Principles of Marketing 2 (After Midterm)

interpersonal communication

the exchange of thoughts, feelings, and beliefs between two or more people

offshoring

The practice of exporting U.S. jobs to lower paid employees in other nations.

intransit inventory

moving from producer to customer

clicks and collect

shop online but go somewhere to collect them: physical and online presence: clicks and mortar

traditional selling

Attempts to persuade the buyer into a specific point of view; creates a win-lose outcome.

AIDA concept

Attention/Awareness, Interest, Desire, Action (best) -a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; marketing communications wants to get people through this model

Full-service retailers

Carry more specialty goods Assist customers in every phase of the shopping process

promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

CPG

Consumer Packaged Goods: in grocery stores

individual brand

Different brand names for different products. Only one product line Procter and Gamble believed in this (small print says procter and gamble) big says Febreeze, Tide, Downy

premiums

Items offered free or at a minimal cost as a bonus for purchasing a product; McDonalds Happy Meal

family brand

Lots of product lines for that brand: Procter and Gamble caved: Crest is on a lot of products; Under Armour: umbrella branding: umbrella brand over top and sub brands underneath: Microsoft-office-excel, word, ppt, windows, xbox, bing, Marriott-courtyard hilton family-hampton, hilton gm-buick, chevy, GMC, cadillac ford (dominant brand): jaguar, land rover

non-profit marketing

Marketing activities conducted to achieve some goal other than ordinary business goals such as profit, market share, or return on investment; schools, governments (IRS), charities (United Way funds other charities: go into work places and try to convince employees to donate), Museums (get funds to upkeep exhibits); public advocacy groups, objective other than profits, utilize marketing to achieve objectives; people aspect: increase awareness of person (political--The Selling of the President 1968, celebrities) Scully said that Trump's outlandish sayings helped him make presidency

full-line discount stores

Retailers that offer low prices, limited service, and a broad variety of merchandise; walmart

Self-service retailers

Serve customers who are willing to perform their own locate-compare-select process Piggly Wiggly original self-service retailer

sales promotion

Short-term incentives to encourage the purchase or sale of a product or service

merchant wholesaler

an independently owned wholesale business that takes title to the merchandise it handles; buy from manufacturers then to retailers not consumers, sell in bulk without amenities;

promotion mix

The combination of promotional tools an organization uses advertising: impersonal paid communication, sponsor is identified -traditional media: tv, radio, newspaper, magazine, direct mail, billboards, transit public relations: unpaid communication that try to shape public attitudes and opinions -pro-active public relations: most of time talk about this, get messages out to get people to think certain way about product or company -reactive public relations: respond to negative publicity to try to minimize it -Good companies have both plans most press releases not successful, just want to have news-worthy exposure -David sunflower seeds: went after little league, worked better with major league: they already chew tobacco, costed almost no money sales promotion: marketing strategies other than this stimulate consumer demand now: free samples, contests, giveaways, rebates trade sales promotion: stimulate dealer demand now: trade shows, trade giveaways

Supply Chain Management (SCM)

The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability

order fulfillment

The processes involved in responding to customer orders in a timely manner metrics: order fill rate: percent of orders completed and on time, 98% is very good, want to know historical and competitors order fill rate is

UPC

Universal Product Code (barcode) code for manufacturer so it can be scanned

POP displays

any form of special display that advertises merchandise at point of purchase, generates awareness

promotional strategy

a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, sales promotion, and social media communicate: high quality, rapid delivery, low price, excellent service, unique features

coopetition

a blend of cooperation and competition that tries to reap the best of both worlds; Microsoft and Apple, might cooperate in advantaged areas: Microsoft Office available on Mac

rebate

a cash refund given for the purchase of a product during a specific period

earned media

a category of promotional tactic based on a public relations or publicity model that gets customers talking about products or services: online media coverage -Social media is between owned and earned

paid media

a category of promotional tactic based on the traditional advertising model, whereby a brand pays for media space: traditional advertising

product warranty

a confirmation of the quality or performance of a good or service; express warranty: written guarantee; implied warranty: unwritten that the goof or service is fit for the purpose for which it was sold

personal selling

a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

Store Trading Area

area of dominant influence for a retail location; how far out from store people will come: convenience or home depot (destination)

intangible

can't be touched, tasted, heard, felt

IMC (Integrated Marketing Communications)

carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

product modification

changing one or more of a product's characteristics

consumer products types

consumer durables: provide benefits over period of time: car, washing maching nondurables: consumed in short term: gum, newspaper convenience product: frequenctly purchased little thoguhts, candy milk -shopping products: considerable time and effort, water heater, shoes -specialty products: expensive, important to buyers: rolex watch unsought products: little interest in until neef arises: crutches

packaging

contain and protect, promote, facilitate, storage, use, convenience

strategies for service

core and supplementary standardized or customized: easier to customize services service mix: offer multiple services at once: Fedex office has multiple services in one place

mass communication

the communication of a concept or message to large audiences

R & D new product development

tinker around in lab: post-it notes, not marketing driven, just chemist in lab playing around with adhesive downside: same company came up with mouse, first spreadsheet, graphical user interface: Zyrox from PARC might come up with things company itself can't successfully commercialize

competitive advantage

a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition; perceived advantage

channel control

a situation that occurs when one marketing channel member intentionally affects another member's behavior

product category

where you compete and who your major competitors are: SUV, compact car, frozen pizza, cola beverages, mouthwash, toothpaste Walmart has large product mix (2-3 competitive products in each

agents and brokers

wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers

brand indifference

you'll buy whatever is cheaper; price shopping, worst for marketers

selective distribution

a form of distribution achieved by screening dealers to eliminate all but a few in any single area; in middle of inclusive and exclusive

Public Service Announcement

(PSA) Conveys an important message to the public (no specific audience); often instigates the public to take action or further educate themselves; free; people in position to giveaway advertising; ad counsel; great majority of ads are paid for by advocacy group

Podcast October 11

,aMcDonalds breakfast menu: adds bakery items to permanent menu for the first time in 8 years, apple fritter, blueberry muffin, cinnamon roll available all day, many consumers work from home hurt sales -marketing environment: people aren't driving to work negatively affects breakfast business, market is dynamic coupons: digital coupons surpassed redemption of paper coupons because more people are shopping online Disneyland of football: walt disney is going to make walt disneyland of football in pro football hall of fame in kenton ohio, waterpark, hotels, apartments: hall of fame producer is investor strategic planning/portfolio management: IBM spins off 25% of business to focus on cloud: international business machines, kept spinning off businesses -GE is selling lighting business to Sevant business, part of sale is long-term licensing agreement to use GE brand, selling manufacturing of products -consumer giants are struggling to slim down: portfolio cleanup strategies running into trouble, get rid of dogs, but some companies are having trouble

symptoms of overextension

-Some products have low sales or cannibalize sales of other items: Doritos: original was toasted corn taste but then came out with taco flavor that it's 90% of sales, now it's nacho -Resources are disproportionately allocated to slow-moving products -Items have become obsolete because of new product entries

Identify Product Benefits

- sell the sizzle, not the steak - sell a product's benefits, not its attributes - a benefit should answer "What's in it for me?" - ask "so?" to determine if advertising offers attributes or benefits

product line

a group of closely related product items; Campbells has multiple different soups (red and white cans, different from Chunky lines)

channel captain

a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts; most powerful player

media selection consideration

-cost per contact-reach: get to diff consumers -frequency: more than 3, less than 10 because if only seen a couple times, won't sink in, but don't want to overdo it: wear-out MEASURE gross rating points: GRP: a measure used for comparing the effectiveness of different media vehicles: average reach x frequency -cost per thousand (CPM): The media cost of exposing 1,000 readers or viewers to an advertising impression.

problem with product lifestyle theory

-could be self-fulfilling prophecy, if you pull back marketing investment when you think you're mature -you're never fully sure where you are in product lifecycle -David sunflower seeds: 60th anniversary: put this on package-benefit, got us talking about product lifecycle, but fewer than 15% of target market have tried product, then in intro stage of product lifecycle try introductory tactics-trial pack successful in getting people to try product -iPhone, not same phone that's been around for 10 years, new version of product: Fanta-Coka Cola pushing flavored sodas -few people use shaving products like soap-use shaving cream -chalkboards on decline -audio cassettes on decline -fewer iPods are sold people use phones -products can have lifecycles that last a while: Coke 19th century to today: it's in mature phase but who can say they won't keep it going for decades

new product funnel

-new product strategy: how you plan to grow product mix in business strategy -idea generation (brain storming): how you come up with possible new product ideas -idea/concept screening: windowing out ideas that don't seem viable as successful new products -business analysis: how successful you think product will be: sales, cost, profit projections problem is you're doing it on something that doesn't exist yet -product development: go in R&D lab to develop product, specific parameters:, market research, then go to test market test market: commercialization unless it's a laboratory/stimulatory market test (many use Pittsfield) blackbox research technique: labtest markets .25 million but super good -downside test market: competitors know what you're up to

ideal test market

-not too big -limited media spill in/spill out -demographics similar to US average

dynamically continuous innovation

-pronounced modification to existing product -disrupts consumer's normal routine -requires modest amount of new learning convergence: 2 coming together of technologies to create a new system with greater benefits than its parts: iPhone: music, camera, flashlight, computer (could be discontinuous)

Multi-level marketing

A business structure that pays commission on sales earned by people at two or more levels; the sales representatives usually work independently of the company; the representatives not only sell products but try to get others to sell them; aimway is largest; herbal life

service quality

-reliability: ability to perform services right first time responsiveness: ability to provide prompt services -assurance: knowledge and courtesy of employees -empathy: how employees treat you -tangibles: physical evidence of service: Insurance is most intangible service--buy contract, still have tangible: AllState hands, Geico gecko

franchisor

A company that develops a product concept and sells others the rights to make and sell the products.

Layers of the Product Concept

1. Core Product: all the basic benefits the product will provide (carrying cargo, excitement) 2. Actual Product: physical good or delivered service that supplies the desired benefits (features, appearance of car-color, engine size) 3. Augmented Product: actual product plus supporting features such as warranty, credit, delivery, installation, and repair services after the sale car is consumer durable:

creative decisions in advertising

1. Determine the advertising objectives 2. Make creative decisions, or make media decisions 3. evaluate the campaign. difficult to isolate benefits of advertising

US ad spending

2015: $189 billion; per capita: $592 spent per person in US; grows 5-6% over years

trademark

A brand that has exclusive legal protection for both its brand name and its design; claiming ownership over name; Oldspice

franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area; 7/11

hypermarket

A form of scrambled merchandising, which consists of a large store (more than 220,000 square feet) that offers everything in a single outlet, eliminating the need for consumers to shop at more than one location; France: grocery and department (avg Walmart is 150,000 sw feet)

layout

A predefined arrangement of placeholders for text or objects (such as charts or pictures). part of atmospherics grid layout: people must go certain way in store open layout: don't have to go certain way location: socioeconomic characteristics, traffic, lifestyle center

EDI (electronic data interchange)

A set of standards for exchanging messages containing formatted data between computer application; inventory levels, allows for automatic replenishment; Walmart required this from mid 1980s

MRP (Material Requirements Planning)

A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase. Time-phased MRP begins with the items listed on the MPS and determines (1) the quantity of all components and materials required to fabricate those items and (2) the date that the components and material are required. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.

lifestyle center

A shopping center with an outdoor traditional streetscape layout with sit-down restaurants and a conglomeration of specialty retailers; Dubai: indoor skiing

supplier relationship management process

A supply chain management process that supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers; more of us environment over them environment, work close w customer Walmart and P&G: P&G employees work inside Walmart facility Rubbermade tried to do this with Walmart (but don't want more than a third of your sales with one customer (they had 50% of sales with Walmart) but then prices went up and Walmart refused to accept increase then Walmart threw them out

trade characters

Brand marks that have been made to seem lifelike; ronald McDonald, Michillen man, Geico, Mr. Clean, Brawny, Malboro man

private label brands

Brands developed and marketed by a retailer and available only from that retailer; also called store brands. Owned by retailer: Stop and Shop brand foods, manufacturer didn't put own name on, Kirkland, John B Sanfilpo

evolution of marketing communication

Early: Boston Daily Globe newspaper then: radio then: 4 color magazines Saturday Evening Post then: tv then: cable tv (narrowly target, ESPN to target men now: internet traditional advertising model: impersonal, numbers driven, unquantifiable now with social media: personal, direct communication, feedback driven, highly visible communication

Standardization

Everything is the same

"new and improved"

Federal trade commission: can only call product new for 6 months -continuous innovations: modification to product

October 25 podcast

Food Definitions: Pizza and Cheese -La pizzaria brand not legally pizza;1 in 8 Americans eat pizza in week; 1/3 global pizza; 25% of nations cheese used on pizza; #1: superbowl sunday; new years eve, halloween, night befor thanksgiving, new years day Cheese: culture, enzymes, milk, salt: cheese, cheese food, cheese product Boston Beer Stock Price Surges: stocks rose to 180% (Truly) hard seltzer is 550 million industry in US white claw and truly make up 85% Dunkin Beverage Innovation: oatmilk and refreshers Impossible Foods R&D Push: prototype for dairy free milk, wants to double size research and development teams; beyond is a competitor Tight Inventories and Product Shortages: cars, other goods are being snatched up, need to pay attention to macroenvironment

biggest product fails

Ford Edsel Sony betamax crystal pepsi clearly canadian rj reynolds smokeless cigarette microsoft bob mcdonalds arch deluxe froto lay wow chips-fat free mobile ESPN thr nook qwikster

Categories of Adopters

Innovators (2.5%) Early Adopters (13.5%) Early Majority (34%) Late Majority (34%) Laggards (16%) be careful if product has legs or is a fad: spike quickly then go down: pet rock, instant insanity (like rubik's cube except cube was not a fad)

October 18 Podcast

KFC: Slogan and Sauce -replacing finger lickin good sauce and slogan: didn't want to use this slogan with Corona; paused slogan: KFC is official brand name since 1991; NPR (national public radio), YMCA to The Y; international business meeting to IBM Coca-Cola to Retire Tab -1st cola diet soda; get rid of Dogs, tasted bad, no good artificial sweeteners GM Big Ad Campaign During World Series -Hummer EV: 80% or 255 million will see equal to 2 superbowl broadcasts; unveiling vehicle on world series; 30 second spot costs $275,000-$400,000; Lebron James brand ambassador will be in ad "Nap Dress" -New Yorker; will be 50% of company's sales; 75-100 dollars Day Care Industry -Corona threatens to push childcare industry over edge, many closed due to financial crisis; have half or less children than in February; after demand for daycare will go back up give new businesses opportunities Subway Bread is NOT Bread! -too sugary to be called bread; doesn't meet Ireland's legal limits for sugar in bread subject to higher tax sugar is 10% of weight of flour in dough Lapizzeria brand isn't technically pizza: not enough cheese to meet FDA's standards for pizza; Kraft singles isn't cheese

retailing as theater

Landscape themes Marketscape themes Cyberspace themes Mindscape themes; Abercrombie and Fitch overemphasize overdo dress, attitude, knowledge, CEO said they hire only good looking people, don't market to anyone other than "cool, good-looking people" stock price has plummeted since this: dropped 77.4%

warehouse clubs

Large retailers with an irregular assortment, low service levels, and low prices that often require membership for shoppers; sell in bulk; retailer and wholesaler: Price Club (Sol Price-Gemco in 50s blueprint for Walmart) the first but Costco is dominant then Sam's Club, and BJs

Supercenters

Large stores combining full-line discount stores with supermarkets in one place.

eye-catching publicity

Oscar Meyer weiner mobile

in-process inventory

Products located at employee work stations; most or all will be used during the shift.

coupon

Provides a stated discount to consumers on the final selling price of a specific item; the retailer handles the discount; instant

off-price retailers

Stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts: opportunistic buy inventory; out of season, overstock (different from discount stores: have more regular) can be independent: TJ Maxx, Ross, Marshalls or factory outlet: MFRs outlet: Tanger Outlets (destination location)

The Role of Retailing

U.S. retailers employ nearly 15 million people Retailers account for 10.8 percent of U.S. employment Retailing accounts for 10 percent of U.S. businesses Retailers account for two-thirds of the U.S. GDP Industry is dominated by a few giant organizations, such as Walmart

strategic channel alliance

a cooperative agreement between business firms to use the other's already established distribution channel; businesses signing with major retailers: Hertz have deal with major retailers

direct channel

a distribution channel in which producers sell directly to consumers; most people don't go direct, more efficient to go through intermediaries, intensive, selective, exclusive

electronic distribution

a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals; anything that can be digitized

brand loyalty

a favorable attitude toward and consistent purchase of a single brand over time

pull strategy

a marketing strategy that stimulates consumer demand to obtain product distribution: get customer to reach up through channels and grab: advertising consumer--demands from retailer--demands from wholesaler--demands from manufacturer

push strategy

a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise; manufacturer on top: push goods down through channels to consumer: promotional vehicles like trade promotions to consumer manufacturer--wholesaler--retailer--consumer

flighted media schedule

a media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times

continuous media schedule

a media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle; advertising all the time, too expensive

pulsing media schedule

a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods; illusion it's on all the time

inventory control system

a method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand; easy with computer software, will do it quartely

brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products; specific designation of a product

owned media

a new category of promotional tactic based on brands becoming publishers of their own content in order to maximize the brands' value to customers: online

trade allowance

a price reduction offered by manufacturers to intermediaries such as wholesalers and retailers -merchandising trade allowance -co-op trade allowance

the service offering

a process in which providers ask customers to participate; rental cars--Hertz: shows where car is and what aisle and Emerald

sponsorship

a public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image; sports

automatic replenishment program

a real-time inventory system that triggers shipments only when a good is sold to the end user; computers make the decisions; Walmart

discount store

a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume

specialty store

a retail store that carries a narrow product line with a deep assortment within that line; Children's place; typically smaller

specialty discount store

a retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover; narrow assortment

drugstore

a retail store that stocks pharmacy-related products and services as its main draw: HBA health and beauty products

independent retailer

a retailer owned by a single person or partnership and not operated as part of a larger retail institution; more chain stores in US: Home goods, TJ Maxx; which is different from franchise

used goods retailer

a retailer whereby items purchased from one of the other types of retailers are resold to different customers Goodwill, Platos, Play it Again Sports

party plan system

a sales technique that relies heavily on people getting caught up in the "group spirit," buying things they would not normally buy if they were alone; tupperware; Kraft meats

supplementary services

a service that supports or enhances the core service

marketing channels

a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer, pipeline or flow, interdependent organizations, middlemen, resellers

product item

a specific version of a product that can be designated as a distinct offering among an organization's products; aka SKU (stock keeping unit) campbells cream of chicken soup available in 5 oz and 20 oz can-one product item but different SKUs (different numbers and prices)

department store

a store housing several departments under one roof; Macy's

destination store

a store that consumers purposely plan to visit prior to shopping

drop ship

a technique wherein the retailer does not hold inventory, but instead transmits customer orders and shipping details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer

discontinuous innovation

a totally new product that creates major changes in the way we live -creates major changes in the way we live -consumers must engage in a great deal of new learning ex. microwave oven

product line extension

adding additional products to existing product line in order to compete more broadly in market. marketers add related products to an established brand; very similar: Oreos comes out with Halloween Oreos and double stuff; formula 209 then comes out with 64 oz economy version, then lemon scented 209; David sunflower seeds, flavors, low sodium, different packaging, bucket for baseballs and has seeds inside... what about their pumpkin seeds and sunflower kernels is it a brand or line extension? Pistacios didn't work: too expensive and older consumers eat pistacios than younger who eat sunflower.

advertising

advantage: reach many -low cost -can be micro-targed disadvantages: total cost high -national reach is expensive for small companies

neither routine nor complex buying decision

advertising and public relations

benefits of product lines

advertising economies, package uniformity, standardized components, efficient sales and distribution, equivalent quality (Orida potato line, David sunflower seed: consumers know quality)

routine buying decision

advertising, sales promotion

retailing

all the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use; doesn't have to be in physical store -traditional retailers are struggling: Sports Authority, American Apparel, Radio Shack, Borders, Circuit City, Woolworths; sector of retail is up 6%

unique selling proposition (USP)

an advertising appeal that focuses on one clear reason why a particular product is superior -slice of life: ad shows people in regular everyday settings then talk about product -lifestyle: shows people in desirable lifestyle: have lifestyle if have product -spokesperson/testimonial: celebrity (on the rise; more memorable, break through clutter) or current user -humorous: more memorable helps break through clutter demonstration: shows product being used how it should be: Gillette musical: cuts through clutter

dual distribution

an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product; not great idea: channel conflict

seasonal inventory

an extra inventory buffer that is held in response to predictable demand increases that occur annually

franchisese

an individual or business that is granted the right to sell another party's product; own legal rights

brand insistence

people are coke drinkers over pepsi; will never drink pepsi

servicemark

claim ownership on service; Supercuts

manufacturing flow management process

concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process; smooth and efficient, multiple firms that interact

product mix

consists of all of the product lines offered by an organization: Campbells (red and white, chunky line, gourmet line, V8 line)

supply chain

consists of all parties involved, directly or indirectly, in obtaining raw materials or a product, product services or information, upstream or downstream value chain: try to get competitive advantage (Coke) supply chain: connected chain of all the business entities that perform of support the logistics function aka middleman -eliminate middleman works when cost of middleman outweighs value of performance -inbound logistics: all things that go into product: Pepsi: water, flavorings, sugar, package with label, cap, carbonation: into plant to make pepsi -operations: stuff comes in door and gets sorted, washed, mixed, blended, labeled, coated, inspected outbound logistics: put product on truck and ship out -Hewlett Packard too distribution partners provide channels: breaking bulk: purchasing large quantities of goofs to sell a few at a time to customers Creating assortment: Campbells as an example, M & Ms and Mars make a lot in factory then put them on trucks to distribute to customers break bulk: go to warehouse then store (or Walmart's warehouse-distribution center) creating assortment: ship them out to individual stores, a few cases of this and that eliminating middleman does not work when they perform functions with less expense than if they weren't there: cheaper to get it from Walmart than from the M &M store, reduce number of transactions, if not every buyer would have to deal with every supplier

knockoffs

copy of another, usually higher-priced, garment Tide and Surf to compete against Tide (not successful knockoff Zoon from Microsoft knocked off iPod Mr. Pibb knockoff of Dr. Pepper; Sprite is best knockoff of 7 Up; pepsi knocked them off with siera mist; Cheezit knocked off by cheese nips

advertising: copy, media

copy: what you say media: where you say it newspapers: adv: local, immediate: disadv: quality of printing isn't as good as magazines, newspaper circulation is declining almost 50% over past 30 yes magazines adv: color, targeted: disadv: takes longer advertiser commitment, audience builds slowly, not as urgent radio adv: immediate message, low cost, creative-mental pictures: disadv: no pictures, not as much regional frequency, lots of noise because they listen to it in background tv: reach wide, diverse audience: adv: high value, demographically selective with target in cable stations disadv: high cost, people are skeptical of tv ads, less selective if not on cable, more commitment internet adv: reach narrow target audience, short lead time, moderate cost, measure ad effectiveness outdoor adv: close to where business is (McDonalds is 200 meters from here) disadv: people hate eye-sore component of outdoor directory advertising: on big decline, yellow page cooperative advertising: suppliers to them agree to be in ad

business to business products

equipment, maintenance, repair and operating raw materials processed materials component parts entering goods: go into product, raw materials, basic steel, processed materials steel tube component parts: completed but part of larger product: seat, wheel of chair -specialized services: accounting services

the service continuum

range of product-dominant to service-dominant offerings; but many instances have balance of both

media schedule

designation of the media, the specific publications or programs, and the insertion dates of advertising

channel conflict

disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards

big box retailers/specialty discounters

discount stores that offer a narrow but deep assortment of merchandise: category killers: Toys R Us (started here), Home Depot, Best Buy, Barnes and Noble, Office Depot

retailers

end sale to consumers; Amazon

brand extension

extending an existing brand name to new product categories; Coors put brand on bottled water product: terrible brand extension, KFC opened chain of roast beef shops kentucky roast beef-not success; Orida: extended potatoes to chopped onions; orida fried chicken didn't work, Tide extended to Tide dry cleaners; Mr. Clean-magic eraser, car washes; Black and Decker was gonna go into small appliances successful product line; Stoffer's went from frozen entrees to hotels, but rebranded now; Star Wars movies to Star Wars hotel; Disney-Pixar, ABC, Walt Disney, Disneyland, ESPN, Disney

buffer stock

extra inventory held to guard against uncertainty in demand or supply

FMCG

fast moving consumer goods interchangeable with CPG

knowledge management

finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm; wholesale intermediaries, merchant wholesalers (carry and stock goods-most common independent intermediary) merchant agents and brokers (bring buyers and sellers together)

exclusive distribution

giving a limited number of dealers the exclusive right to distribute the company's products in their territories; high end luxury products

product development and commercialization

includes the group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms; el monterey, ruiz foods, BRC burrito: reece gun ho and costco wanted it, but consumers didn't want it

four characteristics of services

intangibility: can't be touched, tasted, heard, felt; harder to convey benefits of service inseparability: can't separate consumption from production of service: haircut--you have to be there lawyer drawing up will is it service or is will product? heterogeneity/ variability: some variability between quality of service from time to time: machines can be tightly calibrated for products, but people vary in services; use training to help prevent this; consistency hard to achieve, synchronize supply and demand perishability: services cannot be manufactured in advance and stocked in the warehouse they're perishable: haircut place, by 10 you've had 16 units of production but if no one walks in then you miss out on these units Internet services: anything that can be digitized can be sold on internet: banking and brokerage services, music; Apple is largest music retailer; travel services (travel agencies are online-travelosity); dating sites-Match is largest; career services (Monster); medical care: medical information on WebMD; software-what's product vs service--SAAS: Microsoft Office--used to buy physical product disk, now do subscription business, purchase it online: software as a service started in B2B but now in consumer sector Shampoo product and service of hair care intangibility: can't see, touch, or smell service perishability: capacity management allows firms to adjust their services to match supply with demand -services can't be stored for later sale or consumption variability: -products are mass produced by machines -even the sane service performed by same person will vary inseparability: it is impossible to separate the production of a service from consumption (OFTEN): don't need to be there when lawn is being cut

Commercialization

introducing a new product into the market as widely as you want; nationally -expand availability of product: can do everywhere all at once or roll it geographically, new england then mid atlantic states

product lifecycle (PLC)

introduction, growth, maturity (most profitable, pull back on marketing investment but more competition), decline -problems: very predictable marketing tactics to utilize at each level but can become self-fulfilling prophecy, don't know where you are in product lifecycle

conventional marketing strategies

introduction: distribution, play with pricing, communication strategy is informative, goal to get people to buy it growth: try to get more brand loyalty, sales increase but competitors so might need to lower prices, advertise heavily up front mature stage: add new features profit margins are squeezed due to competition, reminder advertising decline: put off demise, cut down on marketing spend, remain profitable longer

floor stock

inventory displayed for sale to customers

back stock

inventory held in reserve for potential future sale in a retailer's storeroom or stockroom: Apple: has few in front only have sample products

shopping products

items for which buyers are willing to expend considerable effort in planning and making purchases, clothes (suit, dress) don't buy all the time, small appliances, requires comparison shopping, found in fewer stores

unsought products

items that the consumer does not know about or knows about but does not initially want; break leg, need to buy crutches

specialty products

items that the consumer makes a special effort to search out and buy; more expensive, more thought, not available in many places-car; search extensively for and are reluctant to accept substitutes; fewer locations

brand term

just do it

supermarkets

large stores specializing in groceries with self-service and wide assortments: superstores

branding strategies

licensing: one firm sells the right to another to use a legally protected brand name for a specific purpose for a specific period of time: kit kat: nestle has name but hershey also owns Boston Red Sox, Patriots: sells tickets but sells to companies who will put it on hats and shirts

new product strategy

link your business plan and product mix; product development plan in business plan, aka new product funnel

captive brand

made for a retailer, parades like manufacturer brand, only available at retailer; Walmart products (Equate) only at Walmart; can charge more than for private label cuz similar to manufacturer brand -no evidence of store's affiliation -higher prices than private label brands, equate copies Dove

core service

main key service that is expected: rental car business: it's the car, there are other services as well but car is at core, Mariott full service have bar and other services; supplementary services and other add ons are part of service package

Customization

making products to meet a particular customer's needs or wants

who creates ads?

market agency -Mad Men 3 components -copy: creates advertising -media: figures out where media will run -account: conduit between agency and client

Product Growth Strategies

market penetration, product development, market development, diversification -existing product line analysis

atmospherics

the physical elements in a store's design that appeal to consumers' emotions and encourage buying; sights, sounds, smells

idea marketing

marketing activities that seek to gain market share for a concept, philosophy, belief, or issue by using elements of the marketing mix to create or change a target market's attitude or behavior; non profits do this: religious, environmental beliefs; most of messages they have to pay for Ads for these littering, drinking and driving, self medication, human trafficking, organ donation, sustainability

place marketing

marketing efforts to attract people and organizations to a particular geographical area; Hawaii (Hawaii Tourism Authority), New York (I love new york campaign); try to get new visitors using marketing; position these areas

traditional channels of distribution

may involve little or no cooperation among channel members 7/11 may buy from small wholesaler and other people will buy from then: why products cost more in convenience stores Walmart doesn't go through intermediaries: but function doesn't go away, provide own function: some customers go directly to producer vertical integration: consumer channels of distribution

Marketing Communications MARCOMM

messages that deal with buyer-seller relationships

push money

money offered to channel intermediaries to encourage them to "push" products - that is, to encourage other members of the channel to sell the products -issue: comes close to being bribe

generic product name (product descriptor)

name of product it is (Crest is toothpaste) Sometimes product name is so strong people use it in place of generic name "I need a band-aid-or Q-tip registered trademark brands for bandages and cotton swabs

convenience stores

neighborhood retailers that carry a limited number of frequently purchased items and cater to consumers willing to pay a premium for the ease of buying close to home, narrow goods but cost more: 7/11: gasoline is biggest, then beverages: soda and beer; then snack food

NPD

new product development; most companies follow similar process -marketing-driven NPD (also R&D development): new product development funnel--each stage gets narrower--bottom comes out product FUNNEL -new product strategy (parameters: hurdles-sales of X, manufactured on existing equipment and existing distribution) -idea generation stage -idea screening stage -business analysis stage -development stage (can be longest) -test market -commercialization AIDA: awareness, interest, desire, action

new product

new to the world (discontinuous innovations): when the first cell phone came out MOST OFTEN: New to them product: won't be successful unless it's new to the market or cost reduction of what's already available -repositioned, "new" product

RFID (radio frequency identification)

newest method of electronic inventory control (scanners are older) limit of scanning is you need visual line of sight; main concern is privacy issue

Instant Rebate

no difference between this and coupon

nontraditional channels

nonphysical (often electronic) channels that facilitate the unique market access of products and services

outsourcing (contract logistics)

outsourcing logistic function to 3PL (3rd party logistic companies) in business of performing supply chain management lots of electronic: DHL

manufacture brands (MfR)

owned by manufacturer: Nike, even if they outsource, Procter and Gamble-Pampers, Crest, Planters

packaging graphics

package design firms help marketers come up with graphics: Wheaties changes front panel to take in current athletes (superbowl champions) also have NLEA data (nutritional facts) UPC code (bar codes) efficient inventory management branding, product information, directions for use, nutritional info, UPC code, picture of product, recipes

complex buying decisions

personal selling and print advertising

4 Ps in services

place (distribution) strategy: convenience, number of outlets, location promotion strategy: stress tangible cues; create a strong organizational image Price (most difficult in services) -define unit of service consumption -determine if multiple elements are bundles or priced separately: call plumber fixes it in 5 minutes but bill is $125--pay for expertise to fix it in 5 mins; pay for time or level of expertise?

flexible package

potato chip bags, sugar

rigid package

pringles container; rigid, plastic container

CRM (Customer Relationship Management)

prioritizing market focus on customers to maximize their long-term value to company; use of technology to know data of customers

business products/industrial product

products meant for use in producing other products

consumer products

products purchased by the ultimate consumer convenience products, shopping products, specialty products, unsought products

trade sales promotion

promotion activities directed to members of the marketing channel, such as wholesalers and retailers

consumer sales promotion

promotion activities targeted to the ultimate consumer market; coupons, rebates, frequent buyer program

Returns management systems (RMS)

provide global visibility, standardization, and documentation of product returns, while minimizing reverse logistics costs; explicit process to handle returns

logistics

purchasing, manufacturing, storage, transporting; Walmart: can lower inventory carrying costs, packaging costs, transportation, warehousing costs, better customer service: occurs when multiple functional areas coordinate business processes to seamlessly link to one another: Walmart 1984: requires all suppliers to dedicate 24 hr EDI link with Walmart system

adoption pyramid

reflects how a person goes from being unaware of an innovation through stages from the bottom up of awareness (massive advertising), interest (teaser advertising), evaluation (give info they need), trial (demonstrations, trial packages), adoption (get them to buy it), and confirmation

convenience product

relatively inexpensive item; a consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort; not much risk-bread

direct marketing

sales and promotional techniques that deliver promotional materials individually; pull strategy; direct mail, shop at home tv

marketing channel members

selecting, managing, and motivating individual channel members and evaluating their performance over time, -Form: coka cola: coke doesn't make cans of coke, they make and sell syrup to bottler who does the rest: exchange from corporate to bottler -Time and place utility: bottler takes coke to store for convenience -Exchange utility: store does this for you: 7/11 transport and store goods; provide communication and transaction functions disintermediation: removal of traditional intermediaries: travel agent was always a middleman but now people search online like Travelosity or travel provider directly

academic communication process model

sender: originates message; marketing or advertising manager, ad agency -direct communication: other consumers -noise: anything in system impedes communication; other ads encoding: converting message in specific channel -channel: where message went: media; direct sales: sales person, retail store decoding: interpreting message in channel; different people might interpret it differently receiver: customer, clients receives message feedback: how well are we doing how well is message working: use market research, market share 3 basic objectives: inform (introduction, early growth): build up image, or persuade (growth, early maturity): get brand switching, change perceptions, influence immediate buying decision, or remind (maturity): remind where to buy, maintain customer awareness, connect (all)

gap model of service quality

service marketers try to identify gaps between desired service delivery and customer service experience: why is there this difference between what's expected to be delivered and what's perceived to be delivered -how people talk about services: word of mouth is important to marketing: now customers to potential customers: Yelp

non-store retailing

shopping without visiting a store; etailing: internet retailing, vending, direct marketing

laboratory test market

simulated marketplace situation for new products where consumers are exposed to advertising and may buy products in the simulated market toaster hash browns by Orida: accurate to sales and market share--more than a million dollars for today these test markets are super expensive great majority of new products fail

service encounter

social elements: employees and customers -service quality is only as good as its employee -physical elements: servicescape, physical facility where service is performed, delivered, or consumed -servicescapes influence quality perception

business to business channels of distribution

some producers go directly to end customer: direct distribution; omaha steaks drop ship directly to customers; Amazon

loyalty programs

specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time; airlines

intensive distribution

stocking the product in as many outlets as possible; coka cola

logistical components of the supply chain

supply management inventory control (cost of imperfect information) minimize inventory carrying costs and stock outs: safety stocks: materials requirement planning; automatic replenishment programs (material-handeling system) order processing production warehousing and material handeling transportation traditional modes: (air, water (least used by itself-needs intermodal), pipe (#4-oil), truck (#1 method), rail (#5-not super common can't typically go the whole way)) intermodal (starts on one goes to another (2nd most used method: water, then rail, then truck) Intermodal #3 most useful (air then truck) Internet as a mode of transportation: books, magazines, music, entertainment-movies, tv shows): if the goods can be digitized they can be transported through internet

mass customization

tailoring products to meet the needs of individual customers; due to technology, can offer everyone a custom experience; not all services can offer

service

tend to be fragmented the result of applying human or mechanical efforts to people or objects; anything other than a product: not physical or tangible: act, deed, performance, effort exchanged from producer to user without ownership rights, lawyers, accountants account for 80%-4/5 of GDP in 2012 US economy personal, financial, health, professional-legal, interior design, architecture, landscaping, plumbing service industries are fragmented: no company has more than a 1 percent share of the market: haircut, lawncare; restaurant industry used to be much more fragmented: if you're not familiar with provider you don't know quality: now you know what you're getting: McDonalds did this first: 3 segments: fast food, casual dining (Applebees, Chiles, TGI Fridays), fine dining (becoming more concentrated: Rutes Chris 127 units around country) Capital Grill -hair salon used to be more fragmented: Paul Mitchell; SuperCuts product services are concentrated: when most of the industry's sales are accounted for by only a few firms; the big four: accounting firms audit 96% of public companies in US -only 3 firms make jet engines for the world's commercial aircraft; only two make the aircraft: GE Aviation, Rolls Royce, Pratt and Whitney: 2 make: Boein,g, Airbus; auto industry 10 auto makers 72% of global auto production; P&G

brand name

that part of a brand that can be spoken, including letters, words, and numbers, Nike

gross margin

the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted sales-cost of goods sold=gross margin traditional retailers typically have 50% gross margin, sell for double price: keystone markup -Walmart operates on skinnier gross margins: 25%: buy something in Walmart for $10 then they pay $7.50: Gatorade is $5.88: Walmart pays $4.48; low price, good value

channel power

the capacity of a particular marketing channel member to control or influence the behavior of other channel members; one channel member has more power: Walmart has this with suppliers: most of suppliers need Walmart more than Walmart needs them

product quality

the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs; -level of quality -consistency of quality -durability, reliability, precision, versatility, satisfies needs, ease of use, degree of pleasure, product safety

cost per contact

the cost of reaching one member of the target market

brand preference

the degree of brand loyalty in which a customer prefers one brand over competitive offerings coke drinkers but will go to pepsi if need be

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation test market fail: toast em pop ups; went to test market: Kellogs took product in R&D facility and reverse engineered similar product and developed poptarts -Pepsi One fail: went national without test market, one calorie option SUCESS: B to the E: beer with ginseng; failure in market place, but only went into one small market, failed quickly and cheaply so not much cost

public relations

the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance; nonpaid attempts to get media attention; proactive and reactive public relations

product line depth

the number of product items in a product line: Procter and Gamble: wide product mix but lines are deep-laundry detergent-10 different brands, deep product line

product mix width

the number of product lines an organization offers; Pepsico: product mix width is sodas, diet sodas, energy drinks; Campbells has frozen entrees, sauces, wide product mix

product placement

the paid integration of branded products into movies, television, and other media; Reeses Pieces in ET (m and ms could have been in it)

relationship selling

the practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time

co-branding

the practice of using the established brand names of two different companies on the same product; Crest toothpaste with Scope mouthwash -ingredient branding: nutrisweet, had to have ingredient name Betty Crocker with Hershey chocolate, Intel inside, -cooperative branding: coke and McDonalds come together and pay for advertising also complementary branding; Mint oreo blizzard: ingredient, cooperative, complementary branding

Demand Management

the process of changing demand patterns using one or more demand options; understanding and predicting demands: Walmart knows how much they will sell; uses technology

direct retailing

the selling of products by representatives who work door-to-door, office-to-office, or at home sales parties; push strategy: door to door (few people buy these--encyclopedias; fuller brush): MLM multi level marketing

value chain

the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products marketing and sales service margin

planned obsolescence

the strategy of deliberately designing products to fail in order to shorten the time between purchases; products are replaced by newer products: Apple iPhone, people refer to iPhone 4 as old, company plans for this by coming out with new generation, consumers make old products obsolete

merchandise mix

the total set of all products offered for sale by a retailer, including all product lines sold to all consumer groups breadth: different product lines KINDS of merchandise narrow breadth: limited store: airport bookstore, shallow: not many books Depth: number of choices within same kind of merchandise broad depth: Sam's Club, many product lines but shallow breadth: not many within each line -narrow and deep: lord of the rings book sale: one line many books in line Broad and deep: Amazon

Nearshoring

the transfer of an offshored activity from a distant to a nearby country, Mexico and Carribean nations

product lifestyle

the way a product goes through predictable stages: introduction (no profits because the company is recovering from R & D costs), growth (profits increase and peak, sales keep climbing up but slowsss), maturity (sales hit their peak), decline (product sales continue to decline until unprofitable which you would take it out of the market)

internal marketing

treating employees as customers and developing systems and benefits that satisfy their needs; marketing to employees: your employees interact with customer so employee needs to know what's expected of them; have company wide process ensures employees are ready to provide promise; compensation and positive work environment reinforce employees Fortune comes out with 100 best companies to work for: Google is top Walmart and McDonalds never make worst companies to work for: prioritize employees, rallies for employees

brand equity

value in a brand over any specific value: Coke: has greatest brand equity, simply the name will make products sell, ultimate value of brand

brand mark

visual designation of brand- nike swoosh, Adidas is three lines

stock out

what happens when you make or buy too few goods to sell; don't have products when you need them