Marketing Final

character hook

ad strategy hero, villain or victim to embody a key attribute of a brand Ronald McDonald

reading 5 overview - "if brands are build over years, why are they managed over quarters?"

allure of brands fading, so companies working with a ton of ST promotions - hurt brand's LT health, and stock up on deals and wait til next promo track purchasing trends, and if promotions are hurting, invest in ads, new prod, and new distributions for LT and ST sales boost

price

amt $ charged for g/s, sum of values that customers exchange for having/using g/s when currency for exchange changes hands need price to be above product costs/price floor (seller) and less or equal to CPV/price ceiling (buyer) use CPV,cost and comp while pricing TRUE PRICE IS NOT BASED ON COST

strategy 2 - willfully overprice to stimulate curiosity (reading 6)

apple computers always priced at a premium, burts bees, starbucks 50-80% premium thought-provoking effect of moderate overprices customers don't automatically dismiss higher priced model, but instead discover why it is higher-priced (added features?) higher willingness to pay than they initially intended

indirect marketing channel

contains 1+ intermediaries consumers are comfortable with buying from amazon or kroger create utility and efficiencies (see "mkg channel") producer view: more intermediaries, less control and more complexity

measuring media impact: Consumer Lifecycle approach

database drive, easier to measure determine cost to acquire, then estimate CLV with embedded ongoing marketing costs

social sphere - reading 8

help people forge new connections or enrich existing ones - interact with and relate to others turn social interactions into carriers of ad messaging - like in presents, at parties like always, right place, right time, right message relevant in context align with social goals address a social need /problem facilitates social interaction

measuring media impact: frequency

how many times the avg person in the target market is exposed to message

main point of reading 8: human experience

interaction and experience in advertisement - not interruption place ads in these spheres: public social tribal psychological

pricing with elasticity

lost opp: high price, elastic (BAD) alignment: avg price, elastic (avoid spiral into commodity) price is king: low price, elastic (price is why they bought, increased cust price sensitivity) gold rush: high price, inelastic one that got away: avg price, inelastic (missed opp) don't go here: low price, inelastic (BAD)

pop-up shops

new trend in retail stores that appear for a short time, then disappear usually seasonal

Personal Selling

personal presentation by firm's salesforce for purpose of making sales/building cust relationships cust feel like they have to listen, easy to build relationships hard to scale/be flexible (bc talking about people's jobs); most expensive tool relationship selling focuses on customer, their needs, confirms product fit - what we teach at kelley - helps customers be happy v transactional selling: focus is on sale, provides information, sells at this moment, more old school, customer may regret purchase

marketing logistics (physical distribution)

planning, implementing, and controlling the physical flow of g/s and information to meet customer requirements/desires involves entire supply chain mgmt (outbound dist(products --> customers), inbound dist (inputs --> factory), and reverse dist (recyclable material) logistics mgr: forecasting, IS, purchasing, prod planning, order processing, inventory, warehousing, transportation planning cost savings and comp adv

psychological pricing

price says something about the product too people perceive a good with a higher price to be higher quality - successful if customers not able to actually judge quality of a prod; offer more expensive models that don't sell well to make higher priced products more affordable

pricing formulas (price, markup, cost, MU as percent of price, MU as percent of cost)

price=MU+C MU=Price-C C=Price-MU MU(%price)=MU/Price MU(%cost)=MU/Cost

product mix pricing

product line optional product captive product product bundling

omni-channel retailing helps this cycle...

searching --> shopping --> sharing (which leads to new customers searching) or called pretail --> retail --> post-tail

competition based pricing

set prices based on comp strategies, prices, costs and market offerings customers base judgement of products value on prices that comp charges for a similar product give superior value for price range

cost-based pricing

set prices based on costs for producing, distributing and selling the product plus fair rate of return for effort/risk - price floor Walmart, SW cost-plus pricing (markup pricing) - add standard markup to cost of product simple but not super effective BE of target return pricing: determine price where firm BE or receives a certain return

placing ads in spheres - reading 8

takes customer-centric approach, vs media-centric 1 define objectives from consumers view point build awareness? drive loyalty? 2 target campaign to create value for consumers choose sphere(s) where advertiser and consumers interests interact 3 test, listen, adjust ads to improve consumer experience - dynamic testing 4 evaluate an expansion strategy - may withdraw advertising from one sphere or extend it into add'l sphere 5 constantly look for ways to refresh message - essential approach in public sphere change tagline, imaging etc

purpose of a price tag (reading 6)

terms of exchange signals quality AND shape the value to help customers better understand what they're being offered

elasticity

think in percentage: if E=-2, 1% decrease in price means 2% increase in sales (negative number (change in q/change in p) measure of sensitivity of demand to changes in price elastic: demand changes a lot with change in price lower price means more revenue avoid pricing that turns prod into commodities inelastic: demand hardly changes with change in price recently: increased consumer price sensitivity - more products turn into commodities unit elasticity: any change in price is matched by an equal change in quantity (E=1) relative elastic: number is more than 1 - Beef relative inelastic: number is less than one - gas (inelastic) perfect elasticity: either commodities (elastic) or necessities (inelastic)

Product category volume

total category $ sales of stores carrying our brand _______________________________________________________________________ total category $ sales of outlets available

customer value-based pricing

uses buyer's perceptions of value as key to pricing price is considered before design, considered along with all other marketing mix variables - price ceiling 1 assess customer needs and value perceptions 2 set target price to match cust perceived value 3 determine costs that can be incurred 4 design product to deliver desired value at target price good-value pricing (right combo of qual/service at fair price) - Walmart, kohls (high low - always on discount) value-added pricing (highlights differences and justifies higher prices)

superstore

very large store for cust total needs for routinely purchased items supercenters (supermarket+discount store) category killer (deep assortment in particular category Supertarget, Meijer (supercenters) BestBuy, PetSmart, Barnes & Nobles (category killer)

strategy 4 - equalize price points to crystallize personal relevance (reading 6)

when cust asked to choose among several options designed to appeal to dif tastes - all offerings should be priced the same, bc then compelled to discover which option best suits their needs like swatches, or all songs 99cents on itunes doesn't focus customers on lowering price as much as possible, focuses them on value

strategy 3 - partition prices to highlight overlooked benefits (reading 6)

"price partitioning": break price into its component charges - highlights differences that might otherwise go unnoticed present cost as a set of smaller, mandatory charges invites closer analysis (customer more likely to revise a routine consumption behavior) experiment where those who saw price partitioned on a flight cared more about the quality of it - people unlikely to factor a benefit into their choice unless an explicit charge is made for it but: customers might be annoyed by it - sometimes absurd fees, so make sure customers see real benefit

promotion mix

(marketing communications mix) communication! specific blend of promo tools used to communicated customer value/build customer relationships Advertising, PR, Sales promotion, personal selling

trends with AI/data in retail

Amazon Go stores: digital title flow In-store experience where you can virtually try on clothes Need to use tech to create an in-store experience for customers - also credit cards, rewards, order-ahead

distribution center

Designed to move goods large, highly automated warehouse designed to receive goods from various plants/suppliers, take orders, fill them, and deliver goods (order processing and creating assortments) vs warehouses: store goods for moderate to long periods (storing goods costs money)

market penetration pricing

NEW PROD pricing - set a low initial price to penetrate market quickly and deeply, attract a lot of buyers fast and win market share high sales volume means falling costs, and other companies have to cut prices further price sensitive market, and prod must get cheaper as sales volume increases, low price must keep out comp candy bars

market-skimming pricing (price skimming)

NEW PROD pricing - set high initial prices to skim revenues, layer by layer, from the market Apple: iphone starts super high then gets lower Tech usually this way Trends produce less at start - maybe more expensive prod cost make sure comp can't easily copy

IRP

Possible advertising objectives Inform: suggest new uses for product, customer value, describe avail services, correct false impressions Remind: maintain cust relationships, remind where to buy, imp during off-seasons, etc Persuade: building brand preference, encouraging brand switch, change perceptions, etc Building Relationships through customer value

sales promotion

ST incentives to encourage purchase or sale of prod/service variety of tools (coupons, rebates, discounts, displays) dramatize product offers quick, short-lived response

direct marketing channel

a marketing channel with no intermediary levels no quantity of intermediary levels, so length of channel is short can serve/understand customers better lower prices, more control (in price, service, delivery) ex) mary kay and amway sell goods directly to customers through sales parties or online

multi-channel distribution system

a single firm sets up 2+ mkg channels to reach 1+ customer segments use traditional retail, online retailers, and service providers: most companies use this ex) John deere sells its tractors to John Deere retailers, Lowes, and online. some of these have dif target customers. some directly to cust, some to business. all stems from JD (producer)

why firms are ST with brand management - reading 5

abundant ST data - scanner data makes sales promotion look super profitable, so mgrs push then small margins (also makes data more volatile to measure so often) (tracks price v sales) difficulty measuring LT marketing tactics - easier to measure instant spikes, even if other tactics have more positive LT effects (rev from first yr of ads doubles over subsequent two-yr period) wall street pressures: quarterly sales performance to value firms/advise clients, so mgrs rewarded for ST impacts

wholesaling

activities involved in selling goods/services to those buying resale or business use usually buy from producers and sell to retailers, industrial consumers, and other wholesalers add value through: selling/promoting assortment bulk breaking warehousing transportation (quicker - closer to buyers than producers) financing - give credit to customers risk bearing market info (to producers and customers) mgmt services/advice (for retailers)

consistent layout

ad strategy unique design look, and repeats these elements at each touch point (iPod ads with silhouetted dancers)

word hook

ad strategy repeatable catch phrase from ad to ad "15 minutes can save you 15% or more on car insurance"

repeatable theme

ad strategy situation that plays out again and again, calling out the need for a company's product Got Milk or Mayhem (allstate)

geographical pricing

adjust price based on location of customer, bc of higher cost of shipping can make cust pay for it (FOB origin) one price (uniform) zone it basing-point - pick a city to ship from freight-absorbtion - seller absorbs it

advertising budget (4 methods)

affordable method: set promotion budget at level you can afford (sm business) - ignores effect of promotion on sales so usually underspending percentage-of-sales method: set promotion budg at certain percentage of current of forecasted sales (or % of unit sales price) - simple but views sales as cause of promotion, not result - hard for LT planning competitive-parity method: set budget to match competitor's budget - reflects wisdom of the industry, and helps prevent promotion wars (in theory - no proof of either) objective and task method: most logical - set promotion budget based on what you want to accomplish with promo (define objectives, determine tasks for objectives, estimate those costs) - most difficult to use

discount store

carries standard merchandise sold at lower prices with lower margins and higher volume Walmart, Target, Kohls

price adjustments

change price bc of competition, liquidity, its the end of the season, broken assortments, change in macro-econ

how to measure LT health of brand - reading 5

changes in baseline sales (estimate for what product's sales would be at a constant, nondiscounted price) consumers' responses to regular prices and price promotions (price sensitivity/price premiums)

ad strategy def and 2 major elements

consists of: Message (creation) and Media (selection) plan by which company accomplishes its ad objectives also a LT document which extends and elaborates a brand's mkg strategy into area of ads use following four strategies to build brand and drive sales: word hook, character hook, repeatable theme, consistent layout

measuring media impact: CPM

cost per thousand viewers/users whatever in whatever unit you'd like

free customer (reading 7)

cust who pay litter or nothing and are subsidized by another set of customers this business model accounts for a majority of the revenues of 60 of the world's 100 largest companies "two-sided markets" must find true value of free customers for: optimal way to grow, valuation, and org design trad'l CLV doesn't help: benefits from indirect network effects or more buyers attracts more sellers, vice versa

disintermediation/reintermediation

cutting out of marketing channel intermediaries by product or service producers (disintermediation), or the displacement of trad'l sellers by radical new types of intermediaries (reintermediation) trending toward this - have to find innovative new channels - creative destruction if you don't keep up ex) travel agents replaced by sale directly to consumers, or by Expedia.com; venmo ex) record stores replaced by iTunes

retail convergence

different types of retailers now sell the same products at same prices to same consumers ex) can buy brand-name home appliances at dept stores, discount stores, off price retailers etc merging of consumers, products, prices, retailers - greater comp for retailers and greater difficulty in differentiating product assortments now can buy groceries at target, walmart, cvs, and soon menards

commoditization - reading 6

diminishing differences among offerings also a psych state: mind-set less receptive to innovation or mkg campaigns, and focus only on price fix by altering price (what they're focused on) in a surprising/challenging way

network effects of free customer (reading 7)

direct: buyer attracts more buyers or sellers attract more sellers - positive or negative (xbox live - more players, vs employment sites) indirect: buyers attract more sellers or sellers attract more buyers (auctions)

public sphere - reading 8

engage customers during moments of downtime - between activities or destinations online like on social media and stuff for when consumers are chillin, or in real life at bus stops etc 1 relevant in context (makes sense with moment ad is experienced) 2 help people reach personal objectives - integrate with some solution (on zipcars) 3 branded interventions - duracell helping hurricane relief with batteries 4 engaging/refreshing/compelling experiences - pop up stores/trucks, public restrooms, permanent stores

"how to stop customers from fixating on price" - reading 6

heavy comp --> more commoditization use price as a means for customer interest solutions: 1 use price structure to clarify your advantage 2 willfully overprice to stimulate curiosity 3 partition prices to highlight overlooked benefits 4 equalize price points to crystallize personal relevance

brokers and agents

independent intermediary that does not take title to merchandise it handles, and only performs a few functions generally specialize by prod line/cust type broker: brings buyers and sellers together, assists in negotiation agent: represent buyer/seller in more permanent basis manufacturer's agent: most common type of agent wholesaler

merchant wholesaler

independent intermediary that takes title to the merchandise it handles largest group of wholesalers generally specialize by product line/cust type full service: full set of services limited-service: fewer services to suppliers and customers (varied specialized functions)

IMC

integrated marketing communications blend promo tools (ad, PR, personal selling etc) to deliver a clear, consistent and compelling message ab org and its products marketers treat dif channels differently, which results in a muddled brand image

tribal sphere - reading 8

more focused social engagement - create consumer identification with groups addresses desires for self-expression/identity performs social signal or status marker form of affiliation empowers the individual oakley - stickers on cars, branded products - logo detached from product = ski bum, adventurous yelp - majority of reviews by elite squad who get to go to exclusive events and such starbucks - gold card member, barista badges luxury brands signal social status with logo and brand name

value delivery network

new term for supply chain+marketing channel larger than traditional supplychain +mkg channel bc considers and encompasses both - can be cheaper/more effective bc no disconnect made up of company, suppliers, distributors, customers who partner with each other to improve the performance of the entire system

pull strategy

producer directs marketing activities toward final consumers to induce them to buy the product Axe markets directly to young men, who then demands (pulls) the product through channels usually BtoC companies most of advertising

measuring media impact: awareness

qualitative measures: brand awareness, media engagement, consumer impressions, consumer expressions

measuring media impact: gross rating points

reach x frequency

internal reference pricing

related to psych pricing sometimes you know exactly how much something should be (gasoline), sometimes you don't (an oven) if you don't, more susceptible to price manipulation

push strategy

sales force and trade promotion push product through channels (stores like Kroger, or websites like Etsy) product then reaches final consumer through the channels usually BtoB companies

off-price retailer

sells merch bought at lower wholesale prices, sold at less than retail. factory outlets, independent ones, or warehouse/wholesale clubs with limited amt of goods at deep discounts and membership fees Couch outlet, TJ Maxx (ind), Costco (warehouse club)

marketing/distribution channel

set of interdependent organizations that help make a product/service available for use or consumption by consumer/bus user use these intermediaries bc they create efficiency in making goods avail to target markets through their contacts, scale of operation, experience and specialization also can take mass quantities produced (buy thousands of bars of soap) and allow you to purchase them in small quantities (buy 2 bars at Kroger)

selective distribution

type of distribution where you use more than one but fewer than all intermediaries willing to carry your products develop good working relationships, expect better-than-average selling effort ex) tvs, furniture and home appliance brands

intensive distribution

type of distribution where you want the product stocked in as many outlets as possible - available where and when consumers want them (lg number of channel members) ex) coca-cola, candy bars (CPG companies)

ACV

All commodity volume Total $ sales of stores carrying our brand _____________________________________________________________ total $ sales of outlets available

media types today

Traditional: TV Out of Home (billboards, buses) Radio Newspaper Magazines Digital: Video Out of Home (screens at subway stops, vid at gas pump) Music (spotify ads) Information News

dynamic pricing

adjust prices continually to meet characteristics/needs of indv customers and situations prevalent online especially huge for: stocks airlines hotels football tickets

retail

all activities involved in selling goods/services directly to final consumers for personal or nonbusiness use

press relations (PR)

creating and placing newsworthy information in the news media to attract attention to a person, product, service; lobbying, press relations, etc -bc of digital age, pr and advertising are blurring

factors affecting pricing

industry influencers: society, gov't elasticity demand economy

psychological sphere - reading 8

language, cognition, and emotion - inserts words, phrases or emotions to a consumers psyche to inspire action or feelings new ways to: articulate ideas engender habit formation guide reasoning elicit emotion "just do it" - habit "i'll google it" or "don't be evil" - guide cognition "I'll friend you" "life is good" - positivity "can you hear me now?"

optional product pricing

offering to sell optional or accessory products along with main product can buy car with leather, fabric, gps, bluetooth must decide what items to include in base price, which as option

advertising

paid form of nonpersonal presentation/promotion reach masses of geographically dispersed buyers at low cost; repeatable message can create LT image or ST sales impersonal, one way communication, can be costly

measuring media impact: reach

percentage of people in target market exposed to ad

creating value with previously-dark assets

previously dark assets: wifi, labor, video, internet --> not yet transformed to interact with customers through social media, real time etc walk in fitting room to virtually try on clothes - transformed

markup as a percent of cost price formula

price = cost + (CxMU%)

markup as a percent of selling price price formula

price = cost/1-MU%

strategy 1 - price structure to clarify advantage (reading 6)

price based on the unique value your product/service delivers ex) goodyear: price tires based on how many miles they should go - defines their quality key: vary price according to what's distinctive ab your offering, to take it out of head-to-head price comp argument that this is impossible in hyper-competitive markets where customers have expectations ab paying

product bundling

price bundling: sell 2+ products for single price (season tickets) offer a combo at a lower price verizon - internet, phone, tv

product line pricing

price jumps based on features setting price steps btw various products in a prod line based on cost differences, customer evaluations of features, and comp prices reviews of product costs; canibalization - one product steals business from other product

captive product pricing

set price for products that must be used with a main product - only work when used together wii games, razor blades low priced main product, high margin on repeat purchases

trends in retail

shortening life cycles - mature a lot faster wheel-of-retailing: start low margin, status, price, then evolve new form of retail: pop up stores

convenience store

sm store near residential areas, 24/7 or close, limited amt of high-turnover convenience products at slightly higher prices VP, 7-Eleven

hootsuite

social media management platform - integration

physical distribution

supply chain management supports value delivery network (max cust service and minimize distribution cost)

exclusive distribution

type of distribution where number of intermediaries are limited - give limited number of dealers the right to distribute its products stronger dealer selling support (sellers have information), enhances image (premiums) ex) rolex, bentley

department stores

type of retailer carries several prod lines (typically clothing, home, household goods) with separate departments managed by special buyers Macy's

supermarket

type of retailer lg, low-cost, low-margin, high volume, self-service operation to serve cust total needs for grocery/household products Kroger, Safeway

specialty stores

types of retailers store carries a narrow prod line with deep assortment, such as apparel stores, sporting-goods, furniture stores, florists, bookstores

product publicity (PR)

unpaid communication ab a product appearing in mass media (builds interest, creates awareness ab an event related to a product) managing the message ab products to make them newsworthy, and gain positive placement/attention focus on innovation and early adopters (blogs)

publicity (PR)

unpaid communication ab an org that appears in the mass media important when company's image is at risk due to product tampering or some other mishap can be positive or negative

PR

unpaid use of media - building good relationships with public through publicity, image, and handling of bad press very real, and can reach people who avoid sales/ads can be effective and economical - underused

supply chain/marketing channel

upstream and downstream partners upstream: providers of raw materials, expertise, info downstream: marketing or distribution channel (wholesalers/retailers/brokers - link btw firm and its customers) implies that you take a "make-and-sell" view of business, which is not what we want. need to consider consumer wants and demand

trends in financial sector

use AI/data for personalized services/data collection

google analytics

uses behavior analysis on websites most common way to measure web traffic can teach yourself, and there is a free version