Marketing Final
Caveat Emptor
"Buyer Beware" - Consumers need to be careful when making purchases from companies because they may lie to sell us things
Bounce-Back Coupon
"Get $3 off your next purchase of any of these featured dice products"
Kimpton
- "Tell us something good with #KimptonKarma" - YouTube video showing Tweets and thoughtful rewards to Tweeters
McDonald's
- 10 second advertisements on Snapchat to fill employment positions - Internal marketing for employees
Dell
- 24/7 monitoring of social media websites
Credit Card Company Defection Curve
- 5% fewer defections increases average customer life value by 75%
- 60 Minutes - Brad worked as the Digital Director for the Trump campaign, sent low-cost, tailored ads primarily to FB (highest budget for this platform) and other social media - Trump claimed that FB was anti-Trump, but Brad got conservative FB employees to come help him use the technologies several days a week - Micro-targeted on a scale never used before - Changes colors (give you red, don't like that, gives you green), words (ex. donate vs. contribute) - So much noise- what gets you to stop? - Hired company that uses psychographics (e.g. introvert, neurotic, etc.), he didn't use it because it didn't work (not because he thought it was immoral, he thought it was fine) - "Aspire to Greatness" - "Only Trump Can Stop Crooked Hillary" - "Unity and Strength"
- 60 Minutes interview with prominent lawyer - Search "Go..." Google comes up - Bought YouTube, Android, DoubleClick - A monopoly in search, "makes the internet work" "The gatekeeper for the internet as we know it" "Powerful yet intimate" "People tell Google things they wouldn't tell their wives" - Hard for startups to get funding if they're competing with Google - Yelp founder says he never would have been able to found Yelp today because of Google - "Google could bury you" - Being one of the first couple links that show up is crucial and if you're not on the first page, forget it! - As digital/online marketing grows, companies need to rely on social media and engines like Google to succeed, but need to be careful because Google is so powerful and also has the ability to crush competitors - 2011 investigation filed by Yahoo and other companies, claiming Google violated anti-trust laws, moved its own products to the top of the search page, was anti-competitive (stifling healthy competition) - Google claimed it was not a monopoly and didn't manipulate; case was closed - Investigator Margaret went against Google, found company to be manipulating, putting self on top, believed it was deliberate, illegal, rigging the game, setting the rules with its enormous power; Google declined to respond
Price Endings
- 99 cent: fast food - 95 cent: casual - None: fine dining
Yelp Ratings and Revenues
- A one-star increase in Yelp ratings leads to a 5-9 percent increase in revenue - This effect is driven by independent restaurants; ratings do not affect restaurants with chain affiliation, and chain restaurants have declined in market share as Yelp penetration has increased
With hotels: three common approaches to determine which competitive set or cluster is most appropriate
- ADR - Product type ("luxury" "resort" etc.) - Management company set: based on contracts
Cheerios
- Advertising Goes Viral - Stephen Colbert segment - Viral version got far more views than original ad - Cheerios tries to create an emotional connection, got made fun of - Kid asks if Nana gave Mom Cheerios and if they were the same, "they've pretty much always been the same," "it's kind of like we're having breakfast with Nana" - "Leveraging the death of a grandparent" "Joins group of cereals with names like "boo" etc." "Cheerios haunted by the spirit of the dead" - Fake recording of Colbert getting emotional in the cereal aisle - Cheerios sales went way up after this; can't buy this type of marketing!
Garcia's Irish Pub
- Advertising: Billboards aka Outdoor/Out of Home - Medium-sized city, brand new restaurant - White collar, single, 20s-30s man comes in on a Friday evening to the post-dinner crowd, chatting with bartender, room fills up, sees a beautiful woman in a red dress, does a double take, goes to the bathroom to freshen up, goes back to find her, she's gone! Waits for her, around 1am, owner asks what happened, they set up a plan... - Buys the most prominent billboard in town for a week to get her attention, asks to meet her, nothing - Following Monday, another billboard; nothing - However... there are more women than usual in red dresses at Garcia's - Did she get the wrong day? Goes Saturday, nothing. - Rule of Three: needs to try three times to get the message across? - Following Monday: a third billboard - Tuesday: on his billboard, a sign that says she's Candi, is not his angel but wants to meet him - He meets Candi, has a great time, but she's not his angel - Posts another billboard - Guy in town thinks he's talking about his girlfriend. Frankie puts up: "back off" - Posts another, putting it all on the line - Finally, Angel puts up a billboard - 7:30pm: crowd outside, press, policemen, crowd control... - The two have a wonderful time - Next week: he puts up "I'm in heaven" - Garcia's paid $40,000 for it all, but got great press; $4.5 million in response when you monetize all the mentions, etc. Nobody knew about them, then everyone did - They wound up breaking up eventually, but oh well...
Colossal Media
- Advertising: Billboards aka Outdoor/out of Home - Street art based in Brooklyn, started in 2004 - 120 walls in various cities - Social media "selfie backdrop" - Political, selling something - "Art first" - Worked with Samsung, Delta, Comedy Central, Nintendo - Work really hard, e.g. pushed through Bomb Cyclone - Intend to look as good as if not better than a picture; should not look like a painting
EconoLodge
- Advertising: Print - Cobranding: borrow from Mr. Clean's Brand Equity - "At EconoLodge, you'll always know who was in the room before you" - "Mr. Clean Housekeeping Program" only at EconoLodge
Hilton/MadMen
- Advertising: Product Placement - Ad man and CEO talking in a big meeting room with ad agency and client tems with story boards, etc. - Listing magnificent destinations - "Average Americans live luxuriously, relatively" - International luxury with the comfort of home: "Hilton" - "Hamburger" in Japanese? "Hilton" - "Fresh towels" in whatever language? "Hilton" - Clever yet friendly - "I want Hilton on the moon" "You didn't give me what I wanted" "I want the moon, I expect the moon"
Motel 6
- Advertising: Radio - People still walk into hotels without reservations, especially on the highway - Evening drive-time - No other lodging company was creating segments like this... - Target market: VFR (visiting friends and relatives), looking for budget as they have an alternative place to stay anyway - When you stay with relatives, you learn too much about them; you like dogs, they like cats, tension, etc. - Smarter plan: clean, comfortable room; not too far, not too close; "we'll leave the light on for you"
Types of Loyalty
- Affective Loyalty (Heart): how much you like the company - Cognitive Loyalty (Wallet): how much you spend with the company - Low, Low: DGAS (they don't give a shit) - High Affective, Low Cognitive: Admirer - Low Affective, High Cognitive: Hostage (have the money, not spending it) - High, High: Fan
Promotion mix
- Aka marketing communications mix - The specific blend of advertising, public relations, personal selling, sales promotion, and direct-marketing tools that the company uses to pursue its advertising and marketing objectives Consistent, clear, and compelling company and brand messages: - Advertising - Sales Promotion - Personal Selling - Public Relations - Direct and Digital Marketing
Amazon (Execution)
- Amazon Prime Day - Minimum 20% discounts for small business sellers to be featured on Prime Day in hopes of turning flash sale customers into loyal customers - Handmade glass, etc. - Amazon takes 15% of purchases; cut may be worth it for small sellers gaining attention and relevance
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Address buyer's remorse
- As many as 81% of people abandon their online travel bookings. Commonly referred to as buyer's remorse, buyers may have a nagging sense that they didn't make the right decision after booking with you, no matter how long they spent consulting/reviewing/comparing
The Marketing Funnel
- Awareness - Interest - Consideration - Intent - Evaluation - Purchase AICIEP: Are inverted cones inside every penis? Cylinder: amazing product; e.g. everyone who's aware of it winds up purchasing it Sharp cone: not so great; most people who are aware do not end up buying it Somewhere in between: the funnel
Benefits of Customer Relationship Management
- Building continued patronage of loyal customers - Reducing marketing costs - Decreasing price sensitivity of loyal customers - Partnership activities of loyal customers
IMC Overview
- Calls for recognizing all contact points where the customer may encounter the company and its brands; delivering a consistent and positive message with each contact - Ties together all the company's messages and images; TV and print ads have the same message, look, and feel as its email and personal selling communications, and its PR materials project the same image as its website
- Channel Disruptors - Goal: be the travel distributor of choice; want hotels to give them money, put other travel distribution channels out of business, create its own booking engine - Search: "Europe vacation," select dates, number of flyers, amount seeking to spend, result in itineraries from people who have been there, sliding scale, better than Expedia
BlockBuster
- Channel Obsolescence - The Onion video - "Historically authentic video store experience" - "Historical performance actors" - Uncertainty- line, alarms, do they have what I want? - "People had to go through so much, I can't believe they lived this way!"
6 Characteristics of a Highly Effective Mission Statement and Vision Statement
- Clear: to both internal and external customers - Concise: brief and to the point - Credible: company can achieve it - Aspirational: makes us all "Stretch" - Achievable: in the foreseeable future - Aligned: with company stakeholders Both should pass the elevator test
7 Characteristics of Highly Effective Core Values
- Clear: to both internal and external customers - Concise: brief and to the point - Credible: company can achieve it - Aspirational: makes us all "Stretch" - Achievable: in the foreseeable future - Aligned: with company stakeholders - CONSISTENT with mission and vision Should pass the elevator test
Setting the Total Promotion Budget: Percentage of Sales Method
- Companies set promo budget at a certain percentage of sales or forecasted sales or a percentage of the sales price
Push Strategy
- Company directs its marketing activities at channel members to induce them to order, carry, and promote the product - Producer markets to retailers and wholesalers - Retailers and wholesalers use reseller marketing activities to consumers - Market on distribution channel to convince intermediary to carry product Ush Intermediary!!
Zappos
- Core Values - Very hard decision for them to create a final list of 10 core values- original list had 37 - CEO first resisted idea of creating a list - Committed to having core values that are COMMIDABLE : willing to hire/fire based on core value alignment, regardless of job performance - Didn't want to sound the same as just any other company - Google search any of their CVs, "Zappos" will result on the first page
Key to Internal Marketing: Culture
- Culture serves as glue to hold an organization together, and when an organization has a strong culture, the organization and employees act as one - A strong service culture influences employees to act in customer-oriented ways and is the first step toward developing a customer-oriented organization - Developing a customer-oriented organization requires a commitment from management of both time and financial resources - Four Seasons: follows the Golden Rule: treat others the way you want to be treated; has not an HR department but 'People & Culture' and builds company from the inside out
The Five Cs of Pricing
- Customer - Competitor - Cost - Channel - Compliance
Nordstrom's
- Customer Loyalty - "I don't shop anywhere else for my clothes, makeup, pocketbooks" - Diamond ring went missing while she was shopping, an employee looked all over, goes through the vacuum cleaner bags, found it "might have been a small effort but it meant a lot!" - "I did this for you because that's who I am as a Nordstrom employee, and I value you as a Nordstrom customer"
Selecting channel members
- Customer needs - Attracting channel members - Evaluating major channel alternatives (economic feasibility of channel member; control criteria)
Linked to BAV (long term), BAV Social (short term) captures 4 dimensions of online equity
- Differentiation --> Vitality (passion in the online conversation) - Relevance --> Involvement (engagement in the online conversation) - Esteem --> Mood (visible respect for the brand, driven by healthy discourse) - Knowledge --> Prominence (a brand's online footprint measured by referrals and search) DVRIEMKP: Do valuable, reputable influences entering marketplaces keep pooping?
College Marketing
- Direct Marketing - High school students are often inundated by a blizzard of materials from colleges based on various databases, often with mail merge messages - Dev's son got a unique postcard from RIT (Rochester Institute of Technology) - They targeted as he was interested in engineering - Name and address - "Hey Andrew" - Highway sign "RIT 94 miles from Ithaca, NY" - License plate "ANDREW" with RIT bumper sticker
Catalogs
- Direct Marketing - Retailers are getting better at targeting and spiking interest - Peaks during the holidays - ROMI: Return on Marketing Investment - $3 for every $1 spent, $9 return for every $1 spent on top customers - Companies that start as e-commerce improve by adding catalogs - Better than paid search - Millennials: engaged by imagery
Major hospitality distribution channels
- Direct booking - OTAs - Global distribution systems - Travel agents - Travel wholesalers and tour operators - Specialists: tour brokers, motivational houses, and junket reps - Hotel representatives - National, state, and local tourist agencies - Consortia and reservations systems - Restaurant distribution systems (online e.g. OpenTable; delivery, take-out, drive-through window, food trucks, or concierge)
Advertising Hyperbole
- Don't say too much with claims you can't substantiate - Red Bull lawsuit over "Red Bull gives you wings" - Dannon yogurt blow up ad: you don't want consumers to think it's thaaat big - Ikea huge hot dogs with small text: "not actual size"
Concerts
- Earned Content - "Long ago, people danced at concerts..." Now they take pictures and videos the whole time and post all over social media, becomes an endorsement/testimonial - Become worthy of other people creating your content for you
Marketing is Everybody's Business!
- Employee attitude, appearance, and willingness to handle the guest's requests help form a first impression of a service - It is often hard to differentiate the tangible part of the product of competing companies; product differentiation often derives from the people who deliver the service; - In services, MOST marketing is carried out by the employees outside the marketing department, not the marketing staff
Factors to consider when setting prices: Internal Factors: Costs
- Fixed costs: do not vary with production or sales level - Variable costs: vary directly with the level of production - Total costs: the sum of the fixed and variable costs for any given level of production
Edible Arrangements
- Franchising - Humble beginnings; founder worked hard as a kid mowing lawns, etc. Ran a flower shop at 17, grew into 3 locations with money from his dad's boss - Immigrant to American Dream - Got rich the old-fashioned way: slowly - Created supply chains from scratch - Child-safe skewers - Fresh fruit **Franchised stores!! - 1,300 stores, 9 countries, 60% of orders online - International sensation, "Wow" reaction, "experience company" - Fruit that looks like flowers
Classification of Visitor Segments: most common terms
- GIT (Group-inclusive tour) - IT (Independent traveler)
Four pieces of print advertisement
- Headline - Body Copy - Mandatories - Visual
Diagnosing Attribute Importance and Performance: Elevator Service
- Helps companies focus on improving failures that could put them out of business, and save on what's not as important - Maps Importance and Performance, compares focal company and competitor - Low Importance, Low Performance: Monitor - Low Importance, High Performance: Increase Importance - High Importance, Low Performance: Fix Now - High/High: Good
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Emotional engagement
- Human choices are often heavily rooted in emotion. Guests need to feel inspired - Combine descriptive language with emotion-rich adjectives to bring your destination and property to life - Hotel Milo Santa Barbara: invites guests to "breath in fresh Pacific air," "discover new Pinots on a SB wine tasting tour," etc. Storytelling helps to create vivid imagery and emotionally engage with the target audience, shifting the idea of booking a hotel room away from transaction and into something more
Distribution channel functions
- Information: gathering and distributing marketing research and intelligence information about the marketing environment - Promotion: developing and spreading persuasive communications about an offer - Contact: finding and communicating with prospective buyers - Matching: shaping and fitting the offer to the buyers' needs - Negotiation: agreeing on price and other terms of the offer so that ownership or possession can be transferred - Physical distribution: transporting and storing goods - Financing: acquiring and using funds to cover the cost of channel work - Risk taking: assuming financial risks, such as the inability to sell inventory at full margin
The need for integrated marketing communications
- Integrated marketing communications calls for recognizing all touch points where the customer may encounter content about the company and its brands - As mass markets have fragmented, marketers are shifting away from mass marketing to narrowly defined micromarkets - The digital age has spawned host of new information and communication tools, from smartphones and tablets (including digital, mobile, and social media, which are becoming more important), to the Internet and cable and satellite television systems
Amazon (Strategy)
- Jeff Bezos interview - #1 conviction: customer obsession as opposed to competitor obsession - Working backwards, starting with customer needs, anticipate them in advance - Inventive, pioneering culture - Willingness to think long term - Invest in initiatives that are both risky *and* long term (5-7 years); most companies would not do so; unique - Operational excellence: finding/fixing root causes of defects
Patagonia
- Key to Internal Marketing: Culture - Founder: cute old man; mountain climber, fisherman, etc. - Used to be very poor, now feels guilty about making so much money, believes it is his responsibility to ensure that customers can wear their Patagonia clothing for as long as possible - Believes in building the best product possible and causing no unnecessary harm; do good and do well at the same time - Transparency: organic cotton costs more than not organic cotton, openly explains how that's why Patagonia costs more - Barely has any new Patagonia clothing, "doesn't need it" - "Make old new again" - Launched gourmet repair shop for the clothes (which already have a lifetime guarantee); logic: more cost-effective than creating new ones, more meaningful to keep old ones with memories - Ad in NYT just said: "don't buy this jacket!" aka, get one fixed. Good marketing, result: people buy more new jackets anyway
Lifetime Value of a Frequent Traveler
- LTV = f(PROFIT) - P: Periods remaining - R: Referrals - O: Overall group size - F: Frequency - I: Income potential - T: Time spent You make more money on transactions 4, 5, and 6 than on 1
The Customer Satisfaction Effect
- Leading indicator of future economic returns - Builds trust and reputation - Lowers costs of attracting new customers - Reduces operating costs - Lowers costs of future transactions - Insulates customers from the competition - Reduces price elasticity - Increases the expected "life" of current customers
Sweetgreen
- Marketing Excellence: Best Practices - Green: GREAT - Goal simple: connect with people through food - Born when founders were students at Georgetown - Something was missing: a quick, healthy, fun place to eat - Sweetgreen in Schools program to educate on healthy eating; create impact in community - Block party, music festival; no longer just a place to eat - Idea of the "sweet life," living well - Passion x Purpose
Five Guys
- Mission - America's favorite burger place - No ads/marketing besides "being nice to people" - Found people who gave them small amounts, always paid back on time, always nice to everyone - Be good at whatever you do - Cook in front of people - "What you see is what you get" - Magazines and articles of testimonials as hanging artwork - a form of marketing
Familiarization trips (fam trips)
- NTO develops these for travel agents or others who can send business to a tourist destination attraction, cruise, or hotel are invited to visit at a low cost or no cost
Dissemination of marketing information to employees
- Often, the most effective way of communicating with customers is through customer-contact employees - Employees should hear about promotions and new products from management, not from advertisements meant for external customers - Management at all levels must understand that employees are watching them for cues about expected behavior - Hospitality organizations should use printed publications as part of their internal communication - Hotels can use technology and training to provide employees with product knowledge - Employees should receive information on new products and product changes, marketing campaigns, and changes in the service delivery process
Marketing Rescue Animals
- Owned Content - Professional pet photographer taking pro-bono pictures; she owns the pictures - She says thousands of dogs are euthanized every year due to bad marketing - Takes pictures of rescue dogs with pearls and cute things, not behind bars - All dogs get adopted- 100% increase
Jabbrrbox
- PERCEIVED VALUE - Founder was working selling office furniture, wasn't being productive enough working in public spaces, wanted a modern-day phone booth in Central Park - Now at LGA, $10 for 15 minute use, can track flights - Superman had a phonebooth, you can have a Jabbrrbox! - Closed seated areas in outside public spaces to do your work: wifi, photo booth, etc. - Hundreds in Germany, Ireland, Dublin
Starbucks
- PR - CBS interview in a Philly SB - Executive Chairman Howard Schultz: "I'm embarrassed, ashamed" "Everyone's taking it personally" - Closing stores is "just the beginning" of racial bias training, which he considers an investment, not an expense "not a one-day event" - "Opportunity for healing"
One & Only
- PR 1. Closed and reopened in the Bahamas: celebrities, Whitney and Stevie performances, magazine features 2. Travolta's 50th birthday in Cabo: Kelly rented, showed the room where they were staying, celebrities in attendance, magazine features 3. New resort in the Maldives on Indian Ocean: showed newly married couples choosing the resort as honeymoon destination, in newspapers, etc.
Groupon
- PUSH Strategy; market to businesses to partner with them - 60 Minutes feature - Arrow of push strategy goes both ways - Started as a side project of a quirky Midwesterner (who also has a weird yoga video in front of a Christmas tree on YouTube, is unwilling to change himself to what's expected) - Almost overnight phenomenon, worth jumped like crazy on first day of trading; one of the fastest-growing companies - Voucher, use like cash - Way to explore city - At least 50% off balloon rides, emails, massages; sometimes for things we don't "need" - Began in 2008 around beginning of recession - Retail revolution - Human salespeople - Trial and error - Tailor offerings by age and gender - Merchants don't always make money, but gets people in the door at least - Daily emails have quirky jokes to keep people subscribed; brand has a personality - He said he was probably not "Ready" to be CEO but believes it's good to have the founder be the CEO - Has 500 competitors including Amazon, Google - However... - Spending more than taking in on the wrong subscribers - Yet to turn a profit..? - Complaints from merchants, Groupon customers come once and never come again - Accounting tricks to make marketing costs disappear..?
Red Bull
- Paid Content - Red Bull pays - "Red Bull gives you wings" - Extreme sports ad- biking dude doing crazy stunt, jumping over a big thing
3 Key Content Types
- Paid Content: a company pays a third party to create/distribute advertising, etc. - Owned Content: created and/or controlled by the company itself - Earned Content
Hilton (Strategy)
- President and CEO: wants to deliver better, customized experience through technology; wants people to come to Hilton directly when booking
Major Activities of PR Departments
- Press relations - Product publicity - Corporate communication - Lobbying - Counseling
Psychological Travel Motivations
- Prestige - Escape - Sexual opportunity - Education - Social interaction - Family bonding - Relaxation - Self-discovery
Pull Strategy
- Producer markets directly to final consumers to induce them to buy the product
Sales representatives perform one or more of the following tasks for their companies
- Prospecting - Targeting - Communicating - Selling - Servicing - Information gathering - Allocating - Maintaining strategic partnerships - Prevent erosion of key accounts - Grow key accounts - Grow selected marginal accounts - Eliminate selected marginal accounts Please try calmly saying sorry instead. Always maintain politeness. Good, good evening!
The Sales Process
- Prospecting and Qualifying (to identify prospects) - Preapproach: learn as much as possible about the prospect company - Approach: engage with the customer for the first time - Presentation: tell the value story to the buyer, using the AIDA approach - Negotiation: reach agreement on the price and other terms of the sale - Overcoming Objections: salesperson seeks out, clarifies, and overcomes any customer objections to buying - Closing: salesperson asks the customer for an order/order is requested - Follow-Up: after the sale to ensure customer satisfaction and repeat business PQ, princesses are probably not often cleaning fungus!
Fairmont Sonoma
- Public Relations - An initial investment in PR can lead to a high ROMI - High revenues generated by PR
Jet Blue
- Public Relations - February storm, tons of flight delays, "Valentine's Day Massacre" - JB had planes on tarmacs for up to 9.5 hours on end, suffered more than other airlines, had to cancel 250+ flights - Crisis management: appearance on David Letterman - "Alright?" Founder/CEO: "Been better" - Letterman gives him airplane-style snack and can of soda with a cup - Gets a chance to explain: "overwhelmed, cascading effect, took them longer to match 1,000 crew members with 250+ flights, hard to rebuild past a certain point, learned a huge lesson" - Generally avoided answering why JB suffered more than other airlines after Letterman asked him repeatedly - Wasn't clear with specific ways they were going to fix it, just said "we're gonna fix it" - Overall not a very charismatic dude, did not seem adequately prepared, kinda blew his opportunity to explain the situation
Royal Caribbean
- Pull Strategy; market directly to potential cruise goers - "This is not a cruise" "You are not a tourist" - Last part of video commercial: "Call your travel agent" "RoyalCaribbean.com" side by side, travel agent went first, deliberate decision...
Quotas
- Quantitative and time-specific accomplishment measurements established for members of a sales force - Based on next year's objectives - Individualized - Realistic and obtainable - Broken down to small units - Understandable and measurable
Three problems that the marketing communicator must solve: Message content (what to say). Three types of appeals:
- Rational appeals: relate to audience self-interest; show that the product will produce desired benefits - Emotional appeals: attempt to provoke emotions that motivate purchase - Moral appeals: directed to the audience's sense of what is right and proper
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Use rounded numbers for rates and discounts for emotionally-led purchases
- Rounded numbers rather than non-rounded numbers (e.g. $100 vs. $98.72) are better at driving emotionally-led purchases, because rounded numbers are easier to process and encourage a reliance on emotions, which leads to a sense of the decision "feeling right." In contrast, the extra mental bandwidth needed to process non-rounded prices turns the decision into a rational one. Given that travel purchases are often linked to an emotional desire, rounded numbers can be a useful extra way to make room rates and deals look more appealing
Nudie Australia
- Sales Process - Selling/promoting products to consumers/retailers - Delicious fruit drinks with no preservatives - All about fun, the experience - Honest: what you see is what you get - Positive, confident, passionate; all about the vibes - Put juice in multiple "right" areas, fridge positioning - "Nudie addiction" tagline - Community-based events - "A day's fruit in every bottle" - Crushie, smoothie, soupie options - B to B retailer sales as well as B to C - Hot air balloon - Radio - Sampling - POS - Coles partnership - "Nudie street"
Hyatt
- Sales Promotion - Dev got a card, under one half you might win a free weekend, other is a special offer - Back side: ridiculously long list of official rules, he threw the card out - The next week: the same ad was placed in the WSJ with so much space taken up by long AF promotion rules
Harvey Nichols
- Sales Promotion - Objective: increase sales during Christmas - Leading luxury fashion retailer in London - "Sorry I spent it on myself" holiday collection online and in all UK stores - "For the truly selfish" Christmas card - Satirical, controversial commercial, huge success, resulted in increased sales! - Amidst the clutter, you must find a way to stand out
Communication Process Elements
- Sender (e.g. McDonald's) - Encoding: the process of putting thought into symbolic form (ex: McD's ad agency assembles words, sounds, and illustrations into a TV ad to convey the intended message - Message: the set of symbols that the sender transmits- the actual ad itself - Media: the communication channels through which the message moves from the sender to the receiver- e.g., TV and the specific TV programs that McDonald's selects to show ad - Decoding: the process by which the receiver assigns meaning to the symbols encoded by the sender; a consumer watches the commercial and interprets the words and images it contains - Receiver: the party receiving the message by another party; the customer who watches the ad - Response: the reactions of the received after being exposed to the message- e.g. likes McD's better, more likely to eat there next time, hums the jingle, or does nothing - Feedback: the part of the receiver's response communicated back to the sender - Noise: the unplanned static or distortion during the process, which results in the receiver getting a different message than the one the sender intended to send- e.g. the consumer is distracted while watching the commercial and misses its key points
Purpose of a Marketing Plan
- Serve as a road map for all marketing activities of the firm for the next year - Ensure that marketing activities are in agreement with the corporate strategic plan - Force marketing managers to review and think objectively through all steps in the marketing process - Assist in the budgeting process to match resources with marketing objectives
IBM Study
- Service Recovery - People were more likely to purchase again in the future if a problem was resolved satisfactorily than if there was no problem at all! And of course, the least likely to make future purchases were those with unresolved problems - The power of recovery!
Stew Leonard's
- Service Recovery, Satisfaction and Loyalty - Stew's out on the floor like a politician- it's his passion, wants to make everyone feel special - Good prices: buy directly from producers - Known as well as Disney in many communities - "Nothing like it" - Fun atmosphere, even for those who hate shopping - Stew Jr. has been working at the store since he was little, has same passion, works in customer relations and leads focus groups of passionate customers who volunteer time to give feedback; Stew's listens - Lots of family members involved - Oversized suggestion box, always stuffed to capacity; people care, their voices are heard, Stew's acts on their desires - "Tell us what you don't like!" - Fish was always fresh, but some customers didn't see it that way because of how it was packaged, so Stew's changed it and created an ice station --> fish sales doubled - Strawberries are laid out like a farm rather than in boxes, sales up 3x
Snapchat
- Sexting - "Let your friends live your day with you"
BAV helps clients deal with
- Social Equity Analytics - Brand and Campaign Planning - Deals and Acquisitions Evaluation - Brand Elasticity Analysis - Cultural Insights and Trends - Brand Monitoring - Brand Positioning and Optimization - Portfolio Architecture - Brand Partnership and Sponsorship Analysis - Brand Equity Audit - Shopping Behavior Insights - Customer Research and Tracking
EpicMix
- Social Media Clutter - Vail, Beaver Creek resorts - App that enables users to share and capture experiences - Reward accomplishments/milestones with pins, - Automatically shares on FB and Twitter when you connect the accounts - Shows where your friends are - Kid-friendly features
Coca-Cola Integrated Marketing Communications TV Ad
- SuperBowl: in the desert, camel riders vs. flashy pink flappers vs. truck drivers all racing to Coke; get to it, says "50 miles to go," they keep going, encourage viewers to go to the website and vote for who should win (pink girls won) - combined multiple communication methods - showed that people from different backgrounds want the same things - company developed database of voters, got to know customers
Chili's Bar & Grill
- Take our Internet survey within the next 3 days and you could win $25,000 - Random (everyone has an equal chance) - Representative (weekday vs. weekend, lunch vs. dinner, single vs. family, local vs. tourist, etc.) - Robust (significant data to make better decisions)
Mission Statement
- Tells you the fundamental PURPOSE of the organization - Concentrates on the present - Defines the customer and the crucial processes - Informs you of the desired level of performance
Colombia
- The 6 Elements of 'Right' Marketing - Good marketing can help make the world a better place- world peace! Part 1: - 60 Minutes segment - Country was infamous for cocaine, kidnapping, crtels, etc. 52-year-long war, killing and displacing many - Top ad man created ad campaign to convince guerrillas to surrender and Colombians to accept them back; demobilize as many as possible - "If Christmas can come to the jungle, you can come home" "Before you were a guerrilla, you were my child, Come home for Christmas" - Ad man was born into war without really knowing peace - Operation Rivers of Light: give gifts to guerrillas, glow in the dark, flow dark the river - Best campaign: football; threw soccer balls out of planes that said "Demobilize. Let's play again" Part 2: - Music video on the beach "Land of Sambrosura" fun, adventurous, relaxed, chill, safe vibes Result: - November 2018 marked two years since Colombian government signed a peace agreement to end a violent civil war, earning the country's president at the time the Nobel Peace Prize - Colombia is seeing massive growth in its tourism sector - NYT listed Colombia as a place to visit, Hilton plans to build three hotels in the country in the next 18 months
DoubleTree Club Hotel, Houston: Yours is a Very Bad Hotel
- The Customer Journey - Tom and Shane held guaranteed, confirmed reservations, held for late arrival with a major credit card, Tom is a card-carrying Hilton HHonors Gold VIP, yet when they arrived at 2am, they were refused rooms, despite being "confirmed" and "guaranteed" for late arrival - Night Clerk Mike said the only rooms left were off-limits because the plumbing and AC in them had broken, and he had given away the last good rooms three hours ago! He'd done nothing about finding them accommodation elsewhere and was deeply unapologetic - "Most of our guests don't arrive at two o'clock in the morning" - Mike at 2:08am, explaining why it was Tom and Shane's fault that the DoubleTree Club could not honor their guaranteed reservation - They discussed the definition of the term "guarantee" with Mike, but he didn't much care; seemed to have been betting that they wouldn't show up; when they suggested that he could have lined up other rooms for them in advance, he bristled - "I have nothing to apologize to you for" - The Career Path of Night Clerk Mike o Two years ago: Paper Boy o Last year: Subway Sandwich Maker o Today: Rude Hotel Clerk o Next year: TSA Agent o The year after: Septic Tank Cleaner - Mike wasn't too optimistic about finding them a place to sleep... slowly started dialing around town... "I don't know if there ARE any hotel rooms around here... all these hotels are full" - Mapped against other service providers, your DoubleTree Club Fared Badly on November 15 o Placed in a category with Kim Jong Un: Despises & Mistreats Customers and Heading for Collapse - Mike finally found rooms at Shoney's Inn & Suites, which is a "dump" and six miles further away from downtown Houston, making a difference in morning rush-hour traffic; would have called dump Shoney's in the first place if they wanted to stay there, could only get smoking rooms - The Experience Mike provided deviated from the usual treatment of an HHonors Gold Member - Even after they left the DoubleTree club, their troubles weren't over: Jon, a colleague, was arriving in Houston on an overnight flight and coming to join them at the DoubleTree first thing in the morning. As they had to go elsewhere, they wrote Jon a note and left it in care of Night Clerk Mike, who failed to give Jon the note - They are very unlikely to return to the DoubleTree Club Houston o Lifetime chances of dying in a bathtub: 1 in 10,455 o Chance of Earth being ejected from the solar system by the gravitational pull of a passing star: 1 in 2,200,000 o Chance of winning the UK Lottery: 1 in 13,983,816 o Chance of them returning to the DoubleTree Club Houston: worse than any of those ("and what are the chances you'd save room for us anyway?") o Revenue Lost to the DoubleTree Club Houston as a Result of Their November 15 Incident chart o "We'll Be Sending This Presentation Around"
Reservations by Mouse
- The Five Cs of Pricing: CHANNEL - OpenTable.com, the largest online reservation service, says that 10 million diners made reservations through its operation since 1998 - About 30 percent of online reservations are made between 10 p.m. and 10 a.m., hours when reservationists might not be working - Union Bar & Grille: pays to lease equipment, for software, and a fee per person for each reservation made online
Amazon Go
- The Five Cs of Pricing: CHANNEL - Walk into a store, grab what you want, and go - No lines, no checkouts, no, seriously! - What you pick up is automatically updated on your card - Don't want it? Just put it back on the shelf and walk away! - "Just walk out" technology - Selling through Amazon might cost more, but is worth it
Boston Restaurants
- The Five Cs of Pricing: COST - More than 200 Boston-area restaurants joined to form a "Dining Alliance" that will bargain with vendors for lower food COSTS. The eateries have negotiated 10% or more price cuts on produce, flour, milk, meats, paper goods
Cambridge Beaches
- The Marketing Plan - Prepared by Dev
Chicago
- The Marketing Plan - SF, Orlando, NY, LV, other big travel destinations often spend far more money on tourism - Behaviorally and geographically targeted --> well-rounded families, specifically the "planner" moms in Milwaukee, Grand Rapids, etc. "Come visit the big city" "Road trip away" "Second to none"`
WellBeing Australia
- The Marketing Plan - Saw an opportunity in the market - "Share of stomach" - Consumer trends: "time poor" and interested in eating healthfully and quickly - SWOT: -S: young company, getting employees from different industries - W: small size - O: growing market - T: new entrants - Segmentation and Targeting --> Demographic: most are busy, knowledgeable about/focused on nutrition - Name: chose a generic one so as not to limit the company since food trends change (don't want to be Wellbeing Soup, Wellbeing Salad, etc.) - Variety: small, but very fresh core offering - Open kitchen, fresh-baked bread every day - Place: location is key - Promotion: glass in front, simple, minimalist, freshness cues - Price: customers will pay premium for healthy, but also don't want to be ripped off - Market the marketing plan with a video made for investors, franchisees, etc.
6 Elements of 'Right' Marketing
- The Right Product (Solution) - At the Right Price (Value) - To the Right Customer - In the Right Place (Point of Access) - With the Right Promotion (Information) - At the Right Time
Integrated Marketing Communications
- The company carefully integrates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands
Advertising objectives can be classified by their aim:
- To inform - To persuade - To remind
Ritz Carlton
- Turning Clients into Fans - Amelia Island property - Founder/CEO of a company sent his wife and kids, daughter left behind a teddy bear/blanket combo named "Joshie" he told her surely Joshie just wanted to stay longer, golf, chill... - Couple days later: Joshie, plus binder with photos of Joshie at the Ritz with photos of him hanging by the pool, with a parrot, at the spa, at the loss prevention office as an employee, driving a golf cart to return home - Dad posts video, gets more hits than any actual advertising - Example of Earned Content
Japan Airlines Case Study
- Turning the organizational structure upside down - According to HBR: the best CEOs are humble CEO: - Wants to be a company without hierarchy that treats everyone equally - sits with everyone in the cafeteria - Cut corporate perks, totally slashed his own pay - Laughs at how USA CEOs make so much - Dug into his own savings to help fix his company
Hilton (Execution)
- Video advertisement - "Stop clicking around" - "Start playing; relaxing; loving; saving" - Book directly through us! Smaller, independent hotels (such as Statler) take advantage of/benefit from OTAs, while the big ones like Hilton, etc. want you to book through them; hotels should find a healthy mix based on their business strategy, etc.
Virgin
- Vision - Video showing what kind of company they want to be - Edgy, suggestive, customer-centric, innovative, eco-friendly - Close ups of Richard Branson
Classification of Visitor Segments: VFR
- Visiting/staying with friends or relatives; often not included as important tourists, but they should be! They do spend on dining, attractions, events, shopping
Three problems that the marketing communicator must solve: Message format (how to say it symbolically)
- Visual ad: using novelty and contrast, eye-catching pictures and headlines, distinctive formats, message size and position, color, shape, and movement - Audio ad: using words, sounds, and voices
Coca-Cola TV Advertising: Cobranding
- Wanted to partner with movie franchise, chose James Bond at the time of the Skyfall launch - Commercial with vending machine, chance to win exclusive tickets to Skyfall - Coke Zero brand: "007" - Certain number of seconds to get there - Sing Bond tune to unlock tickets, "unlock the 007 in you"
Three problems that the marketing communicator must solve: Message structure (how to say it)
- Whether to draw a conclusion or leave it to the audience - Whether to present a one- or two-sided argument - Whether to present the strongest arguments first or last
Coca-Cola TV Advertising: TV #1
- Young dude making weird noises on a bench, girl giving him looks, he answers a pretend phone, hands it to girl, cute moment - Seeking to appeal to younger people because we're increasingly choosing healthier options than Coca Cola
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Emphasize free cancellations for refundable rates in bold text...
...To reassure bookers that they can change their minds if they wnt to. For the booking form, minimize the amount of details required (e.g. name, address, and card number) to complete the booking. Use your confirmation and pre-stay emails to make your guests focus on all the positives of their decision calling out your most attractive amenities or destination highlights, and use inspiring images to excite them
Effective salesperson has two basic qualities
1) empathy, the ability to feel as the customer does 2) ego drive, a strong personal need to make the sale
Buyer Readiness Stages
1. Awareness 2. Knowledge 3. Liking 4. Preference 5. Conviction 6. Purchase 7. Repurchase 8. Referral AKLPCPRR: All kindred lunatics play creatively, probably really regally Promotional tools vary in their effects at different stages of buyer readiness Hospitality companies are sometimes bad at retention/referral
Steps in Strategic Planning
1. Defining the company mission (and vision and values) 2. Setting company objectives and goals (corporate level) 3. Designing the business portfolio 4. Planning Marketing and Other Functional Strategies; business unit, product, market level
Steps in Developing Effective Communication
1. Identify the target audience 2. Determine the communication objective 3. Design a message (AIDA Model, Message Content, Structure, and Format) 4. Select Communication Channels 5. Message Source 6. Measure the results of the communication
Optimize the 3 Ms of Marketing Communiation
1. Market 2. Medium 3. Message
Three problems that the marketing communicator must solve
1. Message content (what to say) 2. Message structure (how to say it) 3. Message format (how to say it symbolically
Four steps in choosing a business location
1. Understanding the marketing strategy: know the target market of the company 2. Regional analysis: select the geographic market areas 3. Choosing the area within the region: demographic and psychographic characteristics and competition are factors to consider 4. Choosing the individual site: compatible business, competitors, accessibility, drainage, sewage, utilities, and size are all factors
Marketers can engage in social media in two ways
1. Use existing social media (Facebook, Twitter, YouTube, Pinterest, Instagram, or others) 2. Set up their own (e.g. niche)
Worst time to cold call prospect
1pm-2pm
World Average: ___ % of people say they share 'everything' or 'most things' online
24
___ % of all tweets contain a link
25
A study of tweets to airlines showed that when a tweet is answered in ___ minutes or less, the customer will pay almost ___ more for a ticket on that airline in the future
5; $20
Best times to cold call
8am-9am, 4pm-5pm
Impact
A QUALITATIVE measure of the value of the message exposure through a given medium
Data warehouse
A central repository of an organization's customer information
Distribution: Economy of Effort
A distributor tends to reduce the number of channel transactions
Multiday Hiking and Religious Pilgrimages
A huge and growing market exists for multiday trekking (hiking), often with a religious basis, such as to specific religious sites
Combination-structured sales force
A large hotel might have a catering/banquet sales force (product), a convention/meeting sales force (market segment), a tour wholesales sales force (marketing intermediary), and a national accounts sales force (customer)
Channel level
A level of middleman that performs some work in bringing the product and sits ownership closer to the final buyer
Direct marketing channel
A marketing channel that has no intermediary levels
Reach
A measure of how many people in the target market are exposed to the ad
Contractual VMS: Franchising
A method of doing business by which a franchisee is granted the right to engage in offering, selling, or distributing goods or services under a marketing format that is designed by the franchisor, who permits the franchisee to use the trademark, name, and advertising
"I would found an institution where any person can find instruction in any study" is an example of
A mission statement
Pricing Strategies: Existing Product Pricing Strategies: Price-Adjustment Strategies: Discounts based on time of purchase
A seasonal discount is a price reduction to buyers who purchase services out of season when the demand is lower. Allow the hotel to keep demand steady during the year
Distribution channel
A set of independent organizations involved in the process of making a product or service available to the consumer or business user
Executive summary
A short summary of the marketing plan to quickly inform top executives
Tourism
A stay of one or more nights away from home for business or leisure, except such things as boarding, education, or semipermanent employment
Aerotropolis
A transportation and urban development concept built around an airport; designed to serve as a powerful economic development force; built to facilitate the rapid movement of freight and passengers
Broker
A wholesaler who brings buyers and sellers together and assist in negotiations; does not take title to goods
Agent
A wholesaler who represents buyers or sellers on a more permanent basis, performs only a few functions, and does not take title to goods
Direct Mail A&Ds
A: Audience selectivity; flexibility; no ad competition within the same medium; personalization D: Relatively high cost; junk mail image
Internet A&Ds
A: Audience selectivity; personalization; immediacy; interactive capabilities D: Demographically skewed audience; relatively low impact; audience controls exposure
Television A&Ds
A: Combines sight, sound, and motion; appealing to the senses; high attention; high reach D: High absolute cost; high clutter; fleeting exposure; less audience selectivity
Outdoor A&Ds
A: Flexibility; high repeat exposure; low competition D: No audience selectivity; creative limitations
Newspapers A&Ds
A: Flexibility; timeliness; good local market coverage; broad acceptance; high believability D: Short life; poor reproduction quality; small pass-along audience
Magazines A&D
A: High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership D: Long ad purchase lead time; some waste circulation; no guarantee of position
Radio A&Ds
A: Mass use; high geographic and demographic selectivity; low cost D: Audio presentation only; lower attention than television; nonstandardized rate structures; fleeting exposure
Social Media A&Ds
A: targeted and personal; interactive; immediate and timely; cost effective D: still figuring out how to use effectively, results hard to measure; largely user controlled
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Reduce decision making
According to "Paradox of Choice," having too many options can be a bad thing, creating anxiety and uncertainty in the buying process, giving a sense that a better choice could have been made, and leaving consumers paralyzed and less likely to make a purchase at all. For hotels looking to increase conversion rates, offer guests fewer options or at least split options into multiple steps
Pricing Strategies: Existing Product Pricing Strategies: Price-Adjustment Strategies
Adjust basic prices to account for various customer differences and changing situations
Applebee's
Advertising: Billboards aka Outdoor/Out of Home - Headline: "Just Meat" "Meat Here" "No Baloney" "Hail Caesar" "Chicken Feed" "Cluck Stock" - Body Copy: menu items or, on the salad one, list of locations - Mandatory: top left corner "Applebee's Neighborhood Bar & Grill" All in caps, simple, to the point, eye catching - No Visual Bus shelter: - Headline: "Next Stop" "Must Stop" "Exact Fare" - Body Copy: list of locations - Mandatory: under the headline - No Visual
Agritourism
Agriculture-based tourism that includes farms, ranches, and wineries; provides rural areas with a means to attract tourists
TTCI: Travel and Tourism Competitiveness Index
Aims to measure the factors and policies that make it attractive to develop the T&T sector in different countries; each country/economy is ranked on a set of indexes
General Pricing Approaches: Cost-Based Pricing
Aka Cost-Plus Pricing: adding a standard markup to the cost of a product
General Pricing Approaches: Competition-Based Pricing
Aka going-rate pricing; based on the establishment of price largely against those of competitors, with less attention paid to costs or demand
Customer Database
An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data
Promotion Mix: Advertising
Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor - Includes broadcast, print, Internet, outdoor - Suggests that the advertised product is standard and legitimate; used to build a long-term image for a product and to stimulate quick sales - Considered impersonal, one-way communication
Kiosk Marketing
As consumers become more and more comfortable with computer and digital technologies, many companies are placing information and ordering machines called kiosks in stores, airports, etc.
Space tourism
As private companies provide vehicles to send tourists into space, this form of tourism will develop. In the near term, it will just be for the very rich
BOGOF vs. BOGOHO
BOGOF doesn't compromise pricing in the way that BOGOHO does
Classification of Visitor Segments: Drifters
Backpacker group; seldom, if ever, found in a traditional hotel. May stay at youth hostels with friends, camp out. Tend to mix with lower socioeconomic native groups; commonly found riding third-class rail or bus. Often young Bourdain vibes
Brand equity drives:
Behavior: - Brand Consideration - Top Brand Preference - Brand Usage Emotion: - Customer Advocacy - Brand Loyalty - Brand Pricing Power
Revenue Management: BAR Pricing
Best Available Rate; for guests who stay several nights, charges different rates for each night
BAV stands for
Brand Asset Valuator
Setting the Total Promotion Budget: Affordable Method
Budget set based on what management thinks it can afford
Bleisure travelers
Business and pleasure travelers; plan to incorporate a period of relaxation prior to or after their business
UNESCO World Heritage Sites
By the United Nations Educational, Scientific, and Cultural Organization - Designates and thereby hopes to help conserve sites of outstanding cultural or natural importance to the common heritage of humanity
Advertising Posttesting: Measuring the sales effect
Can be measured by comparing past sales with past advertising expenditures and through experiments
Patronage rewards
Cash or other awards for regular use of a company's products or services
BAV Model is ___ and uniquely looks at a brand's equity vs. peers and against the dynamics of the broader cultural "brandscape" by comparing outside one another's categories e.g. Airbnb vs. Marriott. Measures all brands, regardless of category, on a consistent set of 48 ___ on the same metrics
Category Agnostic; Imagery Attributes
Pricing Strategies: New Product Pricing Strategies: Product-Bundle Pricing
Combine several products and offer the bundle at a reduced price
Corporate VMS
Combines successive stages of production and distribution under single ownership. Channel leadership is established through common ownership at different levels
General Pricing Approaches: Value-Based Pricing
Companies base their prices on the product's perceived value. Uses the buyer's perception of value, not the seller's cost, as the key to pricing
Market-segment structured sales force
Company structures its sales force based on market segments
Price Changes: Buyer reactions to price changes
Competitors, distributors, suppliers, and other buyers associate price with quality when evaluating hospitality products they have not experienced directly
Channel conflict: vertical conflict
Conflict between different levels of the same channel
Channel conflict: horizontal conflict
Conflict between firms at the same level
Conventional marketing system
Consists of one or more independent producers, wholesalers, and retailers, each is a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole
Vertical marketing system
Consists of producers, wholesalers, and retailers acting as a unified system. Developed to control channel behavior and manage channel conflict and its economies through size, bargaining power, and elimination of duplicated services. Either one channel member owns the others, or has contracts with them, or has so much power that they all cooperate. Three major types: corporate, administered, and contractual
Sales Representative Task: Servicing
Consulting on customer problems, rendering technical assistance, arranging financing, expediting delivery
Measuring the communication effect: Advertising Pretesting: Portfolio Tests
Consumers view or listen to a portfolio of ads, taking as much time as they need
Revenue Management: Dynamic Pricing
Continually adjusting prices to meet the characteristics and needs of the marketplace
Administered VMS
Coordinates successive stages of production and distribution through the size and power of one of the parties
Corporate communication
Covers internal and external communications and promotes understanding of the organization
Destination branding
Creating a differentiated destination image that influences travelers' decision to visit a destination, conveys the promise of a memorable experience that is uniquely associated with the destination
Buzz marketing
Cultivating opinion leaders and getting them to spread information about a product to others in their community
Sales Representative Task: Targeting
Deciding how to allocate scarce time among prospects and customers
Sales Representative Task: Allocating
Deciding which customers to allocate scarce resources to during product shortages
Atmosphere
Designed environments that create or reinforce a buyer's leanings toward consumption of a product
Plog's categorization
Destinations can be placed on the psychographic curve based on the types of people who visit there most; tourists' personality characteristics determine their travel patterns and preferences; range from psychocentric to allocentric
Macrodestinations
Destinations such as the United States that contain thousands of microdestinations, including regions, states, cities, towns, and visitor destinations within a town
Setting the Total Promotion Budget: Objective and task method
Develop promo budget by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing them
Contractual VMS: Alliances
Developed to allow two organizations to benefit from each other's strengths
Diagnosing Attribute Importance and Performance: Elevator Service: High Importance, High Performance:
Diagnosing Attribute Importance and Performance: Elevator Service: High Importance, Low Performance:
The fastest-growing form of marketing
Direct and Digital Marketing
Channel conflict
Disagreement among marketing channel members on goals and roles- who should do what and for what rewards; although they depend on each other, they often act alone in their own short-run best interests
The Customer Journey is not a set of
Discrete events, but, indeed, a journey!!
Channel Organization
Distribution channels are shifting from loose collections of independent companies to unified systems
Territorial-structured sales force
Each sales representative is assigned an exclusive territory in which to represent the company's full line; designed to provide either equal sales potential or equal workload (size); formed by combining smaller units they add up to a territory of a given sales potential or work load
Revenue Management: Overbooking
Effective in the hospitality industry, but the supplier has an ethical and legal responsibility to compensate the buyer and/or find alternative hotels, flights, etc. when problems arise
The demand is ___ if demand changes greatly with a change in price
Elastic
Promotion Mix: Direct and Digital Marketing
Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships; build customer engagement, brand community, and sales - Includes direct mail, telephone, direct-response TV, email, the internet, catalogs, online and social media - More targeted, immediate, and personalized
Psychocentrics
Eventually a destination becomes familiar enough for ___, the least adventurous group, to find it acceptable; persons who do not desire change when they travel. they like to visit nonthreatening places and stay in familiar surroundings
Road Blocking
Ex: purchasing radio spots on all rock stations at the same time so that intended listeners won't switch stations to avoid the ad
Classification of Visitor Segments: Pass-through tourists
Extremely important to states like Kansas and Nebraska and to cities in Texas that serve as convenient rest or overnight stopping areas
Examples of traditional direct marketing
Face-to-face selling, direct-mail marketing, catalog marketing, telemarketing, direct-response TV marketing, and kiosk marketing
Employee should not be involved in uniform selection (T/F)
False; they should be involved!
Sales Representative Task: Prospecting
Finding and cultivating new customers
Diagnosing Attribute Importance and Performance: Elevator Service: High Importance, Low Performance:
Fix Now
Destination marketing organization (DMO)
Group that promotes a specific destination
Use Behavioral Economics to Improve Hotel Booking Conversion Rates: Use urgency-based selling
Has become a cornerstone of the online travel industry. OTAs have baked it into the heart of their user experience. Urgency led to 992% sales uplift. Idea of urgency is built around the scarcity heuristic, the observation that when a product or service is in short supply, it assumes more value Rather than adding an end date to your offers and deals, use a countdown timer. Add scarcity by highlighting availability such as "Don't miss out! Only 2 rooms remaining!" Let your customers know how many res have been made in the past 48 hours, or advertise how many other people are looking at the same rooms they are
Pricing Strategies: Existing Product Pricing Strategies: Price-Adjustment Strategies: Volume Discounts
Hotels have special rates to attract customers who are likely to purchase a large quantity of hotel rooms, either for a single period or throughout the year
Pricing Strategies: New Product Pricing Strategies: Prestige Pricing
Hotels or restaurants seeking to position themselves as luxurious and elegant enter the market with a high price that supports this position
Pricing Strategies: Existing Product Pricing Strategies: Promotional Pricing
Hotels temporarily pricing their products below list price, and sometimes even below cost, for special occasions, for special occasions, such as an introduction or festivities. Gives guests a reason to come and promotes a positive image for the hotel
Classification of Visitor Segments: Explorers
IT; plan their own itineraries/make own reservations. Very sociable, enjoy interacting with people at destination
Turning the Organizational Structure Upside Down
In a conventional structure, everyone is working for their boss and concerned with how they're viewed from above; as a result, little attention is paid to the customer. When a company has a service culture, the organizational chart is turned upside down; the customers are at the top, and corporate management is at the bottom. Everyone is working to serve the customer. Corporate mgmt is helping GMs to serve the customer, GMs are supporting departments on the same task, etc.
Point-of-Purchase (POP) Promotions
Include Displays and Demonstrations that take place at the time of sale (DAD)
Organizing the Sales Department: Field Sales Force
Includes commissioned reps, salaried reps, and sales team
Organizing the Sales Department: Inside Sales Force
Includes technical support persons, sales assistants, telemarketers
Diagnosing Attribute Importance and Performance: Elevator Service: Low Importance, High Performance:
Increase Importance
Contractual VMS
Independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact
Sales Representative Task: Communicating
Information about the company's products and services
Counseling
Involves advising management about public issues and company positions and image
Lobbying
Involves dealing with legislators and government officials to promote or defeat legislation and regulation
5 to 1 Rule
It is 5 times more costly to attract a new customer than to retain an old one
The Sales Process: Preapproach
Learn as much as possible about the prospect company
Interactive TV (iTV)
Lets viewers interact with TV programming and advertising using their remote controls
Factors to consider when setting prices: Internal Factors: Organization Considerations:
Management must decide who within the organization should set prices. In small companies, this will be top management; in large companies, pricing is typically handled by a corporate department or by a regional or unit manager under guidelines established by corporate management
Stopover tourism
Many visitor destinations are only stopover destinations for travelers on their way elsewhere
Sales Representative Task: Information Gathering
Market research and intelligence work and filling in call reports
Internal Marketing
Marketing aimed at a firm's employees
Supply Chain: Downstream Partners from the company
Marketing/distribution channels; wholesalers, retailers
Marketers are shifting away from ___ to targeted communication
Mass marketing
Designing a message: AIDA Model
Message should: - get Attention - hold Interest - arouse Desire - obtain Action
Diagnosing Attribute Importance and Performance: Elevator Service: Low Importance, Low Performance:
Monitor
Organizing the Sales Department: Team Sales
Multiple people (not necessarily from same company) working toward common sales objective
NTOs
National Tourist Organizations; national government or quasi-government agency that markets destination tourism
Perceived Value
Not just how much you pay, but also give vs. get, e.g. might pay more if hassle factor is reduced
Moment of truth
Occurs when an employee and a customer have contact
Classification of Visitor Segments: Business travelers
Often encompasses any form of business, including conventions, trade shows, and job seeking
Medical tourism
One of the fastest growing and most lucrative tourism markets. Tourists spend a large amount on medical treatment, stay in top hotels, and often travel around the country after their surgery. The aging baby boomers and the growing cost of health care will ensure the growth of medical tourism in the future
Customer-structured sales force
Organized by market segment, such as the association market and the corporate market or by specific key customers
Vision Statement
Outlines what the organization wants to be/aspires to do - A source of inspiration - Concentrates on the future/desired future state - Provides clear decision-making criteria - More broad - North Star!!
Promotion Mix: Personal Selling
Personal presentation by the firm's sales force for the purpose of making sales and building personal customer relationships - Includes sales presentations, trade shows, incentive programs - Keeps customer interests at heart, allows personal interactions with customers - Most expensive promotion tool
Destinations
Places with some form of actual or perceived boundary, such as the physical boundary of an island, political boundaries, or market-created boundaries
Press relations
Placing newsworthy information into the news media to attract attention
Allocentrics
Plog observed that destinations are first discovered by ___, persons with a need for new experiences, such as backpackers and explorers
Pricing Strategies: New Product Pricing Strategies:
Pricing strategies usually change as a product passes through its life cycle. The introductory stage is especially challenging
Motivational houses
Provide incentive travel offered to employees or distributors as a reward for their efforts, usually to a resort area at first-class or luxury properties
Price Changes: Initiating Price Cuts
Reasons for a company to do so are excess capacity, inability to increase business through promotional efforts, product improvement, follow-the-leader pricing, and desire to dominate the market
Price Changes: Initiating Price Increases
Reasons for a company to do so: cost inflation or excess demand
Advertising Posttesting: Recognition tests
Researcher asks viewers to point out what they have seen
Second-chance selling
Sales department contacts a client who has already booked a service (e.g. a meeting or hotel room) to sell additional services, such as airport limo transit, room upgrades, F&B
Continuity
Scheduling ads evenly within a given period
Pulsing
Scheduling ads unevenly over a given period
Pricing Strategies: Existing Product Pricing Strategies: Price-Adjustment Strategies: Discriminatory Pricing
Segmentation of the market and pricing differences based on price elasticity characteristics of the segments. A company sells a product at two or more prices, with differences in price not based on differences in cost but on demand, etc.
Junket reps
Serve the casino industry as intermediaries for premium players
Pricing Strategies: New Product Pricing Strategies: Market-Penetration Pricing
Set a low initial price to penetrate the market quickly and deeply, attracting many buyers and winning a large market share
Setting the Total Promotion Budget: Competitive parity method
Set promotion budgets to match competitors
Pricing Strategies: New Product Pricing Strategies: Market-Skimming Pricing
Setting a high price when the market is price-insensitive; makes sense when lowering the price will create less revenue
Promotion Mix: Sales Promotion
Short-term incentives to encourage the purchase or sale of a product or service - Includes discounts, coupons, displays, demonstrations - Dramatizes product offers and boosts sagging sales - Considered short lived
Slice of Life Message Execution Style
Shows one or more people using the product in a normal setting
Classification of Visitor Segments: Individual mass tourists
Similar to OMT but have somewhat more control over their itinerary; e.g., may rent a car to visit attractions
Sales Representative Task: Eliminate selected marginal accounts
Some accounts result in net losses for a hospitality company
Customers: Low Profitability/High Frequency
Some of these guests have the potential to become more profitable
Timetable
Specific dates to accomplish strategies and tactics
Digital is poised to ___ TV in world-wide ad spending this year
Surpass
Destination Marketing System
Systematically linking supply (destination features and benefits) with demand (needs and wants of travelers) and enhancing competitiveness of a destination in a sustainable manner
BAV Philosophy is grounded in:
Tension: differentiation and relevance are polar, and the most compelling brands bridge the conflict between the two
Search-related advertising
Text- and image-based ads and links that appear alongside search engine results on sites such as Google and Yahoo!
Price Discrimination
The act of a given provider of selling the same product at different prices to different buyers/markets in order to maximize sales and profits; ex. time sensitive, price insensitive, etc.
Advertising Posttesting: Recall tests
The advertiser asks people who have been exposed to recall everything they can about what they saw
Measuring the communication effect: Advertising Pretesting: Direct Rating
The advertiser exposes a consumer panel to alternative ads and asks them to rate the ads
Price
The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service
Core Values
The essential and enduring tenets of an organization - A small set of timeless guiding principles - Require no external justification - Have intrinsic value and importance to those outside the organization
Market-channel structured sales force
The importance of marketing intermediaries, such as wholesalers, tour operators, travel agencies, and junket reps, to the hospitality industry has created sales force structures to serve different marketing channels
Genealogical tourism
The interest in knowing more about one's ancestors has grown substantially in recent years. Many people plan vacations to visit genealogical research sites
Emotional labor
The necessary involvement of the service provider's emotions in the service delivery
Frequency
The number of times the average person in the target market will see the ad
Organizational culture
The pattern of shared values and beliefs that given members of an organization meaning and provides them with the rules for behavior in that organization
Supply Chain: Upstream Partners from the company
The set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service
Infrastructure
The system according to which a company, organization, or other body is organized at the most basic level
Advertising Posttesting: Measuring the awareness effect
The target market's awareness of the brand or product is measured before and after the advertising
Publicity
The task of securing editorial and news space, as opposed to paid space, in print and broadcast media to promote a product or service. Also includes new product launches, special events, and crisis management
Market potential
The total estimated dollars or unit value of a defined market for a defined product, including competitive products
Customers: High Profitability/High Frequency
These are your best customers, reward them
Customers: Low Profitability/Low Frequency
These customers follow promotions; make sure your promotions make money
Classification of Visitor Segments: Organized mass tourists
These people have little or no influence over their travel experience other than to purchase one package or another. Commonly travel in a group, view the destination through the windows of a tour bus, and remain in preselected hotels. Shopping in the local market often provides their only contact with the native population
Why are marketing intermediaries used?
Through their contacts, experience, specialization, and scale of operation, they can normally offer more than a firm can on its own
Sustainable tourism
Tourism that minimizes the environmental impacts and sociocultural changes, sustains the longevity of a destination, and creates economic opportunity for local communities
Tourism: Multiplier effect
Tourist expenditures that are recycled through the local economy, being spent and spent again; a benefit of tourism
Cross-training
Training employees to do two or more jobs within the organization
Brands do have intangible value in addition to tangible value; BAV demonstrates the power of brand in driving consumer advocacy, brand pricing power, and business success
True
The compounded annual growth rate of BAV's BEX Index outperforms the S&P 500 and the NASDAQ; BAV's Brand Strength metric is an indicator of future performance and overall growth potential (T/F)
True
Customers: High Profitability/Low Frequency
Try to get them to come more often
Spam
Unsolicited, unwanted email messages
Persuasive advertising
Used as competition increases and a company's objective becomes building selective demand
Reminder advertising
Used for mature products because it keeps the consumers thinking about them
Informative advertising
Used to introduce a new product category or when the objective is to build primary demand
Social Media: Managing UGC
User-Generated Social Media Content - Valuable, whether positive or negative - Positive comments create community and encourage others to use the product - Negative provide feedback and help company improve
Measuring the communication effect: Advertising Pretesting: Laboratory Test
Uses equipment to measure consumers' physiological reactions to an ad: heartbeat, blood pressure, pupil dilation, and perspiration
Pricing Strategies: Existing Product Pricing Strategies: Psychological Pricing
Using aspects such as prestige, reference prices, round figures, and ignoring end figures in pricing
Empowerment
When a firm empowers employees, it moves the authority and responsibility to make decisions to the line employees from the supervisor. Firms should train and empower employees to handle non-routine transactions
Multichannel marketing system
a single firm sets up two or more marketing channels to reach one or more customer segments
Factors to consider when setting prices: Internal Factors: Marketing objectives: Survival
a technique used when sales slump, creating a loss that threatens the company's existence. Because the capacity of a hotel or restaurant is fixed, survival often includes cutting prices to increase demand and cash flow, and a manufacturing firm can reduce production to match demand
General Pricing Approaches: Target Profit Pricing
a variation of BE pricing that targets a certain ROI
Sales Representative Task: Selling
approaching, presenting, answering objections, closing sales
Promotion Mix: Public Relations
building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events through third-party endorsement - Includes press releases, sponsorships, special events, Web pages - Reaches prospective buyers and dramatizes a company or product
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: Unique value effect:
creating the perception that your offering is different from those of your competitors avoids price competition
Factors to consider when setting prices: Internal Factors: Organization Considerations: Revenue Management:
forecasting demand to optimize profit/maximize yield or contribution margin. Demand is managed by adjusting price. Fences are often built to keep all customers from taking advantage of lower prices. For example, typical fences include making a reservation at least two weeks in advance or staying over a Saturday night
Factors to consider when setting prices: Internal Factors: Marketing objectives: Product-quality leadership:
hotels like the Ritz charge a high price for their high-cost products to capture the luxury market
Factors to consider when setting prices: External Factors: Price Elasticity:
how responsive demand will be to a change in price. The demand is elastic if demand changes greatly with a change in price, and inelastic if demand hardly varies with a small change in price. Buyers are less price sensitive when the product is unique or when it is high in quality, prestige, or exclusiveness, or when substitute products are hard to find. If demand is elastic and demand would significantly increase with a change in price, sellers generally consider lowering their prices to produce more total revenue
Factors to consider when setting prices: External Factors: Other environmental factors:
inflation, boom or recession, interest rates, government purchasing, and birth of new technology
Factors to consider when setting prices: External Factors: Consumer Perception of Price and Value
it is the customer who decides whether a product's price is right. The price must be buyer oriented. The price decision require a creative awareness of the target market and recognition of the buyers' differences
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: Substitute awareness effect:
lack of the awareness of the existence of alternative products reduces price sensitivity
Factors to consider when setting prices: External Factors: Competitors' price and offers: Price-rate compression
occurs when higher-priced hotels lower rates to maintain occupancy and become direct competitors to lower-rated hotels
Factors to consider when setting prices: Internal Factors: Marketing Mix Strategy
price must be coordinated with product design, distribution, and promotion to form a consistent and effective marketing program
Factors to consider when setting prices: Internal Factors: Marketing objectives: Other objectives:
stabilize market, create excitement for new product, and draw more attention
Factors to consider when setting prices: External Factors: Market and Demand: Cross-Selling
the company's other products that are sold to the guest (e.g. a hotel selling rooms can cross-sell F&B, exercise room services, and retail products). Part of effective revenue management
General Pricing Approaches: Break-Even Analysis
the firm seeks to determine the price at which it will break even
Factors to consider when setting prices: External Factors: Market and Demand: Upselling
training sales and reservation employees to continuously offer a higher-priced product that will better meet the customers' needs, rather than settling for the lowest price. Part of effective revenue management
Horizontal marketing system
two or more companies at one level join to follow new marketing opportunities; can combine their capital, production capabilities, or marketing resources to accomplish more than what one company can accomplish working alone
Factors to consider when setting prices: External Factors: Competitors' price and offers:
when a company is aware of its competitors' price and offers, it can use this information as a starting point for deciding its own pricing
Factors to consider when setting prices: Internal Factors: Marketing objectives: Market-share leadership:
when companies believe that a company with the largest market share will eventually enjoy low costs and high long-run profit, they set low opening rates and strive to be the market-share leader
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: Business expenditure effect:
when someone else pays the bill, the customer is less price sensitive
Pricing Strategies: Existing Product Pricing Strategies: Price-Adjustment Strategies: Dynamic Packaging
- A package vacation on a single Web site in which buyers can put together airline flights, lodging, car rental, entertainment, and tours in their own customer-designed packages
Pricing Strategies: Existing Product Pricing Strategies: Value Pricing
- Aka EDLP (everyday low prices) - Offering a price below competitors permanently, which differs from promotional pricing, in which price may be temporarily lowered during a special promotion - Risky if a company can't cut costs significantly
DoubleTree Orlando Case Study
- Marketing is Everybody's Business! - Banquet Captain Louree hugs everyone, gives compliments, masters name recognition, knows birthdays, wants guests to feel like family, be happy, and come back! - Gives homemade kits to everyone with: marbles 'so you don't lose 'em', a string to tie everything back together if it falls apart, Hershey's (hug and) kiss, penny, rubberband - Greet clients visiting/considering event spaces with a red carpet
Jack and Jill
- Price Bundling - Heterogeneity of Demand - Jack and Jill come to a B&B, Jack wants to pay $80 for the room, $20 for breakfast, Jill wants to pay $90 for the room, $10 for breakfast - Must price room at $80 and breakfast at $10 for both to come, OR bundle for $100 to get both! - Bundle when people have different demands for different components
The Chicken Experiment
- Price Decoying/Anchoring - Half the class got one added item on the menu, resulting in a higher average price of the dish chosen even though only one person actually chose that most expensive item - Add one more fancier-sounding, more expensive item to the list, and suddenly people are willing to spend more; most didn't actually buy that item, but it did influence sales to get them to buy the slightly more expensive items on the list than what they would have bought had that item not been added
Cheesecake Factory Case Study
- Relationship Between the Marketing Function and the Marketing Department in the Service Industry; Internal Marketing - Started as a small family business - Goal: nurture minds, bodies, hearts, spirits - Once a year: reward the best employees at a fun, off-site event - GMs get free (company-owned) BMWs - Terrific healthcare program - "How Cheesecake are you?" Strong culture; bright eyes; big smile; energetic; ooze hospitality - Treat employees like customers (very well) and customers like employees (in the sense that they will love it, advocate, and create business)
Shamwow
- The Five Cs of Pricing: COMPETITOR - Say WOW every time you use it! - Use on your house, car, boat - Holds twice its weight in water - Made in GERMANY! Luxurious! - Don't waste money on dumb COMPETITORS like paper towels, sponges - Lasts 10 years, 10 year warranty - Infomercial, faster paced than typical advertisement - Act NOW, get more; 8 for $19.95 (magic number) - BETTER than alternative!!!! - Call to action (phone number) - Not in stores (company doesn't have to pay retailer)
BevMo
- The Five Cs of Pricing: COMPLIANCE - Label says 2012, bottle says 2013 - Took hidden camera into 4 California BevMo stores - Got different answers from different clerks regarding the discrepancy "One year is of competition" "Aged from one year to the other" - Intentional, systemic fraud - Online: customers are given option to uncheck "allow vintage substitutions" but still given them anyway - Bait and switch: the action (generally illegal) of advertising goods that are an apparent bargain, with the intention of substituting inferior or more expensive goods
Citizen M Hotels
- The Five Cs of Pricing: Customer - The world is getting smaller - Targeting culture seeking CUSTOMERS who travel a lot and wisely, are independent, respect the places they visit, are technology focused - Where budget meets luxury, "low-priced luxury" - Big bed, wifi, self check in, 24/7 F&B, lounge - Personality as a hotel - Commercial made by the hotel
Some topics BAV has a POV on
- The Power of Purpose - Brand Trust - Love / Hate - Future Female Leaders - Navigating Brand Crisis - BAV People - The New Generation Gap - Brand Elasticity - Brand Tensity Activation Workshops - Acquisition Analyses - Customer Journeys - Brands in Recession - Partnerships
Internal Marketing in hospitality
- The hospitality industry is unique in that employees are part of the product - Marketers must develop techniques and procedures to ensure that employees are willing and able to deliver quality service - Employee satisfaction and customer satisfaction are correlated - The behavior of employees can be monitored through reading reviews on social media and Online Travel Agency (OTA) sites
McDonald's: there are two types of employees, all serving customers in some capacity:
- Those serving customers - Those serving those serving customers *Note: Hamburger University: two-week employee training program, earn a degree in Hamburgerology
BAV three-part global strategic framework
- What people think (BAV) - What people do (eXploring) - How people engage (BAV Social)
Development of a marketing approach to Human Resources Management
1. Create positions that attract good employees 2. Use a hiring process that identifies and results in hiring service-oriented employees 3. Use hiring procedures that identify those employees who are team players 4. Provide initial employee training designed to share the company's vision with the employee with product knowledge 5. Provide continuous employee training programs 6. Make sure employees maintain a positive attitude. Managing emotional labor helps maintain a good attitude 7. Reward and recognize customer service and satisfaction
Three things that make BAV unique
1. Cross-Category Learnings (e.g. Apple vs. Marriott) 2. Linked to Financial Impact of Brands 3. Actionable Cultural Insights
Service Culture
A system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business
Cast members
A term used for employees, implying that employees are part of a team that is performing for their guests
BAV measures brands on four pillars of Brand Equity and Momentum
Brand Strength: Future Growth Potential - Differentiation; unique meaning, standing out; relates to margins, loyalty, and cultural currency - Relevance: appropriateness; fitting in; market penetration Brand Stature: Current Operating Value - Esteem: Regard; perception of quality and respect - Knowledge: understanding; consumer experience
The demand is ___ if demand hardly varies with a small change in price
Inelastic
Price Changes: Firm's own response to price changes
Issues to consider: reason, market share, excess capacity, meet changing cost conditions, lead an industry-wide program change, temporary vs. permanent change?
BAV is the ___ study and model of brands globally
Largest and longest-running
Factors to consider when setting prices: Internal Factors: Marketing objectives: Current Profit Maximization
companies may choose the price that will produce the maximum current profit, cash flow, or ROI, seeking financial outcomes rather than long-run performance
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: End-benefit effect:
consumers are more price sensitive when the price of the product accounts for a large share of the total cost of the end benefit • Ex: a Japanese couple paying airfare to travel to Australia will pay a lot for a luxury ocean-front hotel, which is a small cost of the end benefit- a big vacation. A family driving to the ocean from Sydney are less likely to splurge on fancy accommodations. When the Japanese couple goes to a theme entertainment park, the admission fee is a small portion of the price of their vacation and they pay without hesitation, but those traveling from Sydney may view the charges as high
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: Price quality effect:
consumers tend to equate price with quality, especially when they lack any prior experience with the product
Factors to consider when setting prices: External Factors: Analyzing the price-demand relationship:
demand and price are inversely related; the higher the price, the lower the demand. Most demand curves slope downward in either a straight or a curved line. The prestige goods demand curve sometimes slopes upward; for example, a luxury hotel may find that by raising its price from X to Y, it sells more rooms rather than fewer
Price Changes: Competitor reactions to price changes
most likely to react when the number of firms involved is small, when the product is uniform, and when buyers are well informed
Tensity
the convergence of two or more contradictory forces, resulting in excitement, anticipation, and a palpable energy; the most iconic brands in culture have a clear tensity that's innate to their meaning; differentiation and relevance are polar, and the most compelling brands bridge the conflict between the two
Factors to consider when setting prices: External Factors: Factors affecting Price-Demand Relations: Total expenditure effect:
the more someone spends on a product, the more sensitive they are to the product's price