MKTG 4250: Final Exam

Packaging Tells a Story

Color, shape, size-even the simplest cues- paint a picture worth a thousand words. You don't need to tell your brand's story through words. A package is your customer's welcome mat. Not only does it serve a function, but it is also an INTEGRAL PART OF THE CUSTOMER EXPERIENCE. They pick it, they hold it, they take it home with them- it needs to align with your brand's values and be distinct & recognizable at the same time.

IMC & Promotional Mix

Consistency is key. Integrated marketing communications coordinates all promotional activities to provide a consistent message, an expression of the insight born from what need(s) it solves

Online Influencers Making Brands Vulnerable

Consumer relate to influencers more than large corporations. Influencers are regular people expressing themselves & what they love. This doesn't play out well for corporations, since corps are used to hiding problems. Being opinionated for influencers is great and scary for firms. "Marketing is no longer about the stuff that you make, but the stories you tell" -Seth Godin

IMC: Aveeno Example

Core Message: Achieve radiant skin naturally with aveeno active naturals. Purchase (step 5): Soft-touch, neutral packaging reinforced natural positioning. In-store display signage reinforced brand's premium price point Brand Awareness (step 3): Print ads in women's magazine& OOH aveeno branded bicycle taxis in NYC Loyalty (step 7): Aveeno discoverers program- a dedicated program to encourage you to share your thoughts & experiences of our brand and our products with other people & with us, so that everyone can hear about what makes our brand so unique. This is experiential type of innovation

Shinesty Video from Guest Speaker Jen Nicolaysen

-Started selling a curated collection of vintage clothing sourced at thrift shops, etc -Relied on a lot of gut instinct -Moved into designing & creating their own apparel lines -Used novel & inexpensive ways of assessing their consumers' needs & wants -Used Google data to great success to assess best opportunity spaces -Involves their consumer along the way in product design and post purchase feedback -Created their own Mad Labs consumer testing site -Uses tradtional surveys and consumer interviews as well as more unique tools -Monitors trends & social commentary -Is now focused on "cherry picking" their best new product opportunities that offer disproportionately positive results

Enhance Forecast Accuracy & Minimize Risk Do:

-Survey consumers (to assess interest) -Retailer pre-sell meetings (to assess interest & establish partnerships) -BASES forecasts or "in-market" tests -Monitor external variables (Ex: regulations, competitive reaction)

Viactiv Calcium Cast Study

-Women around the world are tired. Over 80% tired every day, over 60% exhausted. -Fear of getting everything done they need to do: Daily Jamu from Indonesia says "This keeps me healthy, I can feel the difference if I don't have my daily Jamu. This is my most important stop during the day. I can only afford to buy it one dose at a time." -There's a fear of losing strength, mobility, independence resulting in a diminished quality of life. -Going a level deeper: fear of osteoporosis -Needs: Make me healthy, relax me, energize me, keep me healthy -Priority #1: Bone Health -Key Brand Insight: Worried don't get enough calcium, hates swallowing huge pills, wishing a more enjoyable way to get calcium, want to be healthy & strong -Target Consumer: women 18+ -Concept Statement: soft chocolate chew -Naming/ Packaging: new to world brand name is an exciting challenge, inspired by need for LT quality of life, utilized female linguistics (soft vowels), strong brand name bracketed by same letter, female color (regal strong jewel tones), not medicinal but still serious, inspiring vision

Elements of a Brand

-product itself -customer service -packaging -facebook page -celebrity endorser -news about CEO's behavior & values -tv ads -monthly invoice you receive in mail

5 Myths of Innovation

1. A shared understanding throughout the organization of what the company is becoming & the innovation culture or expectations 2. Alignment on the right company value & structures to support innovation - letting it be known that failure is accepted, and getting rid of silos 3. Having the right tools in place - training, techniques, and online and in-person tools 4. Incorporating diversity-cross -functional teams, bringing in outsiders. Innovation requires degree of friction 5. Having interaction - forums & events to encourage ideas & build internal networks 6. Slack - giving employees creative "time-out" to think & create away from day to day job duties

How are concepts evaluated

1. Concepts are generally evaluated in small qualitative groups first 2. If they show enough consumer interest they are optimized for quantitative testing. a. Many measures are asked beyond overall linking and purchase interest b. Top 2 box scores are looked at with top box being the higher indicator of overall success c. Certain score hurdles must be met to let a concept pass into further development d. Many ideas are evaluated before a select few are chosen for development e. It's important to check uniqueness, but make sure it has a reason f. Always check your gut

What constitutes a traditional product concept

1. Consumer Need/Insight 2. Description (technology and form): What is it? In consumer language 3. Key consumer benefit: What key job(s) does it do for the consumer? This can be both functional & emotional. Don't have too many benefits in a single concept, keep it focused 4. Reason(s) to believe (technology and form): Why should I believe that this will work? 5. Call to action: short reminder/invitation to act

Also in Product Development Stage

1. Design Specifications 2. Patents (can we be protected?) 3. Consumer testing during the development phase

Stage Gate Process

-Stages: where the work gets done -Gates: where the decisions are made -Holds NPD teams to high level of due diligence. -Instills common disciplines. -Not all projects may need same level of scrutiny

Goals of New Product Ads

Create Awareness thru 1. Pioneering (inform) 2. Comparative (persuade)

Persuade NP Ad

Dove's "doesn't your skin deserve better care?" ads

"9 Reasons Your Pricing Sucks" Video

Look into later

New Product Promotion

Objectives: -Inform prospective buyers -Persuade them to try -Clearly communicate benefits

Alternative Branding Stategies

-Multiproduct Branding Strategy: AKA "family" or "corporate" branding. Example: branded house- every product is strongly branded GE -Multibranding Strategy: house of brands- brands are independent and some do not display "parent name" ex: Proctor & Gamble -Private Branding Strategy: developed by retailer & carries retailer (ex: trader joe's) name or not (costco's kirkland). -Mixed Branding Strategy: company makes essentially the same product under multiple brand names (ex: elizabeth arden w/ clinique & skinsimple

Ansoff's Growth Opportunity Matrix

-Market Penetration: existing product & market (coupon offer) -Product Development: existing market & new product (gatorade gum) -Market Development: existing product & new market (selling in Japan) -Diversification: new product & market (gatorade shoes)

The 3 Kinds of Competitive Strategies

-Overall Cost Leadership -Differentiation -Focus/Niche

Vulnerability

the quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally.

Types of Innovation

-Architectural Innovation: new market & existing tech -Radical Innovation: new market & tech -Incremental Innovation: existing market & tech -Disruptive Innovation: new tech & existing market Disruptive Innovation: 1. Transforms expensive & complicated products for smaller markets, into affordable & accessible products for larger markets 2. Often "missed" by major players 3. Eventually displaces former tech

What Makes a Big Idea?

-Born out of consumer insights -Creates emotional connection w/ consumer (at deep level) -It is distinct for that product/brand -"Re-imagines" what you know about your consumer- how they think, act & feel -Bc it's meaningful, it has value as a topic for discussion (twitter) -Connects people together -It's universal, can be communicated across all media platforms & tie them together -Often expressed "one line phrase" that links consumer insight to brand

What Factors Affect Forecast Accuracy

-Consumer receptiveness to the product -Product performance (has bugs, works well) -Competitive reaction -Uncontrollable environmental factors (weather) -Regulation (FDA changes regulations on claims) -Trends/crisis (travel & terrorism) -Marketing communications effectiveness -Wavering retailer support -Newness to market (consumer familiarity)

Common Types of Communication Objectives for Launch

-Drive AWARENESS OF NEED for product? -Generate AWARENESS for this product? -Drive SALES? -Motivate TRIAL? -Promote understanding of BENEFIT? -Motivate RECOMMENDATION? To make the most of constrained marketing budgets avoid spreading dollars thin across multiple tactics

Which Companies are House of Brands, Branded House, & Hybrid Models

-House of brands: P&G, Wrigley, Unilever -Hybrid: endorsed (Kellogg's, Marriott) or sub-brand (Apple, Microsoft) -Branded House: Virgin, GE, FedEx

3 Questions You Need to Ask When Creating or Communicating Your Brand EXTERNALLY to the target consumer

1. Have we establish a frame ("frame of reference")? The way your product is perceived by the market/ consumer. You need this so that the consumer can compare the product to others in the same category that offer similar benefits 2. Are we leveraging our points of parity? These are elements that a brand needs to be considered in the eyes of the consumer. This is where a brand has similarities to others- leading consumers to believe that brand is "good enough" to be included in the convo 3. Are the points of difference compelling? These make a product more attractive by contrasting its unique qualities with other competing product. Can capitalize on: -brand performance associations -brand imagery associations (who uses the brand & under what circumstances) -consumer insight associations Geico combines BPA & CIA Nespresso focuses on BPA & BIA

Why Forecast?

1. Making sure pursuing opportunity is worth it & that you are meeting financial hurdles 2. Production planning (raw materials, staffing, facilities) 3. Distribution planning (# of store locations, how to get product to stores or other distribution points) 4. Marketing (advertising budget, marketing tactics & costs) 5. Managing financial expectations to shareholders 6. Can change if & when market factors change

Complementary 360 Degree Touchpoints Wheel

1. Need identification: consumer needs, comes into category for 1st time (tactics: personal selling, word of mouth, in-store registries, ads (TV, banner ads, social media, billboards), sampling 2. Search fo info: consumer begins to explore category options (tactics: seeding to key influencers, search engine optimization, consumer reports, event marketing) 3. Brand awareness (evaluate alternatives): consumer is aware of brand options (tactics: advertising, PR, word of mouth, social, direct mail) 4. Consideration & Trial: consumers narrow consideration set & may try (tactics: couponing, free trials/freebates, website, sampling, online user reviews) 5. Purchase: (tactics: packaging, in-store demos, POP displays, in-aisle signage, off-shelf displays, personal sales reps at point of sales) 6. Usage: consumers trying product (tactics: enhance the "unpack", packaging, product performance, customer service, website, tutorials, how-to videos) 7. Loyalty: repeated positive usage occasions lead to brand preference redos &/or loyalty (tactics: word of mouth, social media, relationship marketing, loyalty programs, testimonials, viral videos, event marketing) At what stage in the purchase funnel is your consumer most-receptive to your new product message?

Pricing Objectives Continued (Not Necessarily Mutually Exclusive)

1. Sale-oriented pricing objectives: seeks dollar level of sales (total revenue) as an objective. Thru sales volume of units or $$$. Ex: Target 2. Market share: company's sales as a % of total sales in market. Many firms seek to gain specified share (%) of a market. Pros: (1) forces manager to pay attention to what competitors in the market are doing (2) easier to measure firm's market share (syndicated sources of secondary data such as AC Neilson provide market share data for many industries) than to determine if profits are being maximized. Ex: Walmart, Procter & Gamble, Coca-Cola 3. Unit Sales: companies immediate focus is selling a certain amount of a product, with the derivative being implications for mazimizing revenue. That is, the good is often produced, its cost are historical (sunk), & therefore focus on selling units is analogous to indirectly focusing on getting most revenue from sales, hence profit. Often used to clear out seasonal inventory. 4. Survival: Macy's or specialty toy manufacturers (Schwartz filed for bankruptcy) 5. Product Quality Leader: North Face 6. Social Responsibility: Patagonia

How do we use new product concepts

1. To prioritize concepts being developed in our new product pipeline 2. To refine or improve previous versions of concepts 3. For communication optimization 4. To forecast sales for new products -See slide 14 for more details

Product Design: Trends

1. User-oriented design 2. Benefit-focused design 3. Ergonomics/ human factors 4. Visual brand language 5. 3D printing 6. Design for environment

Pricing & Sales Forecasting

1. What are we trying to achieve? -Identifying your pricing objectives -Are there pricing constraints? 2. How much will consumers pay? -Where does my product fit within competitive set? -How does my price fit with my product position? -Should the introductory price be at parity, higher, or lower? 3. How much will consumer buy? -Sales forecasting -Volume/sales and profit relationships?

Airbnb Storytelling

100% about the customer. W/o the customer there is no product. In this case, the customer- both the hosts & guests - is the brand. Experiences tell the story of where consumer can visit be it surfing in Aus or concerts in Paris. Airbnb doesn't own/manage properties itself. They provide forum for customers to promote & book properties, meals, and more. Most companies still have a product, even if nobody's buying, but not Airbnb therefore they don't tell their stories, but instead get customers to tell theirs. Positioning the customer at the center of the brand - in effect, letting customer be the brand - is essential to Airbnb philosophy.

Managing for Current Profit

2. Managing for Current Profits, or Short-run Profit Maximization- seeks to get as much profit as possible in the short run. Some people believe that anyone seeking a profit maximization objective will charge high prices -- prices that are not in the public interest. However, this point of view is not correct. Pricing to achieve profit maximization doesn't always lead to high prices. Short run profit maximization may bring extremely high prices if competition can't offer good substitutes and consumers demand the product. But this happens if and only if demand is highly inelastic. If demand is (or becomes) more elastic, profit maximizers will be forced to charge relatively lower prices. For example, I just bought an HD color tv (22") for $200. Prices years ago were much higher. What would happen if a mfg didn't continually lower their prices? Managing to maximize current profits means very different things based on market conditions. WSJ: "Landlords Offer Incentives to Stay Put." - an example where lowering price leads to higher landlord profits because demand is (currently) relatively elastic. Boulder Daily Camera: "Boulder, Denver..." - an example of higher prices leading to landlord profits - and the profits attract new entries into the marketplace. (Refer to Daily Camera: "Zero percent vacancy...")

Consumer Testing in NPD

3 Key Consumer Touch Points in Phase 4: 1. Prototype Testing: Not finished product, working or non-working. Goals: refine & improve, potential go/no go, refine packaging, inform mktg plan 2. Product Use Testing: working product, near final design. Goals: same as #1 3. Market Testing: Finished product. Goal: inform mktg plan (distribution, mktg comm, pricing, packaging, promotion), finalize forecasts, refine & improve, potential go/no go

Quick Lesson #4: Product Trumps Concept

Captain Morgan Gold- strongest concept ever. Product development went askew. Great concept will not survive a bad product. Failure that was easy to spot & could have been avoided with more courageous action. Trust your gut.

Target Return

3.Target Return on Investment- the target ROI objective sets a specific level of profits as an objective, it is the most common among larger firms. That is, from a management appraisal perspective, it is really a measure of how efficient management is in using the assets of the company; the higher the ROI, the more efficient management is. Therefore, management performance can be compared to a predetermined target ROI. Also, it can be used as a benchmark for company decisions. Some companies eliminate divisions -- or drop products -- that aren't yielding the target ROI. For example, companies know what their cost of capital is and this can serve as a benchmark for acceptable ROI levels. (Same logic you have in investing in a business vs. putting the money in a cd (and opportunity cost ROI).When I was at Western Electric (part of AT&T before divestiture), we were a gov't regulated monopoly. The gov't allowed us to make 13.5% return on invested capital. Therefore, we never threw anything in the warehouses away. There was obsolete stuff from 20 years previous that was there to build up our investment base. When divestiture came, all of this stuff was scrapped. This is an example of the market operating more efficiently when it is allowed to operate freely.

Brand Positioning Ladder

6. Brand Purpose: heart & soul of brand, this consists of 1-3 words, which sum up the core identity of the brand 5. Personality: description that the target audience would give the brand if it were a person. Should call to mind an image 4. Reason to Believe: most compelling reasons for the target audience to believe your benefit. Can be intrinsic (design, features, product, clinical tests) or extrinsic (expert endorsements, used by professionals) 3. Brand Benefit: split into emotional POD (intangible, feelings, perception based benefits unique to brand) and functional POD (tangible, physical benefits unique to this brand) 2. Brand Insight: a deep & fundamental insight upon which the brand is founded 1. Target Audience & Competition: WHO is your strategic target audience & which category do your compete in and with who

Definition of Brand

A brand is not what you say it is, it's what they say it is. Customers' perception of you based on every interaction (physical, emotional, social) they have with your company.

New Product Concept

A clear, concise statement that effectively communicates an idea to consumer.

6 Types of Greenwashing

Acting "green" when you're not. 1. Hidden tradeoff: only some aspects of manufacturing are sustainable 2. Vagueness: chemical0free, all-natural, green 3. Irrelevance: truthful but unhelpful 4. Fibbing: making claims that are completely false 5. No Proof: lack of transparency in claim substantiation 6. Lesser of 2 Evils: pairing an eco friendly attribute w/ overall negative health affects

Product Names

A name is an emply vessel you fill with meaning over time (Google). Company/product names are VERY important. Create some energy but be careful about being too cute. Make sure you own it "cleanly" (trademark, domain name, brand mark). Expensive to change, be sure you have good justification A GREAT NAME CAN: 1. differentiate you 2. trigger an emotional connection 3. spark conversation 4. replay benefit of product Ex: Gatorade is named after Florida Gators football team who originally developed it. G-force is an example of a strong sub-brand name that served to support the parent brand.

BCG Matrix

A portfolio management tool. Evaluates strategic business units on the basis of (1) their business growth rates and (2) their share of the market. -Star: high growth & share. Invest in it to grow -Question Mark: high growth & low share. Invest in it to see if it can grow -Dog: low growth & share. Don't invest, get money out of it that you can or get rid of it -Cow: high share & low growth. Invest enough to keep its share and profitability high and be able to fund ?'s and stars

How much will consumers buy?

A sales forecast is a projection of anticipated unit sales after launch. Used for: manufacturing, production forecasting, assessing payback, projecting viability from financial perspective, gain project sponsorship/buy-in internally, create business cases for advertising investments, manage customer expectations for post-launch POS results Pros of forecasting: 1. Determine whether to move forward with new product (low projection might suggest it's not worth it ex: Jo's meat snack client) 2. Determine if you need to modify product 3. Assess other market factors -Distribution (need to increase availability) -Target audience (need to reacher broader target) -Pricing (need to charger higher price) -Marketing communications (need to increase/improve promotional plan) 4. Inform production planning -How much to product

Actual Test Markets

Actual small launch or using behavior scan markets. Pros: 1. Most accurate sales prediction (since real) 2. Data to gain national distribution 3. Work out "kinks" with production as a "soft launch" 4. Build accurate production plan for full scale launch 5. Discover geographic differences 6. Identify distribution issues Cons: 1. NOT fully projectable (too many variables) 2. Very expensive 3. Show your hand to competitors

Key Consumer Insight

An insight is a deep understanding of consumer. 1. We express insights as short statement, in the consumer's voice 2. Strong insight statements include a truth, need, and friction

Jan Van Mieghan's Reading: Product Life Cycles

Another way to estimate new product volume is to take into consideration expected lifecycle for that type of product. It may not be the standard social diffusion. A high tech product may be more like a triangle, more like the "fad" product. It may rise & fall quickly as the tech changes. Fashion products may also have much shorter life cycles. High rise & faster fall should be taken into account when forecasting sales volume of a new product.

Claims in Advertising: Puffery vs. Deception

Avoid Deception: a material representation, omission or practice that is likely to mislead the reasonable consumer Ex: EasyTone claiming pockets of moving air create "micro instability" that tones & strengthens muscles as you walk or run Puffery is OK but be careful: promotional statements & claims that express subjective rather than objective views, which no "reasonable person" would take literally Ex: Starbucks saying the best coffee for the best you

Avoid These Brand/Product Names

Avoid generic or purely descriptive names as they are not protectable. Ex: Lowfat granola, frosted flakes, slow cooker, tasty burger, fresh meals, ice pop, healthy crisps

Vulnerability in Today's Brand Building

Bc of our shift to amore transparent way of life, driven largely from the shift to a digitally driven world, business has become much less about impressive ads and selling an (often fictional) dream, and more about effective brand representation & expression. The CURRENCY OF LEADERSHIP IS TRANSPARENCY. You've got to be truthful. Don't be vulnerable every day, but there are moments here you've got to share your soul & conscious with people & show them who you are & not be afraid of it. Vulnerability leaves a last impression when incorporated with a brand

Multi-Product Branding Strategy (Branded House)

Brands are linked together by an evident "Parent Brand" Ex: FedEx office, corporation, express, ground, freight, etc

Why do we Brand?

Brands distinguish & differentiate products, simplify shopping experience, convey main consumer benefit

Seth Godin Video: It's Broken

Business elements or communications (including brands) that are poorly designed are BROKEN. If the consumer thinks they are broken they ARE, even if the person that designed them or the system around them might not think so. (Inspired by long Newark taxi lines) 1.NOT MY JOB - big companies get so specific in their jobs, so siloed, that no one is in charge of fixing a problem, even an obvious one (like dog prescriptions with warnings not to drive a moving vehicle). 2. CREATED BY SELFISH JERKS - people or companies out for short term gain (Chase credit card spam offers damage brand) 3. THE WORLD CHANGED - products designed for a past era are not changed for a new era (Hallmark not wanting to change from traditional snail mail cards??- my example! ) 4, I DIDN'T KNOW - things that are irrelevant or made hard for consumers (JFK inadequate signage to terminals) 5. I AM NOT A FISH - things that just don't work as intended (coffee cup holders by cold air vents in car) 6. CONTRADICTIONS- things that just don't go together like wine lists on an ipad (making wine selection impersonal, unspecial, and automated in feeling) 7. HOWEVER, BROKEN ON PURPOSE CAN WORK TO GET NOTICED ( Pocari SWEAT isotonic beverage, or purposely unmatched socks sold as a set) KEY LESSONS- view your product offering holistically from the consumer perspective to make sure it 1) works, and 2) that no element of the product design or execution does damage your brand

Product Packaging Design

Creation of the exterior of a product. Includes choices in material & form as well as graphics, colors, font used in label, wrapping, a box, a can, a bottle or any kind of container Ex: All of Tides different packages

Yves Behar Ted Talk

Designing objectives that ell stories forms into user-oriented design "I wanted to work, not just on the skins, but on the entire human experience. As designers, we need to think about how we can create a different relationship between our work and the world. Design is the glue that bring (these values) together."

Planned Obsolescence

Designing product with limited lifespan from its inception. Motivation: value engineering (to last) vs consumption motivator (replace fast with the next generation) Ex: Apple

User-Oriented Design

Designing with the end-user in mind. What does the design for y water communicate about its user? -unique/different -fun/playful -highly interactive

Multibranding Strategy (House of Brands)

Different brand names for different segments, manufacturer's name is not prominent, not part of the brand name (which are proper nouns, instead of common nouns like in multiproduct branding). This reduces transference from one brand to another, but marketing costs are higher since you need to create unique identities for the different brands. Ex: Heinz ketchup, pickles, mustard, etc) Pro: If one brand becomes negatively perceived for any reason, rest of porfolio is not adversely affected

Perceptual Map

Displays, in two or more dimensions, the position of a products or brands compared to the competition

ATAR forecasting

Make assumptions on awareness, trial, availability, and repeat. Multiply all these factors. AWARENESS (sources: advertising testing & projections, company benchmarks) given to you by agency TRIAL (sources: consumer concept testing (purchase intent question)) you calculate using discounted concept PI scores AVAILABILITY (sources: % ACV, retailer pre-sell meetings, sales distribution estimates) you can estimate REPEAT (sources: industry standards, pre-launch consumer trials, consumer concept testing (switching questions), switching model) you can estimate or from market research results

Portfolio Management

Manifestation of your business's strategy. -Dictates where & how you'll invest for the future -Treats R&D investments like how a fund manager in the stock market treats financial investments

Margin Math for New Products

Every distribution channel must get their cut. MANUFACTURER $2.50 variable cost per 4 pack $4.50 selling price to wholesaler WHOLESALER $4.50 purchase price from manufacturer $7.00 selling price to retailers RETAILER $7 purchase price from wholesaler $16.99 selling price to consumer CONSUMER &16.99 SRP of item at retail Based on the above #'s % margin is as follows (price-VC)/price: 44% 36% 59% And the % markup is (price-VC)/VC: 80% 56% 143% EQUATIONS recap: 1. Contribution margin is price-VC per unit 2. % Margin is contribution margin/price. The % of selling price a firm retains after variable costs. This is always <100%. This is the ratio of margin dollars to price. 3. % Markup is contribution margin/VC. The % of cost that's been added to cost to arrive at price. Can be >100%. This is ratio of margin dollars to cost.

Example of an Key Consumer Insight

Example: Dove -Truth: beauty is important in this world -Need: I want to feel beautiful -Friction: If only I wouldn't get so insecure from all those models dominating the beauty industry -Insight Statement: In this world that prizes certain types of outer beauty, I wish that I could be valued for exactly who I am and how I look

Formal Brand Positioning Example

For people seeking heathier, organic food options, BrightHouse Organics is the organic brand grown using the best of nature and science They are grown all year round in protected greenhouses using bees to naturally pollinate plants, crop protecting insects instead of chemical insecticides, and are nourished with an optimal mix of nutrients delivered along with clean, filtered water.

Ease of Forecast Accuracy

Forecasting breakthrough innovation is more challenging. Easy: -History -Statistical Analysis -Pinpoint Forecast -Planning for Certainties Ex: regular gatorade Difficult: -Assumptions -Judgement -Forecast Range -Planning for Contingencies Ex: Gatorade hydration monitoring

Authentic, Open, & Honest Brands

Great stories are powerful & moving and have heart and sould. But not every brand story will meet this criteria. The stories you tell don't all have to move people to laughter or tears, they just have to be authentic, open, and honest. Show that your company & customers are real people w/ real stories to tell. Share what brand is all about: core values, purpose, beliefs, mission. Create & share content, cultivate active community, & tell stories that matter to them. Ex: method cleaning product "lay off the hard stuff

Pricing Strategies

How we price our product is critical. 1. What is the price of competitive alternatives? I can charge MORE for better solution 2. What is consumer willing to pay? Might ask consumers 3. What price will generate profit? 4. What message am I trying to convey? Higher price signals quality & prestige

Reference-Based Forecasting

Identify sales for similar product & estimate my potential sales based on that point of reference (benchmark). Ex: last year, 6 mil homes purchase Kellogg's fruit loops. I can get 10% of them to buy my product = 600,000 boxes Another Ex: Benchmark avg unit sales is 17 units per store per week so New Item unit sales per store is 17 units per store per week * # stores (8,200) * # weeks in distribution (45) = annual unit sales 6.3 mil

The Big Idea

In marketing & advertising this is a term used to symbolize the foundation for a major undertaking in these areas - an attempt to communicate a brand, product, or concept to target audience by creating a strong message that resonates

Quick Lesson #3: Be Prepared to Battle the Competitor

Invented the "pore category." Tech driven KAO product. Ponds quickly followed with a cheaper & technically inferior product in the US causing total category decline. Could have outed competitors weakness with more combative stance

What's Certain about Forecasting?

It will be wrong! The trick is utilizing the best inputs & thinking to make best assumptions to generate more accurate forecasts. In NPD make sure you forecast range of outcomes vs one trying to be "exact" forecast

Quick Lesson #1: Do Your Homework

Know your users. 1/3 of Rice Krispies volume was used for making treats. Clear opportunity to increase penetration & grow brand. Holiday Rice Krispies gave consumers a reason to make more- and be recognized for making something special(w/o too much effort). Operations was key in this success.

Intellectual Property

Legally protectable ideas, concepts, names, designs, and processes associated with a new product. -Patents: temporary monopoly on a product design (~20 yrs). Invention must be novel, useful, & non-obvious. Design patent (red & white Coca Cola package). Utility patent (functionality of a pez dispenser). -Trademarks: exclusive right to use a specific name/symbol associated with a product -Copyright: exclusive right to copy & distribute an orignal work of expression (literature, graphics, music, art, software) -Trade Secrets: protected info used in business that offers competitive adv. & you want to keep it a secret

BelVita's Big Idea

Looking to bring their breakfast biscuit to market in US where there is a lot of competitors Whilst most brands talked about morning as a problem, Belvita's own research revealed that consumers felt breakfast was very important because they wanted to accomplish a bigger goal in the morning. The morning was not a problem to overcome but a fresh opportunity to accomplish things. #MorningWin amplified campaign of "own the morning."

Market Testing vs Test Markets

Market Testing: wide array of different techniques to gain feedback before launch, some real & stimulated Test Market: selling product in two or more markets. This is one form of market testing

Inform Insight-Driven NP Ad

Meat-rich diet for the wolf within by BLUE wilderness dog food

Product Design: Design for Environment

Minimize environmental impact. This is a "cradle to grave" mentality that takes into account the potential environmental impacts of a new product throughout the products lifecycle (from birth to death)

To Test or Not To Test?

More Testing: 1. Improve product (new to market) 2. Reduce risk 3. Better inform mktg plan 4. Better meet consumer need 5. Gain internal support (funding) No More Testing: 1. Already have high confidence 2. Similar to existing products/tech 3. Key timing issue (ex: holiday season) 4. Beat a competitor to market (key account) 5. Have limited budget

What's an example of a product concept?

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Old vs New Branding

Old Branding: advertisers shouting carefully pedicured messages at consumers who may/may not want to hear it New Branding: Advertisers (1) humbly listening to what consumers tell others the brand is & back up with real action (like repeat purchases) (2) incorporating appropriate innovations so their products continue to earn consumer's loyalty and word of mouth

Consumer Concept Testing

Qualitative (open-ended questions, broader exploration) for an early on idea or quantitative (survey with specific questions) for a more developed proposition or when testing alternatives. A base size of at least 100 consumers is desired reliable statistical inference 1. Monadic (consumers see one concept at a time) 2. Sequential Monadic (consumers see multiple concepts-rotated) 3. Comparative ( consumers see concepts next to each other Monadic is recommended, since interaction effects & biases are avoided. Results from 1 test can then be compared to that of another and a normative database can be constructed

Quick Lesson #2: Be Ready to Pivot

Originally trying to make a yogurt frosted Rice Krispies. R&D thought they had failed when consumers said it did not taste like yogurt, but it did taste like like Rice Krispies Treats. DING! Don't be afraid to change course when an even better pathway emerges. Huge success: took out ads apologizing for bare shelves.

How Much Will Consumers Pay?

Pricing Constraint: rational, consumer understood place in your competitive set What do my competitors sell for? Understand competitive set, what are consumers paying for like product, will they pay more for this innovation, importance of testing for purchase intent with pricing

Managing for Long-run Profits

Profit-Oriented Pricing Objectives 1.Managing for long-run profits -- (READ FROM THALER (1985) ACR -- NOTE THAT THE REASON FOR SELLERS KNOWINGLY CHARGING LESS FOR THE MARKETING CLEARING PRICE IS FOR POSITIVE TRANSACTION UTILITY AND THE GOODWILL FOR FUTURE PURCHASES-WHEREAS CHARGING WHAT THE MARKET WILL BEAR WOULD RESULT IN NEGATIVE FEELINGS TOWARD THE SOURCE -- NOTE THE COMPARISON THALER MAKES REGARDING REPEAT BUSINESS OR NOT, I.E., THE TABLE ON P. 231). Explain the concept of customer lifetime value.

What Are We Trying to Achieve? Pricing Objectives (Not Mutually-Exclusive)

Profit: -Managing for long-run profits (often the case in truly new product launches) -Managing for current profits (typical in launching line extensions) -Target return (allowing corporate goals to be accomplished)

Ergonomics/Human Factors

Scientific discipline of analyzing & understanding human interactions with a product in order to optimize consumer well-being & overall product performance

Skimming and Penetration Pricing

Skimming: Will consumers initially pay more? -High initial price for new/innovative product vs a large enough segment of early adopters/fast followers in target consumer group are willing to pay it -High barriers to entry: not easily/quickly copied -Pricing may come down later as competitors emerge Ex: new version of Iphone Penetration: Will pricing need to be more value or at category norms? -Low price on product to drive adoption -Low barriers to entry/copy -High price sensitivity in category -Economies of scale lower production costs Ex: Vizio TV

ATAR Forecasting Example

Step 1: Find discounted trial definitely would buy (35%)*75%+ probably would buy (20%)*50% = 36.25% Step 2: Calculate market share 60% awareness * 36.25% trial * 50% availability * 34.78% repeat = 3.78% share Step 3: Calculate total unit sales by multiplying share * total market units 3.78% share * 50 mil units = 1.89 mil units Step 4: Calculate total retail $ sales by multiplying total units * retail price 1.89 mil units * $4.99 retail price = $9.4311 mil in Year 1 sales

Brand Storytelling

Telling brand's story is critical part of building your brand. It helps to shape how people view you & enables consumers to begin foraging a connection w/ you & your company. Do it right, & you'll put building blocks in place that allow you to develop a thriving brand with and equally thriving future, one that people buy from simply bc they love what you do, stand for, & the stories you share. Ex: Snap, crackle, & pop debut in 1928 and represent as the cereal differentiator

Price Elasticity Modeling: Waterfall Method

Testing concept purchase intent at various prices 1. How likel would you be to purchase this product for a price of $10? -Definitely would (skip remaining price questions) -Probably would (skip remaining price questions) -Might/might not (respondent is asked about next price level) -Probably wouldn't (respondent is asked about next price level) -Definitely wouldn't (respondent is asked about next price level) 2. ... at $5? 3. ...at $3? This establishes a reference price for consumer, but allows you to test multiple price points cleanly

Product Innovation Charter (PIC)

The PIC is a written document, created at the start of a project and is used throughout the NPD process. It charts your products through development and into the market 1. Background: Key ideas from the situation analysis 2. Focus (Technology/Market dimensions): What are our competencies and what are our competitive advantages 3. Goals & Objectives: In both the short and long term 4. Guidelines: this is essentially a roadmap for the team Examples: Focus groups, surveys, test markets

La Croix Reading

Their share has been falling as Pepsi countered with Bubbly. Recommendations: DO NOT change the brand and 90's graphic style, DO innovate to be more entrepreneurial and relevant to the millennial base. 1. Own flavor- go wild, botanicals? 2. Pair that with function- go into CBD arena? Coke & Pepsi wouldn't be able to follow there 3. Hire relevant celebrity talent to be spokesperson(s). Recommended POV: go from being an obscure sparkling water and millennial darling to a great tasting fizzy water spike with functional wellness. Pivot to a positioning of flavor & function

Packaging a Product

This is a key touchpoint between a brand & consumer. It is a chance for the brand to reach out to the consumer, to have a conversation with them w/o speaking a word. Very important platform for brands to foster a more positive relationship with consumer.

Top 2 Box Purchase Intent

This is the "golden metric" for concept testing. How likely are you to buy the product described if it were available where you shop today? 1% definitely would buy 7% probably would 27% might 41% probably wouldn't 24% definitely wouldn't This means the top 2 box score is equivalent to 8% since (1%+7%)

Brand Positioning Statement

To (target audience) in (market sector), Brand X will deliver (benefit: emotional/rational) because (reason to believe)

Price Elasticity Modeling: Von Westendorp Method.

To assess consumer's internal reference price & price sensitivity ask 3 questions: 1. What price would you EXPECT TO PAY for this item? 2. What price would be SO LOW that you would question this product's quality? 3. What price would be SO HIGH that you would no longer be willing to pay for this product? Ex: Camping bamboo toothbrush

Sales Forecasting: Top Down vs Bottom Up

Top Down Forecasting: sales are projected by drilling "down" from a total market view, using key assumptions. Ex: total market is $40 mil. We should reasonably be able to capture 20% market share (8 mil). ATAR model Bottom Up Forecasting: sales are projected building "up", aggregating individual sales (SKU, rep, store) projections Ex: we have 120 field sales reps. I think we should be able to assume each rep can achieve $100,000 ($12 mil) in sales on this new product. Reference-based modeling (AKA looks like analysis) BOTH ways are used in order to heighten accuracy & get best forecast

Integrated Marketing Communications

Unifying & connecting traditional & untraditional marketing tools so that they reinforce & strengthen each other best to deliver on a consistent brand, brand messaging & marketing strategy Product Promotion: -Advertising -Sales promo -Publicity -Personal selling -Direct marketing

Visual Brand Language

Unique design element (shape, color, material, finish, typography and composition) directly & subliminally communicating a company's values & personality through compelling imagery & design style. Example: BMW's VBL is 1. Distinctive 2-planted front grill 2. Center-mounted logo plate 3. Noise door makes when it closes

Archetypes in Brand Stories

Using archetypes can create deeper understanding of the inherent distinct power of your brand. By understanding your brand archetype you can more effectively shape brand personality, brand purpose or essence and message consistently in this vein. Ex: Creator-Apple, Hero-Nike, Ruler-Rolex

Benefit-Focused Design

Using design to communicate a product benefit. Ex: women vs mens razors -Women: rounded, pink, curvy, smaller, smooth=feminine & gentle -Men: rectangle, silver/black, racing stripes, larger, rougher=masculine Things such as color, material, finish, shape, size, & other design elements drive different reactions

Market Testing: Simulated Test Markets (STM)

Very common research technique pre-launch. CPG (consumer packaged good) brands really want a prediction of success prior to launch before investing millions in advertising, production ramp up, and distribution. Many research firms offer turn key approach including benchmarking to MANY previous new product studies. Big players: -BASES _IRI simulated market test

Mixed Branding Strategy

Where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market

Private Branding Strategy (Private Labeling/ Reseller Branding)

a company manufactures products but sells them under the brand name of a wholesaler or retailer. To the extent consumers see value in the private labels, it gives wholesalers & retailers leverage with manufacturers-this has huge implications for distribution channels. Ex: CVS deciding not to carry multiple national brands of batteries (from CVS to Costco)

Co-op Advertising

a sales promotion where the manufacturer and the retailer share the cost

Brand Positioning

refers to an articulation of why a "target" would want to buy your brand in preference to others. This is the place you want to own in your target's mind. It's exploring, identifying, and refining your distinctiveness via a brand positioning strategy