BUS 312 Marketing UH Manoa
Blue ocean strategy
"jump in with everyone else, or jump right"; -create products & services for which there are no direct competitors; goal is to make competition irrelevant
How do channel members add value?
-Information, promotion, contact, matching, negotiation, physical distribution, financing, risk taking
What are major international marketing decisions
-Looking at the global marketing -environment -Deciding whether to go global -Deciding which markets to enter -Deciding how to enter the market -Deciding on the global marketing program -Deciding on the global marketing organization
What are examples of branded entertainment/content & advertainment
-Madison & vine: the intersection of Madison Ave. in NY and Hollywood- represents the merging of advertising & entertainment -That Dove ad where Dove hired an FBI-trained sketch artist
What are important marketing decisions for retailers?
-Segmentation targeting -differentiation -positioning Reason for relevancy?: -too many retailers fail to define their target markets and positions clearly -they try to have "something for everyone" and end up satisfying no market well. -Product variable decisions: product assortment, services mix, store atmosphere -Price decision: price policy must fit the target market & positioning, product & service assortment, competition & economic factors -Promotion decision: advertising, personal selling, sales promotion, public relations, direct marketing
Place/distribution - marketing distribution channels
-an individual firm's success depends not only on how well it performs but also on how well its entire marketing channel competes with competitor's channels
Corporate marketing ethics
-broad guidelines that everyone in the organization must follow that cover distributor relations, advertising standards, customer service, pricing, product development & general ethical standards
Value delivery network
-composed of the company, suppliers, distributors & customers who partner with each other to improve the performance of the entire system -composed of the company, suppliers, distributors & customers who partner with each other to improve the performance of the entire system: firms that supply raw materials, components, parts, info, finance & expertise needed to create a product/service
Reasons for new product failures
-creating a product with no benefit over existing alternatives -overestimating the size of the market -poor positioning strategy -poor implementation of the marketing mix (bad product quality, pricing too high/low, ineffective advertising) -bad product quality
What is the concept of "moment of truth" why is it relevant for retailers to understand
-critical 3-7 seconds that a shopper considers a product on a store shelf. -influencing consumer's buying decisions as they shop involves efforts aimed at online research and in-store, online, and mobile shopping
Competitive advantage
-design marketing offers that deliver more value than the offers of competitors seeking to win the same customers
Downstream partners
-include the marketing channels/distribution channels that look toward the customer, including retailers & wholesalers
Integrated marketing communication (IMC)
-involves carefully integrating and coordinating the company's many communication channels to deliver a clear, consistent and compelling message about the org. and its products -ties together all of the company's messages/images -EX: television and print ads have same brand message as its email and personal selling communications, and its PR materials are consistent with website, online, social media and mobile marketing content
Price Ceiling
-no demand above this price
Price floor
-no profits below this price
Global firm
-operates in more than one country; gains marketing, production, R&D & financial advantages not available to purely domestic competitors; sees the world as one market
What are major considerations when setting a price
-product costs -competition and other external factors -consumer perceptions of value
Advantage of vertical marketing system
-provide channel leadership and consist of producers, wholesalers and retailers acting as a unified system.
Multichannel distribution system
-systems in which a single firm sets up two or more marketing channels to reach one or more customer segments
Price-demand -relationship
-the demand curve shows the number of units the market will buy in a given period at difference prices; higher price = lower demand
Supply chain
1 raw materials 2 supplier 3 manufacturing 4. distribution 5. customer 6. consumer -Make & sell view includes the firm's raw materials, productive inputs & factory capacity
Major stages of new product development
1. Idea generation 2. Idea screening 3. Concept development and testing 4. Marketing strategy development 5. Business analysis 6. Product developments 7. Test marketing 8. Commercialization
Steps in developing effective marketing messages
1. Identify the target audience a. What will be said, how will it be said, when it will be said, where it will be said, who will say it 2. Determine the communication objectives a. Awareness > knowledge > liking > preference > conviction > purchase 3. Design the message a. Message content is "what to say" b. Message structure & format is "how to say it" 4. Choose the media to send the message a. Opinion leaders: people whose opinions are sought by others b. Buzz marketing: involves cultivating opinion leaders & getting them to spread information about a product/service to others in their communities c. Nonpersonal communication: media that carry messages without personal contact/feedback, including major media, atmospheres & events 5. Select message source & collect feedback a. Celebrities: athletes, entertainers b. Professionals: health care providers c. Collecting feedback: the communicator understanding the effect on the target audience by measuring behavior resulting from the content
Additional readings required
3M, Google reveals its principles of innovativeness, requirements of truly innovative companies
Innovation
A product that customers perceive to be new and different from existing products.
What are advantages/disadvantages of social media marketing
Advantages: •Targeted, personal •Allow to create/share tailored brand content •Interactive, immediate, timely (Real Time Marketing) •Can be very cost effective •Engagement & social sharing capabilities Disadvantages: •Aggressive •Sometimes shady tactics can bother and harm consumers
How can brands be positioned?
Attributes(weakest) -least desirable, bc competitors can easily copy attributes Benefits(average) -association w/ a desirable benefit EX: nivea "protect and refresh" Beliefs and Values(strongest) -engage customers on a deep, emotional level; customers have a strong emotional connection w/ them and love them unconditionally.
What are 4 choices of brand development?
Brand Extensions: -extends a current brand name to a new/modified products in a new category EX: (frozen) snicker ice cream bars, from snickers Line Extension: -occurs when a company extends existing brand names to new forms, colors, size, ingredients, etc EX: coke, diet coke, coca cola cherr, coke zero etc. Multibrands: -companies often market many different brands in a given product category. Each brand includes a long list of sub-brands EX: Procter and Gamble (tide, pampers, gillette, etc.) New Brands: - a company might believe that the power of its existing brand name is waning, so a new brand is needed/it may create a new brand name when it enters anew product category, for which none of its current brand names are appropriate.
Concept of Brand Equity
Brand equity -brand awareness -perceived quality -brand association -brand loyalty Brand Equity: a brand's value to its organization over and above the value of the generic version of the product
What are BRIC countries
Britain, Russia, India, China
What are benefits for the seller and buyer when using direct/digital marketing
Buyer: •Convenient, easy, private •Anywhere, anytime access to unlimited product/buying information •Access to comparative information about companies, products, and competitors •Interactive and immediate Seller: •Tool to build customer relationships •Low-cost, efficient, fast alternative to reach markets •Flexible •Access to buyers not reachable through other channels
What are close & distant competitors (strategic units)
Close competitors: those that resemble them most Distant competitors: do not resemble
Competitor analysis - what are steps in the analysis process
Competitor analysis: process of identifying, assessing, & selecting key competitors Steps: 1. Identifying the company's competitors 2. Assessing competitors' objectives, strategies, strengths & weakness & reaction patterns 3. Selecting which competitors to attack/avoid
Types of Innovations
Continuous innovations: ***a modification to an existing product -most common form of innovation -EX: brand extensions, line extensions -Knockoff copy (with a slight modification) the design of an original copy Dynamically continuous: pronounced modification to an existing product; requires a modest amount of learning/behavior change Discontinuous: ***a totally new product -creates major changes in the way we live -consumers must engage in a great deal of new learning -EX: microwave opens vs. traditional ovens, iphones, internet, etc.
Major Pricing Strategies
Customer value-based: uses the buyers' perceptions of value rather the seller's marketing mix variables before the marketing program is set Good value pricing: offering just the right combination of quality and good service at a fair price (everyday low pricing) Value added pricing: attaches value-added features and services to differentiate the companies offers and thus the higher their prices. Cost-based: sets prices based on the costs for producing, distributing and selling the product + a fair rate of return for effort and risk Cost-plus pricing: adds a standard markup to the cost of the product Break-even pricing: setting price to break even on costs/to make a target return Competition-based: setting prices based on competitor's strategies, costs, prices, and market offerings
What is the tool: sales promotion (give examples, describe, what is its advantage/ nature)
Definition: refers to the short-lived incentives to encourage purchases or sales of a product or service now Objectives: consumer promotions, trade promotion, business promotions, sales force promotions EX: samples, coupons, rebates, price packs, premium,s advertising specialities, point-of-purchase promotions, contests, sweepstakes and games, conventions and trade shows, sales contests Advantages: luring new customers with price, gaining community favor, encourage repeat purchases, entice reluctant consumers, providing information
Number of channel levels/difference between direct/indirect
Direct: a company sells directly to consumers; EX: geico and amway Indirect: company uses one or more levels of intermediaries to help bring its products to final buyers; EX: toothpastes, cameras, cars
Types of cost
Fixed costs + variable costs = total costs Fixed: don't vary with production sales level (rent interest, insurance executive salaries, internet) Variable: vary directly with the level of production (raw materials, packaging) Break even analysis: determines the number of units a firm must produce/sell at a given price to cover costs Break even point: total revenue = total cost
Forms of traditional direct & digital marketing
Forms of traditional direct marketing: •Online marketing (web sites, online advertising, e-mail, online videos, blogs) •Social media marketing •Mobile marketing Forms of digital marketing: •Face-to-face selling •Direct-mail marketing •Catalog marketing •Telemarketing •Direct-response TV marketing •Kiosk marketing
Sources for new product ideas (internal and external)
Internal sources -Marketing managers -Researchers -Sales personnel -Engineers -Organizational personnel -Brainstorming incentives External sources: -Direct observation of competitors products -Evaluations of their product features -Grapevine of suppliers Crowdsourcing: inviting broad communities of people -customers, employees, independent scientists and researchers, and event the public at large- into the new product innovation process EX: Dell innovation challenge, OpenIdea, 99Designs, Heineken innovators brewhouse, My starbucks idea, GE ecomagination
Sources for new product ideas
Internal sources -Marketing managers -Researchers Sales personnel -Engineers -Organizational personnel -Brainstorming incentives External sources: -Direct observation of competitors products -Evaluations of their product features -Grapevine of suppliers
Product life cycle stages
Introduction: slow sales and nonexistent profits -strategies: offer a basic product, cost-plus pricing, building selective distribution -objectives: build product awareness among early adopters and dealers Growth: rapid market acceptance and increasing profits -strategies: offer product extensions, service and warranty, price to penetrate market, build intensive distribution. -objectives: build engagement and interest in the mass market Maturity: slow sales growth and profits level off/decline -strategies: diversify brand and models, price to match/beat competitors, build more intensive distribution -objectives: stress brand differences and benefits Decline: sales fall off and profits drop -strategies: phase out weak items, cut price, selective distribution -objectives: reduce to level needed to retain hard-core loyals
Sales Force Management
Is the analysis, planning, implementation, and control of sales force activities Designing sales force strategy and structure---> Recruiting and selecting salespeople---> Training salespeople---> Compensating salespeople---> Supervising salespeople---> Evaluating salespeople-->
Know the new product pricing strategies: skimming and penetration, what is their difference, give examples
Market-skimming pricing: sets high initial prices to "skim" revenue layers from the market; EX: initial price of iphone= $599, 6 months later -- dropped price to $399, now you can get 8-GB model for free with a phone contract. -in this way, Apple has skimmed the max amount of revenue from the various segments of the market Market Penetration Pricing: involves setting a low price for a new product in order to attrac a large number of buyers and a large market share EX: Samsung in African markets: used low initial prices to make quick & deep inroads into emerging mobile device markets
What are major advertising decisions
Objective setting-communication objectives, Sales objectives-----> Budget decisions-Affordable approach, Percent of sales, Competitive parity, Objective and task------> Message decisions-Message strategy, Message execution----------Media decisions- Impact and engagement, Major media types, Specific media vehicles, Media Timing-------> Advertising evaluation- Communication impact, Sales and Profit, Return on advertising Advertising objectives have a primary purpose, either to remind, inform, or persuade Definition: a specific communication task to be accomplished with a specific target audience during a specific time
Promotion mix & tools
P Mix: specific blend of promotional tools that the company uses to persuasively communicate customer value and build customer relationships Advertising: any paid form of nonpersonal presentation and promotion of ideas, goods/services by an identified sponsor •broadcast, print, online, mobile, outdoor • Nature: can each huge audiences of geographically dispersed buyers at a low cost per exposure and it enables the seller to repeat a message many times Sales promotion: short-term incentive to encourage the purchase and sale of a product/service -discounts, coupons, displays, demos, -can be used to dramatize product offers and boost sagging sales; invites and rewards quick response; often not as effective as advertising/personal selling Personal selling: interactions by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships •sales presentations, trade shows, incentive programs •Nature: most expensive tool; allows all kinds of customer relationships to spring up; has unique qualities Public relations: involves building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, & handling/heading off unfavorable rumors, stories & events • Press releases, sponsorships, events • Nature: allows to get the message to buyers as "news & events" rather than as a sales-directed communication; can be very effective/economical Direct & digital marketing: involves engaging directly with carefully targeted individual consumers & customer communities to both obtain an immediate response & build lasting customer relationships • Direct mail, catalogs, online & social media, mobile marketing • Nature: more targeted & interactive; allows for customer engagement & building one-to-one customer relationships
Steps in building strong brands
POSITIONING: marketers need to position their brands clearly, and target their customer's minds BRAND NAME SELECTION: benefits/qualities, easy to pronounce, recognize, extendable, BRAND SPONSOR: manufacturer's brand, private brand, licensed brand, co-brand BRAND DEVELOPMENT:
What is important when selecting a brand name?
Positive meaning, memorable, easy to say/spell, good fit with product, target and culture.
What is price and how is it different than the other 3 P's?
Price: the assignment of value/amount the consumer must exchange to receive the offering Includes money, goods, services, favors, votes/anything else that has value to the other party The only element in the marketing mix that creates revenues! All the other P's create costs.
MVP -minimum viable product -why is it relevant, what are the advantages of making use of it, what is its purpose
Purpose: -be able to test product hypothesis with minimal resources -accelerate learning -reduce wasted engineering hours -get the product to early customers as soon as possible -base for other products -to establish a builders abilities in crafting the product required. Definition: -developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
When it comes to selection of advertising media, what are the major considerations (reach, frequency, impact, engagement; choosing among media types, select media vehicles, choose media timing)
Reach: a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time Frequency: a measure of how many times the average person in the target market is exposed to the message Impact: the qualitative value of a message exposure through a given medium Engagement: a measure of things such as rating, readership, listenership, and click-through rates Choosing among major media types-- Narrowcasting: focuses the message on selected segments •Lowers cost •Targets more effectively EX: television, magazines, online and mobile vehicles Selecting specific media vehicles-- •Involves decisions presenting the message effectively and efficiently to the target customer and must consider the message's impact, effectiveness, and cost Choosing media timing-- The planner must consider: •Seasonality •Pattern of the advertisement -Continuity: scheduling evenly within a given period -Pulsing: scheduling unevenly within a given period
Retailing vs. wholesaling, difference, def, and examples
Retailing: includes all activities in selling goods or services directly to final customers for their personal, nonbusiness use Wholesaling: includes all activities involved in selling goods and serices to those buying for resale or business use. EX: buying bulks of items from Costco
Public relations - what are main tools used & what is its role & impact
Role and Impact: •Lower cost than(of?) advertising •Stronger impact on public awareness than advertising •Has power to engage consumers and make them part of the brand story Major public relations tools: News | speeches | spec.events Writ. mat. | corp. id. mat. | public spec. activities Buzz market | soc. network. | internet
Different type of retailers
Specialty store: carries narrowed down products with deep assortment within those lines EX: sunglass hut Department store: carry a wide variety of product lines EX: Neiman Marcus, Nordstroms Convenience store: small stores that carry a limited line of higher-turnover convenience goods EX: 711 Superstore: much larger than regular supermarkets EX: target Category killer: Bed, bath and beyond
Marketing Logisitics
Suppliers -->(IB) Company-->(IB) Resellers-->(OB) Customers(OB) ^^^Reverse Logisitics
Marketing channel (distribution channel)
a set of interdependent organizations that help make a product/service available for use/consumption by the consumer/business user
What are different stages of buyer-readiness?
awareness ->knowledge-> liking->preference-> conviction->purchase -it is relevant because knowing at which stage the good or service is at, helps determine which promotional message or medium is most suitable for a marketing campaign
Sustainable marketing
calls for socially & environmentally responsible actions that meet the present needs of consumers & businesses while also preserving/enhancing the ability of future generations to meet their needs
Brand
name, term, sign, design, combination of these, that identifies the maker/seller of a product/service
Different methods of setting promotional budget
o Affordable: sets the promotion budget at the level management thinks the company can afford o %-of-sales: sets the promotion budget at a certain % of current/forecasted sales/as a % of the unit sales price o Competitive-parity: sets the promotion budget to match the competitors' outlays o Objective-and-task: develops the promotion budget by specific promotion objectives & the costs of tasks needed to achieve these objectives
What are principles of sustainable marketing
o Consumer-oriented marketing: view marketing activities from the consumer's POV; deliver superior value o Customer-value marketing: invest in customer-value-building marketing; create value FOR customers o Innovative marketing: company seeks real product & marketing improvements o Sense-of-mission marketing: define mission in broad social terms rather than narrow product terms o Societal marketing: a company should make marketing decisions by considering consumers' wants, the company's requirements, and society's long-term interests.
2 major movements: environmentalism & consumerisms (describe)
o Consumerism: organized movement of citizens & government agencies to improve the rights & power of buyers in relation to sellers o Environmentalism: organized movement of concerned citizens, businesses & gov't agencies to protect & improve people's living environment; involves earning profits while helping to save the planet
Know the price adjustment strategies
o Discount: reduces prices to reward customer responses such as making volume purchases, paying early, or promoting the product o Segment: selling a product/service at 2 or more prices, where the difference in prices is not based on differences in costs, companies will often adjust their basic prices to allow for differences in customers, products & locations o Psychological: the price is used to say something about the product, consumers usually perceive higher-priced products as having higher quality o Promotional: temporarily pricing products below the list price & sometimes even below cost to increase short-run sales o Geographic: used for customers in different parts of the country/world o International: sets prices in a specific country based on many factors o Dynamic: involves adjusting prices continually to meet the characteristics & needs of individual customers & situations
Strategies to enter new markets: exporting, joint venturing, direct investment (difference)
o Exporting: when the company produces its goods in the home country & sells them in a foreign market; simplest means involving the least change in the company's product lines, organization, investments/mission -Indirect & direct exporting o Joint venturing: when a firm joins with foreign companies to produce/market products/services -Licensing: when a firm enters into an agreement with a licensee in a foreign market; for a fee/royalty, the licensee buys the right to use the company's process, trademark, patent, trade secret/other item of value -Contract manufacturing, management contracting, joint ownership o Direct investment: development of foreign-based assembly/manufacturing facilities; offers a number of advantages: -Labor, logistics, control, gov't incentives, lower costs, raw materials
What are free trade zones/economic communities - give examples
o Free trade zones: economic communities; groups of nations organized to work toward common goals in the regulation of international trade EX:. EU, North American free trade agreement (NAFTA), Central American free trade association (CAFTA); Union of South American nations (UNASUR)
International trade system - what is the WTO, GANTT
o General agreement on tariffs & trade: established in 1947, modified in 1994; 61-yr old treaty; designed to promote world trade; reduces tariffs & other international trade barriers o World trade organization: replaced GATT in 1995 & now oversees the original GATT provisions; met in 8 rounds of negotiations to reassess trade barriers & establish new rules for international trade Enforces GATT rules, mediates disputes, imposes trade sanctions
What is the AIDA model when it comes to forming marketing messages
o Get Awareness o Hold Interest o Arouse Desire o Obtain Action (upside down triangle)
Why do companies involve marketing channels?
o Greater efficiency in making goods available to target markets o Intermediaries usually offer the firm more than it can achieve on its own
Social criticisms of marketing
o High prices o Deceptive practices o High-pressure selling o Shoddy, harmful/unsafe products o Planned obsolescence o Poor service to disadvantaged consumers
Industrial structure/income distribution - factors that reflect a market's attractiveness
o Industrial structure: the country's industrial structure shapes its product & service needs, income levels & employment levels o Income distribution: industrialized nations may have low-,medium-, & high-income households; in contrast, countries with subsistence economies consist mostly of household with very low family incomes
Competitive positions (market leaders, challengers, followers, nichers)
o Market leader: most industries contain an acknowledged market leader o Market challenger strategies: challenge the leader with an aggressive bid for more market share o Market follower strategies: not all runner-up companies want to challenge the market leader -Play along with competitors & not rock boat -Copy/improve on leader's products & programs with less investment -Bring distinctive advantages -Keep costs & prices low/quality & services high o Market nicher strategies: ideal market niche is big enough to be profitable with high growth potential & has little interest from competitors
3 value disciplines by Michael Treacy
o Operational excellence o Customer intimacy o Product leadership
4 basic strategies by Michael Porter
o Overall cost leadership: a company achieves the lowest production & distribution costs & allows it to lower its prices & gain market share o Differentiation: a company concentrates on creating a highly differentiated product line & marketing program so it comes across as an industry class leader o Focus: a company focuses its efforts on serving few market segments well rather than going after the whole market o Middle of the road
What are the steps in the personal selling process
o Pre-approach: compiling background information about prospective customers & planning the sales interview o Approach: contacting the prospect, learning even more about the prospect's needs, created a good impression & building rapport o Presentation: laying out the benefits & added value of a firm's product/service & its advantages over the competition o Handle objections: anticipating why a prospect is reluctant to make a commitment & responding with additional information/persuasive arguments o Close the sale: gaining the customer's commitment in the decision stage using a variety of approaches (last-objection close, assumptive/minor-points close, standing-room-only/buy-now close) o Follow-up: arranging for delivery, payment & purchase terms
Different mix pricing strategies & give examples
o Product line: management must determine the price steps to set between the various products in a line Ex. Kindle, kindle touch & kindle fire o Optional: optional/accessory products along with the main product, companies must decide which items to include in the base price & which to offer as options Ex. camera bag with camera, GPS with car o Bundle: combines several products at a reduced price, can promote the sales of products consumers might not otherwise buy, but the combined price must be low enough to get them to buy the bundle Ex. burger/fries/drink combo, tv service, phone & internet o By-product: company seeks a market to help offset the costs of disposing of them & help make the price of the main product more competitive EX: oil, chemicals, etc. that are made in order to create main product o Captive product: sets prices of products that must be used along with the main product, often priced low & set high markups on supplies EX: Ink cartridges are the captive product, and a printer is the core product.
Difference between push & pull strategy
o Push: the company "pushes" the product to resellers, which in turn "pushes" it to consumers o Pull: the company promotes directly to final consumers, creating a demand vacuum that "pulls" the product through the channel
What are different forms of appeal in a message content (rational, moral, emotional) give examples
o Rational appeal: relates to the audience's self-interest -Product's quality, economy, value o Emotional appeal: attempt to stir up positive/negative emotions to motivate a purchase -Love, joy, humor, fear, guilt Wha o Moral appeal: directed to an audience's sense of what is right & proper (often to support social causes) -Cleaner environment
Impact of marketing strategies on cultures
o Social critics contend that large American multinationals (McDonalds, Coca Cola, Starbucks, Google, etc) aren't just globalizing their brands, they are Americanizing the world's cultures
Decisions for the global marketing program (standardized vs adapted mix)
o Standardized marketing mix: involves selling the same products & using the same marketing approaches worldwide o Adapted marketing mix: involves adjusting the marketing mix elements in each target market, bearing more costs but hoping for a larger market share & ROI
Different sales force strategies (territorial, product, customer, complex)
o Territorial sales force structure: o Product sales force structure: o Customer sales force structure: o Complex sales for structure: ??????
Real time marketing examples
•2013 Super Bowl Power Outage: -Oreo reacted by creating a quick ad that said "You can still dunk in the dark" Iphone 6+ Bend Gate: -Kit-kat reacted by tweeting "We don't bend, we #break" Lego: -When Leonardo DiCaprio won his Oscar for The Revenant, Lego tweeted congratulating him with a photo of a Lego Leo holding an Oscar with the bear that mauled his character to the brink of death
What is consumer generated content?
•Consumers submit ad message ideas, videos, and other brand content •Incorporates the voice of the customer into brand messages •Generates greater customer engagement
Challenges of social media marketing
•Many companies still experimenting •Results hard to measure •Largely user controlled •Social media campaigns can backfire Public Policy Issues - Customer Privacy -The concern is that marketers may know too much about consumers and use this information to take unfair advantage
What is personal selling
•The interpersonal part of the promotional mix and can include: •Face-to-face communication •Telephone communication •Video or web conferencing
