and political forces Strengths/weaknesses - internal Opportunities/threats - external
B2B vs. B2C
B2B - large orders, more high risk, less price sensitive - rational decisions, strict budgets - share best practices - consultative selling: understand needs, create trusting relationship - long purchase process - brand identity through personal relationships B2C - small orders, low risk, more price sensitive - relationship ends w/ purchase - more emotional decisions, more wants - convince consumer of needs - fast purchases - brand identity through advertising
Service sector growth
B2B growing faster than consumer services Growing because: - economic growth - changes in society & lifestyles (ex: more women work) - changes in tech (ex: phone service fees) - collaborative consumption/shared services (ex: Netflix)
Porter's competitive forces
Bargaining power of buyers (pay less, get more) and suppliers (paid more, deliver less) Competitive rivalry - forced to defend yourself or change Substitutes available? Threat of new entrants
Repositioning
Brand has notoriety/equity you don't want to give up but needs repositioning. Market changes: - Changing demographics - Declining sales - Changes in social environment Ex: Ford repositioned w/ Lincoln to target males, used celebrity commercial Ex: Dominos focuses on more than pizza now, emphasizes delivery Ex: Old Spice now targets women who buy the products for men
Qualitative data collection *
Capture beliefs/feelings/attitudes through: - observation - in-depth interviews - focus groups - social media
Evoked (consideration) set
Choices you actually consider, analyze and rank attributes, use cutoff (evaluative) criteria, eventually choose
Targeting
Choose a market segment to pursue
Compensatory and non-compensatory decision rules
Compensatory - criteria you are willing to give up for something else that compensates/seems better, trade-off Non-compensatory - dealbreaker, nothing can compensate
Immediate environment *
Competition - understand SWOT, tout benefits Corporate partners - suppliers/manufacturers, partners (ex: Aldi partners with InstaCart) Company - leverage core competencies (ex: good locations, cost containment), perform good SWOT analyses Physical environment
Product types
Convenience - inexpensive - widespread buying - will accept substitutes - frequent purchase, little time/effort Shopping - relatively expensive - large number of selective outlets (each carry certain brands) - differentiation from competitors stressed - prefer specific brands, but may do substitutes - infrequent purchases Specialty - very expensive - limited places to buy - uniqueness/status stressed - brand loyal, no substitutes - very infrequent, extensive search/time Unsought - varies in price - often limited places to buy - awareness is essential (want expert help often) - will accept substitutes - very infrequent, some comparison shopping
Core and supplementary services
Core ex: bball ticket Supplementary ex: food, merch
Strategic Planning
Create and maintain a fit between organization's objectives and resources and the evolving market opportunities Ex: How Covid affects organization actions
Competitive Advantage types
Customer excellence - garner loyal customers (reluctant to buy from competitors), loyalty programs, RETAIN customers Operational excellence - excellent supply chain and HR (order correct quantities, low delivery costs, fast shipping), great vendor/supplier relations Product excellence - High value, effective branding and positioning Locational excellence - physically, strong internet presence
Positioning
Define market mix so target customers have a CLEAR, DESIRABLE UNDERSTANDING of the product and how it compares to competition
External factors impacting business/marketing - technological *
Direct selling online, communication through social media, smart devices, AI and robots, time expectations are immediate
Segmentation
Divide market into groups of customers with different needs/wants/characteristics
Everyday Low Pricing (EDLP) vs. High/Low Pricing
EDLP - save search costs of trying to find lowest prices - not many sales - lower inventory management costs - less advertising/promotion - cost structure and mission need to match High/low - thrill of chase to find lowest price - attract deal seekers and those less price sensitive - can generate higher margins - accommodates more levels of products
Conscious marketing stakeholders
Employees AND families - provide safety, benefits Customers (current and potential) - be honest and enrich their lives Marketplace (partners and competitors) - adopt new policies to remain competitive or be left behind Society (community and environment) - ex: health impact
Social factors impacting consumer behavior
External - Family: initiator, influencer, buyer, decision-maker, user roles. Share resources can create conflict - Social class: determined by wealth, education, income - Reference groups: groups you want/don't want to be associated with (ex: hippies, rednecks), basis for comparison - Opinion leaders: experts in field (ex: chef for food) - Celebrities/influencers
Benefits of branding
Facilitates purchase - provides assurance - risk reduction Self-expression/status Differentiates product - reduces price competition - dilutes commoditization Creates loyalty Family branding - speeds introduction - improves marketing efficiency Brand equity - awareness - perceived value
Marketing ethical practices
Fair pricing, good materials sourcing, proper usage and disposition, honest, ethical partnerships
Family vs. Individual Branding
Family - market several different products under same name (line extension) - ex: Coke, Diet Coke, Coke Zero Individual - use different brand names for different products - ex: Sprite, Coke, Fanta
Promotion and communication
Feedback cycles through: source - coded message - communications channel - decoded message - receiver/audience Noise outside
External factors impacting business/marketing - demographics *
Gender, education, age, income, ethnicity Generational - too large/broad Family - more single parents, women work, smaller family size, women influence 80% spending (ex: Old Spice targeting women)
Quantitative data collection *
Get definite answers, large samples, great confidence: - experiments (w/ controls) - survey - scanner (barcode) - panel
Situational factors impacting consumer behavior
Gift, time of day, mood (ex: vacation mode), store atmosphere, crowding, promotions, packaging, salespeople, peer involvement, sensory factors
Green marketing and green washing *
Green marketing: development and marketing of products designed to minimize negative effects or improve environment Green washing: deceptive practices used to make it seem as if the product is environmentally friendly (when it actually isn't)
Spaghetti sauce video
Grouped data into clusters to determine what was wanted but not currently serviced by the market - shift from asking customers what they want since they don't always know - horizontal segmentation importance: no longer give consumers something more expensive/something to aspire to, all products are worth the same - no longer a platonic notion of what was best, switch from focusing on universals to variability (universals are a disservice, embrace diversity)
External factors impacting business/marketing - social *
Health/wellness concerns Greener consumers Privacy concerns
Marketing Strategy
Includes target market, marketing mix (4 P's), sustainable competitive advantage (not easily copied by others) Success: creative and visionary, watch environment (both internal and external) closely
External factors impacting business/marketing - economic *
Income - education determines earning potential, more extremes now (more rich, less mid-income) Impacted by recession, inflation, currency strength, interest rates
Factors impacting ethics
Individual - brain tells us what's ok/not ok (ex: drive above speed limit), from influences (family, teachers, etc.) Group - attitudes/beliefs change with different people and what they view as right/wrong Opportunity - do we think we can get away with it, codes of conduct and laws try to reduce this
Factors affecting elasticity of demand *
Inelastic- demand doesn't change despite changes in price Elastic - demand changes with changes in price Necessity - inelastic Price relative to purchasing power - small ticket items are less elastic Product durability/alternative use - less elastic Available substitutes - more elastic Force of habit - less elastic
Psychological factors impacting consumer behavior
Internal - Motivation: internal energizing force, need/want badly enough to seek satisfaction - Perception: select, organize, interpret info to form a picture - Learning: permanently change what's in brain - Beliefs - Attitudes: cognitive (think), affective (feel), behavioral (do). - Memory - Lifestyle: actual vs. perceived (ex: North face used for active/outdoor wear, but may just wear bc you like evoking that image)
Information search: internal and external
Internal: all in your brain, you control outcome External: ask others, use resources, other factors control outcome, usually done for more important decisions
Product items, lines, and mixes
Item - specific version of product, distinct offering Line - group of closely-related items - breadth: # of lines - depth: # of products in line Mix - all products the company sells
Service gaps
Knowledge gap - between customer expectations for service quality (like cleanliness or order wait time) and management perceptions of customer expectations Standards gap - between management perceptions of customer expectations and standards specifying service to be delivered Delivery gap - between standards specifying service to be delivered and actual service delivered Communication gap - between actual service delivered and retailer communications about service quality (like overpromising)
Types of decision making/involvement
Limited - little thought goes in before purchasing Habitual - routine purchases/don't think anything about it Impulse - last minute, no thought before went into it Extended - spend lots of time/effort evaluating before making decision/purchase, usually creates stronger relationship with the chosen brand
Set price for manufacturer vs retailer
Manufacturer - cost factors - demand (WTP - can determine w/ survey or test) - competitive set - MSRP: manufacturer suggested retailer price (direct to consumer) - trade/resellers: can get discount off MSRP, allowances (ex: give 0.99 conditional if you put product on endocarp in store), negotiation (ex: P&G gives 35% MSRP to Walmart so they make a profit too) Retailer - many items to price - margin targets to determine markup - promotional pricing tactics: lining (good, better (most popular), best), bundling, "on sale," odd-even (like if price ends in .99)
Cobranding
Market 2 or more brands on same package, promo, store (ex: Taco Bell and Pizza Hut)
Ansoff's Growth Model *
Market penetration: present market and product (ex: increase promos, advertising) Product development: present market, new product (ex: develop new instant coffee powder) Market development: present product, new market (ex: open new store in new country) Diversification: new market and product (ex: Starbucks opens in new country with foods tailored to taste there, Gap creates Old Navy)
Business Marketing (B2B)
Marketing of goods and services to individuals and organizations for purposes other than personal consumption
Markup and margin calculations *
Markup = (price-cost)/cost Margin = (price-cost)/price
BCG Matrix *
Measures how attractive market is and establishes firm's position Question mark: high market growth rate, low market share - invest heavily to increase share or liquidate based on more STUDIES Stars: high market growth rate and share - heavy resource users, cashflow must exceed required investment to continue growing Dogs: low market growth rate and share - if making a profit, keep, but don't invest much resources and liquidate if not making profit Cash cows: high market share, low growth rate - generate resources to be used elsewhere, foundation of company, low investment yet high profits (ex: Coke drink)
Survey research *
Most popular for gathering primary data, obtain facts, opinions, and attitudes - online/telephone/mail surveys - in-home, executive, mall intercept interviews - focus groups
Sustainable competitive advantage
Need multiple types of advantages, unique and not easily copiable by others (ex: patent)
Why firms create new products
Need robust process to create a new product - changing customer needs - market saturation - managing risk through diversity (ex: Starbucks' at-home coffee line) - fashion cycles - improve business relationships
Market definition
Need/desire a product, have ability to purchase it, willing to use buying power to purchase it, authority to buy product
PepsiCo Video and Article *
Performance w/ purpose: long-term strategies benefit the company and the community. Practices include: - Talent sustainability: attract talent that see personal values reflected in the company - create culture of integrity - code of conduct: integrity, ethical behavior, mutual respect, responsible on shareholders' behalf - deliver superior financial returns - transform product portfolio - limit environmental impact - take bold actions: overturn decisions they would've made in the past, let some people go, fill positions w/ outsiders - focus on R & D and resource allocation - join forces with other companies
Graphics/labeling
Persuasive - reinforce brand - focus on promotional theme Informational - help make proper selections - lowers cognitive dissonance - legal requirements (FDA)
Positioning
Place products and services in customers minds relative to other competitive offerings/substitutes - choose position where efforts will have greatest impact - utilize product differentiation (like based on changing needs/desires - P&G detergent example) - use perceptual map to determine positioning of competitors Ex: Tylenol states they're for people who take aspirin - they are positioning in comparison to a competitor Ex: Nancy's daughter asking about political affiliation (position based on others' affiliations?)
Marketing Planning
Planning Phases: 1. Mission Statement 2. Situation (SWOT) analysis Implementation Phases: 3. Identify opportunities - segment, target, position 4. Implement marketing mix (4 P's) Control Phase: 5. Evaluate performance with metrics, take corrective action
Market testing *
Premarket tests - customers exposed, surveyed - firm makes decision Test marketing - simulated: experiment where consumers select products - controlled: online or limited retailer tests, small production runs, less risk and expense - standard: offer new product through normal distribution channels with introductory marketing in a limited area - survey for all methods for repurchase intent/satisfaction - estimate demand and profitability for all
Primary and secondary data *
Primary data: - newly collected for the project - observational data - questionnaire data: interviews, surveys, focus groups, mail Secondary data - facts already recorded prior to project - internal data (inside firm): financial statements, research reports, customer lists - external data: U.S. census reports, trade studies, business periodicals, etc.
Diffusion
Process by which adoption of an innovation spreads How fast it spreads is based on: - relative advantage (needs to be better than what's out there) - complexity (want easy) - compatibility (ex: Apple products compatible w/ one another) - observability (see others using it) - easy to try
Marketing evolution
Production-oriented era: focused on innovation only, believing the product would sell itself Sales-oriented era: overproduction from wars allowed focus to shift to personal selling and advertising, aggressive sales Market-oriented era: U.S. entered buyer's market, MANY CHOICES, focus shifts to what customers want and need Value-based era: provide needs/wants at greater value than competitors
Pricing objectives
Profit-oriented - target profit pricing - profit maximization - targeted ROI - ex: Jolly Time Blast O Butter popcorn is popular, so charge more Sales-oriented - market share (ex: Heinz has 50% share and competes w/ store brands) - sales maximization (doesn't always imply low prices) - premium pricing (ex: Louis Vuitton w/ scarcity of products) Status quo - meet competition - competitive parity - maintain prices/margins - ex: Coke and Pepsi
Marketing Mix 4 P's
Promotion - inform, persuade, remind Place Product - what you get in exchange (good, service, idea), needs to have value Price - determine appropriate price to satisfy yet still make a profit
Primary data pros & cons *
Pros: - answers specific research question - data is current - source of data known - secrecy Cons: - expensive - timely - requires more skill and training to collect and analyze
Secondary data pros & cons *
Pros: - saves time/money - aids in determining collection of primary data - pinpoints who to approach - basis of comparison for other data (ex: determine product's industry based on other categorizations) - readily accessible Cons: - Maybe not on target with research problem - Quality, timeliness, accuracy not always known - May not be enough info - not proprietary so others also have access to it
Conscious marketing
Purpose is more than making profit, includes: 1. Recognize marketing's greater purpose 2. Consider stakeholders 3. Conscious leadership and culture 4. Ethical decision making
Retrieval set
Readily Brough forth from memory (internal), narrow down choices
Post-purchase behavior
Satisfaction - can be achieved by company building reasonable expectations, clear product use, warranty, encouraging their feedback, personal contact (email after purchase) Dissonance - uneasiness, discomfort, especially with high risk decisions, companies can minimize through effective communication Loyalty - companies use CRM to retain WOM - word of mouth, can be good or bad
STP
Segmenting - benefits sought is key, based on who we are (demographics, usage-target heavy, etc.) Targeting - what segments are viable Positioning - in consumer's minds
Technology service growth
Tech is a service - you access info with it Includes: - price aggregates (ex: Hotels.com) - apps: entertain, buy, convenience - tangible good sellers add more services (ex: pickup curbside, order through app) - collaborative consumption model growing (ex: Uber)
Product life cycle
Theory to understand the CATEGORY - introduction: gain awareness - growth: stress differentiation - maturity: maintain brand loyalty - decline: harvesting, deletion
Purple cows video
Too many choices with too little time leads people to ignore stuff, which is why you need to be REMARKABLE. 1. put design to work for them 2. safe is risky - need to be unique 3. Very good is boring - need to be exceptional Otaku - obsession/desire for product
External factors impacting business/marketing - political/legal *
Trade/tariffs Food/drug labeling Privacy/censorship International growth efforts
Exchange definition
Transfer of goods, services, ideas in exchange for something of value. Ex: buyer provides feedback and $ in exchange for item
Strategic Business Unit (SBU)
Unit of business with their own vision and direction, somewhat independently managed Can be organized by product or region
Social Media steps
Use this channel to: - have 2 way conversation w/ engagement - first listen: see what others are doing and why users are there - then determine goals: build relationships, generate leads, manage reputation, improve customer service, promote products and services
Product warranties
Warranty - confirmation of quality or performance of good/service -ex: Zappos (free ship, 365 money back), Hyundai (bigger mile assurance) Express Warranty - written guarantee Implied Warranty - unwritten guarantee that good/service is fit for purpose for which it was sold (ex: shoes)
Segmenting
What/how we buy: - benefits sought - purchase behavior/characteristics: usage rate (heavy or light, ex: Coors repositioned from women to men) loyalty, occasion (ex: time of day) price sensitivity Who we are: - geography - demographics - psychographics (self-values (life goals), self-concepts, lifestyles)
CLV loyalty programs video
program benefits include: - customers shop more often (ex: free shipping, special offers incentivize) - customers spend more (ex: reward when spend this much) - customers stick around (want to visit more often)