Marketing Midterm 2
Media Selection: Know advantages/disadvantages of:
Television A: communicates with sight, sound and motion; network television reaches 96.7 percent of households more than any other advertising option; many opportunities for out-of-home TV viewing at places such as bars, hotels, offices, airports, and college campuses o Reaches extremely large audience; uses picture, print, sound, and motion for effect; can target specific audiences D: cost; wasted coverage oHigh cost to prepare and run ads; short exposure time and perishable message; difficult to convey complex information Radio A: a segmented medium o Low cost; can target specific local audiences; ads can be placed quickly; can use sound, humor, and intimacy effectively D: limited use for products that must be seen o No visual element; short exposure time and perishable message; difficult to convey complex information. Newspapers A: excellent coverage of local markets; ads can be placed and changed quickly; ads can be saved; quick customer response; low cost D: ads compete for attention with other newspaper features; short life span; poor color Direct mail A: high selectivity of audience; can contain complex information and personalized messages; high-quality graphics D: high cost per contact; poor image (junk mail) Magazines A: great number of special-interest publications that appeal to narrowly defined segments; perceived to be more trustworthy, inspirational, and encouraging than other media o Can target specific audiences; high-quality color; long life of ad; ads can be clipped and saved; can convey complex information D: cost; infrequency o Long time needed to place ad; relatively high cost; competes for attention with other magazine features Outdoor advertising A: good reach and frequency o Low cost; local market focus; high visibility; opportunity for repeat exposures D: heavy travel times o Message must be short and simple; low selectivity of audience ; criticized as traffic hazard Interactive A: INTUITIVE One definite advantage of many forms of interactive media is that they make technology more intuitive to use. Many smartphones, for instance, are easy to use; users are often encouraged to experiment with their products rather than reading detailed instruction manuals for their proper use, the thinking being that users are able to sense how the product is used. Designers often create their interactive media products with intuitive use in mind. AUGMENTATION Another advantage of interactive media is the possible medical uses that it has as an augmentation for handicapped people. Computer chips implanted in a quadriplegic's body, for instance, have been able to take the movement signals sent by his brain and interpret those as directions for a cursor on a computer screen. This is one area where the interactivity of media could have huge positive impacts on many lives. D: INTRUSIVE One potential disadvantage of interactive media is that it can be intrusive. In some countries and cities, for instance, stores use computer-generated voices projected out in to the street to try to lure customers into the store, which some people classify as noise pollution and a nuisance.
Types of Buying Decision Behavior:
* Routinized response behavior This is a situation wherein consumers are typically purchasing low priced, frequently purchased items. It is also called routine response behavior. This is because it is usually a product that one buys over and over without giving it much thought. A marketers goal with routine problem solving is to reinforce the purchase habits of existing customers and change the habits of non-existing customers. * limited response solving In a limited problem solving situation, a consumer is familiar with the product class, the major brands in the product class, and knows the attributes and characteristics on which to evaluate the product. However, the customer may then be confronted with a brand with which he or she is unfamiliar. A marketer of the unknown brand must provide information to the consumer that will increase his or her comprehension and confidence in the brand. This could be in the form of comparison charts or information packets. * extended problem/complex solving In this scenario, consumers do not know the product class, the major brands, nor the product attributes on which to evaluate the product. The marketer must provide information to the consumer that will indicate what the important product class attributes are, the relative importance of those attributes, and the position your brand has on those attributes.
Consumer Decision Process:
* Step 1: Problem or Opportunity recognition Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision Perceiving a need * out-of-stock * new need or want * dissatisfied with old need/product * boredom with existing product * new financial wealth * Step 2: Search for Information Seeking value * internal search- scan your memory for previous experiences with products or brands * external search- needed when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and the cost of making the decision is low. The primary sources of external search: o Personal sources: such as relatives and friends whom the consumer trusts o Public sources: includes various product-rating organizations such as Consumer reports, government agencies, and TV "consumer programs" o Marketer-dominated sources: such as information from sellers including advertising, company websites, salespeople, and point-of-purchase displays in stores * motivation/involvement play into this decision * Step 3: Alternative Evaluation Assessing value Clarifies the problem for the consumer by: o Suggesting criteria to use for the purchase (1) o Yielding brand names that might meet the criteria (2) o Developing consumer value perceptions (3) *What are the criteria? evaluative criteria: represents both the objective attributes of a brand (such as display) and the subjective ones (such as prestige) you use to compare different products and brands ex: 200 dollars or less o excellent messaging capability (for a phone) * How do marketers get consumers to get their brands into the consumer's "evoked set"? Advertising, word of mouth etc. * Step 4: The Purchase Decision Buying value (1) from whom to buy (2) when to buy * Does it actually happen all of the time? What events might change the decision or cancel It altogether? Yes it does happen all the time Cost, time etc. * Step 5: The Purchase Act * Step 6: Postpurchase Evaluation Satisfied/ dissatisfied o Satisfied customers tell three people o Dissatisfied customers tell nine people
TYPES OF SEGMENTATION: define each one and cite examples
*Geographic Region, Statistical area, density o Ex: European Union, South America, etc.; U.S., Japan, India, etc. o Ex: Metropolitan and micropolitan statistical areas; Census tract; etc. o Ex: Urban; suburban; small town; rural separates a market into different geographical boundaries which can impact the marketing mix of product, price, promotion and channel to market. For instance, you may not sell many down comforters in Arizona, but the market in Michigan is pretty good. Ever been to Hawaii? The price of goods is substantially higher than the continental United States. And the way you promote and sell a product in southern California will be quite different from Vermont. *Demographic, age, gender, income separates a market by demographic indicators including gender, age, household type, education level and income. Simply put, the type of products we buy, how much we spend, and how we buy them are largely determined by demographic factors NAICS code, NAICS sector, Number of employees, Annual sales o Ex: 2 digit: sector; 3 digit: subsector; 4 digit: industry group; etc. o Ex: Agriculture, forestry (11); mining (21); utilities (22); etc. o Ex: 1-99; 100-499; 500-999; 1,000- 4,999; 5,000+ o Ex: under $1 million; $1 million- $9.9 Million; $10 million- $49.9 million; etc. *Psychographic separates a market by lifestyle as well as values and beliefs. There are large target markets which fit psychographic segmentation, such as outdoor recreation and fitness. Ex: Social grade: A Description of occupation: higher managerial, administrative or professional Example: Company director *behavioral such as occasion separates a market by shopping and buying behaviors. Are you an online shopper or do you prefer to handle products in the store? How often do you shop? Do you research a purchase carefully before making a decision, or do you tend to buy on impulse? All of these factors determine how consumers are segmented and marketed to. Groups individuals according to the occasions when they purchase, use or think of buying a product. Number of locations, Kind, Where used, Application, Purchase location, Who buys, Type of buy o Ex: 1-9; 10-49; 50-99; 100-499; 500-999; 1,000+ o Ex: Product; service o Ex: Installation; component; supplies; etc. o Ex: office; production; etc. o Ex: centralized; decentralized o Ex: Individual buyer; industrial buying group o Ex: New buy; modified rebuy; straight rebuy *benefit segmentation Benefit segmentation is dividing your market based upon the perceived value, benefit, or advantage consumers perceive that they receive from a product or service. You can segment the market based upon quality, performance, customer service, special features, or other benefits. Often, different grades of the same product are offered to different market segments. Many different businesses use this type of segmentation, including the auto, clothing, furniture, and consumer electronics industries. Ex: An Athletic Footwear Company People, who run an athletic footwear company can use this concept to segment their market into trail runners, professional runners, and recreational runners. Footwear for trail runners must be comfortable, less slippery, and must reduce the risk of injury. On the other hand, shoes of recreational runners must be comfortable, stylish, and inexpensive. Shoes for professional runners must be adequately cushioned, stable, flexible, and lightweight. * usage rate segmentation (high, medium, low) (frequency) Groups individuals according to the level of usage they make of the product, be it Heavy, Medium or Light usage. divides consumers according to how much they use a product. They are divided into groups of non-users and light, medium, and heavy product users, and companies often seek to target one heavy user rather than several light users. Ex: The Wine Market Council in the USA has applied usage rate as the primary variable to segment the US wine market this helps them to market their company in such a way to promote sales. pg 225 and 229 in book
Psychological Factor: Maslow's hierarchy of needs... (low to high)
*Physiological: food, water, shelter, oxygen *Safety: freedom from harm, financial security *social/belongingness: friendship, belonging, love *esteem (personal needs): status, respect, prestige *self-actualization: self-fulfillment
Requirements for Effective Segmentation
*measurable: purchasing power, profiles and size can be measured *accessible: must find a way to reach and serve the market segments *substantial: must identify segments sufficiently large to yield good profit potential *actionable: target a number of segments that match the firm's capabilities
Psychological Factor: attitudes: what are they? Marketers Job?
A "learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way Marketer's job is to change attitudes or reinforce existing ones.
Seasonality plays a part in scheduling:
1. continuous: advertise all year 2. pulsing: advertise continuously all year, but heavier at certain times of year (new cars in June; flowers on Mother's Day, Valentine's Day, Easter) 3. flighting: intermittent periods of advertising & non-advertising; example: Cadbury eggs only seen at Easter).
OBJECTIVES OF PROMOTION:
1. provide information to consumers & others 2. increase demand: define differences between primary & selective demand 3. differentiate a product 4. accentuate a product's value 5. stabilize sales
HOW TO DEVELOP AN OPTIMAL PROMOTIONAL MIX:
1. the nature of the market: who are the customers? Are they spread out or concentrated? 2. nature of the product: standardized or unique 3. stage in the product life cycle: determines which method of promotion is most effective 4. price: low-price/advertising dominates; high-price/personal selling, lots of brochures 5. finds available for promotion
OBJECTIVES of Advertising:
1. to achieve communications objectives including informing, persuading, & reminding potential customers of the product 2. to attempt to condition consumers to adopt favorable viewpoints toward a promotional message 3. to increase the likelihood that a consumer will buy a particular good 4. enhance consumer perceptions of a product leading to gains in loyalty, repeat purchases & protection against price wars 5. to support personal selling practices
Why has advertising gone global?
1.growth in the number of multinational companies & global brands 2.increased trade among nations 3.worldwide improvement in living standards 4.innovations in communications & transportation (World Wide WEB) advertising is the most cost-effective way to reach consumers & deliver information companies must do environmental scanning to see what is acceptable and what is not in other countries
80/20 rule
A concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers
Strategies for reaching target markets: differentiated marketing
A differentiated marketing strategy is when a company creates campaigns that appeal to at least two market segments or target groups. For example, a store can promote a sale that appeals to people in at least two cities or locations, or a company can market a product that appeals to women in at least two age groups.
Define sales promotion: Why is it used?
A short-term inducement of value offered to arouse interest in buying a good or service Sales promotion is used to stimulate sales
What is CROSS-PROMOTION?
Alternative term for cross merchandising. o Retail selling technique in which purchase of one item allows an automatic discount on a different but related product. Also called cross promotion. the cooperative marketing by two or more companies of one another's product
How to position...by: cultural symbol
An additional positioning strategy where in the cultural symbols are used to differentiate the brands. Examples would be Humara Bajaj, Tata Tea, Ronald McDonald. Each of these symbols has successfully differentiated the product it represents from competitors.
Personal Factor: Personality
An individual's personality also affects his buying behavior. Every individual has his/her own characteristic personality traits which reflect in his/her buying behavior. A fitness freak would always look for fitness equipment whereas a music lover would happily spend on musical instruments, CDs, concerts, musical shows etc.
ADVERTISING: define it
Any paid form of nonpersonal communication about an organization, good, service, or idea, by an identified sponsor.
What is it? Blogs, UGC, social networking sites, virtual social worlds, collaborative projects (Wikipedia), content communities, virtual game worlds
Blog: a contraction of "web log," is a web page that serves as a publicly accessible personal journal and online forum for an individual or organization. UGC: use generated content refers to the various forms of online media content that are publically available and created by end users. It covers all the ways people can use social media. It satisfies three basic criteria: o It is published either on a publically accessible website or on a social networking site, so it is not simply an e-mail. o It shows a significant degree or creative effort, so it is more than simply posting a newspaper article on a personal blog without editing or comments, o It is a consumer-generated by an individual outside of a professional organization, without a commercial market in mind. Social networking sites: Ex- Facebook, Twitter, LinkedIn, YouTube Virtual Social Worlds: a virtual world built on user creativity and collaboration, thus allowing the users to define their universe, rules and objectives, as well as to create digital objects and landscapes that surround them. VSWs are sometimes referred to as "metaverses" or "real virtual worlds," because of the freedom (e.g., to generate User-Created Content (UCC)) they provide. a computer-based online community environment that is designed and shared by individuals so that they can interact in a custom-built, simulated world. Users interact with each other in this simulated world using text-based, two-dimensional or three-dimensional graphical models called avatars. Collaborative projects (Wikipedia): Collaborative projects allow groups of people to work together to create online content. Content communities: allow users to share online multimedia materials. Popular content communities include YouTube, Flickr, and SlideShare. After registering for an account, individuals upload their materials, describe them, and make them publicly available. Virtual game worlds: A virtual world or massively multiplayer online world (MMOW) is a computer-based simulated environment populated by many users who can create a personal avatar, and simultaneously and independently explore the virtual world, participate in its activities and communicate with others.
Psychological Factor: Tri-partite model of an attitude: cognitive, emotional, conative (behavioral)
Cognitive: beliefs Affective/emotional: feelings or emotions that people have in relation to the attitude object Conative/behavioral: peoples' actions with respect to the attitude object oHow the attitude affects behavior Cognitive, affective, and behavioral responses to a stumulus are taken to suggest an overall attitude about some object.
Define the following examples of sales promotion & cite advantages/disadvantages of each
Coupons: sales promotions that usually offer a discounted price to the consumer, which encourages trial. Stimulate demand o Advantages: encourage retailer support o Disadvantages: consumers delay purchases Deals: short-term price reductions, commonly used to increase trial among potential customers or to retaliate against a competitor's actions. Advantages: reduce consumer risk Disadvantages: consumers delay purchases; reduce perceived product value Premiums: consists of merchandise offered free or at a significant savings over its retail price. Build goodwill o Advantages: consumers like free or reduced-price merchandise o Disadvantages: consumers buy for premium, not product Contests: where consumers apply their skill or analytical or creative thinking to try to win a price. Increase consumer purchases; build business inventory o Advantages: encourage consumer involvement with product o Disadvantages: require creative or analytical thinking Sweepstakes: sales promotions that require participants to submit some kind of entry but are purely games of chance requiring no analytical or creative effort by the consumer. Encourage present customers to buy more; minimize brand switching o Advantages: get customer to use product and store more often o Disadvantages: sales drop after sweepstakes Product Samples (Product Trial): offering the product free or at a greatly reduced price Encourage new product trial o Advantages: low risk for consumer o Disadvantages: high cost for company Loyalty Programs: used to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. Advantages: help create loyalty Disadvantages: high cost for company Point-of-Purchase Displays: take the form of advertising signs, which sometimes actually hold or display the product, and are often located in high-traffic areas near the cash register or the end of the aisle. Increase product trial; provide in-store support for other promotions o Advantages: provide good product visibility o Disadvantages: hard to get retailer to allocate high-traffic space Rebates: offers the return of money based on proof of purchase. Encourage customers to purchase; stop sales decline o Advantages: effective at stimulating demand o Disadvantages: easily copied; steal sales from future; reduce perceived product value Product Placements: involves the use of a brand-name product in a movie, television show, video game, or commercial for another product Introduce new products; demonstrate product use o Advantages: positive message in a noncommercial setting o Disadvantages: little control over presentation of product
What determines consumer behavior?
Cultural, social, personal and psychological factors
Cultural Factor: Culture, Subculture, Social Class
Culture: refers to the set of values, ideas, and attitudes that are learned and shared among the members of a group. Subculture: subgroups within the larger, or national, culture with unique values, ideas, and attitudes. Social Class: the relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior can be grouped.
Psychological Factor: motive or drive
Drive: a need that moves an individual to action.
How Does Social Media Produce Sales? (connect ads to webpage and/or Facebook)
Facebook could be an ad platform for another company such as zappos Zappos.com would have their own Facebook page The brand manager composes title, copy, and images or photos in a zappos ad. The web address is also specified to which its ad should link based on the brands social media marketing goals. To increase awareness and build up a fan base she would link the ad to the zappos website or the Facebook page Coupon codes and promotional offers could be linked to ad producing and encouraging new sales Facebook generates its sales revenue by selling ads that appear along the right-hand section throughout the Facebook pages
Social Networks: Facebook, Twitter, Linked In, YouTube: What are they? How are they different?
Facebook: a website where users create a personal profile, add other users as friends, and exchange comments, photos, videos, and "likes" with them. Twitter: a website that enables users to send and receive tweets, messages up to 140 characters long. Linked In: a business-oriented website that lets users post their professional profiles to connect to a network for businesspeople. YouTube: a video-sharing website in which users can upload, view, and comment on videos. They are different because linked in is meant solely for business, Facebook is personal, twitter is meant for thought and YouTube for videos.
Social Factor: family influence, norms, cycle
Family influence: result from three sources: consumer socialization, passage through the family life and decision making within the family or household o The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group Norms: something that is usual, typical, standard o Informal guideline about what is considered normal (what is correct or incorrect) social behavior in a particular group or social unit. Norms form the basis of collective expectations that members of a community have from each other, and play a key part in social control and social order by exerting a pressure on the individual to conform. In short, "The way we do things around here." o Formal rule or standard laid down by legal, religious, or social authority against which appropriateness (what is right or wrong) of an individual's behavior is judged. Cycle: Periodic, repetitive sequence of events in a process that plays out over time (such as a life cycle), or keeps on going indefinitely (such as a cash cycle). o Periodic, repetitive fluctuations from a constant average (mean) or trend line in a time series data observed over an extended period (typically more than one year). Cycles within a year are called seasonal patterns or variations. o Single execution of a complete set of operations in a process, from beginning to end.
Performance Measures of Social Media: Fans, share of voice, page views, visitors, interaction rate, click-through rate (CTR), fan source
Fans: the number of people who have opted in to a brand's messages through a social media platform at a given time Share of voice: the brand's share or percentage of all the online social media chatter related to, say, its product category or a topic. Page views: the number of times a Facebook page is loaded in a given time period Visitors: the total number of visitors to a Facebook page in a given time period; if someone visits three times in one day, she is counted three times. Interaction rate: the number of people who interact with a post ("like", make a comment, and so on) divided by the total number of people seeing the post. Click-through rate (CTR): percentage of recipients who have clicked on a link on the page to visit a specific site. Fan source: Where a social network following comes from- with fans coming from a friend being more valuable than those coming from an ad.
Personal Factor: Lifestyle (VALS 2)
Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way an individual stays in the society. It is really important for some people to wear branded clothes whereas some individuals are really not brand conscious. An individual staying in a posh locality needs to maintain his status and image. An individual's lifestyle is something to do with his style, attitude, perception, his social relations and immediate surroundings.
Psychological Factor: What are needs and motives?
Needs: is a consumer's desire for a product's or service's specific benefit, whether that be functional or emotional. the basic requirements and include food clothing and shelter. Without these humans cannot survive Motives: thought, urge, feeling, emotion and drive which make the buyer to react in the form of a decision. Motivation explains the behavior of the buyer why they are going to buy the goods.
What is a Target Market?
One or more specific groups of potential consumers toward which an organization directs its marketing program
Social Factor: aspirational groups, opinion leaders
Opinion leaders: individuals who exert direct or indirect social influence over others. Aspirational groups: a person wishes to be a member of or wishes to be identified with, such as a professional society.
Social influences *reference groups
People to whom an individual looks as a basis for self-appraisal or as a source of personal standards
Celebrity testimonials:
Primary advantage is improved product recognition in promotional environments; celebrities help cut through all the "clutter." Improve believability, recall, brand recognition; create positive attitudes. If celebrity is perceived as "credible," then endorsers work. If celebrity is involved in a scandal, could hurt your product (OJ Simpson w/ Hertz Rent-a-Cars) If celebrity is overexposed (endorsing too many products at the same time), credibility is reduced
How to position...by: Attributes
Product feature and/or benefit A product attribute is a specific feature or benefit of the product. Positioning in this way focuses on one or two of the product's best features/benefits, relative to the competitive offerings Associating a product with an attribute, a product feature or a consumer feature. Sometimes a product can be positioned in terms of two or more attributes simultaneously. The price/ quality attribute dimension is commonly used for positioning the products. A common approach is setting the brand apart from competitors on the basis of the specific characteristics or benefits offered. Sometimes a product may be positioned on more than one product benefit. Marketers attempt to identify salient attributes (those that are important to consumers and are the basis for making a purchase decision) o Consider the example of Ariel that offers a specific benefit of cleaning even the dirtiest of clothes because of the micro cleaning system in the product. o Colgate offers benefits of preventing cavity and fresh breath. o Promise, Balsara's toothpaste, could break Colgate's stronghold by being the first to claim that it contained clove, which differentiated it from the leader. o Nirma offered the benefit of low price over Hindustan Lever's Surf to become a success. o Maruti Suzuki offers benefits of maximum fuel efficiency and safety over its competitors. This strategy helped it to get 60% of the Indian automobile market.
PUSHING VS. PULLING STRATEGY: Define pushing vs. pulling
Push strategy: directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product. Pull strategy: directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product • Pulling relies mainly on advertising • Pushing relies more on personal selling (pushed through the channel) Most firms use both!!!
Define the following terms and explain how the model works:
Sender (source)- is a company or person who has information to convey during the communication process. Encoding- is the process of having the sender transform an idea into a set of symbols during the communication process. Message- consists of the information sent by a source to a receiver during the communication process. Media (Channel)- is the means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver during the communication process. Decoding- the process of having the receiver take a set of symbols, the message, and transform them back to an idea during the communication process. Receiver- consumers who read , hear, or see the message sent by a source during the communication process. Response- in the feedback loop, the impact the message had on the receiver's knowledge, attitudes, or behaviors during the communication process. Feedback (takes the form of attitude change, purchases, or nonpurchase)- in the feedback loop, is the sender's interpretation of the response, which indicates whether a message was decoded and understood as intended during the communication process. NOISE- consists of extraneous factors that can work against effective communication by distorting a message or the feedback received during the communication process. How the model works is it starts with the source then goes to encoding which then the message goes into the channel of communication and is then decoded and sent to the receiver who forms a response and then feedback is given back to the source.
Comparative advertising: why do we use it or not? What is it?
Shows one brand's strengths relative to those of competitors A: attract more attention and increase the perceived quality of the advertiser's brand although their impact may vary by product type, message content, and audience gender D: need market research to provide legal support for their claims; high costs; increase in lawsuits
Why do we segment markets? (Why does P&G have 8 brands of laundry detergent?)
So business firms can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits. Nonprofit- to satisfy client needs more effectively while achieving the organizations goals.
How to position...by: price/quality
Some firms will position products based on relative high quality, or based on the claim that they represent significant value. Marketers often use price/ quality characteristics to position their brands. One way they do it is with ads that reflect the image of a high-quality brand where cost, while not irrelevant, is considered secondary to the quality benefits derived from using the brand. Premium brands positioned at the high end of the market use this approach to positioning. Another way to use price/ quality characteristics for positioning is to focus on the quality or value offered by the brand at a very competitive price. Although price is an important consideration, the product quality must be comparable to, or even better than, competing brands for the positioning strategy to be effective. oParle Bisleri - "Bada Bisleri, same price" ad campaign.
Social Factor: status, roles
Status: Sum total of an entity's legal capacity, duties, liabilities, rights, and standing. o Relative rank in a hierarchy. o Current state of affairs. Roles: A prescribed or expected behavior associated with a particular position or status in a group or organization.
Personal Factor: Age and life cycle stage
Teenagers would be more interested in buying bright and loud colours as compared to a middle aged or elderly individual who would prefer decent and subtle designs. A bachelor would prefer spending lavishly on items like beer, bikes, music, clothes, parties, clubs and so on. A young single would hardly be interested in buying a house, property, insurance policies, gold etc. An individual who has a family, on the other hand would be more interested in buying something which would benefit his family and make their future secure.
What is consumer behavior?
The actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.
What is the Promotional MIX? What are the elements?
The combination of one or more communication tools used to (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product Personal selling: the two-way flow of communication between a buyer and seller designed to influence a person's or group's purchase decision A: communication flexibility; can communicate complex information; can target to specific markets and customers; direct feedback D: high cost per contact; expensive way to reach large number of customers; difficult to communicate uniform message Advertising: any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor A: ability to control message; cost effective way to reach large target market; ability to create images and differentiate brands; can sometimes strike responsive reaction from consumers D: high cost of producing and placing ads; difficult to determine effectiveness; credibility problems; clutter Sales promotion: a short-term inducement of value offered to arouse interest in buying a product or service. A: provides extra incentive to purchase product; way to appeal to price sensitive consumer; can generate extra interest in ads; easier to measure effects D: often only has short-term impact; often abused; can lead to promotional wars; often does not contribute to brand image Direct marketing: uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet A: changes in society have made consumers receptive to direct- marketed products; allows more selectivity and target marketing; can customize message D: consumers and businesses receive too much unsolicited direct mail and phone calls; image problems for direct-marketed products; clutter problems Public relations: a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services. A: credibility; low cost way to communicate D: lack of control; difficult to get media cooperation; can be negative Publicity: a nonpersonal, indirectly paid presentation of an organization, product, or service. Same as PR ****know the differences, advantages, disadvantages of each of these elements (see handout) or in book-strengths & weaknesses *Define each tomorrow
What is IMC (Integrated Marketing Communications)?
The concept of designing marketing communications programs that coordinate all promotional activities- advertising, personal selling, sales promotion, public relations, and direct marketing- to provide a consistent message across all audiences.
Psychological factor: Motivation
The energizing force that stimulates behavior to satisfy a need
Define Cognitive Dissonance: How does one get rid of it? *consumers are happy or unhappy (satisfied/dissatisfied) *What steps are taken by these happy/unhappy consumers?
The feeling of postpurchase psychological tension or anxiety customers may experience when faced with two or more highly attractive alternatives To alleviate it, consumers often attempt to applaud themselves for making the right choice. oYou may seek information to confirm your choice such as asking friends questions like "Don't you like my new phone?" or by reading ads of the brand you chose. You may also look at the negative features about the brands you didn't buy.
POSITIONING: What is it? What is a positioning map? (Perceptual map) Why do we use them?
The place a product occupies in consumers' minds on important attributes relative to competitive products Perceptual map: a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers Why we use them: 1) identify the important attributes for a product or brand class 2) discover how target customers rate competing products or brands with respect to these attributes 3) discover where the company's product or brand is on these attributes in the mind of potential customers. 4) reposition the company's product or brand in the minds of potential customers. competitive advantage: what is it? Enables a manager to see how consumers perceive competing products or brands, as well as the firm's own product or brand.
Psychological Factor: What is perception?
The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world
Does the receiver always get the intended message of the sender?
The receiver does not always get the intended message of the sender because of things such as misunderstanding. Communication is not always entirely effective.
How to position...by: product user
This positioning approach highlights the user (the ideal or representative target consumer) and suggests that the product is the ideal solution for that type of person and may even contribute to their social self-identity. Positioning a product by associating it with a particular user or group of users is yet another approach. o Motography Motorola Mobile Ad.n this ad the persona of the user of the product is been positioned.
How to position...by: product class
This positioning strategy tends to take a leadership position in the overall market. Statements with the general message of "we are the best in our field" are common. Often the competition for a particular product comes from outside the product class. For example, airlines know that while they compete with other airlines, trains and buses are also viable alternatives. Manufacturers of music CDs must compete with the cassettes industry. The product is positioned against others that, while not exactly the same, provide the same class of benefits.
Strategies for reaching target markets: undifferentiated marketing
Undifferentiated marketing treats all buyers, or potential buyers, as a homogeneous group. Another term for undifferentiated marketing is mass marketing. Rather than producing different marketing strategies for different segments of society, or even different products for different groups, undifferentiated marketing attempts to reach all potential buyers using one marketing strategy. In this way, undifferentiated marketing treats all segments of the population the same, and the strategy is to use one approach that aims to appeal to as many people as possible.
Strategies for reaching target markets:
Undifferentiated, differentiated, and concentrated marketing
Cultural Factor: values, beliefs
Values: a society's personally or socially preferable modes of conduct or states of existence that tend to persist over time. Beliefs: a consumer's subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.
Personal Factor: Self-concept
We all have various views about ourselves. We all may think we are kind, calm, patient, selfish, rude and what not. It doesn't matter what perception you have about yourself, but the one perception that facilitates all these insights is organized self-concept. How one views themself
How to position...by: Competitors
With this approach the firm would directly compare (or sometimes just imply), a comparison against certain well-known competitors (but not generally not the whole product class as above). Competitors may be as important to positioning strategy as a firm's own product or services. In today's market, an effective positioning strategy for a product or brand may focus on specific competitors. This approach is similar to positioning by product class, although in this case the competition is within the same product category. oOnida was positioned against the giants in the television industry through this strategy, ONIDA colour TV was launched with the message that all others were clones and only Onida was the leader. "neighbour's Envy, Owners Pride".
How to position...by: use or application
With this approach, the product/brand is positioned in terms of how it is used in the market by consumers, indicating that the product is the best solution for that particular task/use. Another way is to communicate a specific image or position for a brand is to associate it with a specific use or application. o Surf Excel is positioned as stain remover 'Surf Excel hena!' o Also, Clinic All Clear - "Dare to wear Black".
Psychological Factor: selective perception or perceptual screens
a filtering of exposure, comprehension, and retention
DESIGNING A MESSAGE- Message Content: Rational appeals Emotional appeals
concerned with an appealing price point and with highlighting the benefits of owning the product. The rational appeal is widely used by small businesses to fend off competition. This method attempts to prove the product's quality and usefulness to the consumer. Marketing strategist Ken Orwig affirms that forms of proof may include stating the product's benefits, performing a product demonstration or citing facts or statistics. When the advertiser uses rational appeal, it is also appealing to the consumer's logic, persuading the consumer to choose the result it desires. A: it allows you to market the product to more than one demographic target group at a time. By focusing exclusively on the product's price and the benefits it offers, you are creating a generalized marketing campaign with wide appeal. This in turn appeals to customers of all backgrounds who are either looking for a bargain or who need (as opposed to want) a product or service. Common household items such as vacuum cleaners, kitchen appliances and even lower-range automobiles are marketed in this way. Consumers need these products and may not necessarily be concerned with having the fanciest or most expensive ones. Appealing to the budget-conscious and consumer-friendly customer is therefore key to the rational appeal. Furthermore, in times of economic crisis or recession, products marketed by rational appeal tend to do well. Consumers are apt to adopt a mindset of austerity during these times and will appreciate businesses that cater to their needs. D: Consumers, even budget-conscious ones, are typically looking for quality. Trying to pass off poorly made or ill-designed products by focusing on the low price point may actually backfire on a company. If you sell orange juice, for example, you may find that customers respond well to a lower price point. However, if this lower price-point comes at the sacrifice of having orange juice made from 100 percent juice or not-from-concentrate, you may lose out on customers who are concerned about quality. The key to utilizing the rational appeal then is to be honest and consistent with your brand messaging and to know your target audience. Emotional: pulls on the customers' heartstrings to get them to purchase a product or service because of its high quality, its use as a status symbol or its connection to the individual's deep-seated interests. By nature, human beings are emotional creatures. Businesses use a variety of techniques to appeal to consumer emotions. Advertisers take the time to carefully choose every detail, including the tone, lighting, color scheme and mood the advertisement sets. People are more inclined to pay attention to a catchy radio advertisement than one that is bland, or a caring and compassionate-sounding announcer than one who sounds matter-of-fact, Orwig asserts. Advertisers also appeal to fear, empathy, sympathy, happiness and other human emotions. fear, humor, sex fear: suggest to the consumer that he or she can avoid some negative experience through the purchase and use of a product or service, a change in behavior, or a reduction in the use of a product One of the first advertising appeal and probably the most effective to date is the advertising appeal of fear. Using fear in advertising concentrates on emotional responses from customers to a perceived threat. An example of a fear appeal would be an advertisement for a "web hosting" company focusing on the risk of downtime experienced on the site and the customers' vulnerability of losing business due to downtime. A advantage of fear appeals is that it tends to be very persuasive and is great for capturing peoples attention; for example, such as an eye-catching advertisement of an injured car crash victim due to drink diving. A disadvantage would be hard to know how much fear to use. If it was too much and you can scare people away from your ads, and too little fear and nobody will notice your ad. sex: suggest to the audience that the product will increase the attractiveness of the user Sex appeal has been used for so many years by marketers to capture attention of the sexes. An advantage of using sex appeal is proven to break through clutter. If your advertising in a busy time-slot using sex appeals will help the ad get noticed, this helps in increasing brand recognition. The disadvantage os sex appeal is that it can be provocative and may cause negative reactions with different cultures. Humor: imply either directly or subtly that the product is more fun or exciting than competitors' offerings. A: Linking positive emotions to your brand name creates goodwill for your products. For example, if you consistently include images of happy families in your advertisements, people will begin to view your brand as family-friendly. Your advertisement can solidify the connection by linking the images you present with the objective of your marketing campaign. For example, a lawn-care company could promote its services using images of happy families picnicking on beautifully maintained lawns. Everyone loves to laugh and most people have negative attitudes towards advertising but positive reactions to humor. A consumer watching a humorous ad laughs and tells people the joke and remembers it; this greatly helps marketers. There are many memorable TV ads that use humor to promote their brands. The advantage of humor appeal is that it is one of the best methods for cutting through advertising clutter as funny ads are more easily noticed by the increasingly busy consumers. Humor gets attention and stays in peoples' memories. The disadvantage is that it is important that the joke does not overpower the brand or overcomes the message; if people remember the joke but not the brand this is not effective. It is very important and ethically obliges the advertisers to must be culturally aware as what is funny in one culture may be offensive in another. each has advantage or disadvantages (know them)
Psychological Factor: Learning
consists of those behaviors that result from (1) repeated experience and (2) reasoning.
Personal Factor: Occupation
individual's nature of job has a direct influence on the products and brands he picks for himself/herself. Tim was working with an organization as Chief Executive Officer while Jack, Tim's friend now a retired professor went to a nearby school as a part time faculty. Tim always looked for premium brands which would go with his designation whereas Jack preferred brands which were not very expensive. Tim was really conscious about the clothes he wore, the perfume he used, the watch he wore whereas Jack never really bothered about all this. That is the importance of one's designation. As a CEO of an organization, it was really essential for Tim to wear something really elegant and unique for others to look up to him. A CEO or for that matter a senior professional can never afford to wear cheap labels and local brands to work. An individual's designation and his nature of work influence his buying decisions. You would never find a low level worker purchasing business suits, ties for himself. An individual working on the shop floor can't afford to wear premium brands every day to work. College goers and students would prefer casuals as compared to professionals who would be more interested in buying formal shirts and trousers.
Psychological Factor: Reinforcement theory
proposes that you can change someone's behavior by using reinforcement, punishment, and extinction. Rewards are used to reinforce the behavior you want and punishments are used to prevent the behavior you do not want. Extinction is a means to stop someone from performing a learned behavior.
What is promotion?
refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty. It is one of the four basic elements of the market mix, which includes the four P's: price, product, promotion, and place.
MEDIA Scheduling:
refers to the pattern of timing of an advertising which is represented as plots on a flowchart on a yearly basis. The plots in the flowchart indicate the pattern of periods that matches with favorable selling periods.
Psychological Factor: subliminal perception
seeing or hearing messages without being aware of them
Strategies for reaching target markets: concentrated marketing
strategy whereby a product is developed and marketed for a very well defined and specific segment of the consumer population.