Chapter 12: What to Know
What are TRADE SHOWS?
Usually organized by industry trade associations, trade shows give exhibitors a chance to display and promote their products to their distributors. They typically attract hundreds of exhibitors and thousands of attendees. Trade shows are especially common in rapidly changing industries such as toys and consumer electronics.
What is CANNABALIZATION?
When a producer offers a new product that takes sales away from its existing products
What is COBRANDING?
When established brands from different companies join forces to market the same product. - Starbucks and Spotify work together to create curated playlists to benefit both partners and customers in Starbucks cafes around the world. - Dairy Queen worked with Girl Scouts to offer the hugely popular limited-edition Thin Mint Blizzard.
What are SPONSORSHIPS?
A deep association between a marketer and a partner (usually a cultural or sporting event), which involves promotion of the sponsor in exchange for either payment or the provision of goods.
What is a POSITIONING STATEMENT?
A brief statement that articulates how the marketer would like the target market to envision a product relative to the competition.
What is the PRODUCT LINE?
A group of products that are closely related to each other, either in terms of how they work or the customers they serve. Sony, for example, carries a wide range of digital cameras and accessories, to meet the needs of as many different customers as possible.
What are BRAND EXTENSIONS?
A new product, in a new category, introduced under an existing brand name. The Bic brand, for instance, is quite elastic, stretching nicely to include diverse products such as pens, glue, cigarette lighters, and disposable razors. The Virgin brand demonstrates similar elasticity, covering more than 350 companies that range from airlines to cell phones, to soft drinks, to cars.
What is a BRAND?
A product's identity—including product name, symbol, design, reputation, and image—that sets it apart from other players in the same category.
What is CONTINUOUS INNOVATION?
A slight modification of an existing product. Examples include new sizes, flavors, shapes, packaging, and design. The goal of continuous innovation is to distinguish a product from the competition. The goal of a knockoff is simply to copy a competitor and offer a lower price.
What is BUZZ MARKETING?
A viral marketing technique that focuses on maximizing the word-of-mouth potential of a particular campaign or product, whether through conversations between consumers' family and friends or larger-scale discussions on social media platforms. By getting consumers talking about their products and services, companies that employ buzz hope to grow their brand awareness through traffic growth and increase online sales and profits.
What are the TRADITIONAL PROMOTIONAL TOOLS?
Advertising, sales promotion, public relations, and personal selling.
What is DISCONTINUOUS INNOVATION?
Brand-new ideas that radically change how people live. Examples include the first car, the first television, and the first computer. Affordable space tourism will also represent this. These dramatic innovations require extensive customer learning, which should guide the marketing process.
What are NATIONAL BRANDS?
Brands that the producer owns and markets. Many are well known and widely available, such as Oreo cookies, Dial soaps, and Nutella.
What are STORE BRANDS?
Brands that the retailer both produces and distributes (also called private-label brands) Deep discounters, such as Walmart and Costco, have had particular success with their private-label brands (e.g., Sam's Choice and Kirkland).
What is DYNAMICALLY DISCONTINUOUS INNOVATION?
Characterized by marked changes to existing products. Examples include cell phones, Blu-ray Discs, digital cameras, and driverless cars. These types of innovations require a moderate level of consumer learning in exchange for significant benefits.
What are REBATES?
Entice consumers with cash-back offers. This is a powerful tactic for higher-priced items, since rebates offer an appealing purchase motivator.
What are DISPLAYS?
Generate purchases in-store. Most experts agree that consumers make a hefty chunk of their purchase decisions as they shop, which means that displays can play a crucial role in sales success. Marketers of consumer products often give prefabricated display materials to grocery stores and mass merchandisers to encourage promotion.
What is PRODUCT CONSISTENCY?
How reliably a product delivers its promised level of quality. With a positive relationship between price and performance, consistent delivery can offer a competitive edge at almost any quality level. When most people consider the Accord, the Civic, and the CRV, all Honda-owned models, quality quickly comes to mind. And all three dominate their markets. But clearly, the quality levels (and price) are different for each. The Accord serves the upper, more conservative end of the market; the Civic tends to appeal to younger, hipper, more budget-minded consumers; the CRV tends to appeal to middle-of-the-road shoppers seeking a reliable, small SUV. In short, Honda succeeds at delivering product consistency at several markedly different quality levels.
What is QUALITY LEVEL?
How well a product performs its core functions. The right level of product performance is the level that meets the needs of your consumers, and those needs include price. Decisions about quality level must also consider the competition. The goal is to outperform the other players in your category while maintaining profitability.
What are PROMOTIONAL CHANNELS?
Include advertising, sales promotion, direct marketing, and personal selling. But more recently, a number of new tools have emerged. The combination of communication tools that you choose to promote your product is called your "promotional mix."
What are the EMERGING PROMOTIONAL TOOLS?
Internet advertising, social media, native advertising, product placement, advergaming, buzz marketing, sponsorships.
What is CONSULTIVE SELLING?
Involves shifting the focus from the products to the customers. On a day-to-day basis, the practice involves a deep understanding of customer needs. Through lots and lots of active listening, consultative salespeople offer practical solutions to customer problems—solutions that use their products.
What are PREMIUMS?
Items that consumers receive free of charge—or for a lower than normal cost—in return for making a purchase.
What is DEVELOPMENT?
Leads to detailed descriptions of each concept with specific product features. New product teams sometimes also make prototypes, or samples, that consumers can actually test. The results help fully refine the concept.
What is MISSIONARY SELLING?
Promoting goodwill for a company by providing information and assistance to customers.
What is CONSUMER PROMOTION?
Marketing activities designed to generate immediate consumer sales, using tools such as premiums, promotional products, samples, coupons, rebates, and displays.
What is SALES PROMOTION?
Marketing activities designed to stimulate immediate sales activity through specific short-term programs aimed at either consumers or distributors.
What is TRADE PROMOTION?
Marketing activities designed to stimulate wholesalers and retailers to push specific products more aggressively over the short term. Special deals and allowances are the most common form of trade promotion, especially for consumer products. The idea is that if you give your distributors a temporary price cut, they will pass the savings on to consumers via a short-term "special."
What is PROMOTION?
Marketing communication designed to influence consumer purchase decisions through information, persuasion, and reminders. Hires can prove their worth on the job before they become permanent. Marketers can directly control most promotional tools. From TV advertising to telephone sales, the marketer creates the message and communicates it directly to the target audience. But ironically, marketers cannot directly control the most powerful promotional tools: publicity, such as a comment on The View or a review in Consumer Reports, and word-of-mouth, such as a recommendation from a close friend or even a casual acquaintance. Marketers can only influence these areas through creative promotional strategies.
What are COUPONS?
Offer immediate price reductions to consumers. Instant coupons require even less effort, since they are attached to the package right there in the store. The goal is to entice consumers to try new products. But the downside is huge. Marketers who depend on coupons encourage consumers to focus on price rather than value, which makes it harder to differentiate brands and build loyalty.
What is ADVERTISING?
Paid, nonpersonal communication, designed to influence a target audience with regard to a product, service, organization, or idea. Television (network broadcasts and cable combined) remains the number-one advertising medium, with magazines and newspapers following.
Jess wants to open a pizza restaurant in his town. There are already three established pizza restaurants and two national pizza chains in town, but Jess believes that he can offer value to his customers through a highly curated menu using farm-to-table ingredients in a fine dining environment. This is distinct from the kind of pizza that the other restaurants offer. While customers will sometimes prefer a quick, cheap pizza, Jess' restaurant will cater toward those who are craving a higher-end pizza experience. Which concept is Jess attempting to leverage?
Product differentiation
What is a CONSUMER PRODUCT?
Products purchased for personal use or consumption.
What is a BUSINESS PRODUCT?
Products purchased to use either directly or indirectly in the production of other products.
What is a PURE SERVICE?
Products that do not include any goods. Examples include financial consulting or a piano lesson. Other products—such as a meal at Pizza Hut—fall somewhere between the poles.
What is a PURE GOOD?
Products that do not include any services.
What is LICENSING?
Purchasing the right to use another company's brand name or symbol. On a worldwide basis, the best-known licensing arrangements are probably character names, which range from Bart Simpson to SpongeBob and appear on everything from cereal to toys, to underwear. Many movie producers also do high-profile licensing, turning out truckloads of merchandise that features movie properties such as Batman and Frozen.
What are SAMPLES?
Reduce the risk of purchasing something new by allowing consumers to try a product before committing their cash. From 2009 to 2011, Muscle Milk hired hundreds of personal trainers to conduct promotions and distribute samples. Sampling also drives immediate purchases. At one time or another, most of us have probably bought food we didn't need after tasting a delicious morsel in the supermarket aisle. Costco and Trader Joe's do especially well with this angle on sampling.
What are LINE EXTENSIONS?
Similar products offered under the same brand name. Possibilities include new flavors, sizes, colors, ingredients, and forms. One example is Lay's potato chips, which offers more than 45 versions, including Barbecue, Baked, Flamin' Hot, Chile Limón, Dill Pickle, and Chedder Jalepeno.
What is IDEA GENERATION?
Some experts estimate that it takes 50 ideas for each new product that makes it to market, so you should definitely cast a wide net. Ideas can come from almost anywhere, including customer research, customer complaints, salespeople, engineers, suppliers, and competitors.
What is NATIVE ADVERTISING?
Specifically designed to mimic the user experience into which it is placed in terms of form and function. Specifically designed to mimic the user experience into which it is placed in terms of form and function. (Picture the "suggested posts" in your Facebook newsfeed that you as a user are much more likely to read and click on than a typical banner ad, or similarly, any of the first few options that come up on a typical Google search)
Chandra buys mostly organic food to prepare at home, but every now and then, she enjoys going to Taco Bell for a quick bite. She knows that Taco Bell is probably not using organic ingredients or taking much time to carefully prepare the food. In fact, the food usually looks "thrown together." Because this meets her expectation of Taco Bell, she is satisfied with her experiences there. What is meeting Chandra's expectations?
Taco Bell's quality level
What is TEAM SELLING?
Tends to be especially effective for large, complex accounts. The approach includes a group of specialists from key functional areas of the company—not just sales but also engineering, finance, customer service, and others. The goal is to uncover opportunities and respond to needs that would be beyond the capacity of a single salesperson. In these situations, a key part of the salesperson's role is to connect and coordinate the right network of contacts.
What is INTERNET ADVERTISING?
The highest growth areas include paid search advertising, search engine optimization, and online video advertising. Paid search advertising includes both sponsored links on Google that relate to the topic you've searched, and targeted Google text ads on a number of different websites.
What are PUBLIC RELATIONS?
The ongoing effort to create positive relationships with all of a firm's different "publics," including customers, employees, suppliers, the community, the general public, and the government. Launch a Hall of Fame, make a list, create a petition
What is BRAND EQUITY?
The overall value of a brand to an organization.
What is PRODUCT PLACEMENT?
The paid integration of branded products into movies and TV When Reese's Pieces played a highly visible role in Steven Spielberg's blockbuster film E.T. Reese's Pieces sales shot up 65%.
What is PERSONAL SELLING?
The person-to-person presentation of products to potential buyers.
What is IDEA SCREENING?
The purpose of this stage is to weed out ideas that don't fit with the company's objectives and ideas that would clearly be too expensive to develop. The Walt Disney Company, for instance, would certainly eliminate the idea of an XXX cable channel because it just doesn't fit their mission.
What is the PRODUCT MIX?
The total number of product lines and individual items sold by a single firm. Sony ranges from cameras to electronics, to phones, to music, to video game consoles, to entertainment (games, movies, music, etc.). Firms can add new product lines to reach new customers
What are PROMOTIONAL PRODUCTS?
They are essentially gifts to consumers of merchandise that advertises a brand name. Or pizza delivery places give away refrigerator magnets with their logo and phone number. Promotional products work best when the merchandise relates to the brand and it's so useful or fun that consumers will opt to keep it around.
What is COMMERCIALIZATION?
This stage entails introducing the product to the general market. Two key success factors are gaining distribution and launching promotions. But a product that tested well doesn't always mean instant success. The VW Beetle, for example, sold only 330 cars during its first year in the United States, but it later became a hit.
What is TESTING?
This stage involves the formal process of soliciting feedback from consumers by testing the product concept. Do they like the features? Are the benefits meaningful? What price makes sense? Some companies also test-market their products or sell them in a limited area to evaluate the consumer response.
What is ANALYSIS?
To estimate costs and forecast sales for each idea to get a sense of the potential profit and of how the product might fit within the company's resources. Each idea must meet rigorous standards to remain a contender.
The online videogame Fortnite has partnered with different brands, celebrities, and entertainment properties to add excitement across its game offerings. For example, users can change their avatar to a popular character from movies, like Kylo Ren from Star Wars, or even a musician like Marshmello. These crossovers are an example of _______________.
advergaming
Scenario 12.1. Ida works in product development at Merrill. One of her favorite new products is a running shoe made with a new synthetic fiber that promises 10x better "breathability." The fiber can be dyed almost any color, so her team has come up with five different designs using on-trend color palettes. The shoe also comes with a Bluetooth sensor that can connect to the wearer's smartphone. The sensor tracks speed, strike, and stride length. Refer to Scenario 12.1. When Ida presents the shoe to her leadership, she describes the colorful fiber and Bluetooth sensor as the ________________.
augmented product
Samia works for Georgia Pacific. She manages a portfolio of industrial paper products, like paper towels, toilet paper, and napkins. Her biggest clients are places like universities and large office buildings. Samia works on a portfolio of _________.
business products
Haitao works at General Mills on the Lucky Charms brand. She read research that suggested that shoppers respond positively to products that show up in unexpected places in stores. So, to help boost sales, she has designed a special display that will sit on the shelving at the end of the aisle, known as an "endcap." This kind of display is a kind of ________________.
consumer promotion
Helga is a programmer for an educational software company. She works on a project team that is responsible for updating the suite of products that her company sells to high schools. Each year, the company launches a newer version of each product that corrects any small errors found in the previous version and adds new features based on its customers' feedback. Helga is working on _______________.
continuous innovation
Scenario 12.1. Ida works in product development at Merrill. One of her favorite new products is a running shoe made with a new synthetic fiber that promises 10x better "breathability." The fiber can be dyed almost any color, so her team has come up with 5 different designs using on-trend color palettes. The shoe also comes with a Bluetooth sensor that can connect to the wearer's smartphone. The sensor tracks speed, strike, and stride length. Refer to Scenario 12.1. When Ida presents the shoe to her leadership, she talks about how the shoe satisfies the customers' need to protect their feet against the elements while running. This is the ________________.
core benefit
Hieu works in finance in Atlanta. He frequently uses the Uber app when he needs a ride home from work instead of using the lower-cost public transportation that's available. He prefers to use Uber because he is able to leave when he wants and can avoid large crowds. When he uses Uber, he knows he is guaranteed a seat, whereas on a bus or train, he may have to stand. Hieu is willing to pay more for transportation because he values the ________________ that Uber provides.
customer benefits
Apple's iPhone introduced a totally new way of thinking about communication and access to information. Before smartphones, people in need of a taxi would need to make a phone call; now they can access an application on their phones and schedule a ride without ever having to speak to a person. The same is true for ordering food and groceries. Apple's iPhone is a prime example of ______________.
discontinuous innovation
Rustam is part of the marketing and communications team at IBM. He works with colleagues in content development, media buying, social media and digital marketing, and external communications. The company's key messages should remain consistent despite the fact that members of the marketing team focus on different communication channels. Rustam is responsible for mapping out the key messaging plan for the year to help the team stay on track. Rustam is responsible for managing the company's ___________________.
integrated marketing communications
Scenario 12.2. Church & Dwight is an American home, health, pet, and personal care products manufacturer. The company is most well-known for its products like Arm & Hammer, Oxi Clean, and Orajel, though it also manufactures a host of industrial products. Refer to Scenario 12.2. Arm & Hammer, Oxi Clean, and Orajel are all examples of _______________.
national brands
Halyna works for a software company. She meets with potential customers to help them understand the benefits of using her company's software. Once they become customers, she continues to meet with them to ensure that they are happy with their new software and to see if they would be interested in any upgrades. Halyna is using ___________ to provide value for both her customers and her company.
personal selling
Lila works on the marketing team for Waddington, a small liberal arts college. She surveyed current students to see what other universities they had considered before deciding to attend Waddington. Her research showed that the two most important factors for students when deciding where to attend college were cost and class offerings. Lila used this information to create a map that showed how Wadding compared to the competition. She will use this information to create a(n) _____________, which articulates how prospective students should think about Waddington when they are evaluating them versus other universities.
positioning statement
When Crocs' unique line of work-oriented clog shoes were first introduced in the early 2000s, only the most adventurous dared wear them in public, which meant that sales were low. Soon, though, consumers of all ages were seeing the benefits of a low-cost, waterproof, comfortable shoe with a style that defied traditional fashion norms. Sales of Crocs skyrocketed in 2007, and soon, the company was so successful that it struggled to keep up with demand. As trends evolved, the demand for Crocs declined, and the company nearly filed for bankruptcy in 2008. The ___________ of Crocs was an extreme example of what happens with novel products.
product life cycle
Scenario 12.2. Church & Dwight is an American home, health, pet, and personal care products manufacturer. The company is most well-known for its products like Arm & Hammer, Oxi Clean, and Orajel, though it also manufactures a host of industrial products. Refer to Scenario 12.2. This is a description of Church & Dwight's _________.
product mix
The James Bond movies are known for featuring high-performance luxury vehicles, like Aston Martin, and for emphasizing the main character's love of martinis that are "shaken, not stirred." This is why viewers may have been confused to see James Bond driving a Ford and ordering a Heineken in Skyfall. Ford and Heineken paid for this ____________, which ensured that their brands were prominent in the film.
product placement
Ester works in marketing for a hardware store. Her manager has set a goal for the team to increase word-of-mouth recommendations by 10% in the next year. Ester knows that word-of-mouth marketing, a form of _________, is impossible to directly control, but she believes she can come up with some tactics that will encourage current shoppers to recommend their store to friends.
publicity
Deepak works for a fast-food company that has a robust social media presence. His manager asked him to create a social media campaign in response to a competitor's ad. This campaign was meant to help consumers understand how Deepak's company is superior to their competitors. Deepak's social media campaign is a(n) __________.
type of promotion
Saoirse runs a coffee roastery that serves small coffee shops in the Seattle area. She takes great pride in her process, which includes inspecting all of the beans before roasting and then personally taste testing every batch. She chooses beans from different farms in South America and Asia and creates special blends each month, focusing on the best-tasting batches. While Saoirse's customers may receive a different product each month, she promises to provide a high level of _________ that differentiates her products from the large commercial roasteries that focus on delivering the exact same product each time.
quality
Costco is a warehouse store where shoppers can find everyday essentials and a constantly rotating assortment of "treasures," like bulk packages of dog treats, patio furniture, or oversized Star Wars-themed pillows. One way that Costco induces shoppers to buy new items is to offer samples: shoppers can taste new foods, try on lotions, or play with phones and TVs before they buy them. This is known as __________, and it increases the odds that shoppers will eventually purchase that new item.
trialability
The BRAND NAME.
− Catchy, memorable name − Unique in the industry -Good alliteration, especially for long names