BUS 1011H - Exam 3

If you want to be global, you should have a: CSG

*Customized strategy*- *particular prod to specific needs of individual customer.* generally practiced by *companies whose prods are expensive/unique* (custom home builders or airplane manufacturers,what foods are going to sell in a British, French, etc market) *Standardized strategy*- company to *use the same marketing strategy from one country to the next, and across various cultures* (sell fast foods) *Global strategy*- *Think global, act local* - have a strategy that can be *implemented into daily routine*

Product Line Decisions (Stretching and Filling)

*Product Line Length - number of items in the prod line* -*don't sell 1 of a product but many* -*Stretching* = *Lengthen BEYOND current range through colors, designs*, etc. ex: different color blouses, skirts, dresses Ex: You don't just want to sell one blouse. You can go into outerwear, dresses, pants, shirts, *go upward in price/go downward in price or BOTH* Coach - wants to make it cheap and accessible in the outlet malls but it'll be more expensive at the actual coach stories -*Filling* = *Lengthen WITHIN current range* *Honda* went from selling *motorcycles to small cars to luxury cars* at it "lengthened" its range. It filled its luxury Acura brand by offering more vehicles under the Acura nameplate. Today they now make *corporate jets*

Marketing goods - Buying TVs at Best Buy

-You need *good salespeople* -Helps *customers make a decision of what to buy/not to buy*

Marketing Mix ( the 4 P's )

1. *Products* - new products 2. *Pricing* 3. *Place* - channel of distribution 4. *Promotion*

The 4 V's of Big Data (A lot of it, becomes more insidious)

1.Velocity (speed) = *interconnectivity of people/things via tech* is generating *data continuously*, and *businesses want to capture and analyze it in real time*, Need to *process real-time live data in huge volumes /variety* going through system daily, *Late decisions -> missing opportunities* Ex: *Searching Twitter posts, Analyzing video streams, Image recognition, Sound analysis*, Text analysis *Companies will analyze texts*, video streams and *Alexa knows* what you need to buy just like other companies (social media) *Based on current location, purchase history*, liking --> *send promos now for a store near you* Target because *young women willing to buy specific prods* were pregnant *People interested in buying cars or vacations* = there's all sorts of evidence 2. *Variety (complexity)* = *Big Data has diff sources* and *includes diff types of info*, Sets of data typically *can't be simply compared to one another w/ trad tools* *Data from various sources* = *Social media*, Mobile, *Machine to machine* systems (GPS, logs, RFID, sensors, etc.), *Database* systems, SG network, refrigerator *Data of various types* = (semi, un) structured - *Structured* = *Relational* Data (Tables/Transaction/Legacy Data), *Machine* log (*specified purchases* you made on a specific date and place and time)-*Semi structured*: *Text(web)/Graph* Data -*Unstructured*: *Social Network* - tweets, FB posts To extract *knowledge*, all these types of *data linked together* 3. *Volume (scale)* = As the phrase implies, *lots of data*, *Individual companies have access* to a lot of it, with *terabytes, petabytes, and soon zetabytes* being stored and collected. *Terabytes - amount of data stored by avg company* today 4. *Veracity* = how do you know the *data is good/real*? How do you know someone isn't using a diff identity?, *Data uncertainty/reliability* issues, *Imprecision of data* (e.g. interpreting unstructured data such as text data), *Diff data quality/structuredness brings doubt*, *Tech data quality* issues (*timeliness, completeness, consistency, reliability*, etc.) actual value from Big Data = tools/processes to verify and clean. Fake data can be as problematic for businesses as fake news is for politics

EPRG Framework

A developmental framework for *analyzing organizations* in terms of *four successive management orientations*: -*ethnocentric* (you *do not adapt to the needs and wants of consumers* Ex: general electrics sent washers to Germany even though Germany didn't want them and don't like vertical) -*polycentric* (companies attempt to spread out the appeal of their products or *services among multiple countries*. It occurs when a business decides to broaden its operations and focus on sales outside of its home country. It sell products in those markets based on the characteristics of those markets) -*regiocentric* (selected from *specific areas* depending on relevance, using Spanish vs English) - *geocentric*(product will sell if you sell it in a *favorable place, positive association*)

Global marketing

A marketing strategy that consciously addresses customers, markets, and competition throughout the world. -*Coca Cola is a constant everywhere* -*Since WW2*, there has been an *increase in global markets*

Push Promotional Strategy

Aimed at wholesalers and retailers, to encourage them to market the product to consumers + ensuring their knowledge of prod - *producer promo a prod to channel members* who in turn *promo it to final consumers* •*Sales person intensive* •*Product* = *kinda complex to sell* •Ex: *Boeing - Requires intense personal effort* to *"Push" an airline to buy a Boeing* instead of an Airbus •They *hire salespeople to buy their airplanes* - very *time consuming* •Has to *push the prods into buyers* •Salespeople in push strategy *can make a lot of money, can be paid even more than CEO*, *paid on commission*, has a very good position - salesperson for *locomotives*, *Best Buy* will talk about the merits of the product and why you should buy it compared to another store, Boeing higher commission than them, *knowledgeable people* (successful cars salesman, engineers) •Ex: *Locomotives- very complex products* - are sold by *General Electric to railroad executives* around the world. It is a *long sales process* that requires a good deal of technical support

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs Cutting market up - *divide the market into segments of customers* -Identify *bases for segmenting the market* -Develop *segment profiles* Ex: (appeal to audience differently) -*age* -*gender* -*college vs high school grads* to get the best outcome

*Marketing Mix* (for the 4 P's)

First you need to *understand customer needs*. This takes a *lot of research* (*Steve Jobs was spot on w/ his intuition and was able to research what his customers needed*). Then you can develop around the marketing mix so *customers will want to come back* -*Product and price target customers*: What price? -*Promotion and place intend positioning* How can you promote the product for the most impact and expose it to the people you want it to? There are various ways to sell too, so you have to decide that.

Challenges of Big Data

How to choose what subset of the data to store Where and how to store the data How to find the nuggets of data that are relevant to the decision making at hand How to derive value from the relevant data How to identify which data needs to be protected from unauthorized access •*Lack of skilled staff* •*Data governance issues* •*Organizational readiness*

*Primary Data Collection*

Information that is *collected for a current, specific purpose*. Has 3 steps: 1. *Exploratory* research 2. *Descriptive* research 3. *Experimental research* Must be *relevant, accurate, current, and unbiased data* that isn't readily available *Go out and look for people* Ex: *20 people in a room and you show various styles of jeans* and you ask them to comment on the styles of holes, zippers, buttons

Levi Strauss & Co.

Levi Strauss & Co. *started in the US because they were selling jeans at 19 retailers* lost and levis won? *Two separate channels of distribution* Levi's *only wanted our jeans for $19 than $35* Americans started shipping jeans to European markets - *discriminative pricing*. Isn't always nice but is often allowed

Encryption

Process of converting readable data into unreadable characters to prevent unauthorized access from other parties •Encryption - You want *good reasons to encrypt*, there's a *plus and minus side* •*Scrambling data* - *using a code*, thereby *hiding it from those w/o key* •When *something is encrypted by bad guys*, it's *hard to know what bad guys are doing w/o white hat hackers* (Apple and the govt. trying to extract their info with white hats) •*Key - Code that unlocks encryption* •*Public key encryption* - *Two key system* used for *securing electronic transmissions* •*Certificate authority* - Trusted *third party* that *provides authentication services in public key encryption* schemes

Marketing and Sales Concepts Contrasted (Selling Concept and Marketing Concept)

Selling Concept Starting Point: Factory Focus: Existing Products Means: Selling and promoting Ends: Profits through sales volume Marketing Concept Starting Point: Market Focus: Customer needs Means: Integrated marketing Ends: Profits through customer satisfaction -*Sales - you've already had a marketing strategy and you're selling existing products* Ex: *Buckets of nails that all look alike* - you have to try to *sell despite other competitors* You can go around or go online to help with sales. You need to sell to your general customers. -*Marketing* - *more intellectual input, you want to create a good market strategy* to sell final goods to consumer, has *more horsepower b/c you need to understand the best way to make everyone happy* (you and your boss) The marketing concept is also more *sophisticated + focuses on extracting wallet share/customer value than targeted sales concept* Over time, a *market - concept focused company should show higher profit margins than one which focuses only on sales* The exception are those *"Selling" companies w/ virtual monopolies/oligopolies on goods purchased in those companies lowering manu costs below competitors'* Examples might be *companies in Thailand that supply simple electronic components for computers/cell phones*

*Secondary Data Collection*

Use of *existing data* (death statistics; birth statistics; census data; mortality, morbidity data; health records; minutes from meetings; prior health surveys) to assess problem ex: *(libraries) internet databases, commercial data services, gov sources* -secondary data *much cheaper and easily available* -while *for primary data, you must do it yourself and can be costly and timely* *Must be relevant, accurate, current, and impartial* Ex: If you are working on a research project for a not-for-profit organization, you will rely on publicly available data (secondary) but you can also interviewed various stakeholders in the non-profit to obtain first-hand information and insights not available elsewhere (primary)

Big Data and Marketing Analytics

consists of the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance •*Big data : Major players* - *Walmart, Amazon, Apple* •*Marketing analytics* = Analyze *big data for marketing strategy*, *new prod development*, *prod positioning*, etc. •*Oracle, IBM, SAS* •The *world is awash in data*. In *recent years, computers have been large enough to process that data* and draw interesting conclusions. •You've probably heard of *Watson at IBM. Watson is a massive computer that seems very intelligent*. It takes large amounts of data, analyzes it, and draws conclusions. •Highly sought after looking for employees

Product Quality Leadership

objective is to leverage dominant position in the industry by always positioning at the highest price point position, higher prices = higher performance quality •*Quality is hard to quantify* and come across •*Companies* need to *cultivate an image of quality* •*Ritz Carlton vs Holiday Inn* - is it that much nicer? If marketed appropriately, you can *convince the consumer that you are getting good mattresses at the Holiday Inn.* •*Four Seasons* starts with very *high-quality service—"we await you with the perfect sanctuary.*" It then *charges a price to match.* •*Perceived luxury* is *reflected in high profit margins* as *companies extract value from consumers*

Major Decisions in Advertising

objectives setting, budget decisions, message decisions, media decisions, campaign evaluation 1. *Objectives Setting*: young *women btwn ages 16-22*, *Communication/Sales Objectives* 2. *Set budget decisions* - how much you want to pay, *Competitive parity: consider how much competitors pay* and price accordingly, *Affordable* Approach, *Percent of Sales*, Objective and Task 3a. *Message Decisions* - Message *Strategy/Execution* -What kind of message do you want to *present/prove* 3b. *Media Decisions* - *How much do you want to present* in the media?, *Reach, freq, impact* - How much do you want to reach out to your consumers?, Major Media Types, *Specific Media Vehicles*, Media *Timing - When* do you want to do this? And how much will it cost you to? Ex:* winter, summer, spring clothing line* 4. *Campaign evaluation* - communication impact, sales impact Ex: blouse - targeting young girls on instagram/media oriented - focused more than on NYT

direct marketing

sales and promotional techniques that deliver promotional materials individually other than face-to-face selling •*Direct connections w/ targeted individual consumers* to obtain an immediate *response + lasting customer relationships* •Circulars/*junk mail, 99% are not relevant* or even looked at •*Facebook targets the ads to make them relevant to you*, *60% are relevant* and made to click it open •*2% Response Rate - "good job"*

Micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing -*Segments* -*Niches* - identifying *small but profitable market shares/designs* or find products for them -*Local areas* - local newspapers, local retailers, currently a lot of political ads -*Individuals* everyone is *advertising for their own markets* -The new technology allows you to do your own marketing

Public Relations (PR)

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 •Building *good relations w/ company's various publics by obtaining favorable publicity* •Building up a *good corporate image - a company people want to buy products from* •Handling or *heading off unfavorable rumors*, stories, and events. •*Boeing has had problems with PR b/c of 737 Max*. companies hire *crisis managers help fix image and situation*. All companies will do it when they face eco crisis. PR still used to maintain a company's positive image •*Trump using rep party to help manage the prices*, issues could *negatively affect company/relations* •-Public relations is trying to *build an image that doesn't translate in revenue*, an image for *ppl want to buy products from* (teachers incorporating an image of classrooms)Ex: *NYC Marathon - a great locale for public relations* •*Companies are trying to get their name out there* and show that they are associated w/ *positive image of NYC marathon* •Want to show that they're an *ethical/environmentally good company* •No *immediate tangible benefits*

Market Targeting

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter -*Target - target the audience accurately*, once you target market, you can get a *good market share* -*Develop measure of segment attractiveness* -You *select the segment you want to hone in on*/ cultivate

Hacker

• *likes to write code* and *break in* computer systems •*White hat hackers - Good Guys!* •*Uncovers computer weaknesses* w/o exploiting them •*Improves system security* • try to hack in and *recover any entries* that they code might have from the bad guys •*Black hat hackers - Bad guys!* •Computer criminals who *exploit a system's weakness for personal gain* •*malicious* and creates all sorts of *problems*

Security

•*Chinese govt. accused of stealing US tech*nology •We need to *protect our radars, don't want to receive foriegn threats*, let them know of our *hide cyber techniques protect secret data* •On *corporate level, companies want competitiveness* •*Dark web- where people hold companies/govts for ransom*($50K-$100K)

Increasing Vulnerability of Information Resources

•*Interconnected, interdependent, wirelessly-networked business environment* •*Smaller, faster, cheaper computers* and *storage devices* •*Decreasing skills* necessary *to be a hacker* - *Organized crime controls cybercrime* •groups in *Eastern Euro hold companies for ransom unless they pay or give up their store*, major problem, used to be individual lone guys •*Organized syndicates* •*Lack of management support* - makes it *easy to hack* since *management has no understanda*. *Companies need resources* to combat hackers •EX: Imagine the havoc we would have if someone *hacked into the traffic system, national security grid is very vulnerable* to the system, *power plants could be shut off* on the grid, stop the hackers from getting in

Marketing analytics

•*Spending on data analytics* •*Firms spending more on data analytics* - with analytics in *marketing and prod development at forefront* •*Use analytics to better target customers* •Use *analytics and models to develop prods/services* •*Covering 67%* of the firm's requirements! •*Demand for "Big Data" is expanding rapidly*. All of the *cash register receipts flow into a retailers' home office*. With that they can *analyze who is buying, how much they are spending, and what they are buying* •Target had so much *consumer data that they were able to analyze when a woman was pregnant* often before her family even suspected. •Big data is *replacing "intuition" or "gut feeling"* data can be used both internally and externally.

Product Line Classifications

•*Supermarket* •*Specialty stores* - ex: apparel, bodywash, etc like GAP or the Body Shop •*Dept stores* - general merchandise. ex: *Macys vs TJ Maxx* but both serve the same function •*Convenience stores* - *located* strategically *in highly populated units*, fewer SKUs stock keeping units •ex: 7Eleven •*Category killers* - *going to a community and disrupting* what's going on •*Amazon - they disrupted* and wipeout communities - *brick and mortar* •*Home Depot - wiped out hardware industry*

Jobs in analytics are growing because many are not trained in this field. Opportunities are unlimited

•According to the *WSJ, the biggest opportunities in data analysis* heavily involve marketing analytics. •*Marketing Analytics is used in 3 out of 4 opportunities* listed by WSJ for the next growth in big data •*Consumer traffic patterns using camera surveillance* •*Social Media* •And *Consumer Images*

Marketing analytics - most desirable skills

•See the word *talent gap* = That means there is *more demand than supply* for these positions. That means *high starting salaries* and more *upside opportunities*

Technology Threats - Malware

•Seeks to *compromise computing system w/o permission* •*Methods of infection*: •*Viruses - Infect software/files* •*Worms - Take advantage of security vulnerability* to automatically spread •*Trojans - Attempt to sneak in by masquerading as something they're not* •*Malicious adware* - *open up something* and you find out it's *not actually from Best Buy* •*Spyware* - *taking money out bank accounts 2% right now* because *15% credit card interest rates* •15% vs 25 *writing off check b/c fraud* •*Keylogger & Screen capture*

Road Map

•Why do *companies use distribution channels*? There are *functions these channels perform* + *how products are sold* •How do *channel members interact and organize to perform the work* of the channel? •Identify the *major channel alternatives open to a company*. •How do *companies select, motivate, and evaluate channel members*? •*Marketing logistics and supply chain* (what *distribution links all activities of various orgs* together) management. *Suppliers plant* -> *manufacturers* -> *wholesalers* -> *retailers* -> *consumers*

A Distributor Reduces the Number of Channel Transactions (image)

•You have a *manufacturer that wants to sell to as many consumers* as he can •*Manufacturers go to consumers' doors* instead of *manufacturers* •*Manufacturers sell prods to doors*

Integrated Marketing Communications (IMC)

carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the *organization and its products* at which the company meets the consumer w/ *rep of 4 P's* •*Integrated Marketing Communication* -Carefully *blended mix of promo tools* •*Advertising*- what kind of advertising? *Ex: press media (newspapers), digital media, direct marketing* •*Sales Promotion* •*Consistent, clear, compelling brand messages* for the company *Ex: 2 for 1 sale for 2 weeks, mass media*, facebook, 75% off, you've seen these promos in NYC •*Public Relations* = *Sells* the *image of a company* •*Personal Selling* •*Direct Marketing* + electronic media—in combination to *provide clarity, consistency, and max communicative impact*

Bid Data Applications (Applicable everywhere)

deals with large amounts of unstructured data from the internet, photos, video, audio, social, networks, and sensors. to analyze trends IE. netflix suggestions Special big data hardware and software can be more effective than traditional relational DBMSs •*Education*: Improving *student performance* indicators such as *grad rates, faster completion(, etc. •http://tech.ed.gov/learning-analytics/ •*Healthcare*: Improving *diagnosis accuracy, public health, new drugs, controlling outbreaks/diseases* *Fin services*: *identifying customers churn*, segmenting by *profitability, volume, length* of engagement, Analyzing *internal and market data* such as internal *emails or volatility index measures* for *risk management such as rogue trading/market volatility*, *Understanding your customers*, *manage* their *portfolios*, reach out w/ prods they're likely to buy Big data applications are perfect candidates for cloud-based applications.

Stages in the Product Life Cycle

intro, growth, maturity, decline -*Each stage of the life cycle* = *marketing mix elements change in response to marketplace*. A new aircraft (eg. *the Boeing 777) can take a decade+ before it becomes profitable*. *Amazon is still in the very early phase* of showing profitability despite the fact it has been in business for *twenty years*. -*Phases GROWTH AND MATURITY can coincide* Car Hybrid Car 1. *Introduction phase: *low Sales, Profits* or negative, *consumers are innovators*, *One/few competitors* 2. Growth Phase: *rising Sales/Profits*, *consumers are early adopters and early majority*, *few/incr competitors* 3. *Maturity Phase*= *Sales are at its peak*, *Profits peak then decline*, *consumers are late majority*, *High number of competitors and competitive products* Decline Phase= *declining Sales/profits*, *Consumers are laggards*, *Low competitors and prods*-*INTRODUCTION PHASE EX: Wework* - *losing tons of money after building real estate* *People who lease* from WeWork are considered *innovators and they have few competitors* -*company grows, the public will be more aware and the company will face pressure from its competitors* -*more competitors, pressure on prices and all sorts of real estate companies doing the exact same thing* -*Many competitors will later leave industry when it is no longer profitable (decline)* Ex: *Oil shell business - Saudi Arabia dominates*

Sales Promotion

marketing activities - other than personal selling, advertising, and public relations - that stimulate consumer buying and dealer effectiveness -*Short term incentives* to* encourage purchase* or sales of a product/service -To *generate immediate sales*, the major forms of sales promotion are: *Consumer, Business, Trade, Sales force promos* Ex: if you know a business is selling soon, you might have a 2 for 1 sale or something to steal their thunder and pick up their market share. Attempt to increase sales immediately (Ex: Blouse company: big competitor will comes out with line of inexpensive clothes and does buy1 get 1 free) -*Rapid growth in the industry* because/ they are doing this because: There's *more pressure to incr current sales* (Ex: If you're a salesperson, if you sell 50 locomotives, we will send your family to the Caribbeans, these are *kinds of promotions* to increase current sales, *keep shareholders/employers happy*, consumers are at a more powerful position than seen before) -*More comp*etition -*Declining advertising efficiency* - Too much so *company will make promos in their overload messages* so people will remember More *deal-oriented consumers* As consumers, we can *easily compare prices and analyze promos for better deals* Ex: *Thanksgiving - Black Friday (day for promos, won't last long)* *Companies offer huge sale incentives to help shareholders*, *little profit* will be helpful getting that *more attention* (with BIG FONTS) and their products out there, *build up excitement* Macy's - Super Sale - Super Sunday for Super Bowl, traditional holidays have sales CVS - $5 Extra Bucks Rewards Every week CVS gives sales promotions, generating revenue to the company the different sales promotions at WalMart or Amazon

Network Externality

the effect that an additional user of a good or participant in an activity has on the value of that good or activity for others -Things are *sold on the network now*, *CD and DVD markets collapsed* -Vinyl record to cds- dvds to internet/ streaming (*Apple Music and Spotify and Amazon Music has changed relationships* between record labels and the services) -*Apple ties you to the Apple iOS system*. If you have all your music stored on iTunes and all your information backed up in the cloud, the "switching costs" of moving to Samsung, LG, or others is huge. You've become embedded in the iOS infrastructure.

Major Considerations in Setting Price

- *trying to maximize profitability* in the long run •Product costs* - *can't sell* anything *below these costs* (*dumping*) •*price floor* - no profits below this price •*Competitors' prices* and *other internal/external factors* •*Consumer perceptions of value* •*Price ceiling* - *no demand above* this price •*Cost based pricing* - *target profit pricing* •*Comp based pricing* - *setting the ceiling* of what *you can price* •*Bananas stand* - if your *competitors has lower prices for bananas* then *you have to lower your prices* so you can sell •*Value based prices* - where you *created an image and where your competitors are irrelevant*, *maximize profits* •Ex: Take *cars*. Today, *no US auto company can sell an equipped vehicle* at less than $15,000 and *make a profit*. *No consumer is willing to pay* $150,000 for an *American-made car*. In between those extremes is where we'll find prices. What about $10,000 *Birkin bags that are the ultimate expression of luxury for women*. •Ex: *Lexus (a lot of comp* from Cadillac, bmw, benz, jaguar) vs *rolls Royce*

Marketing Process

**Goals = delight your customer*/ *create value for customers + relationships with them* 1. *Understand the marketplace + customer needs and wants* (through *research* or intuition) *Steve Jobs* knew that customers needed an *iPhone* even before they did *Henry Ford* - manufacturing *cheap automobiles* *Heinz* brothers - *ketchup* that can last w/o refrigeration *Coca Cola* developed a marking strategy and program 2. *Design a customer-driven marketing strategy* (*executed through the marketing program*) 3. *Construct an integrated marketing program that delivers superior value* 4. *Build profitable relationships and create customer delight* 5. *Capture value* from customers to create *profits and customer equity* *Customers' "wallet" for buying things*. You have to take share from some other vendor selling or who might sell to the customer, unless the size of this wallet is expanding. When you buy an iPhone, you are not buying a Galaxy phone.

Enterprise Rent-A-Car

-use a strong internal labor market -performance evaluation is used for placement •Enterprise Rent-a-Car *targets the insurance-replacement market to avoid direct competition with Hertz, Avis, National, and others.* •They develop a *niche strategy* •Specialty is using people that have car accidents, works with car insurances (easier if you have to rent a car) •People at the airport - larger demand - they price it higher •They can price these a little higher by focusing on the niche market

New Marketing Landscape

- Digital age 1. *Rapid globalization* 2. *Ethics and social responsibility* *Customers - especially Millennials* - often *want to be sure that companies they buy from are ethical and socially responsible* 3. *Not-for-profit marketing* - big thing now, hard to find any not for profits in the past - Customer frugality - Sustainable marketing Ex: Salvation Army, YMCA, online colleges= Nonprofit makes more $ than for profit 4. *New world of marketing relationships* ex: Linkedin - thrives on building connections and relationships -As the *world changes + becomes smaller* = *more sophisticated customers*, *complex marketing landscape* No one could conceive apple phones being shipped from China. Now a French wine company can have an individual relationship with you through its Facebook page or Twitter account.

Toyota Scion targets Gen Y consumers (image)

-*31 - 40* -*Carefully segmented* that market -*Lower costs* but nice looking cars compared to Lexus, *Scion is more for lower class/ poor people*, *Toyota has an upper line*

Mothers Against Drunk Driving (MADD) (Image)

-*Advertised through TV*: Friends don't let friends drive drunk -*Tax deductions to run these ads* -*Emotion*al appeal to not drive drunk -Marketing often means *powerful images to influence "consumers"*

Individual Product Decisions

-*Aspects that go into the marketing tactics* 1.*Product attributes* - think about what kind of attributes you need/want? 2.*Branding* - how are you gonna brand? Do you want it to be *luxury or cheap/accessible* to the general public? 3.*Packaging* - should you make packaging *fancy or simple/elegant* or put it in plastic bags and ship it? 4.*Labeling* - is actually a very *COMPLEX aspect*. You are trying to figure out *how to psychologically impact the minds of the consumers when they buy the product*. ex: colors, shapes, photos Ex: *apple iphone - white box* - implies *simple phone to use*. This was all designed by steve jobs 5. *Product support services* - is the customer able to return a product to a store? Will it have a warranty? everything provides a service. some products don't need (ex: *TJ Maxx, McDonalds App, hardware store don't need*)

Business Intelligence (BI) vs Big Data (**know the difference)

-*BI*: helps find *answers to questions you know* ( what someone bought in the last few months ), *requires loading structured data from transactional systems* and other sources - ( what to do w/ date and use it to see how many of a product you should have ), *Data captured at the user transaction level* -*Big Data*: helps find the *questions you don't know you want to ask*, *Unstructured data from various sources* into that system where it's accessed by Big Data applications, will show you *correlations unseen before*, Data *captured at user interaction level* ex: *women buying chocolates*, other things that correlate to *pregnancy* *Ads in facebook* take your search history, who you're friends with, etc.

Line Filling- BMW (image)

-*BMW (1,2,3 - Cheapest)* -*BMX X, Z4, M - Expensive* -There are *holes in BMW's product line* - can they get a market share, profitability to fill up these holes? Do they need to build another factory to do so? They're* deciding not to fill the holes for now but would have more market share if they decided not to come in earlier* -If they were to *stretch = new category of cars (electric cars)* *Tesla is stretching - went from top w/ new models, more SUVs and trucks* *Apple is talking about introducing cheaper phone prices* - talking about $500 phones, more streaming of music, apps = *want to further their customer relationship*. Apple is *moving from prod model to service model*, *over the next 10 years -> primarily service* *Microsoft Office* - entire family can use it for $90/year . *More service and getting $200 for 90 people*

Branding a Place (image)

-*Brands can be intangible as well* Ex: *Sydney Australia - opera house* NY - big apple brand and I love *NYC* - great place to come and visit. Was developed in the 70s Going bankrupt - advertised I Love NY

The Product-Service Continuum

-*Broad range of goods/services purchased by consumers*. Note this example ranges from *low- value-added commodities (SUGAR- pure tangible GOOD) to high value-added services (EDUCATION- pure tangible SERVICE)* 1)*Determine it's a product OR service* -*Restaurant- in between pure tangible good and pure service* *Apple Computers - goods* products manufactured *Apple provides services - how to use the computers* *McDonalds - you get a product* through a *service is the app* and the employees at the store

Channel Differentiation (image)

-*Channel for which you sell your product*. *Some companies only sell w/ own channels* -Ex: *Amazon sells online* *Nordstrom* - only through *certain retailers* -Ex: *Grubhub* Food services being created that are not grubhub People have to eat, people are very busy and don't have time to go shopping, not accessible especially in the city *People will go on the internet, and pick the products they want and have it delivered*, very successful in pioneering this new home delivering *Disrupted trad supermarkets*-*Fresh Direct* = serves a *niche (addressing a need for a product or service that is not being addressed by mainstream providers)* - home delivery of groceries. It has clearly differentiated itself by *offering consumer ability to order food online* and have it delivered to their homes. It offers a *new channel of delivery to consumers* who otherwise would have to trudge to the traditional markets.

New-Product Development and Product Life-Cycle Strategies

-*Companies have to consider new prods* and *product life cycles* to effectively *compete and surprise*. *1/3 of 3M products are less than five years old.* How do you develop new products?

Product Life Cycle

-describes the stages a new product goes through in the marketplace until they are taken off the market: introduction, growth, maturity, and decline •Sales of the prod - expensive* but *not selling many* of them •As you have *more prods = overtime products get old/tired and sales go into decline AFTER MATURITY* and then profits do too •Once they go into decline, profits start to decline and shareholders were bringing back •*The profitability peaks early in maturity cycle NOT growth cycle* and you *don't want to buy when the cycle starts to decline* •The PLC represents an important tool managers use to plan their marketing activities. These follow the *quintessential "S-Curve"* •(*Tesla is losing money in this early phase of its life cycle*. *Amazon is just beginning to make money*. *Apple*, which is in *early maturity, is most profitable point* in its life cycle. *Kellogg's Corn Flakes is in decline* and is having difficulty showing improved profits.) •*Michael dell - ran into that problem, shareholders were very angry then extended profit lines* •Great s curve is where you want to buy

Key Customer Markets (what 4)

-*Consumer Markets (B2C - Business to Consumer)* Companies selling *mass consumer goods/services* such as juices, cosmetics, athletic shoes, and air travel establish a *strong brand image* by developing a superior product or service, ensuring its availability, and backing it with *engaging communications and reliable performance* -*Business Markets (B2B - Business to Business)* Companies selling *business goods/services* often face well-informed *prof buyers evaluating competitive offerings*. Advertising and Web sites can play a role, but the *sales force, price, seller's reputation* may play a greater one *Chips to iPhone industry, Samsung and Apple* -*Global Markets - most markets are global* Companies in the global marketplace *navigate cultural, lang, legal, pol differences while deciding which countries to enter, how to enter each* (as exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer), how to adapt product and service features to each country, how to set prices, and how to communicate in different cultures. ex: *We import a lot from China, US selling to Canada/Mexico* -*Nonprofit and Governmental Markets* - Companies selling to nonprofit organizations with limited purchasing power such as churches, universities, charitable organizations, and government agencies need to price carefully. Much government purchasing requires bids; buyers often focus on practical solutions and favor the lowest bid, other things equal. *Ex: gov is buying jet aircraft from, to protect us from invasion, gov is buying healthcare through doctors and medicare, nonprofit organizations*

Concepts of Customer loyalty and Retention - capturing the customer's wallet (CLV and Customer Share Wallet)

-*Customer Lifetime Value* (CLV) The entire *stream of purchases the customer makes over a lifetime of patronage* Ex: *Toyota's relationship with Krueger.* Toyota has a *profitable relationship with Toyota owners* or if the service was bad, they wouldn't be buying any more, *subjective* *Buick wants you to purchase Buicks* for the rest of your life *Apple wants you to buy iPhones* as long as you live *Coke wants you to be their favorite soft drink* forever. -THEY PUT LOTS OF EFFORT TO MAXIMIZE the CLV* -*Share of Customer Wallet* *Companies want share of customer wallet*, shares the company gets, *how much products are bought*, you need to get them to buy more of the product and more of yours

Customer Perceived Value (CPV)

-*Customer's evaluation of the diff btwn benefits and costs of a marketing offer relative to competing offers* -*Delight your customer* - Promise an 8 but give them a 10! -You want your *customers to view your relationship as superior to the ones they have w/ other vendors* -*What can you do to delight them*- to give them superior customer value and satisfaction? Examples? -What does Louis Vuitton, the French fashion company, do so well to have a huge amount of customer perceived value over its competitors? Why is Apple's IOS system generally considered to offer superior value to Android systems?

Examples of different tastes in different cultures (Vegemite, Marmite, Jello)

-*Diff markets* have = *diff demands/desires* -*Vegemite* - a specific *product to Australia* and few areas but many find it distasteful -*Marmite* - *British* -*Jello Gelatin* - a popular *American dessert* *Many people abroad don't like it*. *Jello wouldn't sell in Taiwanese market*

Adaptation to Cultures (SRC, Ethnocentrism)

-*Global marketers need to become sensitive to cultural biases* that influence their thinking, behavior, and decision making. -Since WW2 has been developing -*Self reference criterion (SRC)*: *people's unconscious tendency to resort to own cultural experience/value systems* to interpret a given business situation -We *perceive products differently* compared to other cultures An *acceptable product here isn't in Russia or China* Ex: *Germans think our GE washing machines are breaking all the time* *Nissan's Moco green car - moco stands for booger* in spanish *Exxon - there are two xs more acceptable* around the world -*Ethnocentrism - feeling our culture is superior to another*, no culture is our culture

Pricing Considerations and Strategies

-*How to price prods* giving everything we know about the *types of consumers we are targeting*

Line Extensions (image)

-*Morton salt- the ultimate commodity* + *extract value from consumer by extending line beyond the regular table salt (STRETCHING)* sold in the familiar blue container. Morton sells an entire line of salts and seasonings for every occasion *Known for table salt + rock salt* for roads/snow Has a *good name and reputation* = *high profit margins. Costs them not more than 25 cents to make but they sell it for $1.50* -*Narrow Margins on the commodity* -*Wanted brand equity so they differentiated* products. People will say that differentiating products will be *higher evaluated products* Morton went into *kosher salt that became profitable*, and also *light salt* - had less sodium which helped people and gave alternatives to those who had health problems. Others are: Natural seasoning, Popcorn salt, Salt and pepper shakers -*Amazon - from books to everything* -*Hershey - chocolate bars to everything* -*Coca cola* - cherry cola, diet cola Pepsi Cola - *went into foods* -*Kellogg's - corn flakes to making all these flavors* -*Disney - from cartoons* —> bought *pixar, marvel, star wars, amusement parks*

Disintermediation occurs when:

-*OCCURS WHEN a manufacturer sells directly to consumers by passing retailers* the elimination of some layers of the channel of distribution in order to cut costs and improve the efficiency of the channel -*Prod + service producers are bypassing intermediaries* and going *directly to final buyers largely due to the internet* -Radically *new types of channel intermediaries* are emerging to displace traditional ones.Ex: *20 years ago You used to have to call your travel agent* and it would take days to get a ticket but *now you can bypass travel agency by booking flights directly online*. This decimated the travel agency industry. *Expedia, Travelocity, Priceline, Hotels.com, and Orbitz vs traditional travel agents.*Ex: *Bookstores and hardware stores* have also *disappeared* b/c everything is online

Amazon (Website hosting, big data analytics, backup and storage (cloud drive))

-from *B2C* (We used to have phone books sent out with all the products and businesses, Now everything is online) *to B2B* -they started *selling services to become Amazon's most profitable business - cyber criminals.* Amazon has tested this because they are the consumers -Amazon - if you have *built up a large Kindle library, you know it is only compatible w/ Amazon prods*, so you are less likely to jump to a competitor and lose your library. If you pay Amazon Prime for the extended services, you are likely to frequently purchase through their website. -*Pentagon handled a $10 million contract with Microsoft*. Amazon is expected to fight the Pentagon's decision. They didn't get the 10 mill because they are the owners of the WSJ that trump is against -*We didn't understand digital content 10 years ago.* -Digital content is everywhere. (no smartphones, watches, photo backups in past) -Everything is very new - *creates interesting opportunities but also challenges*

The 4 P's

-*Product/Service* •*based on your research* •Variety - e.g. 7 diff iPhone models •Quality - e.g. high or low •Design/Features •Brand name - brand equity •Packaging/Services - e.g. like for a computer/iPhone not books -*Price/ Cost* •figure whether you should *put a high or low price* •Cars - nobody pays list price, consumers will say it's an anchor •List price/Discounts •Allowances - sell your car and get some income •Payment period - you can pay in installments or all at one •Credit terms -*Promotion/ Advertising* •TV, online, print ad, air blimps, etc. •how can you create exposure for your product? •*Personal selling ex: Avon ladies* would come to your door and sell, exists in China, personal selling effort •Sales promotion bargains •*Public relations- where you aren't selling the product but selling the idea*. Ex: *Johnson and Johnson* -*Placement/ distribution* Where are you gonna sell it? •Online, CVS, Macys, Door to Door •Channels •Coverage •Assortments- all kinds of colors/flavors, how broadly sold can this be ex: *oreos and its new flavors* •Locations -(drug store, sunflowers?) east coast vs west coast, ex: *Hellmans Mayo (best in East market)* •Inventory - small amount, you keep a lot of the products on hand, difficult/dangerous for jewelry companies b/c of break-ins •Transportation- big cars, trucks, microchips in a jet airplane •*Logistics - how do you get product to the market* (Apple orders shipped from China through plane)

Value and Satisfaction

-*Value* reflects the sum of the *perceived tangible and intangible benefits and costs to customers* -*Satisfaction* reflects a person's judgments of a *product's perceived performance (or outcome) in relation to expectations* -*Objective:* *Delight customer* + Meet and even *exceed customers' expectations* (Success) *If performance is lower than expectations, satisfaction is low. Post-purchase dissonance* -Your product might not live up to what you expected or your customers didn't want it, *Unhappy customers and failure in market place* If you buy a product and it breaks the first week, you are not happy. What can the company do to offset the bad will and delight you? Maybe replace the product and give you a refund? Or replace it with a bigger or better product? Ex: *1950s, Ford created the Edsel* thought everyone would like it and the performance of the product. *Car buyers didn't want to buy bad/ugly Edsel* + didn't live up to the expectations the company created in the prior months *w/ the epic advertising campaign not what the market was looking for* *1920s, he was making Black model T4* but *people bought diff color cars* and the market moved on + *lost market share* and the *company almost broke* Finally, he released his stubbornness and *decided to delight customers*

Personnel Differentiation: Singapore Airlines (image)

-Became the *most pop. airline by differentiating service* - *good meals, good care of customers*, slightly *higher prices than competitors*, pick up *market share*, business traveler that's sensitive to price -Airlines can differentiate themselves in many ways. Here, *Singapore differentiates itself* by the *friendly flight attendants who take care of passengers* on their flights.

Positioning Map (image)

-Company wants to *create a new product/reposition one* - they look at this and *ask where are the opportunities* (large luxury SUVs) •Companies decide where they want to "position" their products. In this chart, we look at luxury SUVs by auto brand. *Y-axis is price; X axis is Orientation (Luxury vs Performance)*. The *size of each bubble = number of cards sold* in each brand. •Lincoln Navigator - Luxury bottom •Escalade -Middle bottom •Lexus - Leaning to luxury bottom •Range Rover is middle performance and higher •Hummer H1 is highest and more performance

"In the factory, we make cosmetics; in the store we sell hope." (image)

-Cosmetics are *some of the most profitable prods sold today*. They *capture value by selling intangible "hope"* •*Operating profit 80-90%* •*Costs almost nothing to make w/ packaging* = made to *make women look beautiful* and that is why it is *priced so high* •Ex: *Nutrition drinks cost nothing to make but sell for very high prices* or yogurts or *high protein prods*. A lot of it goes into the *exp. packaging*. •*Charles Revlon - Founder of Revlon Cosmetics*

Billy Bean

-EX: *First instances of big data -> MoneyBall Movie/Book* - *Billie Dean put data together* in a successful and rational way *for baseball* used big data *to analyze each player* to improve his baseball team, *the Oakland Athletics, performance*.

Differentiated Strategy: Two-Way Stretch

-Ex: *Marriott added Renaissance Hotels line to serve the upper end* of the market and the *TownePlace Suites serve the moderate/lower ends* -*Marriot* started as a *fairly low level hotel chain* -They *expanded into high/mid level motels*, hotels *with kitchen* where people can stay *Ritz carlton - very high* *Courtyard - moderate* *Springhill/Fairfield - lower end* Marriott Hotels & Resort *Renaissance, Execustay - full wide of product* there (1963 Brighton VA - where Krueger stayed)

Marketing

-Marketing concept: *marketing management process* -Marketing *research* -*Buyer behavior* -*Segmentation, targeting, positioning* -*New product innovation/diffusion*

Product as an idea - non-profit marketing

-Products *don't have to be physical* objects like books or surfboards -Products can be *services and ideas*

brand equity

-The *differential effect that brand knowledge has on consumer respons* to the marketing of that brand Ex: *Coca Cola has huge brand equity = world's #1 soft drink company* The *ingredients cost nothing* It's the *brand adds value*. Building brand plays into the consumer's *psychographic and behavioral space* and extracts value from the consumer's wallet. Brand equity is an *intangible good* that acquiring companies are prepared to pay for. Action Cola or Coca Cola sitting on a shelf next to each other? Which one will you buy? -*Disney: mouse ears* - easily *recognizable* and is able to take the mouse ears and apply it to all sorts of problems, Coca Cola, McDonald's -For *pharmaceutical companies, brand is important* because there are a lot of competitors and drugs are cheap to make -Kelloggs -*Starbucks - has a tremendous amount of brand equity* - costs a couple of cents for dollars prices, Expanded products (food ad music) *Brand loyalty - the degree to which consumers are satisfied + committed to purchases* Ex: Apple, people want iPhones

What is Marketing?

-organizational function and a set of processes for *creating, communicating, and delivering value to customers* and for managing *customer relationships* in ways that *benefit* the *org/stakeholders* -You want to create a product of some kind, of some value and *actually deliver it to the customer* Ex: *Apple TV plus* - they created a new product, they are still in the process of creating/communicating it, there's *lots of advertisements.* As of November 1st, they began to deliver the product and maintain customer relationships. If you are tied with IRS - ?

Types of Vertical Marketing Systems

1. *Corporate VMS (HIGH CONTROL)* - *Common Ownership at Diff Levels of Channel (Ace Hardware)* Ace hardware - owned locally by mom and pop (*"Mom-and-pop" small, family-owned or independent business*. A common charge against big chains is that they *put mom-and-pop stores out of business*, but new businesses often cause the demise of old ones.) -*More purchasing powers to offer high quality at low prices* and pass that to consumers to help *fight competitors like Home Depot* -*Shoprite - small independent markets* worked together to form a *pricing power, successful strategy* 2. *Contractual VMS (MID CONTROL) - Contractual Agreements Among Channel Members (Auto companies and auto dealers)* Ford - *Ford doesnt own distribution center* but ford dealers are the *distribution members and sell to consumers* with the permission of the parent Ford Motor company 3. *Administered VMS (LOW CONTROL) - Leadership Assumed by One or a Few Dominant Members (Kraft)* Kraft - *takes responsibility for handling prods*. Makes sure stores are stocked with their products and can understand how they are selling, see if they are doing good

*The Marketing research process*

1. *Defining the problem and research objectives* 2. *Developing research plan* for collecting information 3. *Implementing the research plan* - collecting and analyzing the data 4. *Interpreting and reporting the findings* Ex: *flip phones* You go to find and develop a research plan with help from colleagues, you get budget, You collect and interpret data, And then you report the findings *"Putting your ideas in the funnel"* Ex: *ice cream* Is there a market for ice cream infused with wine? What is the research objective? Find out if there enough of a market in the New York City area to make a profit selling ice cream with wine. Develop the research plan. Who is going to provide the information. What kind of information do you want. Why is this the right type of information to make a decision. Where will the research be done. When will it be done. Show the timeline. *Go out and pound the pavement*. Implement the research plan. Collect and analyze the data. Then interpret and prepare a report with findings and conclusions

Environmental forces that impact marketing (6 forces) - you must be aware of what's going on DESTNP

1. *Demographic* Ex: *Genova ham - Saudi Arabia has a strong pol-eco system* + *don't eat pork* (neither does India) so not a good environment, unlike Germany, etc. •*Young populations have diff purchasing profiles than older populations* 2. *Economic*: *poor countries tend to have different buying patterns than wealthy countries* The market for *Tiffany diamond rings large in Malaysia* than in Myanmar 3. *Socio-cultural* •*Beer sells better in Germany where there is a culture of beer drinking than in Saudi Arabia* where alcohol is prohibited 4. *Technological*-be aware of wifi, cell phone products •*iPads sell better in countries where internet is widely available such as South Korea* compared to where it is rare as in North Korea 5. *Natural* - Are u selling in an *area that is prone to disasters? Floods?* •Ski equipment will sell better in Switzerland where there are mountains with snow than Sudan where there is desert 6. *Political* - *Legal system does not allow us to sell to north Korea and Cuba* •Google will do much better in the US where broadband search is permitted than in China where broadband search is largely restricted

Buying Decision Process (NIEPP)

1. *Need recognition* 2. *Info*rmation *search* 3. *Evaluation of alternatives* 4. *Purchase decision* 5. *Post-purchase behavior* -*All stuff marketers want to know about - you want to know the mind of the consumer* You want to know where and how are they getting this information Ex: *You need a car, need to transport in suburbs and NYC, go online and looks through car magazines, newspapers with research.* You search for data to figure out what you need and what the possibilities aer. After evaluating the baskets of alternatives you arrive at a decision. Now the *company has to delight you in order to have you recommend its cars to others and to coax you into buying a new car when the time is right.*

Elements of a Modern Marketing System

1. *Suppliers* 2. *Company* (Marketer) *various market intermediaries*, your *competitors are selling from same intermediaries* (*Macys*- various manufacturers selling to the dept) *Competitors* 3. *Marketing Intermediaries* *group of businesses that will have direct contact w/ customers* Ex: *Macys = intermediary btwn manufacturers and ppl* Amazon- doesn't go through intermediary, directly to consumers 4. *Final Consumers* You can pay for a smartphone that is 1000 vs 500 on amazon *Ford - Ford manufactures but the car dealers are the intermediaries to sell it to the people*; gets hands on consumers with dealers and franchises

Levels of a Product

1. *core customer value* 2. *actual product* 3. *augmented product* -*more to the product than the product* A smartphone is a smartphone. *Apple designs*, packages, and brands its *prod to capture value from consumer*. Then it *delights the consumer w/ after-service Applecare* and easy updates of its software 1. You start with a core product/service Ex: *Blouse* - a manufactured good You *get it shipped to inventory* 2. Then for the actual product, you consider things such as *packaging, brand name, quality, design, feats* How is it managed (warehouse in Iraq?) or fancy place in Nordstrom? Will it have a brand name? Brand equity *How is it packaged and merchandised* such as in a *high-end store vs a discount store* Ex: *tj maxx vs macys* What features does it have? Waterproof? workout gear? 3. For the augmented product, you consider the *installation, delivery, warranty, aftersale service* for the product what are the other things that you get from the blouse beside the blouse? Are they delivering to your home or do they give you 90 days credit when you buy it? Is it returnable? - wasn't always easy to send back items in the past You may want the blouse warranted maybe you can have it delivered to people's homes -*Start from the core and work your way out* + Objective: to *exceed customers' expectations and delight a client = successful = good sale = good long term market relationship like the McD app*

Major Stages in New-Product Development

1.*Idea Generation:* what kind of products can we develop/ can we create? This is the process of brainstorming and generating any new product ideas, even crazy ones 2.*Idea Screening*: testing the idea and asking people their thoughts on the product/ service, it may be very helpful or harmful depends on the person 3.*Concept development and testing*: test the best ideas, ask friends neighbors if they sell 4.*Marketing strategy development* 5.*Business Analysis* 6.*Product development* 7.*Test marketing* 8.*Commercialization* - Very *few prods pass through the filter that goes from idea generation to commercialization*

What is big data about?

Big data refers to collections of data that have become so large that traditional means of analysis or processing are ineffective, inefficient, and insufficient. Big data involves numerous difficult challenges, including collection, storage, analysis, mining, transfer, distribution, and results presentation. -*Data analytics* -*taking info + figuring out its meaning*, how can you reach the conclusions, *Massive incr.* In the amount of data available, *Sending out cookies and they know who you are* and you're benefiting from that 1. *ERP - Enterprise Resource Planning* - *purchase detail/record, payment record* ERP *focuses on the business* 2. *CRM - Customer Relationship Management* - *segmentation, *offer details*, *customer touches*, *support contacts* Where CRM is *focused on the customer* 3. *WEB - Web Enterprise Builder* - *track their path* into the page, *Dynamic funnels*, *Web logs, offer history*, A/B testing, *Dynamic pricing, Affiliate networks, search marketing, behavioral targeting* 4. *Big Data - RFID*: radio frequency identifier - *sensors/RFID/Devices* (HD Video, Audio, Images), mobile web, *user click stream Sentiment analysis* - refers to various methods of *examining and processing data, identify a subjective response*, usually a general mood or a group's opinions about a specific topic, User-generated content, Social interactions and feeds, *Speech to text, SMS/MMS - Short Message Service/Multimedia Messaging Service*

Information Technology Current Trends

Current Trends •*Big data analytics- new hot deal*, *high pay*ing field, fairly *new*, things being done today *didn't exist 5-10 years ago* •*Security*

American Idol + Dancing w/ the stars

DWTS - ABC they are *targeting the 18 - 49 age segment* -*don't care about people under 18* because they don't have *no money (Cereal might)* -*Only for viewers with the time and interest* in their type of products -*Different demographics among different companies* CNN - they are selling stuff to older people like Fox TV -

*Model of Buyer Behavior* (MBR)

Environment: 1. *Marketing stimuli* - *price, product, place, promotion* 2. Economic 3. Social 4. Technological 5. Cultural *Buyer's Black Box:* 1. *Buyer's characteristics* 2. *Buyer's decision process* You need to think about what's in the *consumer's head* (you don't have the decisions made with this black box, we don't know how they make certain decisions) *Buyer's Response:* 1. *Buying attitudes and preferences* 2. *Purchase behavior:* what the buyer buys, when they buy, where the buyer buys, and how much the buyer buys 3. *Brand and company relationship behavior* Product choices, brand choice, dealer choice, purchase timing, purchase amount we are concerned with choices

Image Differentiation (image)

Ex: *Coach* By *creating brand and image*, Coach has been able to *capture significant value from the consumer's wallet*. They created an image of a *high quality handbag for those who can't afford LV* Louis Vuitton service Starts at about $1000 -Ex: *Dunkin Donuts differentiate from Starbucks and other cheaper coffee*, a broad selection of *donuts*, and other items on the menu - *everyday/ everymans coffee* shop while people may only want to go to starbucks maybe once a week

Diffusion of Innovation (image)

Ex: *First quantum computers - very pricey* •*5K for a colored TB* •*Innovators- 2.5%* •*Early Adopters- 13.5%* •*Early majority (34%)* - becomes very *popular* among the people •*Late majority (34%)* - where the *price will be lowered and most people start to have it* during this time •*price of computer is now only $1K dollars* •*Laggards (16%)* - really *late people who buy*, now the *price is really low* national security agency involvement, •Ex: •*TiVo has been around for about 10 years, it is probably in the early or late majority stages* •*Cable television*, on the other hand, is now* appealing to laggards* •*Tesla* = *appealing to innovators and early adopters*

Pull Promotional Strategy •**EXAM: is general marketing a push or pull strategy? , know the difference**

Motivating customers to seek out your brand in an active process from retailers •*Advertising and Promotion can "Pull You"* to the shelf to purchase the product •** *DIFF: Product is marketed w/o human intervention in various ways* •*Demand is created* through marketing strategy •Pull Strategy ex: •If you want to buy *M&M's - you know where to buy it, you don't need a salesman to come and lecture* you about the product, demand is generated through marketing strategies without a whole lot of human intervention. •Selling *Lucky Charms cereal - Producers and retailers buy television time to advertise* directly to children on morning cartoon shows who will nag their parents to buy them the boxes of cereal. A Lucky Charms purchase decision ** *DIFF: does not require the same sophistication* as a locomotive purchase decision •*Mr. Clean*: Advertising and Promotion can "Pull You" to the shelf to purchase the product, No one will sit with you explaining why you should buy this, you just know •**EXAM: is general marketing a push or pull strategy? , know the difference**

Categories of New Products

New-to-the-World New Product Lines Product Line Additions Improvements or Revisions Repositioned Products Lower-Priced Products •*SOMETIMES New-to-the-world* •*More profitable prods* with the *same price* •*New prod lines* - Can be *improved as a new product* (New and improved toothpaste) •Additions •*Improvements* •*Repositioning - ex: J&J* •*Cost reductions* - as you gain experience and *figure out how to manufacture cheaply*

Market Positioning

The process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. -*Positioning - figure where it should be sold with best positions for product* Develop *positioning for target segments* Develop a *marketing mix for each segment*

Franchise organization

a *contractual vertical marketing system (VMS)* in which a *channel member( franchisor) links several stages in the production*-distribution process -*MANUFACTURER -sponsored RETAILER franchise system (automobile industry)* *Ford* and its independent franchised dealers - ford *makes the cars and sells products through franchise distributors* -*MANUFACTURER sponsored WHOLESALER franchise system (soft-drink industry)* *Coca cola*'s licensed bottlers Coca cola *makes syrup and sells syrup into independent companies* -*SERVICE-firm-sponsored RETAILER franchise system (auto-rentals, fast food, hotels business)* *McDonald's, Avis, Holiday Inn* Mcdonalds - service

Customer Relationship Management (CRM)

a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups -*Building and maintaining lifelong and profitable customer relationships* -*Delight and satisfy customers* for long term relationships (Lifetime)

contractual distribution system

a distribution system in which *members are bound to cooperate* through contractual agreements -*Manufacturers and Retails* Sign *Contracts to Cooperate*

administered distribution system

a distribution system in which producers manage all of the marketing functions at the retail level •*Producers manage marketing functions* at the *retail level* •They *go to the stores b/c they know how prods sell* and they come and *stock the shelves*

The Internet: the great disrupter

•*1989- Over the last 15 years, lots of disruption* -*Brick and mortar* → *"Click and mortar" companies (BN)* Ex: *Macys* - a classic "brick and mortar company" is *being disrupted by the "Click Only" companies like Amazon*. Macys is desperately trying to become a *"Click-and-Mortar"* company that *does business through website and its "Brick and Mortar"* •*Bed bath and beyond struggles* •*Sears, JC Penney, Barnes and Nobles disrupted* —-> *by Amazon* and online companies and led to kindles, e-books, and audio books •*News / business catalogs* have *collapsed* •*Companies like Facebook, Twitter, and Linkedin* are *online* only •*B2B e-commerce* •*Rapid growth* in b2b transactions online •Social network - *c2c*, *p2p ( eBay and Facebook, Linkedin and Twitter )* •The size of the effects of these changes are still happening

Retail Store Distribution

•*Distribution network* will *sell it to stores* •Many *manufacturers will sell prods to distribution member* and then *they will sell it to a store* (*Amazon made 100K units shipped*) •*Amazon prods will be in distribution warehouse* •*Intensive* - ex: *Walmart or Amazon- focuses on goods to stores* •*Selective* - ex: *dept stores*, *JCP*, dept stores *use distribution members* •*Exclusive* - ex: *Nordstrom*, they have a *limited number of distribution centers* •many *manufacturers will sell prods to distribution member* and then *they will sell it to a store* (Amazon made 100K units shipped)

Market Segmentation (for test understand which goes for demographic, geographic, etc)

•*Geographic* •*Demographic* ex: *18-49, sell to a Jewish company, Vegemite*, mayo •*Psychographic* ex: *things sold for women - pink vs men* - blue •things sold to men and women are advertising •*Behavioral* -*Smoking cigarettes, marijuana* - online because it will be more legal and many people enjoy it people who tend to smoke cigarettes and people who are smoking (become legal in more places, and they'll target whoever wants to buy

The Internet and Pricing Effects

•*Internet gives us access* to *lots of info* we can work with •Lots of *price discrepancies* •*Companies want to extract as much a consumer* wants •*Buyers can:* •Get more *access instant price comparisons* from vendors •*Name their price and have it met* (Best Buy have you compared prices to Amazon's while shopping?) •*Sellers can:* •*Monitor customer behavior* and tailor offers to individuals. •Giver *certain customers access to special prices* (have you received discount coupons online from your favorite stores?) •Ex: Best buy - works with the companies and sells a different model and so when customers come in, *Best Buy will have the better deal*. - Best Buy *matches online prices* so that when a consumer wants to buy they can satisfy their needs •Ex: *Formula 401 - kitchen cleaner*. They had *another competitor so they did a 2 for 1 and sold it for 50% of the price of 1*. They exacerbated the other competitor and *picked up market share.* •Net growth of competitor didn't sell as much as they thought

Corporate Distribution System

•*Manufacturer owns Retail Distributors* •*Sherwin Williams - owns their own stores*, They *don't sell prods except for in their stores* •(McDonalds franchises sell McDonalds prods and others)

New Product Pricing Strategies

•*Market skimming* - *few units for high price*, *limited comp*, *cheating the system*, *new prods* have *high prices* •Set a *high price for a new product to "skim" revenues* layer by layer from the market. •*Fewer, but more profitable sales*. •Ex: *Birkin Bags are Hermes way of skimming the market*. Artificially *reducing bag supply and creating demand from a certain niche of women* allows them to sell these bags at over $10,000 each. They *cultivated an image of quality/luxury* •*Market penetration* - have an *initial low price to build sales* but then *later on raise prices*, *pricing prods low to attract more buyers*, *stop competition* •Set a *low initial price in order to "penetrate" the market* quickly and deeply. •Can *attract large number of buyers* quickly and *win a large market share*. •Ex: *Tech companies do this* •*Cable company* - gives you *50 dollars a month for a year* and gives you services , then *later raises the price sharply to 85* •Prior to 2008, *people would buy homes at 1 1/2 percent a year and mortgage companies were making a lot of loans* greatly contributed to the financial crisis. *Gave people who were unqualified the ability to take loans* •EDLP - like Burlington

Two-Way Product-Line Stretch Differentiated Strategy (image)

•*Price vs quality* •Mariott grew by *incr number of marriotts around*. They also explored the *demands for cheaper hotels* = fairfield marriott •All their hotels *range from diff services provided like breakfast, wifi* •Trying to *go after low middle and high end customers for profit* •They are trying to go to different categories - The concept of *stretching and filling* •*More services = more diff price points, differentiation* *Courtyard Mariott - avg price, gives you free breakfast* *Mariott Marquis- conference rooms for business meetings, superior, high price* *Fairfield Marriott- little service: free WiFi, free breakfast, low price*

Sales Force

•*Two-way personal communication btwn salespeople and customers* •*Salespeople try to establish a relationship* ex: *through lunch, interactive activity* •Salespeople *can probe customers to learn ab probs* •*Adjust marketing offers to fit needs* •*Negotiate* terms of sales •Build *long-term personal relationships* •Critical link between company and customers •*Rep company to customers* •*Rep customers to company* •Goal = *customer satisfaction / DELIGHTING CUSTOMER + EXCEEDING THEIR EXPECTATIONS*, *incr. Sale/profits* •Can often make *more money than CEO* •Make sure you *hire good salespeople* •-A good example is Krueger's investment manager career •Salesperson talks about *issues of the clients* might be bothered about (color selection of blouses) b/c it gets *reflected back on the company*

Marketing Channels/Systems **IMPORTANT slide on EXAM

•*Understand diff btwn conventional vs vertical marketing system*. •The *Vertical system* = *allows conventional system*, but has other alternatives, as well. *main members of a distribution channel PWRC*—producer, wholesaler, and retailer—*work together as a unified group in order to meet consumer needs* •A *wholesales is simply a distributor to the retailers*. Specialty *prods sold by manufacturers* to specialized distributors who have the know how and *resources to sell to retailers* •ex: *decorative fabrics for sofas - many mills around the world produce these prods* and *rely on distributors to get fabrics into distributors who can sell them to furniture manufacturers* home decorators, and the retail channels.

3M

•*dominates the market for scotch tape, post-it notes* •*Post its originally came in one size and were yellow* — branched out into new colors and sizes (*differentiation*) •They were developed because inventor wanted to stick something on refrigerator •*Emphasizes New Product Development*. 3M is a very innovative company always coming up with new ideas •*1/3 of their sales are from products that have been developed over the last five years!* •30% of all their products new

Brand

•A *name, term, sign, symbol or design, or a combination of them intended to identify the goods/services* of one seller or group of sellers and to *differentiate from competitors* •*Worth a lot of money* •*Creating strong demand is essential for consumer value*. Brands also add to the *intangible equity of a company* that is represented on the balance sheet of a company •As consumers we put a lot of *trust* in the brand name

New Direct Marketing Model

•As a *supplemental medium for some* firms •As the *only approach for some* firms (direct and digital marketing constitute a complete model for doing business) •As the *new marketing model of the next millennium*. •*Biscotti* doesn't go bad, easy to ship, good thing to sell around the holidays, *couldn't attract any business*, could only be online, was shut down

Positioning and Differentiation

•Effective positioning begins *with differentiating the company's marketing offer so that it gives consumers more value.* •At the end of the day, you are trying to *focus on the group that will provide the most value to your product* •Ex: *Johnson and Johnson* (image) •J&J *increased the sales of their baby products by modifying not 4Ps but by targeting the adult market* in pink bottles baby product (image) •Their *baby product was reused and redesigned to sell for women* even though it was the same product by putting it in pink bottles •They *positioned an existing product to get more women to buy this product* •Johnson and johnson had a good reputation so just by changing the design made j and j profitable

A New Advertising Challenge

•Ex: *DirecTV - over the air cable* •Read carefully the "copy" of this advertisement. *Each word is carefully crafted to have the max impact* to help *generate "call to action" resulting in sales*. These ads look simple, but they may *take hundreds of hours to craft* •Direct TV has *other competitions + three types of receivers* into their packages, Sun Rising image= "up in space" •*LONG marketing messages (1-2 pages long* = *better sales outcome* than ones with 1-2 paragraphs length •*Spending time crafting messages* for better outcomes •(We craft our own messages to promote ourselves)

Strategies for Obtaining New-Product Ideas

•In recent years, *drug companies have grown w/ acquisitions/licenses*. It's much more *expensive to develop new prods*. *Acquisition Pharmaceuticals require/need independent companies to get drugs*. They then distribute the drugs •*Patents - samsung goes to apple* and apple can *license some prods*, Samsung and Apple might buy off of eachother •*Kodak went bankrupt had a huge number of patents* and they put it to auction • *Acquisition of: Companies, Patents, Licenses* • *New Prods: Original Prods, Improvements, Modifications*

Idea Funnel

•Maybe you have *1000 ideas but only 5 make it out of the funnel* as being *reasonable and successful* •*EX: Pharmaceutical companies* have all sort of drug ideas and only a small percentage are used