University of Iowa Intro to Marketing Final - Nancy Abram

Internal Influences

perception: the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture learning: a change in a persons thought process or behavior and memory: factors that affect the decision-making process stored in the brain motives: Maslow's hierarchy of needs-- psychological, love, safety, esteem, self-actualization attitudes: how a person feels about something lifestyle: the way a person lives his/her life to achieve goals

primary vs secondary

primary: facts and figures newly connected for the project. - observational data (watching people) - questionnaire data (asking people)-- idea generation through in-depth interviews and focus groups and idea evaluation through personal surveys, mail, online, telephone secondary: facts and figures already recorded prior to the project - internal data (inside the firm)-- financial statements, research reports, files, customer letters, sales call reports, and customer lists -external data (outside the firm)-- US Census reports, trade association studies and magazines, business periodicals, and internet-based reports.

when to use public relations

programs to influence stakeholders, free media attention, and social shares

Decline

purpose is for harvesting/deletion, reduced competition, products are only best sellers, price is enough to stay profitable, minimal promotion, fewer outlets

Maturity

purpose is to maintain brand loyalty, many competitors, have a full product line, price to defend market share and profits, promotion is reminder oriented, maximum outlets

Introduction

purpose is to raise awareness, low competition, one product, can skim or penetrate price, promotion is for awareness, limited distribution

Growth

purpose is to stress differentiation, more competition, more product versions, price to gain market share, promotion is to stress differentiation, more outlets to sell

Push Strategy vs. Pull Strategy

push: directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product pull: directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product

Quantitative versus Qualitative

qualitative data: used prior to doing a quantitative study; gets us into deeper dimension on consumer insights, the why and how * observation * in depth interviews * focus groups quantitative: info that marketers can have a high level of confidence that the answers/findings have a significant vale * experiments * surveys

generally it is all communication

source: the seller encoding: the process of deciding what to say and how to say it communication channel: how it will be sent decoding: the process of the receiver translating the message sent by the source. receiver: the intended audience of the message, the target customer

aldi case content -- sources of competitive advantages and type of retailer

sources of competitive advantages: operational excellence. efficient operations-- stores at smaller square feet with fewer products. such a small footprint reduces cost for the company which leads to greater efficiency and lower prices for their buyers - strong relationship with suppliers. aldi has long-term relationships who deliver higher-quality products and are very responsive to changing customer needs. these partnerships aid in Aldi's ability to provide goods where and when customers want them product excellence - product testing-- they test products for months before it goes out on the shelves and also brings products back in the lab to make sure they are meeting or beating competitors versions -positioning-- aldi has high quality goods at the lowest prices. they even alter their products to fit market tastes, so all their customers needs are satisfied. locational excellence - presence-- they have a ton of stores and plan to add more. by being present in more place, aldi is able to gain more customers to become one of the largest grocery chains in the us. more stores means less room for others to enter the market customer excellence - loyal customers: aldi uses all of these strategies to retain loyal customers - customer service: aldi appeals to customers with their outstanding customer service type of retailer - private label. limeted width and depth of products, but there are still many unique offerings at lower prices -level of service is self-service. they check you out and try to keep shelves stocked, and thats about it -price strategy is everyday low pricing -uses pull ordering. distribution centers have products readily available and delivered when needed

cost drivers of each channel

stores, web, mobile

Dimensions of Service Quality (RATER)

tangibles, reliability, responsiveness, assurance, empathy

tangibles

the appearance of physical facilities, equipment, personnel, and communication materials are the gate, the plane, and the baggage area clean?

assurance

the knowledge and courtesy of employees and their ability to convey trust and confidence are the ticket counter attendants, and pilots knowledgeable about their jobs?

Corporate Social Responsibility (CSR)

the notion that corporations are expected to go above and beyond following the law and making a profit It is the right thing to do, businesses have the resources to devote to fixing social and environmental problems, prevents government regulation and potential fines, it can be profitable Stakeholder Theory: ethical theory stating that societal responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm's operation

the purpose of research

to make data driven decisions

experiment/testing

used by a marketer to gather primary data where you change one variable and see if what you've done is better or worse quantitative data

differentiated strategy

when a firm targets many market segments and has a different offering for each. For example, a business selling organic dog food is looking to target a specific type of person - a health conscious, animal loving and eco-friendly individual. but then has another product that is just regular dog food that is targeted to those people who do not care much about the environment .Most effective, but has the mosts costs-- cannibalization

Responsiveness

willingness to help customers and provide prompt service are the flight attendants willing to answer my questions?

marketing strategy development (determine the appropriate marketing mix)

•Product - Creating Value, benefit bundle •Price - Capturing Value, WTP •Place - Delivering Value, •Promotion - Communicating Value

CLV Starbucks and basic model

(Profit over lifetime of relationship less cost to serve) approximate worth of a customer to a company in economic terms; overall profitability of an individual consumerGross Profit per purchase) (Frequency of Purchase/Year) (Duration of the Relationship)

marketing strategy development (determine sources of sustainable competitive advantage)

- Customer Service and Satisfaction Excellence -Operational and Supply Chain Excellence -Product Development and Innovation Excellence -locational Excellence

Informing

- awareness - new uses for product - events -image enhancement Informative promotion seeks to convert an existing need into a want or to stimulate interest in a new product. It is more prevalent during the early stages of the product life cycle.

Media Types - Digital

- loss of control - co-creation paid media Banner ads Sponsored posts Search Engine Advertising owned media Websites Blogs Social Media Presence earned media Media Coverage SEO Social Media posts WOM

Question Mark

A question mark shows rapid growth but poor profit margins. It has a low market share in a high-growth industry. It needs a great deal of cash to prevent conversion to dog status. Strategies are to invest to gain better market share, acquire competitors, or drop the SBU.

Star

A star is a fast-growing market leader. Stars usually have large profits but need cash to finance growth. A marketing tactic is to protect market share by reinvesting earnings in product improvement, distribution, promotion, and production efficiency. Strive to capture new users as they enter the market.

focus groups

A strategy to obtain data from a small group of people using interview questions qualitative data

horizontal conflict

A type of channel conflict that occurs between channel members at the same level (e.g., two retailers)

AIDA

Attention, Interest, Desire, Action - the aim of all advertising.

cost drivers of stores

Bricks and Mortar, Salespeople Attracting Customers to Store Distribution Centers-- warehouses, pricey to have Restocking Returned Merchandise

cost drivers of the web

Building, Refreshing Web Site Attracting Customers to Site Picking, Packing, Mailing Small Orders to Home Restocking Returned Merchandise No low cost of entry as assumed

micro targeting

CRM B2B Digital marketing 1 to 1, can come up with what the consumer wants and needs) customized specifically for you example: proctor and gamble. When P&G was introducing its Pantene Relaxed & Natural shampoo and conditioner product line, it created and ran a unique marketing campaign to target African American women. advantages: highly targeted nature, its tendency to save costs for a company, and its capability of increasing a company's sales through user-generated growth. disadvantages: time-consuming nature, high cost of customer acquisition, and the possibility of targeting the wrong customer audience.

BCG Portfolio Matrix - Resource Allocation (Ch.2)

Low Market Growth, Low Market Share = Dog High Market Growth, Low Market Share = Question Mark High Market Growth, High Market Share = Star Low Market Growth, High Market Share = Cash Cow

Benefits of Effective Supply Chain & Marketing Channel Management

Lower inventory, transportation, warehousing, and packaging costs Improved customer service Higher revenues Increased performance and profitability Greater supply chain flexibility No stock outs

Know how to compute margin and mark-up, and formulas for each Understand how price fits into the value equation Q x P = Revenue

Markup is the percentage of the profit that is your cost. To calculate markup subtract your product cost from your selling price. Then divide that net profit by the cost. To calculate margin, divide your product cost by the retail price.

Ansoff's Strategic Opportunity Matrix (Ch. 2)

Present Market, Present Product = Market Penetration Present Market, New Product = Product Development New Market, Present Product = Market Development New Market, New Product = Diversification

channel conflict

disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards Horizontal and vertical channel conflict: Horizontal (two retailers might be annoyed), vertical (between manufacturers and the retailers) •worse with Private Label brands •Manufacturers drive for favorable arrangements in distribution •Retailers need margins and consumer traffic (customer traffic-is an important metric because higher traffic tends to lead to higher sales and revenue numbers) •Where does power lie in the supply chain? need to figure this out when operating

Marketing (Ch.1)

entails processes that focus on DELIVERING VALUE and BENEFITS to customers, NOT just SELLING good and services It involves the processes of developing need -satisfying products and services, delivering value through pricing strategy, convenient access via distribution and integrated communication to targeted buyers.

varying supply chain systems

food See Tyson/Perdue •Develop Product •Specification •Mfg plants approved (more than 1) •Use pull ordering •Logistics •Staple product fun meal toys/premium Deal with Movie/Brands •Approved suppliers •Designers •Brokers •Factories •Logistics •Financing •Push distribution •Seasonal/Fad

Promotion (Integrated Marketing Communications)

goal: to send a consistent brand message to target consumers with the information they need, when they need it.

When to use advertising

good at creating awareness and interest through controlled messages in a paid channel

availability of substitutes

if there are more alternatives that satisfy the same need, it will be more price sensitive or elastic

force of habit

if we always buy a certain good, it will be less price sensitive or inelastic

when to use sales promotion

incentives for consumer and trade partners

cost drivers of mobile

location enabled tech Apps Same as Web for goods Mobile sites Integration with social Services - App critical Tickets Notifications Beacons

Why do we gather and analyze data?

marketers need the information to guide decision making - helps trace problems - keeps focus on existing customers - understand the marketplace/competitive intelligence - gauge the value of goods and services, and customer satisfaction

When to use personal selling

most expensive form but good for complex, high end products

survey research

most popular technique for gathering primary data, in which the researcher interacts with people to obtain facts, opinions, and attitudes. quantitative data.

factors that effect elasticity of demand

necessity? Available substitutes Price relative to purchasing power Product durability alternative use force of habit

concentrated strategy

niche. A strategy used to select one segment of a market for targeting marketing toward; advantages are concentration of resources, meets narrowly defined segment, small firms can compete, strong positioning; disadvantages are segments too small, or changing, large competitors may market to niche segment

undifferentiated strategy

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix; advantage is potential savings on production and marketing costs; disadvantages are unimaginative product offerings and company more susceptible to competition

marketing strategy development (identify the Market and Target Market Segments)

-Segment the market based on groups with similar characteristics -Analyze the market based on attractiveness of market segments -Select one or more target markets

Persuading

-encourage switching -change perceptions -influence immediate buying -call/visit website NOW Persuasive promotion is designed to stimulate a purchase or an action. It becomes the main promotion goal when the product enters the growth stage of its life cycle.

Reminding

-maintain awareness -reinforce learning -where to buy -stimulate needs Reminder promotion is used to keep the product/brand name in the public's mind. It is effective during the maturity cycle.

Benefits of JIT "just in time" or quick response Systems

-reduced lead time -increased product availability and lower inventory investment Technology and Systems Involved UPC-- THE universal bar codes that are used to scan items RFID-- Radio-frequency identification uses electromagnetic fields to automatically identify and track tags attached to objects. An RFID system consists of a tiny radio transponder, a radio receiver and transmitter. EDI-- the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper. VMI-- helps businesses at each step in the supply chain streamline their processes and improve financial performance. VMI involves close strategic relationships between vendors and their customers by putting the vendor in charge of the customer's inventory.

Connecting

-relationships via social media -loyalty programs -visit website -transparent exchange Connecting is designed to form relationships with customers and potential customers to encourage them to be brand advocates. This helps introduce new products, stimulate purchase, and keep the brand in customer's minds, which makes connecting important for all stages in the PLC.

Business Products

...The KEY is INTENDED USE -are used to manufacture other products -become part of another product -aid the normal operations of an organization -are acquired for resale without change in form

distribution center

1. Management of inbound transportation-- refers to the network that brings goods or materials to your business. 2. Receiving and checking using UPC and RFID-- (bar codes and radio frequency identification--used to track tags) 3. Storing and Cross-Docking -- Cross-docking is a practice in the logistics of unloading materials from a manufacturer or mode of transportation. cross-docking removes the "storage" link of the supply chain. 4. Getting Merchandise Floor Ready 5. Preparing to ship 6. Shipping to store

How Service Differ from Goods (Ch.12)

4 Categories: 1.) intangible 2.) inseparable 3.) inconsistency 4.) perishable

Product Life Cycle

4 Components: 1.) Introduction 2.) Growth 3.) Maturity 4.) Decline

observational research

4 types: people watching people; people watching an activity; machines watching people; machines watching an activity. qualitative data

Cash Cow

A cash cow generates more cash than it needs to maintain market share. It is in a low-growth market, but the product has dominant market share. The marketing strategy is to maintain market dominance by being the price leader and by making technological improvements. Allocate excess cash to high-growth prospects.

creative brief

A creative brief is a document used to outline the strategy of a creative project. A creative brief contains project details including the project's purpose, goals, requirements, messaging, demographics, and other key information.

Dog

A dog has low growth potential and a small market share. Most dogs leave the market. The strategy options are to divest or harvest.

target market

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

pepsico video: tony west talks about performance with purpose

Corporations are constantly being looked to to help resolve large problems because companies operate in societies not as a matter of right but because they earn a social license-- this happens through a sense of trust through communities-- which can only happen sustainable ethical business practices 79% of employees will choose a company based on their purpose Need strategies that are good for the company and community Need to be a place where they can see their own personal values reflected in the workplace Code of conduct: integrity in all of actions, ethical behavior, mutual respect, acting responsibly with shareholders. All of this creates values showing how they do business Companies are being looked to help resolve social and societal problems

benefits of omni channel retailing

Deeper and broader selection of products Adding the internet channel creates a vast number of alternatives retailers can make available to consumers without crowding their aisles or increasing their square footage. Stores and catalogs are limited by their size-- by shopping on the internet consumers can easily visit and select merchandise from a broader array of retailers Enables retailers to provide customers with more personalized info about products and services Personalized customer service (online chats) Personalized offering Offers sellers the unique opportunity to collect information about consumer shopping behavior-- info that they can use to improve the shopping experience across all channels Allows sellers to enter new markets economically Expanded Market Presence (the message the organization communicates to its prospect and customer base) Increased share of wallet from category (Share of wallet is the amount an existing customer spends regularly on a particular brand rather than buying from competing brands) Constant connectivity

Institutional Advertising

Designed to enhance a company's image rather than promote a particular product

Price relative to purchasing power

If a price is so low that it is an inconsequential part of an individual's budget, demand will be inelastic. Rate of INFLATION, When inflation is high, demand becomes more elastic - rising price levels make consumers more price sensitive - we may have the ability to change that price more. Ex: starbucks drink is expensive, but you could probably make it at home. But we dont believe that coffee is that expensive every day.. So we aren't as sensitive to those small amount of things we buy -- we are less price sensitive

alternative use

If it has another purpose, it is less price sensitive or inelastic

product durability

If it lasts a long time, less price sensitive or inelastic

private label/store brands

Increase in contract manufacturing •Power shift to retailers (Walmart, Amazon) •Superior margins for retailer •Creates retailer product loyalty •Development of private label retail concepts (GAP, Zara, ALDI, Trader Joe's) •Reaction to disintermediation

Levels of Distribution Intensity

Intensive: example coca cola -- they want to be everywhere Selective: work with certain places and people Exclusive: only want to be sold at one place-- ex: car or equipment industries

How firms develop new products

Processes first start with the firm's mission and new product strategy. Concept Testing, Product Development and Alpha and Beta testing are iterative processes (a series of steps that you repeat) often times. 1. idea generation-- Development of viable new product ideas, Screen Ideas for Strategic Fit 2. concept testing-- testing new product idea among a group of target consumers to find out if the ideas have strong consumer appeal - triggers marketing research process 3. product development-- development of prototypes and/or the final product- packaging/labeling decided, positioning, branding, marketing mix, marketing and financial feasibility 4. market testing-- testing the actual products in a few test markets 5. product launch-- full-scale commercialization of the product 6. evaluation of results-- analysis of the performance of the new product and making appropriate modifications

Retail Format (Mix)

Product-- Merchandise Width Depth, Mfg/Private Label -- for example: walmart has a board assortiment Width) but not very deep-- (ex: bike--only like 2 great products-- would need to go to a bike store for multiple good options in great bikes). This tells a lot about your concept (private/manufacturer labels) Pricing-- MSRP/HiLo/EDLP/Discount/ Markdown-- are they high end/low end? What do they price their products at? How do you manage discounts and markdowns? Are you a value or luxury retailer? Presentation-- Atmosphere, Layout, Site Design-- what is it going to look like? Big or small footprint store? Promotion-- Advertising/SEA, Partnerships/Promotion, Price Promotions, Goal - Traffic- site/store -- how are you going to communicate with people? App? Newspaper? Work with people? place/distribution-- Location, Hours, Channel Strategy-- shows how you are positioned. Where are you located, how long? Accessible to shop at all times? Delivery? Online? Area of huge investment for retail establishments Personnel-- customer service and personal selling -- are you going to have a lot of personnel density in the store? Live chat on your online portion?

Pull Strategy in Promotion

Pull strategy -- advertise directly to that end-user or consumer Ex: Social media networks. Word of mouth. Media coverage. Sales promotions and discounts. A pull strategy is a technique used to bring the customer to you. ... Pull tactics include advertising and mass media promotion, word-of-mouth referrals, sales promotions and discounts, and customer relationship management

Push Strategy in Promotion

Pushing product out into the channels -- means you put your efforts toward your trade partners. Ex: p&g who makes tide gives incentives to a whole saler distributor to buy certain case counts and then they have salers to call retailers and then they gave retailers incentives to get that product out there Examples of push marketing include fast food "Dollar Menu" offerings and "two-for-one" sales at the grocery store. Cell phone carriers' touting of special "minutes" bargains and holiday "door-buster" specials at department stores and other retailers are also examples of push strategy. Needed if you go through several channels to get to consumer Especially true with convenience goods

Inconsistency (Heterogeneity)

Services are less standardized and uniform than goods. Because services tend to be labor-intensive, consistency and quality control can be hard to achieve. Standardization and training help increase consistency and reliability services depend on their employees for quality, which makes quality hard to maintain

Inseparable

Services are often sold, produced, and consumed at the same time. Consumers are involved in the production of the services that they buy. The quality of services depends on the quality of employees.

Perishable

Services cannot be stored, warehoused, or inventoried. One of the most important challenges in many service industries is finding ways to synchronize supply and demand.

Intangible

Services cannot be touched, seen, tasted, heard, or felt in the same way as goods. Tangible cues are often used to communicate a service's quality and nature. Facilities are a critical tangible part of a service experience.

Product Development

Starbucks develops powdered instant coffe Via.

Diversification

Starbucks launches HearMusic and buys Ethos Water.

Market Development

Starbucks opens stores in Brazil and Chile.

Market Penetration

Starbucks sells more coffee to customers who register their reloadable Starbucks cards (loyalty programs).

green marketing

The development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment ex of companies who use green marketing: patagonia

walmart vs. amazon reverse logistics

Walmart: higher inventory efficiency and cash flow model Amazon: higher return on equity

vertical conflict

a channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer

reliability

ability to perform the promised service dependably and accurately is my flight on time?

the wheel of social media engagement

at the center is engagement. Information: relevant info is spread to other members of the social network Connected: satisfies human's innate need to connect with other people Network: post is spread instantaneously across social media Dynamic: back-and-forth communications. how people flow in and out of networked communities as their interests change Timeliness: engage with the customer at the right place and time

empathy

caring, individualized attention provided to customers do the employees determine if i have a special seating, meal, baggage, transfer or rebooking needs? do they care?

The Nature of Information Search (Ch.6)

consumers CONTINUALLY recognize problems and opportunities, search is ongoing

The marketing environment analysis framework (external)

consumers are at the center 1.) Social -Health/wellness concerns Greener consumers Privacy concerns efficient utilization and distribution of food 2.) Economic -a macroeconomic factor that affects the way consumers buy merchandise and spend money.ex of this: inflation, foreign currency fluctuations, and interest rates. 3.) Technology -changing technology -technology's impact on customer value 4) demographics -Population sorted by gender, education, occupation, income and age - age cohorts have their own needs, values, and consumption patterns, basis for media targeting (Baby Boomers and Millennials are largest cohort; US Median age 40, India 25) 5) political/legal -Comprises political parties, government organization, and legislation and laws -The government enacts laws focused on ensuring that companies compete failry with one another 6) culture -- regional and country culture -Transmitted by words, literature, and institutions, culture is passed down from generation to generation and learned over time.

The marketing environment analysis framework (internal)

consumers are at the center. company: The first factor that affects the consumer is the firm itself.Successful marketing firms focus on satisfying customer needs that match their core competenciesCore competencies are the defining products, services, skills, and capabilities that give a business advantages over its competitors. Put another way, business core competencies are competitive advantages that no competitor can reasonably offer or replicate competition: critical that marketers understand their firm's competitors, including their strengths, weaknesses, and likely reactions to the marketing activities that their own firms undertakes corporate partners: suppliers/manufacturers, partners. -Few firms operate in isolation -- for example, automobile manufacturers collaborate with supplies of what they need-- such as tire manufactures, sheet metal, etcparties that work with the focal form are its corporate partners

what do we want the promotional effort to do?

create awareness, get people to try products, provide information, keep loyal customers, increase use of a product, identify potential customers, and even teach clients about potential services.

external influences

culture: The set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next subculture: A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group demographics: People's vital statistics, such as age, race and ethnicity, and location marketing activities: Family/ family life cycle: most important, they teach us how to buy and how to use money Social status: A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms Reference groups/opinion leaders: groups you want/don't want to be associated with (ex: hippies, rednecks), basis for comparison- Opinion leaders: experts in field (ex: chef for food)- Celebrities/influencers