MKTG 5-9
Physical Differentiation
Beyond differentiating its physical product, a firm can also differentiate the services that accompany the product. Some companies gain services differentiation through speedy, convenient, or careful delivery.
Channel Differentiation
Firms that practice channel differentiation gain competitive advantage through the way they design their channel's coverage, expertise, and performance.
Positioning Statement Template
To (target segment and need) our (brand) is (concept) that (point of difference) Evernote example: "To busy multitaskers who need help remembering things, Evernote is a digital content management app that makes it easy to capture, organize, and share moments and ideas from your everyday or business life using your computer, phone, tablet, and the web." This is not a tagline! A tagline, ads, sales presentations are derived from the positioning statement.
What is a total market strategy and why do marketers use this approach? Provide a recent example of a product or service that uses the total market strategy approach and discuss the components that make it effective or ineffective
Total market strategy is the practice of integrating ethnic themes and cross-cultural perspectives within mainstream marketing. A total market strategy appeals to consumer similarities across subcultural segments rather than consumer differences. Examples may include are general-market commercials for Cheerios and Honey Maid graham crackers that feature interracial and blended families and couples
Psychographics
Used in segmentation; delves into how consumers describe themselves; allows people to describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices.
Buying center
all the individuals and units that play a role in the purchase decision-making process
Positioning
consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Market targeting (or targeting)
consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.
A product position is the way a product is ...
defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products. Products are made in factories, but brands happen in the minds of consumers
Brand Extension
extending an existing brand name to new product categories. Extensions can create immediate new-product familiarity at lower marketing expense.
What is a value proposition? Discuss the five winning value propositions on which a company might position its products and give an example of each.
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Maslow's hierarchy of needs
(level 1) Physiological Needs, (level 2) Safety and Security, (level 3) Relationships, Love and Affection, (level 4) Self Esteem, (level 5) Self Actualization
Buyer responses
-Buying attitudes and preferences -Purchase behavior: what the buyer buys, when, where, and how much -Brand engagements and relationships
Major Brand Strategy Decisions
1. Brand positioning 2. Brand name selection 3. Brand sponsorship 4. Brand development
What factors influence consumer behavior
1. Cultural -Culture -Subculture -Social class 2. Social -Groups and social networks 3. Personal -Age and life-cycle stage -Occupation -Economic situation -Lifestyle -Personality and self-concept 4. Psychological -Motivation -Perception -Learning -Beliefs and attitudes
Four Service Characteristics
1. Intangibility 2. Inseparability 3. Variability 4. Perishability
Branding
Branding is a company's use of a name, term sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service. Consumers view a brand as an important part of a product, and branding can add value to a consumer's purchase. Brand names help consumers identify products that might benefit them. Brands also say something about product quality and consistency.
Internal and Interactive Marketing
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With a successful implementation of brand extension what can happen?
With a successful implementation of brand extension, a firm can reach new demographics, acquire new customers, boost sales, and increase revenue.
define brand as a neurologist, and then branding
brand: a set of associations branding: an exercise in association design ex. Coke spends billions on advertising every year associating their brand with happiness!
The Power of Multiple Segmentation Variables
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Major influences on Business Buyer Behavior
1. Environmental 2. Organizational 3. Interpersonal 4. Individual photo
Major Segmentation Variables for Consumer Markets
1. Geographic (ex. Nations, regions, counties, cities, population density [ urban] , climate) 2. Demographic (ex. Age, life-cycle stage, gender income, education, religion, generation, ethnicity) 3. Psychographic (ex. Lifestyle, personality) 4. Behavioral (ex. Occasions, benefits, user status, usage rate, loyalty status)
Which differences to promote?
1. Important 2. Distinctive 3. Superior 4. Communicable 5. Preemptive 6. Affordable 7. Profitable
How is B2B different from B2C?
1. Market Structure & Demand -Fewer but larger buyers -Inelastic & more fluctuating demand -Derived demand 2. Types of Decisions & the Decision Process -More complex -Process is longer & more formal -Buyer & seller more dependent on each other 3. Nature of the Buying Unit -More decision participants -More professional purchasing effort
Requirements for Effective Segmentation
1. Measurable 2. Accessible 3. Substantial 4. Differentiable 5. Actionable
Buyer Decision Process
1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior
Evaluating Market Segments
1. Segment size and growth 2. Segment structural attractiveness 3. Company objectives and resources
Example of brand extension
Google-owned Nest—which began as a maker of stylish, connected, learning thermostats that can be controlled remotely by phone—has extended its line with a host of smart and stylish smart-home products, including a smoke and carbon monoxide alarm, home monitoring cameras, a home security alarm system, and a video doorbell that lets you know who's calling.
Individual marketing
In the extreme, micromarketing becomes individual marketing—tailoring products and marketing programs to the needs and preferences of individual customers. Individual marketing has also been labeled one-to-one marketing, mass customization, and markets-of-one marketing.
What do we control in the environment?
Marketing Sitmuli: Product Price Place Promotion
Product Mix Decisions
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Product Line Decisions Book
Product line filling NOT ON QUIZ
Product Line Decisions
Product line length - number of items in the product line. The line is too short if adding items increases profits Product line stretching - lengthening a product line beyond its currant range. BMW stretched up by acquiring Rolls Royce and stretched down by acquiring Mini Cooper.
When you bring one thing to mind, you ...
you also recall other concepts associated with it
Are there more B2B or B2C marketing jobs?
B2B
Which one is the best for Brand Positioning?
Beliefs and values "... attributes are the least desirable level for brand positioning. Competitors can easily copy attributes." "The strongest brands go beyond attribute or benefit positioning. They are positioned on strong beliefs and values, engaging customers on a deep, emotional level."
Brand extension vs. line extension, define both
Brand extension - when an established brand creates a new product category that is assumed to meet the needs of consumers. In this scenario, a company heavily relies on its loyal customers who will be glad to see more products from a trusted brand. Line extension - when a firm extends an existing product line. For example, when Apple introduces a new iPhone smartphone model or when Coca-Cola added Coke Zero to its line of carbonated beverages/
Chapter 5
Chapter 5
Chapter 5 v2
Chapter 5 v2
Chapter 6
Chapter 6
Chapter 8, 1 - 2
Chapter 8, 1 - 2
Example of multibranding
Companies often market many different brands in a given product category. For example, in the United States, PepsiCo markets at least eight brands of carbonated soft drinks, three brands of sports and energy drinks, five brands of bottled teas and coffees, five brands of bottled waters, and nine brands of fruit drinks.
Example of line extension
KFC has extended its "finger lickin' good" chicken lineup well beyond original recipe, bone-in Kentucky fried chicken. It now offers grilled chicken, boneless fried chicken, chicken tenders, hot wings, chicken bites, chicken popcorn nuggets, chicken sandwiches, and KFC Go Cups—chicken and potato wedges in a handy car-cup holder that lets customers snack on the go.
Labelling and logos
Labeling and logos range from simple tags attached to products to complex graphics that are part of the packaging. They perform several functions including identifying the product or brand, describing the product, and promoting the brand and engaging customers.
Explain the four choices a company has when developing brands and illustrate each with an example.
Line extension - occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. Brand extension - extends a current brand name to new or modified products in a new category. Multibranding - offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.
Discuss the characteristics affecting consumer behavior that marketers must be aware in evaluating purchase decisions
Marketers cannot control the cultural, social, personal, and psychological characteristics that influence consumer purchases; however they must take them into account
Social Marketing
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Three Types of Service Marketing
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Product support services
Product support services are an important part of the customer's overall brand experience. Keeping customers happy after the sale is the key to building lasting relationships. Many companies now use a sophisticated mix of phone, email, online, social media, mobile, and interactive voice and data technologies to provide support services.
Describe the service profit chain. Provide an example.
The service profit chain links service firm profits with employee and customer satisfaction. This chain consists of five links: internal service quality + satisfied and productive service employees + greater service value + satisfied and loyal customers = healthy service profits and growth. In a service business, the customer and the front-line service employee interact to co-create the service. Effective interaction, in turn, depends on the skills of front-line service employees and on the support-processes backing these employees. Thus, successful service companies focus their attention on both their customers and their employees. For example, customer-service all-star Zappos.com—the online shoes, clothing, and accessories retailers—knows that happy customers and profits begin with happy, dedicated, energetic employees. Similarly, at Four Seasons Hotels and Resorts, creating delighted customers involves much more than just crafting a lofty customer-focused marketing strategy and handing it down from the top. At Four Seasons, satisfying customers is everybody's business. And it all starts with satisfied employees.
product differentiation
Through product differentiation, brands can be differentiated on features, performance, or style and design.
Name and explain the five important decisions that marketers must make in developing and marketing individual products and services?
1. Product Attributes 2. Branding 3. Packaging 4. Labelling and logos 5. Product support services
Designing a Customer-Driven Marketing Strategy
1. Select customers to serve > create value for targeted customer < 2. Decide on value proposition could be better phrased in quizlet
Tell us about the 3 levels of market targeting that companies can use in choosing how many segments to target. Provide an example
1. Using an undifferentiated marketing (or mass marketing) ex. table salt, bottled water, grapefruit 2.
Three Levels of Product
1. core customer value 2. actual product 3. augmented product ex. lipstick 1. Buyers of lipstick are seeking ... self-expression, group memebership, differentiation
Stages of Business Buyer Decision Process
1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review
The 5 Individual Product Decisions, and purpose
1. product attributes 2. branding 3. packaging 4. labeling 5. product support services -to create core customer value
Market-Targeting Strategies
1. undifferentiated (mass) marketing 2. differentiated (segmented) marketing 3. concentrated (niche) marketing 4. micromarketing (local or individual marketing)
Explain the difference between a product line and a product mix and provide examples to illustrate each one
A. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. For example, Marriott offers several lines of hotels: a luxury line including The Ritz-Carlton and St. Regis, a premium line including Marriott and Westin, a select line including Courtyard and Springhill Suites, and a line for longer stays including Residence Inn and TownePlace Suites. A product mix (or product portfolio) consists of all the product lines and items that a particular seller offers for sale. Colgate divides its overall product mix into four major lines: oral care, personal care, home care, and pet nutrition. Each product line consists of many brands and items. Its personal care line includes Softsoap liquid soaps and body washes, Tom's of Maine, Irish Spring bar soaps, Speed Stick deodorants, Afta, and Colgate toiletries and shaving products, among others. Each brand comes in numerous varieties: Colgate toothpastes range from Colgate Total, Colgate Optic White, and Colgate Tartar Protection to Colgate Sensitive, Colgate Enamel Health, Colgate PreviDent, and Colgate Kids.
Describe the tools B-to-B marketers use to engage customers What are the challenges with B-to-B social media marketing?
Business customers have shifted to online buying. B-to-B marketers use a wide range of digital and social media marketing approaches - from websites, blogs, mobile apps, e-newsletters, and proprietary online networks to mainstream social media such as Facebook, LinkedIn, Youtube, and Twitter - to engage business customers and manage customer relationships anywhere, any time. The challenges include managing social media. Updating websites, blogs, and social media platforms takes time and a specialized skill set. Large companies may have skilled social media specialists, but mid-to-small companies most likely rely on current staff to maintain a social presence.
Buyer's black box
Buyer's characteristics Buyer's decision process
Chapter 6, 3-4
Chapter 6, 3-4
Chapter 7, 3-4
Chapter 7, 3-4
Chapter 7, 1 - 2
Chapter, 1 - 2
people differentiation
Companies can also gain a strong competitive advantage through people differentiation—hiring and training better people than their competitors do.
Describe how marketers segment business markets How do business segmentation strategies differ from consumer segmentation strategies?
Consumer and business marketers use many of the same variables to segment their markets -Business buyers can be segmented geographically, demographically (industry, company size), or by benefits sought, user status, usage rate, and loyalty status. Businesses also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics
Product Attributes
Developing a product or service involves defining the benefits that it will offer through the product attributes, including quality, features, style and design. -Product quality is one of the marketer's major positioning tools. -Product features are a competitive tool for differentiating the company's product from competitors' products. -Product style describes the appearance while, -design contributes to a product's usefulness as well as to its looks.
Don't confuse value proposition with?
Don't confuse brand slogans, catchphrases, or even a positioning statement with a value proposition as they're different things.
What do we need to try and understand
Economic Technological Social Cultural
image differentiation
Even when competing offers look the same, buyers may perceive a difference based on company or brand image differentiation. A company or brand image should convey a product's distinctive benefits and positioning. Developing a strong and distinctive image calls for creativity and hard work.
The characteristics of a new product affect its rate of adoption Identify the 5 characteristics that influence the rate of adoption and describe how each factor will influence the rate of adoption of the Apple Watch?
Five characteristics are especially important influencing innovation rate of adoption: 1. Relative advantage: The degree to which the innovation appears superior to existing products. There are a limited number of competitive products in this category. When doing a comparison among brands, the Apple watch will most likely appeal to the existing Apple customer because of its compatibility with the iPhone. 2. Compatibility: The degree to which the innovation fits the values and experiences of potential consumers. The Apple watch is an extension of Apple's successful product line and consumers will be familiar with and able to interface easily with the technology. 3. Complexity: The degree to which the innovation is difficult to understand or use. Purchasers of the Apple watch will most likely be loyal Apple users, so they will not have a high degree of difficulty understanding this product. 4. Divisibility: The degree to which the innovation may be tried on a limited basis. Consumers can try on an try out the Apple Watch in any Apple store or any retailer that carries the product 5. Communicability: The degree to which the results of using the innovation can be observed or described to others. The Apple watch needs little introduction to iPad or iPhone users. The brand maintains a majority market share in many categories.
How can a company gain competitive advantage through differentiation? Describe an example of a company that illustrates each type of differentiation discussed in the chapter
If a company positions its product as offering the best quality and service, it must actually differentiate the product so that it delivers the promised quality and service. It can differentiate along the lines of a. product, b. services, c. channels, d. people, or e. image.
Briefly discuss a business buyer's straight rebuy and modified rebuy strategies What are the similarities and differences? When might it be beneficial to use one approach over the other?
In a straight rebuy, the buyer reorders something without any modifications. -It is usually handled on routine basis by the purchasing department. To keep the business, "in" suppliers try to maintain customer engagement and product and service quality. "Out" suppliers try to find new ways to add value or exploit dissatisfaction so that the buyer will consider them. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The "in" suppliers may become nervous and feel pressured to put their best foot forward to protect an account. "Out" suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business
Name and briefly describe the four major steps in designing a customer value-driven marketing strategy
In the first two steps, the company selects the customers that it will serve -Market Segmentation -Market Targeting In the final two steps, the company decides on a value proposition - how it will create value for target customers -Differentiation -Positioning
Adopter Category Descriptions
Innovators are venturesome - they try new ideas at some risk Early adopters are guided by respect - they are opinion leaders in their communities and adopt new ideas early but carefully Early mainstream are deliberate - although rarely leaders, they adopt new ideas before the average person Late mainstream are skeptical - they adopt innovations only after most people have tried it. Laggards are tradition bound - they are suspicious of changes and adopt innovations only it has become something of a tradition itself. As you go through: Higher need, willingness to take resources, and then lower need
What are four psychological factors that influence a customer's purchase behavior? Name and explain each of the four factors.
Motivation comes from a need that reaches a level of intensity that must be satisfied. Motives (drive) is a pressing need that directs a person to seek satisfaction. A motivated person is ready to act. Perception is the process by which people select, organize, and interpret information to form a picture of the world. A person's actions are influenced by his or her own perception of the situation based on individual interpretation. Learning describes changes in an individual's behavior arising from experiences. If an experience is rewarding, the consumer's behavior is reinforced. Beliefs + Attitudes are a person's relatively consistent evaluations, feeling, and tendencies toward an object or idea. A person's attitudes fit into a pattern and are difficult to change.
Packaging
Packaging involves designing and producing the container or wrapper for a product. Companies realize the power of good packaging to create immediate consumer recognition of a brand. Innovative packaging can give a company an advantage over competitors and boost sales. Poorly designed packages can cause headaches for consumers and lost sales for the company.
What can be differentiated?
Products (feature, performance, style & design) (Bose) Services (speed, convenience) (QuickenLoan's Rocket Mortgage) Channels (coverage, expertise, performance) (GEICO's B2C model) People (hiring & training better than competitors) (Starbucks/Lululemon) Image (brand image should convey distinctive benefits & positioning) (Ritz-Carlton's quality image, McDonald's golden arches) Or a combination
What are the stages in the adoption process? Describe how a student goes through the adoption process when choosing a college or university?
The adoption process is a mental process in which an individual learns about an innovation to finally adopting it. The stages in the adoption process: 1. Awareness: The consumer becomes aware of the new product but lacks information about it 2. Interest: The consumer seeks information about the new product 3. Evaluation: The consumer considers whether trying the new product makes sense 4. Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value 5. Adoption: The consumer decides to make full and regular use of the new product
concentrated marketing
Then P&G further segments each detergent brand to serve even narrower niches. When using a concentrated marketing (or niche marketing) strategy firm goes after a large share of one or a fewer segments. Example, Stance created technically superior socks and focus mostly on socks.
differentiated marketing strategy
Using a differentiated marketing (or segmented marketing) strategy, a firm decides to target several market segments and designs separate offers for each. For example, P&G markets at least six different laundry detergent brands in the United States (Tide, Gain, Cheer, Era, Dreft, and Bold), which compete with each other on supermarket shelves. Then P&G further segments each detergent brand to serve even narrower niches. When using a concentrated marketing (or niche marketing) strategy
Undifferentiated marketing strategy
Using an undifferentiated marketing (or mass marketing) strategy, a firm might decide to ignore market segment differences and target the whole market with one offer. Such a strategy focuses on what is common in the needs of consumers rather than on what is different. The company designs a product and a marketing program that will appeal to the largest number of buyers. Examples of products that are mass marketed may include table salt, bottled water, grapefruit, others
Differentiation
involves distinguishing the firm's market offering to create superior customer value.
Market Segmentation
involves dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments.
Micromarketing
is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments. Rather than seeing a customer in every individual, micromarketers see the individual in every customer. Renaissance Hotels' Navigator program puts a personal and local face on each location by "micro-localizing" recommendations for guests' food, shopping, entertainment, and cultural experiences at each destination.
Value Proposition
is the value you promise to deliver to your customers post purchase. It's ultimately what makes your product attractive to your ideal customer. A compelling value proposition meets three criteria: 1. It's specific. What are the specific benefits your target customer will receive? 2. It's pain-focused. How will your product fix the customer's problem or improve their life? 3. It's exclusive. How is it both desirable and exclusive? How well does it highlight your competitive advantage and set you apart from competitors?
