Principles of Marketing--Exam 2
service blueprint
Another version of a customer contact audit, called a service blueprint, *includes all employee actions *and *acknowledges that services are designed to be "experiences." *
Cost per thousand (CPM)
"I will pay $0.50 for every 1,000 times this ad loads, up to $100 per month." Small websites that sell ads directly (may be using a third-party service) used by: Advertisers who simply want to build "awareness"
Response
*the impact the message had on the receiver's knowledge, attitudes, or behaviors* during the communication process. In the feedback loop,
receivers
Consumers who read, hear, or see the message sent by a source during the communication process.
consumer-oriented sales promotion
Directed to ultimate consumers sales tools used to support a company's advertising and personal selling. Chart in ch19 reading notes A variety of *consumer-oriented sales promotion tools* may be used, including coupons, deals, premiums, contests, sweepstakes, samples, loyalty programs, point-of-purchase displays, rebates, and product placements
case allowance
Discount on each case ordered during a specific time period. These allowances are usually deducted from the invoice. A variation of the case allowance is the "free goods" approach, whereby retailers receive some amount of the product free based on the amount ordered, such as 1 case free for every 10 cases ordered.
Promotional mix in postpurchase stage
In the postpurchase stage, the salesperson is still important. In fact, the more *personal contact *after the sale, the more the buyer is satisfied. *Advertising* is also important to assure the buyer that the right purchase was made. Advertising and personal selling help reduce the buyer's postpurchase anxiety. *Sales promotion* in the form of coupons and direct marketing reminders can help encourage repeat purchases from satisfied first-time triers. Public relations plays a small role in the postpurchase stage
Convenience Products
Items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort. gum
service continuum
What companies bring to the market ranges from the tangible to the intangible. This range of product-dominant to service-dominant offerings is referred to as the service continuum The range of offerings companies bring to the market, from the tangible to the intangible or the product-dominant to the service-dominant. Chart in ch 12 reading notes *some businesses are a mix of intangible services and tangible product factors*. A clothing tailor provides a service but also a product, the finished suit. How pleasant, courteous, and attentive the tailor is to the customer is an important component of the service, and how well the clothes fit is an important part of the product fast-food restaurant is about half tangible products (the food) and half intangible services (courtesy, cleanliness, speed, and convenience). Teaching, nursing, and the theater are intangible, service-dominant activities, and intangibility, inconsistency, inseparability, and inventory are major concerns in their marketing. Salt, neckties, and dog food are tangible products, and the problems represented by the four I's are not relevant in their marketing.
Channel Strategies
channel flow from a producer to intermediaries to consumers. Achieving control of the channel is often difficult for the manufacturer, and promotional strategies can assist in moving a product through the channel of distribution. This is where a manufacturer has to make an important decision about whether to use a push strategy, pull strategy, or both in its channel of distribution Chart in ch18 reading notes
Contests
encourage consumers to apply their skill or analytical or creative thinking to try to win a prize. This form of promotion has been growing as requests for videos, photos, and essays are a good match with the trend toward consumer-generated content. For example, Kellogg's sponsored the Pringles Mystery Flavor Contest, giving people the chance to guess a new flavor of Pringles chips. To enter the contest, consumers purchased a can of the chips, registered for the Kellogg's Family Rewards program, and uploaded a picture of their receipt along with their guess. Correct guesses moved to a final round where one finalist was selected to win $10,000!
Pretesting
ensure that messages are decoded properly.
Shopper marketing
in-store things video displays, shelf ads, instore sinage -meant to draw attention to the brand -relates to the 1st moment of truth (winning consumers attention in the store)
Services
intangible activities or benefits (such as airline trips, financial advice, or automobile repair) that an organization provides to satisfy consumers' needs in exchange for money or something else of value. more than 47 percent of the U.S. gross domestic product (GDP) now comes from services, exceeding goods and the three other components of GDP—business investment, government spending, and net exports (not shown in the figure). Services also represent a large export business—the $783 billion of service exports in 2019 is one of the few areas in which the United States has a trade surplus
Finance allowance
involves paying retailers for financing costs or financial losses associated with consumer sales promotions. This trade promotion is regularly used and has several variations. One type is the floor stock protection program—manufacturers give retailers a case allowance price for products in their warehouse, which prevents shelf stock from running down during the promotional period. Also common are freight allowances, which compensate retailers that transport orders from the manufacturer's warehouse.
traffic generation
outcome of an offer designed to motivate people to visit a business. The Home Depot, for example, uses an opt-in e-mail alert to announce special sales that attract consumers to the store. Similarly, Lands' End uses direct mail to generate traffic in its stores and on its website
risk barriers
physical, economic, or social ex: a risk barrier exists in large measure due to buyer uncertainty about the actual cost of all-electric-powered car ownership.
Influencer marketing
practice of focusing on the identification and recruitment of influencers to advocate a company's products, services, and brands rather than focusing exclusively on prospective buyers. Influencer marketing is based on the concept of personal influence; namely, a consumer's purchases are often influenced by the views, opinions, or behavior of others The identification of influencers on social media is based, in large part, on the number of followers an influencer has on social networking sites such as Facebook, Instagram, and Twitter and content community sites such as YouTube. The number of followers, in turn, is often attributed to an influencer's perceived credibility, knowledgeability, authenticity, and reliability in providing relevant content to his or her audience
Product life cycle
4 stages Describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. *Chart in Ch11 reading notes* has curves for total industry sales revenue and total industry profit. They represent the sum of sales revenue and profit of all firms producing the product. total industry or generalized product class sales curve
2. Avoiding the "NIH problem
A great idea is a great idea, regardless of its source. Yet in the bureaucracy that can occur in large organizations, ideas from outside often get rejected simply because they come from outside—what has been termed the "not-invented-here (NIH) problem." Forward-looking companies attempt to deal with this problem by embracing the policy of open innovation.
The private label win-win-win chart
Consumer: gets cheaper good, similar quality Store: get bigger margins on the private label Manufacturer: reduce a lot of risk. don't need to worry about shipping or ads, just sign a contract, do it, and get paid
salesperson evaluation measures
Conversion rate: #sales/#calls Meeting quota: $ Actual Sales/$ Sales Goals
3 levels of product
Augmented Expected Core
psychological barriers
cultural differences or image
How does advertising actually work?
3 theories: Hierarchy-of-Effects (same model from objective formulation applied in a different context.) Low Involvement Dual Mediation
packaging
A component of a product that refers to any container in which it is offered for sale and on which label information is conveyed.
close
Summarize Benefits Ask for the Sale Confirm the Sale Show Appreciation
Mobile Marketing
broad set of interactive messaging options that enable organizations to communicate and engage with consumers through any mobile device. Recent research indicates that the location data available from mo- bile devices can substantially increase the effectiveness of mobile marketing efforts.
Web 2.0
includes functionalities that permit people to collaborate and share information online. *allows different people to interact via internet.*
Product Placements
involves the use of a brand-name product in a movie, television show, video game, or commercial for another product. It was Steven Spielberg's placement of Hershey's Reese's Pieces in E.T. the Extra Terrestrial that first brought a lot of interest to the candy.
Brand dilution
when consumers no longer associate a brand with a specific product or service or start thinking less favorably about the brand
Viral marketing
attempts to spread a product through the internet at a rapid pace chicken guy for burger king -got them a lot of attention use the internet to get the impact of a persuasive message
Reliability
-*consistency is the single most powerful predictor for consumer satisfaction* -keeping your service promise, doing what people expect you to do for them -if people expect a package to ship over-night, it needs to do exactly that
Cost Reduction
About 80 percent of packaging material used in the world consists of paper, plastics, metal, and glass. As the cost of these materials rises, companies are constantly challenged to find innovative ways to cut packaging costs while delivering value to their customers. Many food and personal care companies have replaced bottles and cans with sealed foil packages, such as StarKist's tuna, salmon, and chicken single-serve pouches. Pouches cut packaging costs by 10 to 15 percent
Transit advertising
Advertising on the sides of busses and such
Augmented
Where you actually win the competitive battles 'surprise' add on/goes above and beyond things we do with our products that go beyond expectations and what our competitors are delivering Helps you use product more effectivly/ draw more satisfaction from it Him being able to return the drill even after the warranty period Ford app to help you find parking in crowded cities ford truck being able to charge your house
Reinforce
reinforce positive behaviors that we would like to see people repeat. -companies will use reinforcement advertising to reinforce a sale (reduce buyer's remorse)
Advocacy ads
state the position of a company on an issue. Chevron's "We Agree" campaign placed ads stating its position on issues such as renewable energy, protecting the planet, and community development. Another form of advocacy advertisement is used when organizations make a request related to a particular action or behavior, such as a request by IBM for gender equality in business leadership.
fashion product
style of the times. Life cycles for fashion products frequently appear in women's and men's apparel. Fashion products are introduced, decline, and *then seem to return*. The length of the cycles may be months, years, or decades. Consider women's hosiery. Product sales have been declining for years. Women consider it more fashionable to not wear hosiery—bad news for Hanes brands, the leading marketer of women's sheer hosiery. According to an authority on fashion, "Companies might as well let the fashion cycle take its course and wait for the inevitable return of pantyhose." example of product life cycle in ch11 reading notes
Lean innovation
tries to accelerate the entire process "if this product is gonna fail, lets find out fast" cut out the costs of product development gets the product to limited market as fast as possible on a trial basis forever-toilet rolls
Share of Wallet
-% in the category Ex: Starbucks share of wallet would be how much of the money a person spends on coffee is spent on Starbucks
Database Marketing
-Customer relationship management is crucial to doing this
two general trends are expected in the services industry in the future?
-new and better services -expanded variety of choices
Retail Media
Amazon, walmart etc since they can also host ads
Shopping Products
Items for which the consumer compares several alternatives on criteria such as price, quality, or style. dishwasher airline tickets
Assessing Service Quality
Once a consumer tries a service, how is it evaluated? Primarily, a consumer assesses service quality by *comparing expectations about a service offering to his actual experience with the service.* Differences between the consumer's expectations and experience are identified through gap analysis. The relative importance of the various dimensions of service quality varies by the type of service
Unaided Recall
The unaided recall approach involves asking respondents a question such as, "What ads do you remember seeing yesterday?" without any prompting to determine whether they saw or heard advertising messages.
Assumptive Close
entails asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized.
Brand marks
nonverbal labels attached to particular products device (design, sound, shape, or color), or combination of these used to distinguish a seller's products or services. nike swoosh, gators logo
3 qualities of promotional objectives
promotion objectives should possess three important qualities. They should (1) be designed for a well-defined target audience, (2) be measurable, and (3) cover a specified time period.
Creating the Actual Message
ad agencies will have mission statements that guide the way they make ads may use a spokesperson -One potential shortcoming of this form of advertising is that the spokesperson's image may change over time, becoming inconsistent with the image of the company or brand. -making ads is expensive...need a budget
CONSUMER ("PULL")
aim to create more demand on consumer's behalf COUPONS REBATES-you pay full price, then after you fill out some paper-work and get money back SAMPLING PREMIUMS--free gifts of some time (mugs, pencils, bobble heads, tshirts) and remind you of the brand CONTESTS POINT OF PURCHASE--have also led to a wider thing called shopper marketing DISPLAYS
wasted coverage
communication with consumers who are not in the target audience
Concept Test
external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual finished product. Firms that take an external approach to screening and evaluation use concept tests, Generally, these tests are more useful with minor modifications of existing products than with new, innovative products with which consumers are not familiar. Concept tests rely on written descriptions of the product but may be augmented with sketches, mockups, or promotional literature. Key questions for concept testing include: How does the customer perceive the product? Who would use it? and How would it be used? Failure to address these questions can lead to disastrous results. Consumer response to Google Glass is a case in point
Three Aspects of the Product Life Cycle (3 PLC Levels)
important aspects of product life cycles are: (1) their length, (2) the shape of their sales curves, and (3) the difference between product classes and forms.
*Branded Entertainment*
refers to the blending of commercial messages with entertainment consumer-generated media: -another form of crowdsourcing, for a new product design -put it out to the crowd to generate promotional ideas -dorritos ad competiton -redbull videos online of them doing cool stufflike flying planes
Urgency Close
used to commit the prospect quickly by making reference to the timeliness of the purchase: "The low interest financing ends next week," or "That is the last model we have in stock."
brand name
Verbal labels attached to particular products Any word used to distinguish a seller's products or services.
fad product
experiences rapid sales on introduction and then an equally rapid decline does not have the character of being a long-standing brand These products are typically novelties and have a short life cycle. They include fidget spinners, car tattoos described as the first removable and reusable graphics for automobiles, and vinyl dresses and fleece bikinis made by a Minnesota clothing company example of product life cycle in ch11 reading notes
Why do we care about PLC
its an aid to marketing planning Marketing mix varies over the the different stages of the plc
key account management
the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relation- ships. Key account management involves teams of sales, service, and often technical personnel who work with purchasing, manufacturing, engineering, logistics, and financial executives in customer organizations.
Expectations vs. Experiences
Expectations are influenced by word-of-mouth communications, personal needs, past experiences, and promotional activities, actual experiences are determined by the way an organization delivers its service, particularly through interpersonal competencies.
3 ways to carry out the advertising program
Full-service agency Limited-service (specialty) agency In-house agency
experience properties
Services such as restaurants and child care have experience properties, which can be discerned only after purchase or during consumption
Traditional Media
Television Radio Newspaper Magazine Outdoor -billboards, street furniture(bus stops), transit(on buses or subway cars)
message
The information sent by a source to a receiver during the communication process.
Encoding
The process of having the sender transform an idea into a set of symbols during the communication process.
How can errors in communication occur
The source may not adequately transform the abstract idea into an effective set of symbols, a properly encoded message may be sent through the wrong channel and never make it to the intended receiver, the receiver may not properly transform the set of symbols into the correct abstract idea, or finally, feedback may be so delayed or distorted that it is of no use to the sender.
Institutional Advertising
Objective is to build goodwill or an image for an organi- zation rather than promote a specific product or service. Institutional advertising has been used to build confidence in the company name Often this form of advertising is used to support the public relations plan or counter adverse publicity. Four alternative forms of institutional advertisements are often used: 1) Advocacy ads 2) Pioneering institutional ads 3) Competitive institutional ads 4) Reminder institutional ads
Insignificant point of difference
Research shows that a distinctive point of difference is the single most important factor for a new product to defeat competing ones—having superior characteristics that deliver unique benefits to the user. Consider General Mills's launch of Fingos, a sweetened cereal flake about the size of a corn chip, with a $34 million promotional budget. Consumers were supposed to snack on them dry, but they didn't.9 The point of difference was not important enough to get consumers to stop eating competing snacks such as popcorn and potato chips.
Pulse (burst) schedule
A flighting schedule is combined with a continuous schedule because of increases in demand, heavy periods of promotion, or introduction of a new product. Some products such as toys or automobiles require pulse- schedule advertising to facilitate sales throughout the year and during special periods of in- creased demand (such as holidays or new car introductions)
If a company elects to employ its own salespeople, then it must choose an organizational structure based on
(1) geography, (2) customer, or (3) product
Selecting Social Media
(1) the characteristics of the website's visitors (2) the number of users or unique visitors to the website.
Different ways to define "new"
-Newness Compared with Existing Products -Newness from the Consumer's Perspective -Newness in Legal Terms -Newness from the Organization's Perspective
Customer Relationship Management
-managing data in order to manage customer relationships -in order to do this we need to consuct business in a way that lets us collect a lot of data (database marketing needs a lot of data) Focus on CRM boils down to 3 different dimensions of people's purchase behavior: *Recency* How recently someone has made a purchase People who have made recent purchases are more valuable *Frequency* How often do they purchase *Monetary Value* How much do they spend with us These three factors are then used to make customer score for each of the people that we do business with -Can then be used to create a customer pyramid
Brand Licensing
A contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee. Successful brand licensing requires careful marketing analysis to ensure a proper fit between the licensor's brand and the licensee's products For example, the NFL and the NBA each earn about $3.5 billion annually by licensing team names and logos for merchandise. The Peanuts brand characters, including Charlie Brown, Snoopy, and Lucy, generate almost $100 million annually in licensing fees
National Brand
Brands we talk about all the time sold in lots of different stores very interested in brand loyalty
Specialty Products
Items that the consumer makes a special effort to search out and buy. luxury car or designer watch
People
Many services depend on people for the creation and delivery of the customer service experience. The nature of the interaction between employees and customers strongly influences the customer's perceptions of the service experience. Customers will often judge the quality of the service experience based on the performance of the people providing the service. This aspect of services marketing has led to a concept called *internal marketing*. In addition, employee participation in activities that identify, generate, and enhance value creation leads to an internal market orientation
Choosing a Medium and a vehicle within that medium
Often advertisers use a mix of media forms and vehicles to 1)maximize the exposure of the message to the target audience while at the same time 2) minimizing costs. These two conflicting goals are of central importance to media planning.
Measuring the Results of Social Media Marketing Programs
Performance measures for social media marketing programs can be divided into (1) those linked to inputs or costs (2) those tied to the outputs or revenues resulting from social media. The ideal performance measure for both conventional and social media is one that ties actual sales revenues to the cost of the ad or other promotion.
Flighting (intermittent) schedule
Periods of advertising are scheduled between periods of no advertising to reflect seasonal demand. snow skis and suntan lotions have seasonal demands and receive flighting-schedule advertising during the seasonal demand period.
Product Forms
Products can exist in various product forms within a product class
Pioneering institutional ads
Used for announcements about what a company is, what it can do, or where it is located. Recent Bayer ads stating "We cure more headaches than you think" are intended to inform consumers that the company produces many products in addition to aspirin. KPMG uses pioneering institutional ads to inform people about its expertise with data and analytics. like the pioneering ads for products discussed earlier,
Remind
Used when companies have used a lot of product, but find that people don't really use the product lysol found that sales were drooping bc everyone had a can of lysol, didn't need another bc they weren't using it very often reminder advertising to help them remember to use it Campbells found the same issue
Social Media synonyms
Web 2.0, Web 3.0, and user-generated content
Risk
degree of risk represented by the product's purchase. Risk for the buyer can be assessed in terms of financial risk, social risk, and physical risk. A private jet, for example, might represent all three risks—it is expensive, employees and customers may see and evaluate the purchase, and safety and reliability are important. Although advertising helps, *the greater the risk, the greater the need for personal selling.* Consumers are unlikely to associate any of these risks with a candy bar.
Fighting Brands
multibrand companies introduce new product brands as defensive moves to counteract competition. chief purpose is to confront competitor brands Frito-Lay introduced Santitas brand tortilla chips to go head-to-head against regional tortilla chip brands that were biting into sales of its flagship Doritos and Tostitos brand tortilla chips.
Introduction Stage
occurs when a product is introduced to its intended target market. During this period, sales grow slowly and profit is minimal. The lack of profit is often the result of large investment costs in product development, such as the millions of dollars spent by Gillette to develop the Gillette Fusion shaving system. *The marketing objective for the company at this stage is to create consumer awareness and stimulate trial—the initial purchase of a product by a consumer* Companies often spend heavily on advertising and other promotion tools to build awareness and stimulate product trial among consumers in the introduction stage. Smart TVs and electric cars are in this stage
Samples
offering the product free or at a greatly reduced price. Often used for new products, sampling puts the product in the consumer's hands. A trial size is generally offered that is smaller than the regular package size. If consumers like the sample, it is hoped they will remember and buy the product. Taco Bell has offered free tacos nationwide several times in the past to encourage customers to try new products.
customized interaction
personal selling uses customized interaction between a seller and a prospective buyer. Personal selling activities include face-to-face, telephone, and interactive electronic communication. Direct marketing also uses messages customized for specific customers.
Customer experience management (CEM)
process of managing the entire customer experience with the company. CEM experts suggest that the process should be intentional and planned, consistent so that every experience is similar, differentiated from other service offerings, and relevant and valuable to the target market. Companies such as Disney, Southwest Airlines, the Ritz-Carlton, and Starbucks all manage the experience they offer customers. They integrate their activities to connect with customers at each contact point to move beyond customer relationships to customer loyalty Zappos.com requires that all employees complete a four-week customer loyalty training program to help deliver one of the company's core concepts—"Deliver WOW through Service."
gross rating points (GRPs)
reach (expressed as a percentage of the total market) is multiplied by frequency, an advertiser will obtain a commonly used reference number called gross rating points (GRPs) *To obtain the appropriate number of GRPs to achieve an advertising campaign's objectives, the media planner must balance reach and frequency*. The balance will also be influenced by cost.
Reminder institutional ads
reminder ads for products, simply bring the company's name to the attention of the target market again. The Army branch of the U.S. military sponsors a campaign to remind potential recruits of the opportunities available in the Army.
Lead generation
result of an offer designed to generate interest in a product or service and a request for additional information. Four Seasons Hotels now sells private residences in several of its properties and sends direct mail to prospective residents asking them to request additional information on the telephone or through a website
Newness from the Consumer's Perspective
second way to define new products is in terms of their effects on consumption. This approach classifies new products according to the degree of learning required by the consumer, as shown in chart in ch 10 reading notes levels of innovation from consumer innovation 1. Continuous Innovation 2. Dynamically continuous innovation 3. Discontinuous innovation
Order Getter
sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers' use of a product or service. Like order takers, order getters can be inside (an automobile salesperson) or outside (an IBM salesperson).
Team selling
the practice of using an entire team of professionals in selling to and servicing major customers Team selling is used when specialized knowledge is needed to satisfy the different interests of individuals in a customer's buying center. A selling team might consist of a salesperson, a sales engineer, a service representative, and a financial executive, each of whom would deal with a counterpart in the customer's firm. -conference selling -seminar selling
Factors affecting whether a consumer will adopt a new product.
usage barriers value barriers risk barriers psychological barriers ex: For example, manufacturers of all-electric-powered automobiles provide low-cost leasing options to overcome usage, value, and risk barriers. Other companies provide warranties, money-back guarantees, extensive usage instructions, demonstrations, and free samples to stimulate initial trial of new products. For instance, software developers offer demonstrations downloaded from the Internet. Free samples are one of the most popular means to gain consumer trial. In fact, 71 percent of consumers consider a sample to be the best way to evaluate a new product
online behavioral targeting
collecting information about your Web-browsing behavior to personalize the banner and display ads that you will see as you surf the Web
subbranding
combines a corporate or family brand with a new brand, to distinguish a part of its product line from others. Used by some multiproduct branding companies Consider American Express. It has applied subbranding with its American Express Green, Gold, Platinum, Blue, and Centurion black charge cards, with unique service offerings for each. Similarly, Porsche successfully markets its higher-end Porsche Carrera and its lower-end Porsche Boxster.
Different Mediums with advantages and disadvantages
Ch 19 reading notes
Brand development Index (BDI)
Deals with sales of the brand (manufacture's perspective) compare certain territories against the national average
Primary demand
the desire for the product class rather than for a specific brand, since there are few competitors with the same product. Advertising and promotion expenditures in the introduction stage are often made to stimulate primary demand
Personal Selling Process
(1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up Chart in ch 21 reading notes
The three major tasks involved in implementing a sales plan
(1) salesforce recruitment and selection, (2) salesforce training, and (3) salesforce motivation and compensation.
Picking a Good Brand Name
*(1) name should suggest product benefits* -For example, Easy-Off (oven cleaner), Glass Plus (glass cleaner), *(2) name should be memorable, distinctive, positive* -In the auto industry, when a competitor has a memorable name, others quickly imitate. When Ford named a car the Mustang, the Pinto and Bronco soon followed. The Thunderbird name led to the Phoenix, Eagle, Sunbird, and Firebird from other car companies. *(3) name should fit company or product image* -Sharp is a name that can apply to audio and video equipment. Bufferin, Excedrin, Anacin, and Nuprin are scientific-sounding names, good for analgesics. Eveready, Duracell, and DieHard suggest reliability and longevity—two qualities consumers want in a battery. *(4) name should have no legal or regulatory restrictions* -Legal restrictions produce trademark infringement suits, and regulatory restrictions arise through the improper use of words. ex: FDA discourages the use of the word heart in food brand names. Increasingly, brand names need a corresponding website address on the Internet. This further complicates name selection because over 330 million domain names are already registered globally. *(5) name should be simple and emotional* -Examples that illustrate the former include Bold laundry detergent, Axe deodorant and body spray, and Bic pens; examples illustrating the latter include Joy and Obsession perfumes and Caress soap, shower gel, and lotion. *(6) The name should have favorable phonetic and semantic associations in other languages. * -In the development of names for international use, having a nonmeaningful brand name has been considered a benefit. ex: A name such as Exxon does not have any prior impressions or undesirable images among a diverse world population of different languages and cultures. The 7UP name is another matter. In Shanghai, China, the phrase means "death through drinking" in the local dialect. Sales have suffered as a result.
Packaging and Labeling Challenges and Responses
(1) the continuing need to connect with customers; (2) environmental concerns; (3) health, safety, and security issues; and (4) cost reduction.
Successful service organizations, like successful product-oriented firms, must
(1) understand how the consumer makes a service purchase decision, (2) understand how the consumer evaluates quality, and (3) determine how to present a differential advantage relative to competing offerings.
Customer Lifetime Value
-The longer someone stays with us, the more profits we can expect from that relationship (In Exam 2 math notes) -what is the average customer (in that category) worth over the span of their "lifetime" CLV is how marketers gage the different contributions of different customers to their company -and how to keep them around for a long time
3 ways to set an ad schedule
1) Continuous (steady) schedule. 2) Flighting (intermittent) schedule 3) Pulse (burst) schedule
Product
A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value.
Posttesting
An advertisement may go through posttests after it has been shown to the target audience to determine whether it accomplished its intended purpose. Five approaches common in post- testing: Aided Recall Unaided Recall Attitude Tests Inquiry Tests Sales Tests
Category development Index (CDI)
Deals with sales of the category/class (not just our brand) compare certain territories against the national average
Promotional mix in the Maturity stage
In the maturity stage, the need is to maintain existing buyers, and advertising's role is to remind buyers of the product's existence. *Sales promotion*, in the form of discounts and coupons offered to both ultimate consumers and intermediaries, is important in maintaining loyal buyers In a test of one mature consumer product, it was found that 80 percent of the product's sales at this stage resulted from sales promotions. Sponsoring events can also help maintain loyalty. For more than 20 years, Purina has sponsored the Purina Pro Plan Incredible Dog Challenge, which is covered by a live stream for online viewers. *Direct marketing* actions such as direct mail are used to maintain involvement with existing customers and to encourage repeat purchases. Price cuts and discounts can also significantly increase a mature brand's sales. The salesforce at this stage seeks to satisfy intermediaries. An unsatisfied customer who switches brands is hard to replace.
Inquiry Tests
Inquiry tests involve offering additional product information, product samples, or premiums to an ad's readers or viewers. Ads generating the most inquiries are presumed to be the most effective.
Tracking New-Product Performance
Marketers monitor the impact of their new products on company sales to gauge the effectiveness of their new-product development effort. One measure used by 62 percent of large U.S. companies is the New Product Vitality Index. (ch 10 reading notes) This index tracks the percentage of total company sales that come from new products each year.
difference between PR and Publicity
PR A function of the company trying to influence the nature of the publicity that we receive. -put our press releases or hold news conferences in order to generate news worthy things about our brand/company that we HOPE the news media will pick up on and publish (don't pay them to publish) *Publicity* anything that is out there ini our environment that is not directly under our control ex: coverage we get on newspaers or websites or magazines -independent of the company -can be good or bad
Data analysis conducted by Product Managers
Sales, market share, and profit trends are closely monitored. Managers often supplement these data with two measures: (1) a category development index (CDI) (2) a brand development index (BDI). *equations in ch11 reading notes* A CDI over 100 indicates above-average product category purchases by a market segment. A number under 100 indicates below-average purchases. A BDI over 100 indicates a strong brand position in a segment; a number under 100 indicates a weak brand position. These indexes help to identify strong and weak market segments (usually demographic or geographic segments) for specific consumer products and brands and provide direction for marketing efforts.
Salesforce Testing
Whereas the recruitment and selection of salespeople is a one-time event, salesforce training is an ongoing process that affects both new and seasoned salespeople. Sales training covers much more than selling practices. On-the-job training is the most popular type of training, followed by individual instruction taught by experienced salespeople. Formal classes, seminars taught by professional sales trainers, and computer- based training are also popular.
Mass Selling
advertising, sales promotion, and public relations—are often said to use mass selling because *they are used with groups of prospective buyers.*
Label
an integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients
helping small businesses network to reach potential customers, as well as filling its traditional role of connecting job seekers and jobs Marketing managers can use LinkedIn to promote their brand in subtle ways. This is done mainly for business-to-business (B2B) image building and networking with other professionals. Among small business owners, 41 percent see LinkedIn as potentially beneficial to their company
Salesforce Motivation
(1) a clear job description, (2) effective sales management practices, (3) a personal need for achievement, and (4) proper compensation, incentives, or rewards ...will produce a motivated salesperson.
Presentation: Tailoring a Solution for a Customer's Needs
(Determine Format To Be Used) Deliver Content -storytelling style works best Use of Visual Aids (Laptop) -apple: less is more Product Demonstrations Handling Objections core of the order-getting selling process, and its objective is to convert a prospect into a customer by creating a desire for the product or service. Three major presentation formats exist: (1) stimulus-response format, (2) formula selling format, (3) need-satisfaction format. Outlined presentation-have a good idea for what you will talk about
Customer Pyramid
(Seg 10 slides) Reflects the value of a customer depending on the Recency, Frequency, and Monetary value -size of the pyramid level doesn't have to reflect the size of that customer group Lead—cost the company money, they try to. Minimize this segment by upgrading these customers or disassociating from them -people who are constantly complaining, returning merchandise Iron—people who provide the volume needed that allows the company to use its full capacity -don't get special treatment Gold—a lil less than platinum platinum—not price sensitive, heavy users, very committed to the company Goal is to treat people at the top really well, and get people at the bottom to move up Use this to determine what kind and how many catalogues to send in the mail
Inform
-will tell you where a store is located or the features a product has
2 factors for classifying social media
1) *Media richness*: This involves the degree of acoustic, visual, and personal contact between two communication partners—face-to-face communications, say, being higher in media richness than telephone or e-mail communications. The higher the media richness and quality of presentation, the greater the social influence that communication partners have on each other's behavior. words->pictures-> animation 2) *Self-disclosure*: In any type of social interaction, individuals want to make a positive impression to achieve a favorable image with others. This favorable image is affected by the degree of self-disclosure about a person's thoughts, feelings, likes, and dislikes—where greater self-disclosure is likely to increase one's influence on those reached. impersonal-(wikipedia) personal-(twitter) chart showing the spectrum in ch 20 notes
Promotional Decision Process
1. Developing 2. Executing 3. Assessing the promotion program chart in ch18 reading notes
self-service technologies
A growing number of customers use *company-controlled* self-service technologies such as Home Depot's self checkout, Southwest Airlines's self check-in, and Schwab's online stock trading without interacting with any service employees.
Gap Analysis
A type of analysis that compares the differences between the consumer's expectations about and experiences with a service based on dimensions of service quality.
Setting the Promotion Budget
After setting the promotion objectives, a company must decide how much to spend. Determining the ideal amount for the budget is difficult because there is no precise way to measure the exact results of spending promotion dollars. However, several methods can be used to set the promotion budget: Percentage of Sales Competitive Parity All You Can Afford Objective and Task
Attitude Tests
Attitude tests involve asking respondents questions to measure changes in their attitudes after an advertising campaign. For example, they might be asked whether they now have a more favorable attitude toward the product advertised. Research suggests that attitudes can be influenced by many factors, including the increasingly popular use of cocreation to develop consumer-generated ads
Five dimensions of service quality
Chart in Ch12 notes
Dual mediation theory**** (find a better explaination)
Chart in exam 2 quantitative tries to capture both types of advertising effectiveness Starts with someone being exposed to an ad we can either: 1) develop a liking for the ad itself 2) develop brand perceptions from either of these we can then see a shift in brand attitude or purchase intent
dynamically continuous innovation
Disrupts consumer's normal routine but does not require totally new learning. only minor changes in behavior are required. *More like a new product form ,as opposed to a new brand. * ex: DVDs taking over from VCRs (product form is just pre-recorded movies) Procter & Gamble's Swiffer WetJet all-in-one mopping solution is a successful dynamically continuous innovation. Its novel design eliminates mess, elbow grease, and heavy lifting of floor cleaning materials without requiring any substantial behavioral change. So the marketing strategy here is to *educate prospective buyers on the product's benefits, advantages, and proper use.* Procter & Gamble did this with Swiffer. The result? Over a billion dollars in annual sales.
Promotional mix in the Introduction stage
Informing consumers in an effort to increase their level of awareness is the primary promotional objective in the introduction stage of the product life cycle. In general, all the promotional mix elements are used at this time, although the use of specific mix elements during any stage depends on the product and situation. News releases about a new dog food, for example, are sent to veterinary magazines, trial samples are sent to registered dog owners, advertisements are placed in Dogster magazine, and the salesforce begins to approach supermarkets and pet stores to get orders. *Advertising is particularly important as a means of reaching as many people as possible to build awareness and interest. * Publicity may even begin slightly before the product is commercially available.
capacity management
Integrating the process component of the marketing mix with efforts to influence consumer demand. Service organizations must manage the availability of the offering so that (1) demand matches capacity over the duration of the demand cycle (for example, one day, week, month, or year), and (2) the organization's assets are used in ways that will maximize the return on investment (ROI) how a hotel tries to manage its capacity during the high and low seasons: Differing price structures are assigned to each segment of consumers to help moderate or adjust demand for the service. Airline contracts fill a fixed number of rooms throughout the year. In the low season, when more rooms are available, tour packages at appealing prices are used to attract groups or conventions, such as an offer for seven nights in Orlando at a reduced price. Weekend packages are also offered to vacationers. In the high-demand season, groups are less desirable because guests who will pay high prices travel to Florida on their own.
Loyalty Programs
Loyalty programs are a sales promotion tool used to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. The most popular loyalty programs today are credit card reward programs. More than 75 percent of all cards offer incentives for use of their card. Citibank, for example, offers "Thank You" points for using Citi credit or debit cards. The points can be redeemed for books, music, gift cards, cash, travel, and special limited-time rewards. One trend in loyalty programs today is to customize the rewards and benefits for different segments of program members. This approach leads to promotions targeted at new members, members with unique purchase histories, or members who have self-selected into "elite" status groups
Organizational Inertia in New-Product failures
Organizational problems and attitudes can also cause new-product disasters. Two key ones are: 1. Encountering "groupthink" in task force and committee meetings. 2. Avoiding the "NIH problem
How do companies organize for effective new product development: *The Cross-Functional Team*
P&G is the company credited with the idea of getting lots of different angles when developing products as we move through the New product development process (not just have the R&D team do everything and then just walk down the hall and hand it to the sales department) historically, the R&D team drove the process. engineers just came up with new sh1t -want to avoid this bc just bc we make something new doesn't mean consumers want it. we should consider their wants as we develop a product Want to develop products that have real value in the marketplace in order to do this we have multiple teams with multiple views (not just R&D) *The Cross-Functional Team* Marketing Sales R & D Production Finance instead of the old way, we have a collective process for developing new ideas doing this leads to fewer bad surprises and greater success
Percentage of Sales budgeting
Percentfunds are allocated to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold. A common budgeting method, this approach is often stated in terms such as, "Our promotion budget for this year is 3 percent of last year's gross salesage of Sales *advantages* It is simple and provides a financial safeguard by tying the promotion budget to sales. *disadvantages* Percentage of sales budgeting implies that sales cause promotion. Using this method, a company may reduce its promotion budget because of a downturn in past sales or an anticipated downturn in future sales—situations in which it may need promotion the most.
Business Products
Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products. A major characteristic of business products is that their sales are often the result of derived demand Business products may be classified as components or support products.
Communication tools
Promotional element of the marketing mix has 5 communication tools advertising, personal selling, sales promotion, public relations, and direct marketing fig18-2 in ch18 reading notes highlights some pros and cons of each
Lanham Act
Protects against trademark infringement In the United States, trademarks are registered with the U.S. Patent and Trademark Office
Sales Plan Formulation: Setting Direction
Sales Objective -are you looking for output ($ or units or margin), or input (make a lot of calls) Make or Buy? -should you have your own sales team or should you outsource it Organization Regional Product Line Type of Account -gov vs specific industry (need right people on it) Size of Salesforce -workflow method Formulating the sales plan is the most basic of the three sales management functions. Sales plan formulation involves three tasks: (1) setting objectives, (2) organizing the salesforce, (3) developing account management policies.
Poor execution of the marketing mix: brand name, package, price, promotion, distribution.
Somewhere in the marketing mix there can be a showstopper that kills the product. Introduced by Gunderson & Rosario, Inc., Garlic Cake was supposed to be served as an hors d'oeuvre with sweet breads, spreads, and meats, but somehow the company forgot to tell this to potential consumers. Garlic Cake died because consumers were left to wonder just what a Garlic Cake is and when on earth a person would want to eat it.
Low involvement hierarchy
TDF Think-do-feel short sales cycle, easy and fast decisions We want to focus on content that builds awareness 1)Cognition -some awareness of the brand 2)Conation -the awareness leads to a trial purchase 3)Affect -after the trial purchase we decide how we feel about the brand
Display Ads
TYPICAL BANNER ADS VIDEO ADS REAL-TIME AUCTIONS BEHAVIORAL TARGETING -done through use of cookies (increase relavence of the ads to the user based on past behavior) ex: user heads to website website tells advertisers about the user, and thier search history in real time and asks how much they would bid to be the3 only search result recieves bids and gives it to the best one *Native advertising*--show up looking like normal content on the site (like ads on ig that look like a post)
Tangibles
Tangible aspects of the service The place of business, cleanliness, how the employees dress, For fast food, the actual food. How comfortable are the theater seats Consumers appreciate a good appearance
search properties
Tangible products such as clothing, jewelry, and furniture have search properties, such as color, size, and style, which can be determined before purchase
Growth Stage
The growth stage of the product life cycle is characterized by rapid increases in sales. It is in this stage that competitors appear. Lots of competitors show up at the beginning, some start to leave at the end Quantity of the product rises, along with companies selling it The result of more competitors and more aggressive pricing is that profit usually peaks during the growth stage *lower prices, higher prices* At this stage, advertising shifts emphasis to stimulating selective demand; product benefits are compared with those of competitors' offerings for the purpose of gaining market share. Product sales in the growth stage grow at an increasing rate because of new people trying or using the product and a growing proportion of *repeat purchasers*—people who tried the product, were satisfied, and bought again. Products in the growth stage today: e-book readers and 3D printers.
5. Prototype Development
The idea goes from paper to prototype develop a product ona limited basis and see how it performs stage of the new-product development process that turns the idea on paper into a prototype. This results in a demonstrable, producible product that involves not only manufacturing the product efficiently but also performing laboratory and consumer tests to ensure the product meets the standards established for it in the protocol. Manufacturing the product efficiently and performing laboratory and consumer tests to ensure it meets protocol standards can make many adjustments until they are satisfied (like taco bell) McChicken tested with a lot of small variations *we are down to 3 products*
value barriers
The product provides no incentive to change Ex: Analysts also mention a value barrier for electric cars. Consumers have not recognized the superiority of all-electric cars over vehicles with internal combustion engines.
Penetration Pricing
To discourage competitive entry, a company can price low This pricing strategy helps build unit volume, but a company must closely monitor costs
Job description
a written document that describes job relationships and requirements that characterize each sales position. It explains (1) to whom a salesperson reports, (2) how a salesperson interacts with other company personnel, (3) the customers to be called on, (4) the specific activities to be carried out, (5) the physical and mental demands of the job, and (6) the types of products and services to be sold.
How does direct marketing work
company directly reaches out to consumer has several forms and uses a variety of media forms include: -direct mail & catalogs -television home shopping -telemarketing -direct selling ^^methods of nonstore retailing
Harvesting
company retains the product but reduces marketing costs. The product continues to be offered, but salespeople do not allocate time in selling nor are advertising dollars spent. The purpose of harvesting is to maintain the ability to meet customer requests. Coca-Cola, for instance, still sells Tab, its first diet cola, to a small group of die-hard fans. According to Coke's CEO, "It shows you care. We want to make sure those who want Tab, get Tab."
Repositioning the Product
changes the place a product occupies in a consumer's mind relative to competitive products. A firm can reposition a product by changing one or more of the four marketing mix elements. Four factors that trigger the need for a repositioning action: *1) Changing the value offered* In repositioning a product, a company can decide to change the value it offers buyers and trade up or down *2) Reacting to a competitor's position* One reason to reposition a product is because a competitor's entrenched position is adversely affecting sales and market share. Ex: New Balance, Inc. successfully repositioned its athletic shoes to focus on fit, durability, and comfort rather than competing head-on against Nike on performance and Adidas on fashion. The company offers an expansive range of shoes and networks with podiatrists, not sports celebrities. *3) Reaching a new market* When Unilever introduced iced tea in Britain, sales were disappointing. British consumers viewed it as leftover hot tea, not suitable for drinking. The company made its tea carbonated and *repositioned* it as a cold soft drink to compete as a carbonated beverage and sales improved. Johnson & Johnson effectively *repositioned* its St. Joseph aspirin from a product for infants to an adult low-strength aspirin to reduce the risk of heart problems or strokes. *4) Catching a rising trend* Changing consumer trends can also lead to product repositioning. Growing consumer interest in foods that offer health and dietary benefits is an example. *Many products have been repositioned to capitalize on this trend.* Quaker Oats makes the FDA-approved claim that oatmeal, as part of a low-saturated-fat, low-cholesterol diet, may reduce the risk of heart disease. Calcium-enriched products, such as Kraft American cheese and Uncle Ben's Calcium Plus rice, emphasize healthy bone structure for children and adults. Weight-conscious consumers have embraced low-fat and low-calorie diets in growing numbers. Today, most food and beverage companies offer reduced-fat and low-calorie versions of their products.
Good
has tangible attributes that a consumer's five senses can perceive. For example, the Apple Watch can be touched and its features can be seen and heard A good also may have intangible attributes consisting of its delivery or warranties and embody more abstract concepts, such as becoming healthier or wealthier.
Earned media
includes consumer-generated posts, tweets, shares, comments, retweets, etc. (in essence, electronic word-of-mouth). Arbbys tweer getting retweeted goal is to do things thru owned or unearned media that will generate earned media
unearned (paid) media
includes typical advertising messages, but also Facebook posts, tweets, Instagram posts, etc., by the brand. Abbys posting something themselves
Product/Brand Manager
manages the marketing efforts for a close-knit family of products or brands All product managers are responsible for managing existing products through the stages of the life cycle. Some are also responsible for developing new products. Product managers' marketing responsibilities include developing and executing a marketing program for the product line described in an annual marketing plan and approving ad copy, media selection, and package design. Product managers also engage in extensive data analysis related to their products and brands. The product manager style of marketing organization is used by consumer goods firms, including General Mills and PepsiCo, and by technology companies such as Intel and Hewlett-Packard
Delivery by People or Equipment
many companies offer services. *Professional services* include management consulting firms such as Booz Allen Hamilton or Accenture. *Skilled labor* is required by Geek Squad to offer services such as cell phone, computer, and appliance repair and by Sheraton to offer its catering service. *Unskilled labor* such as that used by Brink's store-security forces is also a service provided by people. *Equipment-based services* do not have the marketing concerns of inconsistency because people are removed from the provision of the service. Electric utilities, for example, can provide service without frequent personal contact with customers. Movie theaters have projector operators that consumers never see.
Co-branding
practice of pairing two or more strong brands to facilitate the marketing of a joint product or service for their mutual benefit. Want to borrow from eachother's brand image and create something that has value For example, companies use component or ingredient branding (Dell computers with Intel processors, or Hershey's chocolate with Betty Crocker cupcake mix), joint venture branding (Citibank and American Airlines credit cards), and sponsorships (AT&T, Mercedes-Benz, and IBM co-sponsor the annual Masters Golf Tournament).
Cross-selling
practice of proposing related or complementary products and services.
Full-service agency
provides the most complete range of services, including marketing research, media selection, copy development, artwork, and production. The most common form of compensation for an agency is a fee-based model, Does research, selects media, develops copy, and produces artwork; also coordinates integrated campaigns with all marketing efforts
low-learning product
sales for begin immediately because little learning is required by the consumer and the benefits of purchase are readily understood This product often can be easily imitated by competitors, so the marketing strategy is to broaden distribution quickly. In this way, as competitors rapidly enter, most retail outlets already have the innovator's product. It is also important to have the manufacturing capacity to meet demand. Ex: A successful low-learning product is Gillette's Fusion razor. This product achieved $1 billion in worldwide sales in less than three years and remains the best-selling razor in the world. example of product life cycle in ch11 reading notes
Coupons
sales promotions that usually offer a discounted price to the consumer, which encourages trial. More than 93 percent of all coupons are distributed as freestanding inserts in newspapers. Research indicates that consumer use of coupons is steady at approximately 92 percent. Do coupons help increase sales? Studies suggest that market share does increase during the period immediately after coupons are distributed.55 There are also indications, however, that couponing can reduce gross revenues by lowering the price paid by already-loyal consumer
Need-Satisfaction Format
the need-satisfaction presentation format emphasizes probing and listening by the salesperson to identify the needs and interests of prospective buyers. Once these are identified, the salesper- son tailors the presentation to the prospect and highlights product benefits that may be valued by the prospect. The need-satisfaction format, which emphasizes problem solving and customer solutions, is most consistent with the marketing concept and its focus on relationship building. On the other hand, The stimulus-response and formula selling formats share a common characteristic: The salesperson dominates the conversation. 2 selling styles common with this format: *Adaptive selling*-involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information. Sales research and practice show that knowledge of the customer and sales situation are key ingredients for adaptive selling. *Consultative selling*-focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution. With consultative selling, problem solution options are not simply a matter of choosing from an array of existing products or services. *Rather, novel solutions often arise,* thereby creating unique value for the customer. Objections tend to come up in this stage
Durable good
usually lasts over many uses, such as appliances, cars, and smartphones. costly durable goods, such as cars, generally emphasize personal selling.
Cost per click (CPC)
"I will pay $1 for every visitor who clicks on this ad and goes from your website to mine." Most websites use this method— executed by a third party like Google/ AdWords Advertisers who want to pay for success, but may not be able to track sales from advertisement to purchase used by: I pay only for a visitor who has expressed an interest in my ad
4 Types of Consumer Products
Differentiated in terms of: (1) the effort the consumer spends on the decision, (2) the attributes used in making the purchase decision, and (3) the frequency of purchase. the types: 1.Convenience Products 2.Shopping Products 3. Specialty Products 4. Unsought Products Chart in Ch 10 reading notes chart shows how each type of consumer product stresses different marketing mix actions, degrees of brand loyalty, and shopping effort. But how a consumer product is classified depends on the individual. One consumer may view a smartphone as a shopping product and visit several stores and websites before deciding on a brand, whereas another consumer may view a smartphone as a specialty product and make a special effort to buy only an iPhone.
Assessing service quality with RATER
Have been tested in a bunch of different industries to see how people's perceptions of the overall service quality Reliability Assurance Tangibles Empathy Responsiveness
Media Strategy:
How do we distribute our ad message effectively
Protocol
Made with the goal of making sure a product is successful A statement that, before product development begins, identifies: (1) a well-defined target market; (2) specific customers' needs, wants, and preferences; and (3) what the product will be and do to satisfy consumers.
Product class
Most organizations offer a range of products and services to consumers. Each set of offerings can be categorized according to the product class or industry to which they belong, like the iPad, which is classified as a tablet device.
Not satisfying customer needs on critical factors
Overlapping somewhat with point 1, this factor stresses that problems on one or two critical factors can kill the product, even though the general quality is high. Consider the failure of Kold made by Keurig Green Mountain, Inc. The company discontinued its Kold-brand countertop soda machine that allowed users to make chilled Coca-Cola, Dr Pepper, and other carbonated beverages at home. Despite making a great-tasting cold carbonated drink, Kold didn't deliver on other factors consumers considered critical. The machine was too large to fit on most kitchen countertops, the time necessary to produce the drink was too long, and the price was too high. Kold was priced at $370 and the cost per 8-ounce drink was $1.25
Permission Database personalizaion to personalize A/B Testing to refine -test 2 slightly different versions of the ad to see what is bet Preferred medium for a relevant offer
Portfolio Tests
Portfolio tests are used to test copy alternatives. The test ad is placed in a portfolio with several other ads and stories, and consumers are asked to read through the portfolio. Afterward, subjects are asked for their impressions of the ads on several evaluative scales, such as from "very informative" to "not very informative."
2 types of advertisement
Product and Institutional advertisements
In-house agency
Provides range of services, depending on company needs made up of the company's own advertising staff may provide full services or a limited range of services.
Consumer benefits from branding
Recognizing competing products by distinct trademarks allows them to be more efficient shoppers. Consumers can recognize and avoid products with which they are dissatisfied, while becoming loyal to other, more satisfying brands. brand loyalty often eases consumers' decision making by eliminating the need for an external search.
Trading Down
Reducing a product's number of features, quality, or price. For example, airlines have added more seats, thus reducing legroom, and limited meal service by offering only snacks on most domestic flights. Trading down also exists when companies engage in downsizing—reducing the package content without changing package size and maintaining or increasing the package price.
Product class
Refers to the entire product category or industry. ex: prerecorded music car tires you can apply the PLC concept to the whole product class (tires)
Theater Tests
Theater testing is the most sophisticated form of pretesting. Consumers are invited to view new television shows or movies in which test commercials are also shown. Viewers register their feelings about the advertisements either on handheld electronic recording devices used during the viewing or on questionnaires afterward.
Proper blend of elements in the promotional mix also depends on the type of product.
Three specific characteristics should be considered: complexity, risk, and ancillary services.
Allowances and Discounts
Trade promotions often focus on maintaining or increasing inventory levels in the channel of distribution. An effective method for encouraging such increased purchases by intermediaries is the use of allowances and discounts. over- use of these price reductions can lead to retailers changing their ordering patterns in the expectation of such offerings. *three common approaches are the merchandise allowance, the case allowance, and the finance allowance*
Twitter makes it easy to *place brand messages and gain online customer support* based on followers ∙ Generate brand buzz by developing an official Twitter profile, recruiting followers, and ∙ showing photos and videos of their products. Follow the Twitter profiles that mention their product and monitor what is being said, ∙ responding to user criticisms to develop happier customers. Tweet and video stream on topics that provide information of value to their consume
Determining size of the salesforce
Use the *workload method*. -eq in exam 2 quantitative The answer lies in the number of accounts (customers) served, the frequency of calls on accounts, the length of an average call, and the amount of time a salesperson can devote to selling.
Continuous (steady) schedule
When seasonal factors are unimportant, advertising is run at a continuous or steady schedule throughout the year. For example, products such as breakfast cereals have a stable demand throughout the year and would typically use a continuous schedule of advertising.
YouTube
YouTube's videos make it especially useful in explaining a complex product.
Seminar Selling
a company team conducts an educational program for a customer's technical staff, describing state-of-the-art developments.
Job Analysis
a study of a particular sales position, including how the job is to be per- formed and the tasks that make up the job.
Components
are items that become part of the final product. These include raw materials such as lumber, as well as assemblies such as a Toyota car engine.
feedback loop
consists of a response and feedback
*Product Placements*
designed to get around ad skipping capabilities putting our brand into various types of settings -movies -tv shows -video games -embedding your brand in the action -so people see your ad when they are watching the entertainment as opposed to an interrupting ad that people will tune out *Compensation methods* 1)straight fee for using product in a film 2)barter: comapny gives film producer the product, and they figure out how they will use it -wilson volleyball, ipad in modern family 3) Cross-promotion (reciprocal) if product is featured in movie, then the product company will promote the movie in their ads
Push Strategy
giving intermediaries a reason to sell your product Directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product. In this approach, *personal selling and sales promotions* play major roles. Salespeople call on wholesalers to encourage orders and provide sales assistance. Sales promotions, such as case discount allowances (20 percent off the regular case price), are offered to stimulate demand. By pushing the product through the channel, the goal is to get channel members to push it to their customers. Ford Motor Company, for example, provides support and incentives for its 3,100 Ford dealers. Through a multilevel program, Ford provides incentives to reward dealers for meeting sales goals. Dealers receive an incentive when they are near a goal, another when they reach a goal, and an even larger one if they exceed sales projections. Ford also offers some dealers special incentives for maintaining superior facilities or improving customer service. All of these actions are intended to encourage Ford dealers to "push" the Ford products through the channel to consumers
*Infomercials*
grew in the era of cable tv bc there is so much airtime available -long form infomericals that run 30mins or more -tell a whole sotry around these things short form infomericals-> short response tv 1-3mins in length popular late at night emphasize "order now!" -tiddybear easy to measure the response bc people will call in with orders
Idea
in marketing, an idea is a thought that leads to a product or action, such as a concept for a new invention or for getting people out to vote.
Public Relations
indirectly paid media since they are activities that we engage in to try and shape the nature of the conversation regarding our brand, product, company, etc. 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. Many tools, such as special events, lobbying efforts, annual reports, press conferences, social media (including Facebook and Twitter), and image management, may be used by a public relations department, although *publicity* often plays the most important role
Rich media
interactive ads have drop-down menus, built-in games, or search engines to engage viewers. Online advertising also offers an opportunity to reach younger consumers who have developed a preference for online communication.
Inventory
inventory carrying costs are more subjective and are related to idle production capacity, which is when the service provider is available but there is no demand for the service. we need to think about fluctuations in demand for our service and think about how we can adjust eh supply of our service to meet the demand manage real-time invenotry to meet the demand in that short space of time on superbowl sunday: pizza hut hired 11k more people for superbowl sunday and made a lot of pizza boxes *The inventory cost of a service is the cost of paying the person used to provide the service along with any needed equipment.* *The inventory carrying costs of airlines are high because of high-salaried pilots and very expensive equipment. -if an airplane takes off with empty seats, that is lost potential service. unlike a product you cant stock up those empty seats and use them on a later flight. In contrast, real estate agencies and hair salons have employees who work on commission and need little expensive equipment to conduct business.* If a physician is paid to see patients but no one schedules an appointment, the fixed cost of the idle physician's salary is a high inventory carrying cost. In some service businesses, however, the provider of the service is on commission (a financial advisor) or is a part-time employee (a store clerk). In these businesses, inventory carrying costs can be significantly lower or nonexistent because the idle production capacity can be cut back by reducing hours or having no salary to pay because of the commission compensation system.
Trial Close
involves asking the prospect to make a decision on some aspect of the purchase: "Would you prefer the blue or gray model?"
Close: Asking for the Customer's Order or Business
involves obtaining a purchase commitment from the prospect. This stage is the most important and the most difficult because the salesperson must determine when the prospect is ready to buy. Telltale sig- nals indicating a readiness to buy include body language (prospect reexamines the product or contract closely), statements ("This equipment should reduce our maintenance costs"), and questions ("When could we expect delivery?"). Three closing techniques are used when a salesperson believes a buyer is about ready to make a purchase: (1) trial close, (2) assumptive close, and (3) urgency close.
sales management
involves planning the selling program and implementing and evaluating the *personal selling* effort of the firm. Personal selling remains a highly human-intensive activity despite the use of technology. Accordingly, the people involved must be managed The tasks involved in managing personal selling include: -setting objectives; -organizing the salesforce; -recruiting, selecting, training, and compensating salespeople; -evaluating the performance of individual salespeople.
Social shopping
involves the use of social network services and websites by consumers to share their latest purchases, deals, coupons, product reviews, want lists, and other shopping finds with friends and contacts. The underlying idea behind social shopping is that individuals are influenced by their peers' purchases and recommendations, which can greatly influence purchase decisions. Research documents that persons identified as Generation Z and millennials are particularly active in social shopping. Their preferred social media are Instagram, Snapchat, and YouTube
Nondurable good
item consumed in one or a few uses, such as food products and fuel nondurable goods, such as Wrigley's gum, rely heavily on consumer advertising
Web 3.0
now in its application stages, includes additional functionalities that allow personalization and customization to each individual based on location, interests, and needs. It integrates new features such as Cloud computing, big data, the Internet of Things, security solutions, and privacy protection. *customize the internet*
Feature Fatigue
occurs because "consumers give more weight to capability and less weight to usability before use (of the product) tterm-102han after use (of the product), they tend to choose overly complex products that do not maximize their satisfaction when they use them A common result of feature fatigue is annoyance and a reduced likelihood of repurchase and consumer retention. This phenomenon has been observed in the domain of wearable technology, including digital watches, smart glasses, and smartphones. chart in ch 10 reading notes shows the feature bloat to feature fatigue trajectory from a consumer's point of view. *The critical tipping point occurs when the addition of another feature annoys rather than engages a consumer.*
Types of personal selling
order taking, order getting, and customer sales support activities.
social media marketing program
portion of a company's integrated marketing communications effort designed to create and deliver online media content that attracts viewer attention and encourages readers to share it with their social network. Its purpose is to reach "active consumers" who will become "influentials" and be "delighted" with a brand and its message. These consumers will then become "evangelists" who will communicate with their online friends and the company about the joys of using a brand. Social media marketing program success depends on whether it creates and sustains customer engagement
Product Line Extensions
practice of using a current brand name to enter a new market segment in its product class can result in lower advertising and promotion costs because the same name is used on all products, thus raising the level of brand awareness. A risk with line extension is that sales of an extension may come at the expense of other items in the company's product line. Line extensions work best when they provide incremental company revenue by taking sales away from competing brands or attracting new buyers. Campbell Soup Company employs a multiproduct branding strategy with soup line extensions. It offers regular Campbell's soup, home-cooking style, and chunky varieties and more than 100 soup flavors.
Consumer Products
products purchased by the ultimate consumer
Competitive institutional ads
promote the advantages of one product class over another and are used in markets where different product classes compete for the same buyers. America's milk processors and dairy farmers use their "Milk Life" campaign to increase demand for milk as it competes against other beverages.
downsizing
reducing the package content without changing package size and maintaining or increasing the package price
sales plan
statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed. Sales plan formulation involves three tasks: (1) setting objectives, (2) organizing the salesforce, (3) developing account management policies. 3steps are broken down in chart in ch21 notes
Smart System
technology- and data-based network that triggers actions by sensing changes in the real or digital world.
brand personality
A set of human characteristics associated with a brand name. Research shows that consumers assign personality traits to products—traditional, romantic, rugged, sophisticated, rebellious—and choose brands that are consistent with their own or desired self-image. Marketers can and do imbue a brand with a personality through advertising that depicts a certain user or usage situation and conveys emotions or feelings associated with the brand. For example, personality traits linked with Coca-Cola are all-American and real; with Pepsi, young and exciting; and with Dr Pepper, nonconforming and unique. The traits often linked to Harley-Davidson are masculinity, defiance, and rugged individualism.
Emerging issues in how we manage brands
Consumer-brand relationships Brand communities
Expected
In order to be successful in the long run we need to meet customer expectations things people expect from the product, but not the core most basic function it has to accomplish for drill, expectation may go beyond just drilling a hole Well Known brand name gives people confidence extra featues beyond the core thing -detachable cord, variable drill settinges, etc. Warranty
trademark
Legal term that applies to brand name, mark, trade character, or logo identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it. For example, Coca-Cola and Procter & Gamble have trademarked hashtags (#) that make reference to their brands. A lot of work to keep the brand name from becoming generic
high-learning product
Product for which significant customer education is required and there is an extended introductory period ex: personal computers had this life-cycle curve. Consumers in the 1980s had to learn the benefits of owning the product or be educated in a new way of performing familiar tasks. Convection ovens for home use required consumers to learn a new way of cooking and alter familiar recipes used with conventional ovens. As a result, these ovens spent years in the introductory period. The same can be said for all-electric-powered cars and trucks today. example of product life cycle in ch11 reading notes
Brand Equity
The added value a brand name gives to a product beyond the functional benefits provided. This added value has two distinct advantages: *1) brand equity provides a competitive advantage. * Ex: The Sunkist brand implies quality fruit. The Disney name defines children's entertainment. Patagonia means environmental responsibility. *2) consumers are often willing to pay a higher price for a product with brand equity. Brand equity, in this instance, is represented by the premium a consumer will pay for one brand over another when the functional benefits provided are identical.* ex: Gillette razors and blades, Bose audio systems, Duracell batteries, Cartier jewelry, and Louis Vuitton luggage all enjoy a price premium arising from brand equity. ex: cookie in the shape of mickey shows power of brand equity
Length of the Product Life Cycle
There is no set time that it takes a product to move through its life cycle. 1) As a rule, consumer products have shorter life cycles than business products. ex: many new consumer food products such as Frito-Lay's Baked Lay's potato chips move from the introduction stage to maturity in 18 months. 2) The availability of mass communication vehicles informs consumers quickly and shortens life cycles. 3) Technological change shortens product life cycles as new-product innovation replaces existing products. ex: smartphones have largely replaced digital cameras in the amateur photography market.
Multiproduct Branding Strategy. (aka. family branding or corporate branding)
a company uses the same brand name across all the products that it sells apple, nike, sony a company uses one name for all its products in a product class. Church & Dwight uses the Arm & Hammer family brand name for all its products featuring baking soda as the primary ingredient. lets you build an image with ypour brand This approach is sometimes called *family branding or corporate branding* when the company's name is used ex: Microsoft, Samsung, Gerber, and Sony engage in corporate branding—the company's trade name and brand name are identical. *Benefits:* Capitalizing on brand equity, consumers who have a good experience with the product will transfer this favorable attitude to other items in the product class with the same name. Therefore, this brand strategy makes possible product line extensions, Can also use: subbranding brand extension co branding *Risks* Brand Dilution there is a risk with excessive brand extensions, subbrands, and co-brands. Marketing experts claim that too many uses for one brand name can dilute the meaning of a brand for consumers and harm its brand equity.
Packaging Disaster
coors package tore off your skin when you tried to push in the opening marketshare dropped by about half
Logo
graphical element together with its logotype (particular typeface they use) used to form a trademark or comercial brand some logos dont have both components Pepsi has logo and word logo could just be a brand mark
Brand PLC
is under marketing control As beer company's saw tastes switch to light beers, they started advertising their light beers more heavily and their regular beers less as a result
Trade Character
personified symbol to represent brand can give a brand personality by how they act ronald mcdonald m&m mascots albert and alberta
Selective demand
the preference for a specific brand. As more competitors launch their own products and the product progresses along its life cycle, company attention is focused on creating selective demand
Integrated Marketing Communications (IMC)
"making sure we speak with a uniform voice to all our audience members, making sure we don't have conflicting messages" Designing marketing communication programs to coordinate all promotional activities and provide a consistent image across all audiences. 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. This coordination is increasingly important as new media options, interactions between traditional and contemporary media, the need for client and advertising agency collaboration, and shifting consumer communication patterns all make optimal communication more challenging. In addition, by taking the consumer journey and consumer expectations into consideration, IMC is a key element in a company's customer experience management strategy. In the past, marketers often viewed these communication tools as separate and independent. The advertising department, for example, often designed and managed its activities without consulting departments or agencies that had responsibility for sales promotion or public relations. The result was often an overall communication effort that was uncoordinated and, in some cases, inconsistent.
Marketing Mix factors in the growth stage
*(Price)* Aggressive pricing drops prices but profits continue to grow *(Product)* To help differentiate a company's brand from competitors, an improved version or new features are added to the original design and product proliferation occurs. ex: Changes in fax machines included (1) models with built-in telephones; (2) models that used plain, rather than thermal, paper for copies; and (3) models that integrated e-mail. *(Place)* In the growth stage, it is important to broaden distribution for the product. In the retail store, for example, this often means that competing companies fight for display and shelf space. Expanded distribution in the fax industry is an example. Early in the growth stage, just 11 percent of office machine dealers carried this equipment. By the mid-1990s, over 70 percent of these dealers sold fax equipment, and distribution was expanded to other stores selling electronic equipment, such as Best Buy and Office Depot. *(Promotion)* Advertising shifts emphasis to stimulating selective demand; product benefits are compared with those of competitors' offerings for the purpose of gaining market share.
Marketing Mix factors in the introduction stage
*(Price)* During introduction, pricing can be either high or low. A high initial price may be used as part of a *skimming strategy* to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers.To discourage competitive entry, a company can price low, referred to as *penetration pricing*. This pricing strategy helps build unit volume, but a company must closely monitor costs. *(Place)* Gaining distribution can be a challenge because channel intermediaries may be hesitant to carry a new product. As they get more competitors they switch their attention to creating selective demand. *(Product)* A company often restricts the number of variations of the product to ensure control of product quality. As an example, the original Gatorade came in only one flavor—lemon-lime. *(Promotion)* Advertising and promotion expenditures in the introduction stage are often made to stimulate primary demand, the desire for the product class rather than for a specific brand, since there are few competitors with the same product.
Marketing Mix factors in the Maturity stage
*(Price)* Fierce price competition drives down profits *(Place)* Can't really expand to new markets at this point *(Product)* Marketing attention in the maturity stage is often directed toward holding market share through further product differentiation and finding new buyers and uses. ex1: Gillette modified its Fusion shaving system with the addition of Fusion ProGlide, a five-blade shaver with an additional blade on the back for trimming. ex2: Fax machine manufacturers developed Internet-enabled multifunctional models with new features such as scanning, copying, and color reproduction. They also designed fax machines suitable for small and home businesses, which today represent a substantial portion of sales. *(Promotion)* major consideration in a company's strategy in this stage is to control overall marketing cost by improving promotional and distribution efficiency.
Developing an ad program
**1) Id the target audience 2) Specifying advertising objective* -knowing our objective helps us find the most appropriate medium. Also helps us evaluate bc we know what we were tryna do. -ex:Advertising with an objective of creating awareness would be better matched with a magazine than a directory such as the yellow pages. *3)Setting the Advertising Budget* *4) Designing the Advertisement* -An advertising message usually focuses on the key benefits of the product that are important to a prospective buyer in making trial and adoption decisions. -The message depends on the general form or appeal used in the ad and the actual words included in the ad. 2 parts: Message content and creating the actual message *5) Selecting the right media* *6) Scheduling the Advertising* --executing the advertising program-- *7) Pretesting the Advertising* *8) Carrying Out the Advertising Program* --Assessing the advertising program-- *9) Posttesting the Advertising 10) Making needed changes*
3 factors to scheduling an ad
*Buyer Turnover*--how often new buyers enter the market to buy the product. The higher the buyer turnover, the greater the amount of advertising required. *Purchase Frequency*--the more frequently the product is purchased, the less repetition is required *Forgetting Rate*--the speed with which buyers forget the brand if advertising is not seen.
Tools to leverage
*Contract/Master supply agreement* -when she inherits an account, first thing she does it look at the terms of the contract with that parter. -the rules of how they engage in the game. Rule is to look at it once, then never again. *CRM (ai makes it all the more powerful)* -algorithms can help figure out when a customer might need something, or figutre out what time of yea they make an order Sales operations team (not all industries) Various Functional Teams
Factors affecting the persuasiveness of an endorser
*Credibility* -the person is believable 2 main qualities *Expertise* -Micheal Jordan would be trusted to talk to you about sports *Trustworthiness* -would this person endorse this brand if they didn't believe in it *Attractiveness* -physically attractive people tend to be listened to -can also mean attractive in the sense that we want to be like them ("BE like mike Gatorade commercial")
self-service devices
*Customer-controlled* self-service devices such as smartwatches, sport trackers, and smart home assistants allow access to and use of many services. An interesting outcome of customers' growing preference for self-service is that when a service representative is needed, it is typically for a complicated issue or transaction
The different mix elements have
*Different Tasks* -think about task we want to perform, and which promotional tool is most effective at doing that. useful in different situations -benefits of product: video/digital content -detailed info: print (physical or online) -grow sales: sales promotions -close a sale on a big ticket item: personal selling -lots of reminders to people about our brand: billboards, *Consistency* -goal of integrated marketing communication is to speak with a uniform voice that is not contradictory Complementarity -looking for the pieces that fit together and interlock in a way where we use one promotional tool to accomplish one task, and use another to accomplish another
Features Vs. Benefits
*Features*: Aspects of the product itself. -things built into the product/components of the product *Benefits*: things the product does for you ex: feature of the racket is that its threaded with tungsten... the benefit is increased strength and added power
Choosing an ad media
*First*, knowing the media habits of the target audience is essential to deciding among the alternatives. *Second*, occasionally product attributes necessitate that certain media be used. For example, if color is a major aspect of product appeal, radio is excluded. Newspapers allow advertising for quick actions to confront competitors, and magazines are more appropriate for complicated messages because the reader can spend more time reading the message. *The final factor* in selecting a medium is cost. When possible, alternative media are compared using a common denominator that reflects both reach and cost—a measure such as CPM.
Marketer faces 2 issues when putting together the promotional mix
*First, the balance of the elements must be determined. * Should advertising be emphasized more than personal selling? Should a promotional rebate be offered? Would public relations activities be effective? Several factors affect such decisions: the target audience for the promotion, the stage of the product's life cycle, the characteristics of the product, the decision stage of the buyer, and even the channel of distribution. *Second, because the various promotional elements are often the responsibility of different departments, coordinating a consistent promotional effort is necessary. * A promotional planning process designed to ensure integrated marketing communications (IMC) can facilitate this goal.
5 categories and profiles of product adopters
*For a product to be successful, it must be purchased by innovators and early adopters* 1. Innovators (2.5%) Venturesome & higher educated Use multiple info sources 2. Early Adopters (13.5%) Leaders in social setting Slightly above-average education 3. Early Majority (34%) Deliberate Many informal social contacts 4. Late Majority (34%) Skeptical Bellow average social status 5. Laggards (16%) Fear of Debt Neighbors and friends are info sources
Price
*In service businesses, price is referred to in many ways. * *In many cases, there may be few other available cues for the customer to judge, so price becomes very important as a quality indicator* ex: Do you expect higher quality from an expensive restaurant? Would you wonder about the quality of a $100 surgery? *Pricing of services goes beyond the traditional tasks of setting the selling price. When customers buy a service, they also consider nonmonetary costs, such as the mental and physical efforts required to consume the service.* Service marketers must try to minimize the effort required to purchase and use the service. *Pricing also plays a role in balancing consumer demand for services. *Many service businesses use off-peak pricing, which consists of charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service. Airlines, for example, offer discounts for weekend travel, while movie theaters offer matinee prices. ---- price referred to in different ways Hospitals refer to charges; consultants, lawyers, physicians, and accountants to fees; airlines to fares; hotels to rates; and colleges and universities to tuition. Because of the intangible nature of services, price is often perceived by consumers as a possible indicator of the quality of the service.
different types of appeals
*Informational* -appeals that give you a lot of information for you to make your own decision about the brand that you are going to use -explains benefits with data and just other info like a financial broker ad in news week magazine *Comparative* -compares what our brand could do vs what others can do -need data to support the claims you are making -paper towel comparative wipe commercial *Image* -what image will this help the consumer portray -dos equis "most interesting man in the world" *Fear* -want to arouse a fear in a person, and then provide a product or service that will eliminate that fear -goodyear tire commercial where the lady gets hurt changing the tire *Humor* -make us laugh and put humor into the message they want to get accross -reebok "get off the couch" commercial *Sex* -leather jacket ad about the lady and the hotel room -want to make sure it doesn't distract people from what the brand is really about *Emotional* whirlpool ad meant to show how appliances can be a part of a loving family ex: patriotic appeals
Television Advertising
*Network* -don't need cable or satellite, all you need is an antenna -Broadcast tv like nbc, cbs, abc, fox -expensive to run ads on network tv *Spot* -being able to buy things at a regional or local basis -when you want an impact in a certain area (political campaigns) *Cable* -need cable or satellite connnection *Syndicated* pre-packaged programing that is done by an independent producer and is then sold to individual stations around -2 types: -*first run* Filmed and then sold to any station that wants to pick them up Some of the ads are pre sold, and others are open to local advertisers Judge Judy, Family Feud, Jeopardy, Wheel of fortune -*re-runs* Seinfeld, Simpsons, friends, Big Bang theory 80% of the ads are sold locally for these syndicated programs ---- tv ads-has been dropping due to ad skipping with vcr
value of direct marketing
*One of the most visible indicators of the value of direct marketing for consumers is its level of use in its various forms.* For example, each year the USPS delivers more than 80 billion pieces of direct mail, including more than 9 billion catalogs. A study by the USPS found that 84 percent of millennials "look through" their mail, and 64 percent prefer scanning for information in the mail rather than e-mail. Direct marketing through e-mail, however, is also substantial as 89 percent of all e-mail delivers a marketing message. In addition, e-mail is very effective as it has the lowest cost of acquiring a new customer at approximately $10. Finally, more than $60 billion is spent on telemarketing each year. *direct marketing offers a variety of benefits* including: They don't have to go to a store; they can usually shop 24 hours a day; buying direct saves time; they avoid hassles with salespeople; they can save money; it's fun and entertaining; and it offers more privacy than in-store shopping. Many consumers also believe that direct marketing provides excellent customer service. Toll-free telephone numbers, online help links, customer service representatives with access to information regarding purchasing preferences, delivery services, and unconditional guarantees all help create value for direct marketing customers. At Landsend.com, when customers need assistance they can click the "Chat" icon to receive help from a sales representative on the phone or through online chat or online video until the correct product is found *The value of direct marketing for sellers can be described in terms of the responses it generates.*
Valuing brand equity
*Successful, established brand names have an economic value in the sense that they are intangible assets.* *The recognition that brands are assets is apparent in the decision to buy and sell companies.* For instance, when Procter & Gamble bought the Gillette Company for $57 billion, the Gillette brand name alone was valued at $24 billion, or 42 percent of the company's purchase price. When Amazon bought Whole Foods, the Whole Foods name alone accounted for 70 percent of the acquisition price of the company. *Brands alone can be bought and sold by a company.* For example, Triarc Companies bought the Snapple brand from Quaker Oats for $300 million and sold it three years later to Cadbury Schweppes for $900 million. This example illustrates that brands, unlike physical assets that depreciate with time and use, can appreciate in value when effectively marketed.
Decline Stage
*The decline stage occurs when sales drop.* ex: Fax machines entered this stage in early 2005 and the average price for a fax machine had sunk below $100. There are 46 million fax machines installed throughout the world today, sending over 20 billion faxes in 2019. *Frequently, a product enters this stage not because of any wrong strategy on the part of companies, but because of environmental changes.* Ex: digital music pushed compact discs into decline in the recorded music industry. Products in the decline stage tend to consume a disproportionate share of management and financial resources relative to their future worth. *A company will follow one of two strategies to handle a declining product: deletion or harvesting.* Products on this stage: Analog TVs and desktop personal computers
Promotional mix in prepurchase stage
*advertising* is more helpful than personal selling because advertising informs the potential customer of the existence of the product and the seller. *Sales promotion* in the form of free samples also can play an important role to gain low-risk trial. When the salesperson calls on the customer after heavy advertising, there is some recognition of what the salesperson represents. This is particularly important in industrial settings in which sampling of the product is usually not possible.
Sell
*hard sell* -making it very obvious that we want people to buy our product ex: short form infomercial where we hammer people to call a number ex2: head on--apply directly to the forehead *soft sell* -trying to get the message across without being obnoxious/demanding a sale -honda rudegoldburg machine -emphasizes the facgt that honda's cars are reliable
customer sales support activities
*missionary salespeople* do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products. They are used in the pharmaceutical industry, where they encourage physicians to prescribe a firm's product. Actual sales are made through wholesalers or directly to pharmacists who fill prescriptions *Sales engineers* specialize in identifying, analyzing, and solving customer problems. These salespeople bring knowhow and technical expertise to the selling situation but often do not actually sell products and services. Sales engineers are popular in selling business products such as chemicals and heavy equipment.
Private Branding Strategy (Private labeling or reseller branding)
*not to be confused with generic* Brands only associated with a particular store... Cannot be purchased anywhere Brand is owned by thwe retailer, not the actual manufacturer. based on store loyalty Made by a different manufacturer When company manufactures products but sells them under the brand name of a wholesaler or retailer. Rayovac, Paragon Trade Brands, and ConAgra Foods are major suppliers of private-label alkaline batteries, diapers, and grocery products, respectively. Costco, Amazon, Walmart, and Kroger are large retailers that have their own brand names. Private branding is popular because it typically produces high profits for manufacturers and resellers. Consumers also buy them. It is estimated that one of every five items purchased at U.S. supermarkets, drugstores, and mass merchandisers bears a private brand. becoming more popular, as quality improves great recesion contributed to this trend
Feedback
*the sender's interpretation of the response*, which indicates whether a message was decoded and understood as intended during the communication process. In the feedback loop,
Personal Selling
*used heavily for organizational buyers* The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person's or group's purchase decision. Unlike advertising, personal selling is usually face-to-face communication between the sender and receiver. *ADVANATGES:* A salesperson can control to whom the presentation is made, reducing the amount of wasted coverage The personal component of selling has another advantage in that the seller can see or hear the potential buyer's reaction to the message. If the feedback is unfavorable, the *salesperson can modify the message*. *DISADVANATGES:* Different salespeople can change the message so that no consistent communication is given to all customers. The high cost of personal selling is probably its major disadvantage. On a cost-per-contact basis, it is generally the most expensive of the five promotional elements.
Assurance
-an attitude of the service provider If you hire someone to do your taxes, and they exue a sort of confidence in you that they know what they are doing and aren't going to screw up -bought a new keyboard. The guy who had to help her had a short paragraph explaining why he was qualified
*Sponsorships*
-brand puts their name on some person, place, thing, or event that has solicited them -designed to get our name in front of a lot of people ex: NFL has official sponsors -need to *activate* sponsorships by putting them around other related activities -budwiesser rented a house in brasil and made it a party hotel for the duration of the world cup -invited famous people, make sure budwiesser brand stays on peoples minds -*ambush marketing*:nike was not an official sponsor of the olympics in atlanta but still rented out a billboard next to the stadium -can be not worth it if people don't really pick up on it -*event marketing*--a way people have dealt with the lack of effectiveness for sponsorships -not attaching our name to someone else's event, but instead we have our own event, which we control and are responsible for. -ex: nathans annual hotdog eating contest for sponsorships and event marketing: 1) brand needs to fit the theme 2) fans should be engages 3) needs to be a perception that the sponsorship is a substantial one ideally there needs to be a message to convey, which is where the activation comes in where you can fortify the message you want to get across about your brand
Frequency Marketing
-trying to get people to come and do business with us more often -loyalty programs, frequent flyer programs —you basically earn points/rewards for suing the service often —makes people want to come more You do frequency marketing in an attempt to get a greater share of wallet Most frequency programs have *hard benefits and soft benefits* Hard benefits = basically money -upgrade to a 1st class seat (this has a monetary value) Soft benefit = doesn't have a monetary implication -being able to board a plane sooner, getting the managers personal number Hard benefits mean a lot more to people than soft benefits
Newness from the Organization's Perspective
3 levels to how organizations view newness and innovation in their products. *1)* Product line extension -lowest level and least risk -Incremental improvement of an existing product line the company already sells Ex: Purina added its "new" line of Elegant Medleys, a "restaurant-inspired food for cats," to its existing line of 50 varieties of its Fancy Feast gourmet cat food. This has the potential benefit of adding new customers but the twin dangers of increasing expenses and cannibalizing products in its existing line. *2)* next level is --a significant jump in innovation or technology or --a brand extension involving putting an established brand name on a new product in an unfamiliar market. In the first case, the significant jump in technology might be when a manufacturer offers new smartphones or digital cameras. The second case—using an existing brand name to introduce a new product into an unfamiliar market—looks deceptively easy for companies with a powerful, national brand name. Colgate thought so. It put its brand name on a line of frozen dinners called Colgate's Kitchen Entrees. The product line died quickly. A marketing expert calls this "one of the most bizarre brand extensions ever," observing that the Colgate brand name, which is strongly linked to toothpaste in people's minds, does not exactly get their "taste buds tingling. *3)* highest level of innovation involves a radical invention, a truly revolutionary new product. The 3D printer, invented and commercialized by Chuck Hull, the founder of 3D Systems, is an example of a radical invention. Effective new-product development in firms exists at all three levels.
source
A company or person who has information to convey during the communication process. matrix in exam 2 quantitative since *wordofmouth* is so important P&G launched vocalpoint: identified influential women all over the US sent free samples and otehr promotional materials to these women & counted on them to spread the word to their networks buzzfeed: bzzagent similar *Guerrilla marketing* another way to generate buzz about a product or brand -system of promotions on a very low budget relying on time, energy and imagination instead of a big marketing budget -Redbull brand ambassador putting rebull references in funny places -ocarmayor hot dog mobile -Mr clean cross walk Silly things to get people talking about the brand *spokeperson* -gives brand a more human face Can be made like lilly for at&t or flow for progressive or Davie brown index used to find celebrity endorsers that would be good for their brand -cameo
Skimming Strategy
A high initial price (during introductory stage) may be used to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers High prices tend to attract competitors eager to enter the market because they see the opportunity for profit. A master of this strategy is 3M. According to a 3M manager, "We hit fast, price high, and get the heck out when the me-too products pour in."
Communication Benefits
A major benefit of packaging is the label information it conveys to the consumer: directions on how, where, and when to use the product and the source and composition of the product, which is needed to satisfy legal requirements of product disclosure. For example, the labeling system for packaged and processed foods in the United States provides a uniform format for nutritional and dietary information. Many packaged foods contain informative recipes to promote usage of the product. Campbell Soup estimates that the green bean casserole recipe on its cream of mushroom soup can accounts for $20 million in soup sales each year
Marketing Automation
A more sophisticated combination of CRM systems and technology is marketing automation. Marketing automation applies systems and technologies to provide intelligence to salespeople. It is used to identify qualified prospects from leads, provide support for preparing an appropriate preapproach and approach strategy for a customer, track the customer buying process, and identify opportunities for upselling and cross-selling a company's products and services to new and existing customers. Marketing automation emphasizes sophisticated analytical techniques and computer software. For example, these techniques use tracking codes in social media, e-mail, and web- sites to track the behavior of anyone showing an interest in a product or service to gain a measure of intent to buy. Customer leads and prospects are scored, based on their activities, and automatically sent highly targeted product and service information through social me- dia and e-mail. If you've ever researched a product or service online and shortly thereafter received messages from suppliers of that product or service, you've seen marketing automa- tion at work.
Publicity
A nonpersonal, indirectly paid presentation of an organization, product, or service. It can take the form of a news story, editorial, or product announcement. *A difference between publicity and both advertising and personal selling is the "indirectly paid" dimension.* With publicity a company does *not* pay for space in a mass medium (such as television or radio) but attempts to get the medium to run a favorable story on the company. In this sense, there is an *indirect payment* for publicity in that a company must support a public relations staff. *ADVANATGES:* credibility. When you read a favorable story about a company's product (such as a glowing restaurant review), there is a tendency to believe it. ex: Travelers throughout the world have relied on Lonely Planet's guides such as Italy. These books describe out-of-the-way, inexpensive restaurants and hotels, giving invaluable publicity to these establishments. Such businesses do not (nor can they) buy a mention in the guide. Publicity is particularly effective when consumers lack prior knowledge of the product or service *DISADVANATGES:* lack of the user's control over it. A company can invite media to cover an interesting event such as a store opening or a new-product release, but there is no guarantee that a story will result, that it will be positive, or that the target audience will receive the message. Social media such as Facebook, Twitter, and topic-specific blogs have grown dramatically and allow public discussions of almost any company activity. Many public relations departments now focus on facilitating and responding to online discussions. McDonald's, for example, replies to tweets on its customer service Twitter account, which has more than 3.6 million followers. Generally, publicity is an important element of most promotional campaigns, although the lack of control means that it is rarely the primary element. Research related to the sequence of IMC elements, however, indicates that publicity followed by advertising with the same message increases the positive response to the message.
Premiums
A promotion tool often used with consumers is the premium, which consists of merchandise offered free or at a significant savings over its retail price. This latter type of premium is called *self-liquidating* because the cost charged to the consumer covers the cost of the item. McDonald's, for example, used a free premium in a promotional partnership with Disney during the release of Avengers: Endgame. Collectible toys that portrayed one of seven Avengers characters were given away free with the purchase of a Happy Meal. What are the most popular premiums? According to the Promotional Products Association International, the top premiums are apparel, writing instruments, shopping bags, cups and mugs, and desk accessories. By offering a premium, companies encourage customers to return frequently or to use more of the product. Research suggests that deal-prone consumers and value seekers are attracted to premiums
Lead and prospect generation
Advertising may contain a coupon or a toll-free number to generate leads. Some companies use exhibits at trade shows, professional meetings, and conferences to generate leads or prospects. Staffed by salespeople, these exhibits are used to attract the attention of prospective buyers and share information. Others utilize websites, e-mail, and social networks, such as LinkedIn, to connect to individuals and companies that may be interested in their products or services. This practice is called social selling. Another approach for generating leads is through cold canvassing or cold calling, either in person or by telephone.
Executing and Assessing the promotion program
An important factor in developing successful IMC programs is to create a process that facilitates their design and use. A tool used to evaluate a company's current process is the IMC audit. IMC Audit-A tool used to evaluate a company's current processes and assets such as internal communication, key audiences, databases, advertising messages, and promotions expertise The audit analyzes the internal communication network of the company; identifies key audiences; evaluates customer databases; assesses messages in recent advertising, public relations releases, packaging, websites, e-mail and social media communication, signage, sales promotions, and direct mail; and determines the IMC expertise of company and agency personnel This process is becoming increasingly important as consumer-generated media such as blogs, RSS, podcasts, and social networks become more popular and as the use of search engines increases Carrying out the promotion program can be expensive and time-consuming. One researcher estimates that "an organization with sales less than $10 million can successfully implement an IMC program in one year, one with sales between $200 million and $500 million will need about three years, and one with sales between $2 billion and $5 billion will need five years." In addition, firms with a market orientation are more likely to implement an IMC program, and firms with support from top management have more effective IMC programs.35 To facilitate the transition, approximately 200 integrated marketing communications agencies are in operation. In addition, some of the largest agencies are adopting approaches that embrace "total communications solutions." While many agencies may still be specialists, the trend today is clearly toward an integrated perspective that includes all forms of promotion. Agencies can accomplish this by including account managers, channel experts, media specialists, and planning personnel in their campaign design efforts. Now, in addition to ensuring that traditional forms of communication are integrated, companies must be able to monitor consumer content, respond to inconsistent messages, and even answer questions from individual customers marketers should also be cognizant of consumers she calls "accelerators." These individuals easily move content from medium to medium—from TV to YouTube to a mobile phone text message, for example—without any influence or control from the message source
Promotional mix in purchase stage
At the purchase stage, the importance of personal selling is highest, whereas the impact of advertising is lowest. *Sales promotion* in the form of coupons, deals, point-of-purchase displays, and rebates can be very helpful in encouraging demand. In this stage, social media can play an important role in the final decision by delivering promotions and giving consumers control of the process. Research indicates that *direct marketing* activities shorten the time consumers take to adopt a product or service
The Purchase Process
Because services cannot be displayed, demonstrated, or illustrated, *consumers cannot make a prepurchase evaluation* of all the characteristics of services. Similarly, because service providers may vary in their delivery of a service, *an evaluation of a service may change with each purchase.* 3 properties at play: search properties experience properties credence properties *Chart in Ch12 reading notes* To reduce the uncertainty created by these properties, service consumers turn to personal sources of information such as early adopters, opinion leaders, and reference group members during the purchase decision process. Research indicates that consumers search for much more information and they place an emphasis on trust, commitment, expertise, and competence when trying to evaluate services with credence properties
Behavioral Evaluation
Behavioral measures are also used to evaluate salespeople. These include assessments of a salesperson's attitude, attention to customers, product knowledge, selling and communication skills, appearance, and professional demeanor. Even though these assessments are sometimes subjective, they are frequently considered and are, in fact, inevitable, in salesperson evaluation. Why? These factors are often important determinants of quantitative outcomes.
Brand communities
Builds on the consumer brand relationships by expanding the consumer/brand relationship diagram (multiple consumers) Brand<-->consumer \.................. / \.,,,,.......... / consumer each consumer has some kind of relationship with the brand, relationship between the consumer who share affinity for the same brand is the brand community *Brand community emerges where consumers will form relationships with other consumers based on their mutual affinities for the brand* People can share knowlege and folklore Many brands try to nurture their brans communities *There can be downsides:* -Brand community hated the new Tropicana packaging -sales dropped 20% -Brand community united against them and they had to bring back the old design (tropicana should have researched how loyal customers would react to the change in the packaging) Brand communities can cut both ways so we need to pay attention to them. technology enables this ex: Harley Owners Group (HOGs) -people jsut discuss their mutual love for the product. Alumni association (brand is UF, and alumns are the ones who bond together)
Digital ads challenges
Click fraud Adblocking software Consumer multitasking Brand saftey--ad put on a page with stuff they rather not be associated with Privacy
customer contact audit
Consumers judge services on the entire sequence of steps that make up the service process. To focus on these steps, or "service encounters," a firm can develop a customer contact audit *A flowchart of the points of interaction or "service encounters" between consumers and a service provider.* This is particularly important in high-contact services such as hotels, educational institutions, and automobile rental agencies The interactions identified in a customer contact audit often serve as the basis for developing relationships with customers. Recent research suggests that employees' competence and the authenticity and sincerity of their interactions affect the success of their customer relationships. Evaluation of the customer experience requires an understanding of the "touchpoints" that create value for the customer. ex in Ch12 Reading Notes
DEFINING RETAIL SERVICE
Core Service Expected Service Augmented Service Potential Service
inconsitency
Developing, pricing, promoting, and delivering services is challenging because the quality of a service is often inconsistent. *Because services depend on the people who provide them*, their quality varies with each person's capabilities and day-to-day job performance. *organizations attempt to reduce inconsistency through standardization and training* *Industrialization of service*= take aspects of service that can be subjected to some sort of systematic treatment that removes the human element (the inconsistent part. using technology to make services more consistent ex: McDonalds fries have a timer when they are put into the fryer to help them stay consistent --removes the decision making from whoever is working at mcdonalds that day by using a timer -ipads to take orders rather than having a server take it Inconsistency is much more of a problem in services than it is with tangible products. Tangible products can be good or bad in terms of quality, but with modern production lines the quality will at least be consistent. In contrast, the Philadelphia Phillies baseball team may have great hitting and pitching and look like a pennant winner one day—and the next day they may lose by 10 runs. Or a soprano at New York's Metropolitan Opera may have a bad cold and give a less-than-perfect performance on the night that you attend. Whether the service involves tax assistance at H&R Block or guest relations at the Ritz-Carlton, organizations attempt to reduce inconsistency through standardization and training
Follow Up: Solidifying the Relationship
Ensure On-time Delivery Ensure Customer Satisfaction Pursue Add-On Sales Build/Sustain Relationship ask for referral includes making certain the customer's purchase has been properly delivered and installed and addressing any difficulties experienced with the use of the item. Attention to this stage of the selling process solidifies the buyer-seller relationship. Research shows that the cost and effort to obtain repeat sales from a satisfied customer is roughly half of that necessary to gain a sale from a new customer
Core and Supplementary services
For many businesses today, it is useful to distinguish between their core offering—either a product or a service—and supplementary services. A core service offering such as a savings account, for example, also has supplementary services such as a mobile deposit app, parking or drive-thru availability, ATMs, and online statements. *Supplementary services often allow service providers to differentiate their offering from competitors, and they may add value for consumers.* While there are many potential supplementary services, key categories of supplementary services include consultation, finance, shipping, installation, maintenance, and upgrades. *Innovation in core services today often relies on the creative efforts of the organization. * *Understanding the impact of supplementary services, however, may be best accomplished through input from customers*
Field of Experience
For the message to be communicated effectively, the sender and receiver must have a mutually shared field of experience A mutually shared understanding and knowledge that the sender and receiver apply to the message so that it can be communicated effectively during the communication process. chart on ch18 reading notes: shows two circles representing the fields of experience of the sender and receiver, which overlap in the message. Some of the better-known message problems have occurred when U.S. companies have taken their messages to cultures with different fields of experience. Many misinterpretations are merely the result of bad translations. For example, KFC made a mistake when its "finger-lickin' good" slogan was translated into Mandarin Chinese as "eat your fingers off"
Service Recovery
Form of responsiveness for when the service has gone bad Good service recovery can actually increase customer loyalty First part of service recovery is an apology Then you try to make it right. Disney has a model for how their employees should deal with service recovery (Segment 10 slides)
Preapproach: Preparing for the Sales Call
Gathering Information -get company information Setting Sales Call Goals -are you going to ask for some info? -what do you expect to get from the call Preparing Presentation PRACTICE, PRACTICE, PRACTICE! involves obtaining further information on the prospect and deciding on the best method of approach. Knowing how the prospect prefers to be approached and what the prospect is looking for in a product or service is essential, regardless of industry or cultural setting. Merrill Lynch stockbroker will need information on a prospect's discretion- ary income, investment objectives, and preference for discussing brokerage services over the telephone or in person. For business product companies such as Texas Instruments, the preap- proach involves identifying the buying role of a prospect (for example, influencer or decision maker), important buying criteria, and the prospect's receptivity to a formal or informal pre- sentation.
Pull Strategy
Giving ultimate consumers a reason to want your product In some instances, manufacturers face resistance from channel members who do not want to order a new product or increase inventory levels of an existing brand. a manufacturer may then elect to implement a pull strategy by *directing its promotional mix at ultimate consumers to encourage them to ask the retailer for a product.* Seeing demand from ultimate consumers, retailers order the product from wholesalers and thus the item is pulled through the intermediaries. Pharmaceutical companies, for example, now spend more than $9.6 billion annually on direct-to-consumer prescription drug advertising, to complement traditional personal selling and free samples directed only at doctors. The strategy is designed to encourage consumers to ask their doctor for a specific drug by name—pulling it through the channel. Successful campaigns, such as the print ad for Otezla, which says "Ask your doctor about Otezla," can have dramatic effects on the sales of a product. Recent studies indicate that more than 40 percent of direct-to-consumer ads also emphasize a social relationship in the message
No economical access to buyers
Grocery products provide an example of this factor. Today's mega-supermarkets carry more than 60,000 different SKUs. With about 40,000 new consumer packaged goods (food, beverage, health and beauty aids, household, and pet items) introduced annually in the United States, the cost to gain access to retailer shelf space is huge. Because shelf space is judged in terms of sales per square foot, Thirsty Dog! (beef-flavored, water for your dog) must displace an existing product on the supermarket shelves, a difficult task with the high sales-per-square-foot demands of these stores. Thirsty Dog! and its companion product Thirsty Cat! failed to generate enough sales to meet these requirements.
Product Line
Group of closely related products. ex: all of campbells different soup brands like Chunky, Spagetios, Capbell's oven are all different product lines because each of these has many varieties uder it. like chunky has different flavors that sell under the chunky brand group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range. Each product line has its own marketing strategy. Nike's product lines include shoes and clothing, whereas the Mayo Clinic's service lines consist of inpatient hospital care and outpatient physician services. Craptola EX: The "Crapola Granola" product line started as an edgy party joke from Brian and Andrea Strom, owners of tiny Brainstorm Bakery. The dried CRanberries and APples granOLA—hence the "Crapola" name—also contains nuts and five organic grains sweetened with maple syrup and honey. Its package promises that Crapola "Makes Even Weird People Regular." Crapola is sold in retail outlets in the Midwest, California, and Oregon as well as online atCurrently, the company offers other recipes: "Number Two," "Colon-ial Times," and "Kissapoo." These product line extensions enable both consumers and retailers to simplify their buying decisions. So a family liking Crapola might buy another product in the line. With a broader product line, the Stroms may obtain distribution in supermarket chains, which strive to increase efficiencies by dealing with fewer suppliers.
factors influencing the rate of diffusion
Help us determine how quickly we can expect a product to defuse *Relative Advantage* most important factor greater relative advantage = faster defusion The advantage our new product has over existing products that serve the same need "what does our new product do better than existing products" (b/w tv compared against radio, high comp ad cuz they were very different) -b/w tv shotup early on (color tv vs b/w, meh comp ad bc they were not that different) -color tv took 10 years to pick up steam before it took off *Communicability* more communicable means faster diffuison -our ability to communicate to people how our product works and what it does ex: Crack-an-egg bowl communicates how their product works by showing it in an ad (literally show the snack being made) Online videos are really good for showing consumer what our product does IF consumers understand how this can be used by them, the more likely they are to buy google glass: difficualt to communicate to people how it actually works *Complexity* more complex = less diffusion -people tend to shy away from products that seem to complex *Compatibility* more compatible= faster diffusion -how compatible is a product with a consumer's lifestyle does it require too great of a departure or is it something too jarring for people to readily accept? ex: Dishwashers in japan lack of compatibility between american dishwasher and Japanese houshold: small homes, Japanese food is very sticky, housewives would feel guilty -got around it by making it smaller, high intensity jets, got the govt to make feb 22 national dishwasher day -able to solve the compatibility issue in Japan *Risk* morerisk= slower diffusion financial, physical, -big fianancial commitments get people nervous about buying something for the first time
Diffusion of Innovation
How a product diffuses, or spreads, through the population Not all consumers rush to buy a product in the introductory stage, and the shapes of the life-cycle curves indicate that most sales occur after the product has been on the market for some time Some people are attracted to a product early. Others buy it only after they see their friends or opinion leaders with the item. For any product to be successful, it must be purchased by innovators and early adopters. Once accepted by innovators and early adopters, successful new products move on to the early majority, late majority, and laggard categories. 4th chart in ch11 reading notes shows the consumer population divided into five categories of product adopters based on when they adopt a new product.
Packaging funcitons
How do we create more value for our customers through the packaging we put our products in -can be first part of a product the consumer comes across. functions our packaging can preform to improve the value of our product to consumers *Contain/ Protect* most basic requirement tylenol poisening ex *Facilitate Use* Paint cans that are easy to pour Pepsico changing their 1 liter bottles so they are easier to grip and pour with one hand Clamshell pacaging is hard to open *Communicate* Tells you how to use it, how much, etc Communicates values: Campbell's changing cans to pink for breast cancer awareness. *Fit Channel Needs* As we package our products, we need to think about how wholesalers and retailers are going to use that product How is it gioing to affect the way they run their business -will it fit on their shelves, is it practical to transport ex: Leggs hoisery packaging was a success bc it took up little space ex:Amazon puts presure on the laudry detergent company to shrink the size of their products so that it is less weight when shipping *Innovation* even if product is not very inovative, the packaging can be --heinz ketchup container that stands on its lid so the ketchup comes down
Extending PLCs
How do we get a brand to last a long time? 4 strategies for extending maturity stage of a brand - *Market Penetration* Selling more of our product to our existing customer base Not talking about making new products to win new customers, just tryna appeal more to those they already have by improving quality and what not Use "share of wallet" metric Ex: Walmart doesn't need to draw in new customers, they just need to do a better job of selling to those they already have Use CDI & BDI to see where you should be focusing - *Market Development* Trying to find new customers to buy their products Can be done via exporting something to other markets Selling new goods to attract different types of consumers McDonalds has expanded their markets by selling salads to attract more health-conscious consumers Put new items on menu to try and attract consumers Apple trying to sell iPads to businesses as opposed to individuals - *Product Modification* Barbie dolls have changed over time. Tide modifications over the years to keep their brand on top Ford Mustang PLC shows that the way they extended the PLC was thru extended modification of the car - *Product Repositioning* Move the car in consumers minds from being an old person car to being a young person car Cadillac example where they are trying to appeal to a younger audience. (led zeplin and a restyled car) A1 steaks sauce now just A1 original sauce since people don't eat as much steak anymore.
Consumer-brand realtionship
How do we want to manage our brand in order that we form a long-lasting relationship with our consumers that relationship is quantified by customer lifetime value Relationship perspective forces us to move away from the transactional perspective where we only really think about making a sale to really thinking about how we foster a relationship over time diagram of *dyadic* relationship: (requires us to think of the brand as a person) Brand<-->consumer (anything we do as marketers can be interpreted as how a person would treat us) Product out of stock a lot = friend stands us up for a scheduled movie date Iphone ad about jim and the personified Iphone hes in a relationship with
Newness Compared with Existing Products
If a product is functionally different from existing products, it can be defined as new. Sometimes this newness is revolutionary and creates a whole new industry, as was the case with the Apple smartphone. At other times, more features are added to an existing product to try to appeal to more customers. And as smart TVs, smartphones, smart cars, and smartwatches become more sophisticated, consumers' lives can get far more complicated. This proliferation of extra features—sometimes called product "feature bloat"—overwhelms many consumers and creates an unintended consequence: namely, consumer "feature fatigue."
Standard Test Markets
In a standard test market, a company develops a product and then attempts to sell it through normal distribution channels in a number of test-market cities. Test-market cities must be demographically representative of markets targeted for the new product, have cable TV systems that can deliver different ads to different homes, and have retailers with checkout counter scanners to measure sales. A distinguishing feature of a standard test market is that the producer sells the product to distributors, wholesalers, and retailers, just as it would do for other products. Depending on the results of a test market, companies will take one of three actions. If the results don't meet expectations, a product is discontinued. If the results are favorable, a full-fledged national product introduction may be undertaken. Alternatively, a company may choose to undertake a regional rollout, in which a product is introduced sequentially into geographical areas to allow production levels and marketing activities to build up gradually to support the product.
point of purchase displays
In a store aisle, you often encounter a sales promotion called a point-of-purchase display. These product 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 an aisle. The point-of-purchase display for new movies is designed to maximize the consumer's attention to DVDs and provide storage for the products. Annual expenditures on point-of-purchase promotion are expected to grow as point-of-purchase becomes integrated with all forms of promotion.
customer sales organization
In practice this means that a different salesforce calls on each separate type of buyer or marketing channel. In general, the rationale for this approach is that more effective, specialized customer support and knowledge are provided to buyers. However, this structure often leads to higher administrative costs and some duplication of selling effort, because two or more salesforces are used to represent the same products. For example, Google's Cloud- computing salesforce is structured to reflect different needs of large, established companies with existing data manage- ment centers versus smaller, digital native companies that require initial installations of data centers. *An important variation of the customer organizational structure is key account management*
Noise
Includes extraneous factors that can work against effective communication by distorting a message or the feedback received Noise can be a simple error, such as a printing mistake that affects the meaning of a newspaper advertisement or the use of words or pictures that fail to communicate the message clearly. Noise can also occur when a salesperson's message is misunderstood by a prospective buyer, such as when a salesperson's accent, use of slang terms, or communication style make hearing and understanding the message difficult Competing messages, lack of clarity in a message, or even printing mistakes can create problems that prevent effective communication,hier
Technological, Global, and Ethical Issues in Direct Marketing
Increases in printing and postage rates have also increased the importance of information related to the cost of direct marketing activities Direct marketing faces several challenges and opportunities in global markets today. Many countries, including the United Kingdom, Australia, the European Union, and Japan, have requirements for a mandatory "opt-in"—that is, potential customers must give permission to be included on a list for direct marketing solicitations. Another issue for global direct marketers is payment. The availability of credit and credit cards varies throughout the world, creating the need for alternatives such as C.O.D. (cash on delivery), bank deposits, and online payment accounts such as PayPal and Venmo. In addition, the mail, telephone, and Internet systems in many countries are not as well developed as they are in the United States. The need for improved reliability and security in these countries has slowed the growth of direct mail, while the dramatic growth of mobile phone penetration has created an opportunity for direct mobile marketing campaigns
Inseparability
Inseparability of the provider of the service from the service you receive and from the one who provides it In most cases, the consumer cannot (and does not) separate the deliverer of the service from the service itself. The interactions themselves give value to. the service because the interaction is part of the service *This interaction between the service provider and the consumer means that they often co-create value together* The amount of interaction between the consumer and the service provider depends on the extent to which the consumer must be physically present to receive the service. -Some services, such as haircuts, golf lessons, medical diagnoses, and food service, require the customer to participate in the delivery of the services. -Other services, such as car repair, dry cleaning, and waste disposal, process tangible objects with less involvement from the customer. -Finally, services such as banking, consulting, and insurance are often delivered electronically, requiring no face-to-face customer interaction. Even pharmacies may soon be automated for shoppers who are willing to submit to a fingerprint scan. ---- For example, Merrill Lynch ads describe "The Power of the Right Advisor" to emphasize the importance of its employees. Similarly, consider a person's decision to attend a university to receive higher education. The quality of the education may be high, but if the student has difficulty interacting with instructors, finds counseling services poor, or does not receive adequate career planning assistance, he or she may not be satisfied with the educational experience. Students' evaluations of their education will be influenced primarily by their perceptions of instructors, teaching assistants, counselors, and other people at the university. This interaction between the service provider and the consumer means that they often co-create value together
Services
Intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value. Services have become a significant part of the U.S. economy and often augment products. For example, Apple's iPhone is a product and Verizon is a wireless network service provider.
Responsiveness
Is the company responsive to consumer demand Are we there when the customer needs us Progressive got trucks in order to respond to claims faster People will feel like their time is not respected otherwise Service recovery is an aspect of responsiveness
Salesforce Evaluation: Measuring Results
It is at this point that salespeople are assessed as to whether sales objectives were met and account management policies were followed. Both quantitative and behavioral measures are used to tap different selling dimensions.
Creating Brand Equity
It is carefully crafted and nurtured by marketing programs that forge strong, favorable, and unique customer associations and experiences with a brand. Brand equity resides in the minds of consumers and results from what they have learned, felt, seen, and heard about a brand over time. Companies today seek to create and sustain brand equity by communicating and acting upon the *purpose of a brand*. *Steps for Creating Brand equity* 1) develop positive brand awareness and an association of the brand in consumers' minds with a product class or need to give the brand an identity. ex: Gatorade and Kleenex have achieved this in the sports drink and facial tissue product classes, respectively. 2) marketer must establish a brand's meaning in the minds of consumers. Meaning arises from what a brand stands for and has two dimensions—a functional, performance-related dimension and an abstract, imagery-related dimension. ex: Nike has done this through continuous product development and improvement and its links to peak athletic performance in its marketing communications 3) elicit the proper consumer responses to a brand's identity and meaning. Attention is placed on how consumers think and feel about a brand. Thinking focuses on a brand's perceived quality, credibility, and superiority relative to other brands. ex: Feeling relates to the consumer's emotional reaction to a brand. Michelin elicits both responses for its tires. Not only is Michelin thought of as a credible and superior-quality brand, but consumers also acknowledge a warm and secure feeling of safety, comfort, and self-assurance without worry or concern about the brand. 4) most difficult. create a consumer-brand connection evident in an intense, active loyalty relationship between consumers and the brand. A deep psychological bond characterizes a consumer-brand connection and the personal identification customers have with the brand. Brands that have achieved this status include Harley-Davidson and Apple.
Approach: Making the First Impression& get their interest for a more thourough presentation
Making a Good First Impression Building Rapport Asking Questions Listening! *Discovering Needs* involves the initial meeting between the salesperson and the prospect, where the objectives are: -to gain the prospect's attention, -stimulate interest, -build the foundation for the sales presentation itself and the basis for a working relationship. first impression is critical at this stage, and it is common for salespeople to begin the conversation with a reference to common acquaintances, a referral, or even the product or service itself
Handling Objections
Objections are excuses for not making a purchase commitment or decision. Some objections are valid and are based on the characteristics of the product or service or price. However, many objections reflect prospect skepticism or indifference. 1.*Acknowledge and convert the objection*. This technique involves using the objection as a reason for buying. For example, a prospect might say, "The price is too high." The reply: "Yes, the price is high because we use the finest materials. Let me show you. . . . " 2. *Postpone*. The postpone technique is used when the objection will be dealt with later in the presentation: "I'm going to address that point shortly. I think my answer would make better sense then." 3.*Agree and neutralize*. Here a salesperson agrees with the objection, then shows that it is unimportant. A salesperson would say, "That's true. Others have said the same. But, they thought that issue was outweighed by other benefits." 4.*Accept the objection*. Sometimes the objection is valid. Let the prospect express such views, probe for the reason behind it, and attempt to stimulate further discussion on the objection. 5.*Denial*. When a prospect's objection is based on misinformation and clearly untrue, it is wise to meet the objection head on with a firm denial. 6.*Ignore the objection*. This technique is used when it appears that the objection is a stalling mechanism or is clearly not important to the prospect.
Idle production capacity
Occurs when the service provider is available but there is no demand for the service. Inventory carrying costs can be cut back with part time labor and commission based compensation
Selecting the Right Promotional Tools
Once a budget has been determined, the combination of the five basic IMC tools—advertising, personal selling, sales promotion, public relations, and direct marketing—can be specified. While many factors provide direction for selection of the appropriate mix, the large number of possible combinations of the promotional tools means that many combinations can achieve the same objective. Therefore, an analytical approach and experience are particularly important in this step of the promotion decision process. The specific mix can vary from a simple program using a single tool to a comprehensive program using all forms of promotion. The Olympics have become a very visible example of a comprehensive integrated communications program. Because the Games are repeated every two years, the promotion is continuous during "on" and "off" years. Included in the program are advertising campaigns, personal selling efforts by the Olympic committee and organizers, sales promotion activities such as product tie-ins and sponsorships, public relations programs managed by the host cities, online and social media communication, and direct marketing efforts targeted at a variety of audiences, including governments, organizations, firms, athletes, and individuals. At this stage, it is also important to assess the relative importance of the various tools. While it may be desirable to utilize and integrate several forms of promotion, one may deserve emphasis. The Olympics, for example, place primary importance on public relations and publicity.
Scheduling the Promotion
Once the design of each of the promotional program elements is complete, it is important to determine the most effective timing of their use. The promotion schedule describes the order in which each promotional tool is introduced and the frequency of its use during the campaign. The Walt Disney Company and Lucasfilm, for example, use a schedule of promotional tools for their movies Overall, the scheduling of the various promotions was designed to generate interest, bring consumers into theaters, and then encourage additional purchases after seeing the movie. Several factors such as seasonality and competitive promotion activity can also influence the promotion schedule. Businesses such as ski resorts, airlines, and professional sports teams are likely to reduce their promotional activity during the off-season. Similarly, restaurants, retail stores, and health clubs are likely to increase their promotional activity when new competitors enter the market.
Perceptual Benefits
Package and label shape, color, and graphics distinguish one brand from another, convey a brand's positioning, and build brand equity. Packaging and labeling have been shown to *enhance brand recognition* and *facilitate the formation of strong, favorable, and unique brand associations*. Successful marketers recognize that changes in packages and labels can *update and uphold a brand's image in the customer's mind*. ex:Pepsi-Cola has embarked on a packaging change to uphold its image among teens and young adults, introducing new package graphics that change every few weeks to reflect different themes, such as sports, music, fashion, and cars. Because labels list a product's source, brands competing in the global marketplace can benefit from *"country of origin or manufacture" perceptions* *Consumers tend to hold stereotypes about country-product pairings that they judge "best"*—English tea, French perfume, Italian leather, and Japanese electronics—which can affect a brand's image. Increasingly, Chinese firms are adopting the English language and Roman letters for their brand labels sold in China. This is being done because of a common perception in many Asian countries that "things Western are good."
Connecting with Customers
Packages and labels must be continually updated to connect with customers. The challenge lies in creating aesthetic and functional design features that attract customer attention and deliver customer value in their use. If done right, the rewards can be huge. For example, the marketing team responsible for Kleenex tissues converted its standard rectangular box into an oval shape with colorful seasonal graphics. Sales soared with this aesthetic change in packaging. After months of in-home research, Kraft product managers discovered that consumers often transferred Chips Ahoy! cookies to jars for easy access and to avoid staleness. The company solved both problems by creating a patented resealable opening on the top of the bag. The result? Sales of the new package doubled that of the old package.
Functional Benefits
Packaging often plays a functional role—providing storage, convenience, or protection or ensuring product quality. Stackable food containers are one example of how *packaging* can provide functional benefits. *Storage* For example, beverage companies have developed lighter and easier ways to stack products on shelves and in refrigerators. Examples include Coca-Cola beverage packs designed to fit neatly onto refrigerator shelves and Ocean Spray's rectangular cranberry juice bottles that allow 10 units per package versus 8 of its former round bottles. The *convenience dimension* of packaging is increasingly important. Kraft Miracle Whip salad dressing, Heinz ketchup, and Skippy Squeez'It peanut butter are sold in squeeze bottles; microwave popcorn is a major market success; and Folgers coffee is packaged in single-serving portions. Nabisco offers portion-control package sizes for the convenience of weight-conscious consumers. It offers 100-calorie packs of Oreos, Cheese Nips, and other products in individual pouches. *Consumer protection* is another important function of packaging, including the development of tamper-resistant containers. Today, companies commonly use safety seals or pop-tops that reveal previous opening. Consumer protection through labeling exists in "open dating," which states the expected shelf life of the product. Functional features of packaging also can affect *product quality*. Pringles, with its cylindrical packaging, offers uniform chips, minimal breakage, and for some consumers, a better value than chips packaged in flex-bags.
Product form
Pertains to variations of a product within the product class. different forms of the same class of product will have different life cycles (3rd chart in ch 11 reading notes) ex: For prerecorded music, product form exists in the technology used to provide the music, such as cassette tapes, compact discs, and digital music downloading and streaming. Different types of tires: Racing tires, offroad tires, etc. Each form (tire type) can have a unique PLC associated with it Sedans have been in the decline stage of the plc while SUVs have been in a growth stage at the same time. As light beer form went into a growth phase, premium beers went into a decline phase *Product form PLC is driven by changing technology/consumer tastes* changes is taste for product form informs how different brands will change their marketing in order to take into account whether overall product form is receding or thriving
Process
Process refers to the actual procedures, mechanisms, and flow of activities by which the service is created and delivered. The actual creation and delivery steps that the customer experiences provide customers with evidence on which to judge the service. These steps involve not only "what" gets created but also "how" it is created. The customer contact audit discussed earlier in the chapter is relevant to understanding the service process discussed here The customer contact audit can serve as a basis for ensuring better service creation and delivery processes. Grease Monkey believes that it has the right process in the vehicle oil change and fluid exchange service business. Customers do not need appointments, stores are open six days per week, the service is completed in 15-20 minutes, and a waiting room allows customers to read or work while the service is being completed. *Most services have a limited capacity due to the inseparability of the service from the service provider and the perishable nature of the service.* For example, to "buy" an appendectomy, a patient must be in the hospital at the same time as the surgeon and only one patient can be helped at that time. Similarly, no additional surgery can be conducted tomorrow because of an unused operating room or an available surgeon today—the service capacity is lost if it is not used. *So the service component of the marketing mix must be integrated with efforts to influence consumer *demand
Target Audience
Promotional programs are directed to the ultimate consumer, to an intermediary (retailer, wholesaler, or industrial distributor), or to both. Promotional programs directed to buyers of consumer products often use *mass media* because the number of potential buyers is large. *Personal selling* is used at the place of purchase, generally the retail store. *Direct marketing* may be used to encourage first-time or repeat purchases. Combinations of many media alternatives are a necessity for some target audiences today. *Advertising directed to business buyers is used selectively in trade publications* such as Restaurant Business magazine for buyers of restaurant equipment and supplies. Because business buyers often have specialized needs or technical questions, *personal selling* is particularly important. The salesperson can provide information and the necessary support after the sale. Intermediaries are often the focus of *promotional efforts*. As with business buyers, *personal selling* is the major promotional ingredient. The salespeople assist intermediaries in making a profit by coordinating promotional campaigns sponsored by the manufacturer and providing marketing advice and expertise. Intermediaries' questions often pertain to the allowed markup, merchandising support, and return policies.
Quantitative Assessments
Quantitative assessments are based on input- and output- related objectives set forth in the sales plan. Input-related measures focus on the actual activities performed by salespeople such as those involving sales calls, selling expenses, and account management policies. *(how much effort did they put in)* The number of sales calls made, selling expense related to sales made, and the number of reports submitted to superiors are frequently used input measures. Output measures often appear in a *sales quota*. A sales quota contains specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period. *(what outcome did they get from it)* Dollar or unit sales volume, last year/current year sales ratio, sales of specific products, new accounts generated, and profit achieved are typical goals. The time period can range from one month to one year.
Discontinuous innovation
Requires new learning and consumption patterns by consumers. involves making the consumer learn entirely new consumption patterns to use the product. Have you bought a "smart home" gadget from Amazon or Google that controls household systems like security, heating, and lighting? Best Buy's Geek Squad and Amazon's Smart Home Services have a thriving business installing and activating these gadgets because they can be complicated to set up and operate appropriately. Marketing efforts for discontinuous innovations usually involve not only gaining initial consumer awareness but also educating consumers on both the benefits and proper use of the innovative product. ex: Horsecarraige-->car
Continuous Innovation
Requires no new learning/changing of behaviors by consumers. consumers don't need to learn new behaviors. Most common typeof inovation Toothpaste manufacturers can add new attributes or features like "whitens teeth" or "removes plaque" when they introduce a new or improved product, such as Colgate Total Advanced Gum Defense toothpaste. But the extra features in the new toothpaste do not require buyers to learn new tooth-brushing behaviors, so it is a continuous innovation. The benefit of this simple innovation is that *effective marketing mainly depends on generating awareness, not re-educating customers*. continuous invoations at the brand level: -new brand in an existing product class -new feature or attribute New m&m flavors/types -aren't behavior changing a derivation is a *"me-too product"* -seen a lot in consumer packaged goods where there is an oligopoly situation wit a few large competitors -they keep an eye on one another ex: Coke C2 came along with half the carbs, half the calories, pepsi edge came along a few weeks later pepsi saying "me too, i have the same thing!"
Classifying Services
Services can also be classified in several ways, according to whether (1) they are delivered by people or equipment, (2) they are for-profit or nonprofit, or (3) they are government sponsored.
Classifying Services
Services can be classified according to whether they are delivered by (1) people or equipment, (2) business firms or nonprofit organizations, or (3) government agencies.
Product Mix
Set of product lines sold by the company for campbells, its like all the different soup brands like spaghettio's, chunky's, etc Consists of all the product lines offered by an organization. For example, Cray Inc. has a small product mix of three lines (supercomputers, storage systems, and a "data appliance") that are mostly sold to governments and large businesses. Procter & Gamble, however, has a large product mix that includes product lines such as beauty and grooming (Crest toothpaste and Gillette razors) and household care (Downy fabric softener, Tide detergent, and Pampers diapers).
Geographical sales organization
Simplest structure, where the United States, or indeed the globe, is first divided into regions and each region is divided into districts or territories. Salespeo- ple are assigned to each district with defined geographical boundaries and call on all customers and represent all products sold by the company. An advantage of this structure is that it can minimize travel time, expenses, and dupli- cation of selling effort. However, if a company's products or customers require specialized knowledge, then a geographi- cal structure is unsuitable.
Encountering "groupthink" in task force and committee meetings.
Someone in the new-product planning team meeting knows or suspects the product concept is a dumb idea. But that person is afraid to speak up for fear of being cast as a "negative thinker" or "not a team player" and then ostracized from real participation in the group. Do you think someone on the General Mills's Fingo's new-product team suspected a sweetened cereal the size of a corn chip wasn't a good idea but was afraid to speak up? Probably yes, but they didn't, and the product failed. In the same way, a strong public commitment to a new product by its key advocate may make it difficult to kill the product even when new negative information comes to light. Groupthink can be minimized when team leaders encourage team members to challenge assumptions, express constructive dissent, and offer alternatives.
Setting Objectives
Specifies what is to be achieved. In practice, objectives are set for the total salesforce and for each salesperson. Selling objectives can be *output related* and focus on dollar or unit sales volume, number of new customers added, or profit. Alternatively, they can be *input related* and emphasize the number of sales calls and selling expenses. A third type of objective that is behaviorally related is typically specific for each salesperson and includes his or her product knowledge, customer service satisfaction ratings, and selling and communication skills. Increasingly, firms are also emphasizing knowledge of competition as an objective since salespeople are calling on customers and should see what competitors are doing. Once established, these objectives serve as performance standards for the evaluation of the salesforce, the third function of sales management.
6. Market Testing
Stage of the new-product development process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy. If the budget permits, consumer packaged goods firms often do this by *test marketing*, which involves offering a product for sale on a limited basis in a defined area for a specific time period. -helps us know that a product will be repurchased, not just purchased one time. need to do it for enough time, or else it ends up like dryel Lean innovation is an interesting development The three main kinds of test markets are (1) standard, (2) controlled, and (3) simulated. *down to 2 products*
Support Products
Support products are items used to assist in producing other products and services. These include: --Installations, such as buildings and fixed equipment. --Accessory equipment, such as tools and office equipment. --Supplies, such as stationery, paper clips, and brooms. --Industrial services, such as maintenance, repair, and legal services.
Sweepstakes
Sweepstakes are 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. Popular sweepstakes include the HGTV "Dream Home Giveaway," which receives more than 90 million entries each year, and McDonald's Monopoly, which offers a grand prize of $1 million. Two variations of sweepstakes are popular now: First are sweepstakes that offer products that consumers value as prizes. -Mars Chocolate, for example, created a sweepstakes where consumers enter a UPC code from M&M's products for a chance to win one of five Toyota automobiles. -Pepsi created a similar sweepstakes called "Pepsi Fire" that allowed consumers to use Snapchat to submit codes from bottles of Pepsi and Pepsi Fire to win prizes. The second type of sweepstakes offers an "experience" as the prize. -The Voice, and Nissan sponsored a sweepstakes for a chance to win a trip for two to the season finale of The Voice in Los Angeles. -Similarly, for each of the past five years, People Entertainment Network has sponsored the Oscars Fan Experience Sweepstakes for a chance to win a trip to the Oscars in Hollywood. Federal laws, the Federal Trade Commission, and state legislatures have issued rules cover- ing sweepstakes, contests, and games to regulate fairness, ensure that the chance for winning is represented honestly, and guarantee that the prizes are actually awarded.
Privacy issues with direct marketing
The Federal Trade Commission and the U.S. legislature have also been concerned about privacy. Several bills that call for a do-not-mail registry similar to the Do Not Call Registry have been discussed. Similarly, there are growing concerns about Web "tracking" tools used by direct marketers to segment consumers and match them with advertising. The Making Responsible Decisions box describes some of the issues under consideration
seven Ps of services marketing
The Ps are the levers marketers can change to affect consumer behavior An expanded marketing mix concept for services that includes the four Ps (product, price, promotion, and place or distribution) as well as people, physical environment, and process.
Newness in Legal Terms
The U.S. Federal Trade Commission (FTC) advises that the term new be limited to use with a product up to six months after it enters regular distribution. The difficulty with this suggestion is in the interpretation of the term regular distribution.
The Growth of Direct Marketing
The ability to customize communication efforts and create one-to-one interactions is appealing to most marketers, particularly those with IMC programs, because it leads to more favorable attitudes from the recipients. While many direct marketing methods are not new, the ability to design and use them has increased with the availability of customer information databases and new media such as Instagram and Snapchat *Most campaigns use several direct marketing methods.* JCPenney, for example, is one company that has integrated its direct marketing activities. The company begins a campaign by sending coupons to customers through e-mail and text messages. Consumers also receive direct-mail postcards and digital "Look Books" that invite them to visit the company's e-commerce website. A special social commerce app is also available for purchases on JCPenney's Facebook "Fan" page *Many companies also integrate their direct marketing with other forms of promotion*. Porsche, for example, recently launched a campaign to change consumer perceptions that its 911 model was uncomfortable and a poor choice for everyday use The campaign consisted of TV commercials, a video contest, direct mail brochures, and a mobile-ready website. The ads, contest, and brochures all directed consumers to the website where they could view videos, photos, and testimonials from current owners about the everyday use of their cars. In addition, visitors to the website could submit their e-mail address to be contacted by a Porsche dealership. Mobile direct marketing sales and online direct marketing sales are growing at 33 percent and 20 percent, respectively—the fastest of all direct marketing tools
Physical Environment
The appearance of the environment in which the service is delivered and where the firm and customer interact can influence the customer's perception of the service. The physical evidence of the service includes all the tangibles surrounding the service: the buildings, landscaping, vehicles, furnishings, signage, brochures, and equipment. Service firms need to manage physical evidence carefully and systematically to convey the proper impression of the service to the customer. This is sometimes referred to as impression, or evidence management. For many services, the physical environment provides an opportunity for the firm to send consistent and strong messages about the nature of the service to be delivered.
relationship marketing
The contact between a service provider and a customer represents a service encounter that is likely to influence the customer's assessment of the purchase. The number of encounters in a service experience may vary. These encounters represent opportunities to develop social bonds, or relationships, with customers. The relationship may also be developed through loyalty incentives such as airline frequent flyer programs. *Relationship marketing provides several benefits for service customers, including the continuity of a single provider, customized service delivery, reduced stress due to a repetitive purchase process, and an absence of switching costs.* Surveys of consumers have indicated that while customers of many services are interested in being "relationship customers," they require that the relationship be balanced in terms of loyalty, benefits, value, kinds of connections, and respect for privacy and their expectations of the future benefits of the service influence the likelihood that they continue the relationship Understanding the service characteristics that lead to repeat purchases can help services managers allocate their resources to appropriate relationship marketing activities and improve their relationship marketing readiness
Too little market attractiveness.
The ideal is a large target market with high growth and real buyer need. But often the target market is too small or competitive to warrant the huge expenses necessary to reach it. OUT! International's Hey! There's A Monster In My Room spray was designed to rid scary creatures from a kid's bedroom and had a bubble-gum fragrance. While a creative and cute product, the brand name probably kept the kids awake at night more than their fear of the monsters because it implied the monster was still hiding in the bedroom. Also, was this a real market?
Salesforce Compensation
The importance of compensation as a motivating factor means that close attention must be given to how salespeople are financially rewarded for their efforts. Salespeople are paid using one of three plans: (1) straight salary, (2) straight commission, or (3) a combination of salary and commission. Under a *straight salary* compensation plan, a salesperson is paid a fixed fee per week, month, or year. A straight salary plan is easy to administer and gives management a large measure of control over how salespeople allocate their efforts. However, it provides little incentive to expand sales volume. This plan is used when salespeople engage in many nonselling activities, such as ac- count or customer servicing. With a *straight commission* compensation plan, a salesperson's earnings are directly tied to the sales or profit generated. For example, an insurance agent might receive a 2 percent commission of $2,000 for selling a $100,000 life insurance policy. A straight commission plan provides the maximum amount of selling incentive but can discourage salespeople from providing customer service. This plan is common when nonselling activities are minimal. A *combination* compensation plan contains a specified salary plus a commission (or bonus) on sales or profit generated. Combination plans are most preferred by salespeople and attempt to build on the advantages of salary and commission plans while reducing the potential shortcomings of each. A majority of companies use combination plans today. Nonmonetary rewards are also given to salespeople for meeting or exceeding objectives. These rewards include trips, honor societies, distinguished salesperson awards, and letters of commendation. Some unconventional rewards include a new pink Cadillac, Porsche, Buick, and BMW automobile, and jewelry given by Mary Kay Cosmetics to outstanding salespeople and sales directors
Online advertising options
The most popular options are paid search, display (banner) ads, classified ads, and video. *Paid search* is one of the fastest-growing forms of Internet advertising, as approximately 80 percent of all Internet traffic begins at a search engine such as Google, Microsoft's Bing, or Oath. Experts estimate that consumers conduct 20 billion searches each month. Now search engine agencies help firms add tags, wikis, and RSS (rich site summary) to the content of a site to increase search rankings. While the use of *banner ads* is growing also, there is some concern that consumers are developing "banner blindness" because the click-through rate has been declining to its current level of 0.1 percent. The effectiveness of the ads can be improved with targeted advertising, and re- search indicates that online visitors are more likely to consent to provide information needed for targeting if the websites suggest it is a form of reciprocity or exchange for the use of free websites. *Classified ads*, such as those on Craigslist, and video ads also contribute to the growth of online advertising by providing many of the advantages and characteristics of other media such as directories, magazines, newspapers, and television. *Video ads* also have the benefit of "going viral" when people share the ads with friends
internal marketing
The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers. Service firms need to ensure that employees have the attitude, skills, and commitment needed to meet customer expectations and to sustain customer loyalty. Employees with a commitment to mutually beneficial relationships with customers are most suitable for services today. This idea suggests that employee development through recruitment, training, communication, coaching, management, and leadership is critical to the success of service organizations. many service organizations, such as educational institutions and athletic teams, must recognize that individual customer behavior may also influence the service outcome for other customers. These interactions suggest that the people element in services includes employees and all customers. Once internal marketing programs have prepared employees for their interactions with customers, organizations can better manage the services they provide
relationship selling
The practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time. Relationship selling involves mutual respect and trust among buyers and sellers. It focuses on creating long-term customers and long-run customer value, not a one-time sale. In this regard, senior sales executives consider building long-term relationships with customers to be the most important activity affecting sales performance
Promotional mix in the Growth stage
The primary promotional objective of the growth stage is to persuade the consumer to buy the product rather than substitutes, so the marketing manager seeks to gain brand preference and solidify distribution. Sales promotion assumes less importance in this stage, and publicity is not a factor because it depends on novelty of the product. The primary promotional element is *advertising*, which stresses brand differences. *Personal selling is used to solidify the channel of distribution. * For consumer products such as dog food, the salesforce calls on the wholesalers and retailers in hopes of increasing inventory levels and gaining shelf space. For business products, the salesforce often tries to get contractual arrangements to be the sole source of supply for the buyer.
Communication
The process of conveying a message to others that requires six elements: 1) a source, 2) a message, 3) a channel of communication, 4) a receiver, and 5) the processes of encoding and decoding. Chart in ch18 reading notes example: The North Face is the source and the advertisement is the message, which appeared in Wired magazine (the channel). How would you interpret (decode) this advertisement? The picture and text in the advertisement show that the source's intention is to generate interest in its product with the headline "I Live On The Edge. Never Stop Exploring"—a statement the source believes will appeal to the readers of the magazine.
Shape of the Life-Cycle Curve
The product life-cycle sales curve in the ch11 reading notes is the generalized life cycle Not all products have the same shape to their curve. We will explore the different life-cycle curves for 4 different products: high-learning, low-learning, fashion, and fad products.
Brand purpose
The reason why a brand exists, the place it has in consumers' lives, the solution it provides to consumers, and the brand's role in making society better off. Brand purpose focuses on a brand's underlying values and beliefs and its identity and meaning. For example, Nike's purpose is to bring inspiration and innovation to every athlete in the world. Patagonia's brand purpose is to deliver quality apparel, forge relationships based on integrity and respect, and promote responsible environmental behavior. Viewed broadly, the emphasis on a brand's purpose reflects the movement among companies to embrace the basic tenets of stakeholder and societal responsibility
New Product Development Process (FUNNEL)
The seven stages an organization goes through to identify opportunities and convert them into salable products or services. The funnel takes in a lot of ideas, but few end up getting through Carefully using the seven stages in the new-product development process increases the chances of new-product success. 1. New-Product Strategy Development 2. Idea Generation 3. Screening and Evaluation 4. Business Analysis 5. Development 6. Market Testing 7. Commercialization
Complexity
The technical sophistication of the product and hence the amount of understanding required to use it. It's hard to provide much information in a one-page magazine ad or a 30-second television ad, *the more complex the product, the greater the emphasis on personal selling.* Gulfstream asks potential customers to call a representative identified in its ads. On the other hand, very little information is provided for simple products such as Tabasco pepper sauce.
promotional mix
The tools used are: Advertising Personal Selling Sales Promotion Public Relations Direct Marketing 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. --- come from the "promotion" part of the marketing mix m
Promotion
The value of promotion, especially advertising, for many services is to show consumers the benefits of purchasing the service. It is valuable to stress availability, location, consistent quality, and efficient, courteous service and to provide a physical representation of the service or a service encounter The Accenture ad, for example, describes the benefits available to its customers—"High performance. Delivered." The Amazon ad features its two-hour delivery option, Prime Now, by describing the benefit as "What you need, when you need it." In most cases, promotional concerns of services are similar to those of products. Personal selling, sales promotion, and direct marketing also can play an important role in services marketing. Service firm representatives, such as hotel employees handling check-in services or waitstaff in restaurants, are often responsible for selling their services. Similarly, sales promotions such as coupons, free trials, and contests are often effective tools for service firms. Finally, direct marketing activities are often used to reach specific audiences with interest in specific types of services. Increasingly, service firms are adopting an integrated marketing communications approach similar to the approach used by many consumer packaged goods firms, to ensure that the many forms of promotion are providing a consistent message and contributing to a common objective.
1. New-Product Strategy Development
Thinking about what it can address "what are we trying to accomplish with the new product we are trying to produce" have a clear idea of what you want it to do defines the role of a new product in terms of the firm's overall objectives. The stage of the new-product development process that defines the role for a new product in terms of the firm's overall objectives. During this stage, the firm *uses both a SWOT analysis and environmental scanning* to assess its strengths and weaknesses relative to the trends it identifies as opportunities or threats The outcome not only defines the vital "protocol" for each new-product idea but also identifies the strategic role it might serve in the firm's product portfolio. Occasionally a firm's Stage 1 activities can be blindsided by a revolutionary new product or technology that completely disrupts its business, sometimes called a "disruptive innovation." For example: -Wikipedia. This free and community-edited online encyclopedia caused Encyclopedia Britannica to cease print production after 244 years. -Digital photography. Even though they were invented by Kodak, digital cameras made film and film cameras obsolete by the mid-2000s and drove Kodak into bankruptcy. Kodak did not actively market its digital cameras because it wanted to protect its film business. Clearly, a firm's new-product strategy development must be on the lookout for innovative products or technology that might disrupt its plans. New-product development for services, such as buying a stock or airline ticket or watching a National Football League game, is often difficult. Why? Because services are intangible and performance-oriented. Nevertheless, service innovations can have a huge impact on our lives. For example, the online brokerage firm E*TRADE revolutionized the financial services industry through its online investment trading. apple made entertaining products, so as they wanted to make more, they focused n things that were cutting edge, and entaertaining apple tv, iphone, mac, ipad all ccame along bc of focua on making skleek, stylish, and entertaining products green giant realized peolpe were eating more and more on the go, so they focused on making products that were good for this oreo uses inovations in flavors to keep the regular flavor fressh in peoles mind --their goal is to keep the original fresh in peoples mind, they do this by making a product that makes people buy oreos
Poor product quality
This factor often results when a product is not thoroughly tested. The costs to an organization for poor quality can be staggering and include the labor, materials, and other expenses to fix the problem—not to mention the lost sales, profits, and market share that usually result. Consider "hoverboards." After gaining widespread attention with the media, as well as popularity with teens, hoverboards made by a variety of manufacturers were found to catch fire or explode. Needless to say, hoverboard sales suffered greatly as a result.
New Product Vitality Index.
This index tracks the percentage of total company sales that come from new products each year. This index puts emphasis on the percentage of total company sales that came from new products each year. Originated by the 3M Company, this index is used by 62 percent of large U.S. companies. Its purpose is to track the "vitality" of a company's new-product development effort. An index between 20 and 30 percent is considered "good."
Bad timing
This results when a product is introduced too soon, too late, or when consumer tastes and preferences are shifting dramatically. Bad timing gives new-product managers nightmares. Hewlett-Packard, for example, introduced its HP Tablet a few years after Apple launched its original iPad, about the same time Apple introduced its next-generation iPad 2 that featured multiple apps. Hewlett-Packard was late and its HP Tablet was significantly behind in apps compared to the iPad 2. Failure to deliver a product that satisfied consumer preferences in a timely manner caused Hewlett-Packard to abandon its HP Tablet two months after its launch.
Simulated Test Markets
To save time and money, companies often turn to simulated (or laboratory) test markets (STMs), a technique that somewhat replicates a full-scale test market. STMs are often run in shopping malls, to find consumers who use the product class being tested. Next, qualified participants are shown the product or the product concept and asked about usage, reasons for purchase, and important product attributes. They then see the company's and competitors' ads for the test product. Finally, participants are given money and allowed to choose between buying the firm's product or the products of competitors in a real or simulated store environment.
Health, Safety, and Security Issues
Today, most consumers believe companies should make sure products and their packages are safe and secure, regardless of the cost, and companies are responding in numerous ways. Most butane lighters sold today, like those made by Scripto, contain a child-resistant safety latch to prevent misuse and accidental fire. Childproof caps on pharmaceutical products and household cleaners and sealed lids on food packages are now common. New packaging technology and materials that extend a product's shelf life (the time a product can be stored) and prevent spoilage continue to be developed.
Modifying the Market
Trying to find new customers, increase a product's use among existing customers, or create new use situations Strategies by which a company tries to: *1) find new customers* ex: As part of its market modification strategy, LEGO Group is offering a new line of products to attract consumers outside of its traditional market. Known for its popular line of construction toys for young boys, LEGO Group has introduced a product line for young girls called LEGO Friends. Harley-Davidson has tailored a marketing program to encourage women to take up biking, thus doubling the number of potential customers for its motorcycles. *2) increase a product's use among existing customers,* ex: Promoting more frequent usage has been a strategy of Campbell Soup Company. Because soup consumption rises in the winter and declines during the summer, the company now advertises more heavily in warm months to encourage consumers to think of soup as more than a cold-weather food. Similarly, the Florida Orange Growers Association advocates drinking orange juice throughout the day rather than for breakfast only. *3) create new use situations.* ex: Finding new uses for an existing product has been the strategy behind Gillette, the world leader for men's shaving products. The company now markets its Gillette Body line of razors, blades, and shaving gels for "manscaping"—the art of shaving body hair in areas below the neckline—a new use situation.
Pioneering advertising (informational)
Used in the *introductory stage * of the product life cycle, pioneering advertisements tell people: what a product is, what it can do, and where it can be found. The key objective of a pio- neering advertisement (such as the Hyundai ad introducing its new Venue) is to inform the target market. Informational ads, particularly those with specific message content, have been found to be interesting, convincing, and effective
Strategy formulation
Using tennis example from exam 2 quant 3 brands of tenis rackets out there in the consumer's consideration set. use the multi-attribute model want to use it to develop a strategy that will improve our standing relative to the two competitors 3 strategies you can pursue 1) improve how people perceive a part/characteristic of our product 2) change the importance the consumer puts on a particular characteristic 3) Add a new attribute
Levels of Market Offering
What goes into thinking about the experience economy (pine&gilmore) As you go up these levels, you charge more per unit: *Commodity * Nothing to differentiate the commodities at this level Coffee beans, unbranded, nothing really special about them—just scoop and put into bag -would have to take it home and grind it up yourself *Good (Product) * All kinds of branded, ground coffee in their own containers Many options, more conviinet form *Service * Go to a coffee shop, get a croissant and some coffee—all made there Coffee was brewed for you, so its a service -nothing exceptional about it *Experience* Starbucks makes the normal coffeeshop vibe into an experience, mocha, triple shot, the names, The setting is more relaxed and you enjoy the whole experience Difference between service and experience is that the vibe is just unique for the company, and people come to you not just for what you have but also for the vibe -all the things uf did in terms of adding stuff to make the game day "experience" better. They do this by making internet connection better, having food trucks etc. not just the standard things you have for a football game
Selecting Social Media Content
What is the content's purpose How will social media content complement the overall integrated marketing communication effort in creating/sustaining customer engagement. how will the social media content be best conveyed in different social media content choice is also based on the characteristics of the one or more market segments a marketer wants to reach with social media. This starts with demographic characteristics like geographic region, gender, age range, and education. Additional factors like relationship status and user interests are often included as well.
Potential Service
Whatever! - e.g. "Just looking" buttons Service that we might deliver but haven't delivered yet -When we augment a service, eventually that becomes an expectation, so you need to keep innovating Ex: if you augment your service with free wifi, eventually that becomes expectation ands you need to find something new to set you apart from the competition -in order to continue beating our competition we need to come up with new things -ex: Just looking button (for when you don't want a sales associate to help you... Its potential because not many have done it but its something retailers could start doing for their customer -they could it to increase the favorability for how people rate their service Its a common finding that services are not evaluated as highly as products
Multibranding Strategy
When a firm uses a distinct name for each of its products........A branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment. useful strategy when each brand is intended for a different market segment. Procter & Gamble makes Camay soap for those concerned with soft skin and Safeguard for those who want deodorant protection. Stanley Black & Decker markets its line of tools for the do-it-yourself (DIY) household segment with the Black & Decker name but uses the DeWalt name for its professional tool line. *Reasons for it:* 1) Some companies array their brands on the basis of price-quality segments. Marriott International offers 18 hotel and resort brands, each suited for a particular traveler experience and budget. To illustrate, Marriott EDITION hotels and Vacation Clubs offer luxury amenities at a premium price. Courtyard hotels and TownePlace Suites appeal to economy-minded travelers 2) multibrand companies may introduce new product brands as defensive moves to counteract competition (Known as fighting brands) -- Compared with the multiproduct strategy, advertising and promotion costs tend to be higher with multibranding. The company must generate awareness among consumers and retailers for each new brand name without the benefit of any previous impressions. The advantages of this strategy are that each brand is unique to each market segment and there is no risk that a product failure will affect other products in the line. Still, some large multibrand firms have found that the complexity and expense of implementing this strategy can outweigh the benefits. For example, Procter & Gamble has pruned about 100 of its brands through product deletion and sales to other companies in the past decade
product sales organization
When specific knowledge is required to sell certain types of products, then a product sales organization is used. For example, Maxim Steel has a salesforce that sells drilling pipe to oil companies and another that sells specialty steel products to manufacturers. The advantage of this structure is that salespeople can develop expertise with technical characteristics, applications, and selling methods associated with a particular product or family of products However, this structure produces high administrative costs and duplication of selling effort, because two company sales- people may call on the same customer.
Joint Value Creation (JVC)
When we work with the partners to help them achieve their goals Tmobil had music vibe, and so moterola created music product to be sold by them
Incomplete market and product protocol before product development starts
Without this protocol, firms try to design a vague product for a phantom market. Developed by Kimberly-Clark, Avert Virucidal tissues contained vitamin C derivatives scientifically designed to kill cold and flu germs when users sneezed, coughed, or blew their noses into them. The product failed in test marketing. People didn't believe the claims and were frightened by the "cidal" in the brand name, which they connected to words like suicidal. A big part of Avert's failure was its lack of a product protocol that clearly defined how it would satisfy consumer wants and needs
Conference Selling
a salesperson and other company resource people meet with buyers to discuss problems and opportunities
Product Modification
altering one or more of a product's characteristics, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales. ex: Wrinkle-free and stain-resistant clothing made possible by nanotechnology revolutionized the men's and women's apparel business and stimulated industry sales of casual pants, shirts, and blouses A common approach to product modification to increase a product's value to consumers is called product bundling—the sale of two or more separate products in one package ex: Microsoft Office is sold as a bundle of computer software, including Word, Excel, and PowerPoint New features, packages, or scents can be used to change a product's characteristics and give the sense of a revised product. ex: Procter & Gamble revamped Pantene shampoo and conditioner with a new vitamin formula and relaunched the brand with a multimillion-dollar advertising and promotion campaign. The result? Pantene, a brand first introduced in the 1940s, remains a top-selling shampoo and conditioner in the United States in an industry with more than 1,000 competitors.
Stimulus-Response Format
assumes that given the appropriate stimulus by a salesperson, the prospect will buy. With this format the salesperson tries one appeal after another, hoping to hit the right button. A counter clerk at McDonald's is using this approach when he or she asks whether you'd like an order of french fries or a dessert with your meal. The counter clerk is engaging in what is called *suggestive selling*. Although useful in this setting, the stimulus-response format is not always appropriate, and for many products a more formalized format is necessary.
search advertising (sponsored links)
based on search term you search something on google and the first results are paid ads Ad position dictated by: -auction (firms bid on how much willing to pay per click) -relevance -dynamic "real time" bidding the results that are not advertised are organic reesults
Participative Benefits
benefits from the interaction between the customer and the service provider co-creation of value when the recipient becomes an active part of the equation The interactions between customers and providers themselves give value to the service because the interaction is part of the service part of the value comes from customers, like listening carefully or asking good questions 9in this way they help 'Cocreate' value wit the service provider
Customer Service and Support Automation
consists of processes and technologies that supply customers with information about postsale activities, including installation, repair, replacement, and replenishment, and technical expertise pertaining to products. Two features of successful customer service and support automation are the availability of "live chat" opportunities and the ability to provide a single source for customer problem solving. Both features attempt to overcome customer frustration with having to contact multiple service and support personnel to solve any, and all, problems.
Adoption Process (individual level)
corresponds to the decision process from consumer behavior How do people go about adopting a new product. *Awareness* -first, people have to become aware of a new product. -new products have to cut thru the clutter as there are thousands introduced every year -need to promote ourselves in a way to stand out ex: Apple ipod vs the Zen that was not advertised *Interest* -we see something and think it may help us in some way -not only aware, but intrigued by it *Evaluation* -think a lil more systematically about whether this product is actually going to be worth it -if you don't have th opportunity ti try something out (trial) you will spend more time in this stage *Trial* -one time purchase that helps us decide whether we want to adopt that product for continued use -for a consumer good it could be buying it once -*for a durable vehicle, like a car, the trial could be a test drive at the dealership* -trying out a computer in the store before buying Adoption --------- -*for low-involvement products, trial and evaluation stages flip* -first you try, then you make the decision of whether to adopt it or not ex: chips low involment product, bet way to evaluate it is to try.
New Product Diffusion
cumulative proportion of the market that adopts Something we try to forecast when introducing a new product Chart in Exam 2Quant notes (seg9/ch10) shows 3 different trends for how adoption approaches 100%over time, each one varying depending on a bunch of individual adoption decisions 1st diffuses rapidly 2nd 3rd starts slow and gradually goes up Marketers are concerned with how FAST and how FAR a product actually penetrates. (is it something everyone will have at some point, or does it tap out somewhere) -this matters bc the rate at which something defuses affects our payback period, our initial investment, how much of a head start we get over competition
2. Idea Generation
develop some concepts that may help address the things from step 1 The stage of the new-product development process that develops a pool of concepts to serve as candidates for new products, building upon the previous stage's results. the second stage of the new-product development process, *Methods of generating new-product ideas both internally and externally:* -Suggestions from Employees and Friends -Customer and Supplier Suggestions -Research and Development Laboratories -Competitive Products -Smaller Firms, Universities, and Inventors Many forward-looking organizations have discovered that they are not generating enough useful new-product ideas. --------- One internal approach for getting ideas within the firm is to train employees in the art and science of asking specific, probing questions. The goal in generating new-product ideas and strategies is to move from "what is" questions that describe the present situation to "what if" questions that focus on solutions and marketing actions. *Can get ideas from employees (cheeto) and friends (life is good) "What if I put chili on a Cheeto?" *Customer and Suplier suggestions*: Firms ask their salespeople to talk to customers and ask their purchasing personnel to talk to suppliers to discover new-product ideas. Whirlpool gets ideas from customers on ways to standardize components so that it can cut the number of different product platforms to reduce costs. Business researchers tell firms to actively involve customers and suppliers in the new-product development process. This means the focus should be on what the new product will actually do for them rather than simply what they want. Can also crowd source: "Crowdsourcing" is another creative idea generation method if an R&D marketing team wants ideas from 10,000 or 20,000 customers or suppliers. -asking public for oreo flavors Crowdsourcing involves generating insights leading to actions based on ideas from massive numbers of people. This open innovation practice requires a precise question to focus the idea generation process. Dell Technologies used crowdsourcing to develop an online site to generate 13,464 ideas for new products as well as website and marketing improvements, of which 402 were implemented *competitive products* Analyzing the competition can lead to new-product ideas. General Motors targeted Tesla Motors as a reference for its Chevrolet Bolt—a $30,000 all-electric vehicle. Jansport constanly researching how to make better backpacks *get ideas to improve the backpack based off backpack users* *usually about 60 new product ideas*
Direct Marketing
direct contact between seller and consumer -junk mail -email marketing (spam) -permission marketing -you have given the sender of this promotional email the permission -telemarketing -text-marketing A promotional alternative that 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. The communication can take many forms, including face-to-face selling, direct mail, catalogs, telephone solicitations, direct response advertising (on television and radio and in print), and online marketing. Like personal selling, direct marketing often consists of interactive communication. *ADVANATGES:* customized to match the needs of specific target markets. Messages can be developed and adapted quickly to facilitate one-to-one relationships with customers. *DISADVANATGES:* most forms of direct marketing require a comprehensive and up-to-date database with information about the target market. Developing and maintaining the database can be expensive and time-consuming. In addition, growing concern about privacy has led to a decline in response rates among some customer groups. The importance of data in direct marketing efforts, however, is emphasized by the Data & Marketing Association, which advocates "innovative and responsible use of data-driven marketing." Companies with successful direct marketing programs are sensitive to these issues and often use a combination of direct marketing alternatives together, or direct marketing combined with other promotional tools, to increase value for customers.
3. Screening and Evaluation
evaluate new ideas to see what works and what doesn't The stage of the new-product development process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort. Done via: -Internal Approach/Feasibility screening -External Approach/Concept testing *Internal/Feasibility :* Is it something we can do? do we have the capability/money to do this? Should we even try this? In this approach to screening and evaluation, a firm's employees evaluate the technical feasibility of a proposed new-product idea to determine whether it meets the objectives defined in the new-product strategy development stage Organizations that develop service-dominated offerings need to ensure that employees have the commitment and skills to meet customer expectations and sustain customer loyalty—an important criterion in screening a new-service idea. This is the essence of *customer experience management (CEM)*, which is the process of managing the entire customer experience within the company. Marketers must consider employees' interactions with customers so that the new services are consistently delivered and experienced, clearly differentiated from other service offerings, and relevant and valuable to the target market. ex: McDonalds snack wrap to enter the eating-on-the-go market. required fresh food that McDonalds was unable to get, since they usually do frozen stuff...hense, it was not feasable *down to 12 product ideas* *External/Concept testing:* testing the ideas to see what people would think of the product Firms that take an external approach to screening and evaluation use concept tests provide description of the product, maybe some visauls, and then they fill out a questionnaire which helps the company determine if there is a market for it. *leaves us at 9*
Place (distribution)
major factor in developing a service marketing strategy because of the inseparability of services from the producer. Rarely are intermediaries involved in the distribution of a service; the distribution site and the service deliverer are the tangible components of the service. Increased competition, has forced many service firms to consider the value of convenient distribution and to find new ways of distributing services to customers. Hairstyling chains such as Cost Cutters Family Hair Salon, use multiple locations for the distribution of services Technology is also being used to deliver services beyond the provider's physical locations. The availability of electronic distribution through the Internet also allows for global reach and coverage for a variety of services, including travel, education, entertainment, and insurance. With speed and convenience becoming increasingly important to customers when they select service providers, service firms can leverage the use of the Internet to deliver services on a 24/7 basis, in real time, on a global scale.
TRADE ("PUSH")
manufacturer pushes more product for retailer to sell DEALER CONTESTS-sales contests for distributers of our product to get them to work harder to sell TRADE ALLOWANCES--discounts for buying more of it TRADE SHOWS-CES in califormnia. you can reward best retailers with parties/people canmake connections and deals there. CO-OP ADVERTISING--manufacturer cooperates with retailer for advertising a particular product. "if you dedicate 15% of your ad space in your ad to our product we will pay for 15% of that ad
Sales Promotion
meant to spur short-run sales A short-term inducement of value offered to arouse interest in buying a product or service. Used in conjunction with advertising or personal selling, sales promotions are offered to intermediaries as well as to ultimate consumers. Coupons, rebates, samples, contests, and sweepstakes, such as the Pepsi/Cheetos promotion on the previous page, are just a few examples of sales promotions discussed later in this chapter. *ADVANATGES:* short-term nature of these programs (such as a coupon or sweepstakes with an expiration date) often stimulates sales for their duration. Offering value to the consumer in terms of a cents-off coupon or rebate may increase store traffic from consumers who are not store-loyal *DISADVANATGES:* Sales promotions cannot be the sole basis for a campaign because gains are often temporary and sales drop off when the deal ends. Advertising support is needed to convert the customer who tried the product because of a sales promotion into a long-term buyer. If sales promotions are conducted continuously, they lose their effectiveness. Customers begin to delay purchase until a coupon is offered, or they question the product's value. Some aspects of sales promotions also are regulated by the federal government
hierarchy of effects
mental/emotional stages the consumer goes thru from when they don't know about a brand till they buy it the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action. The five stages are: (the order matters) Awareness—the consumer's ability to recognize and remember the product or brand name. Interest—an increase in the consumer's desire to learn about some of the features of the product or brand. Evaluation—the consumer's appraisal of the product or brand on important attributes. Trial—the consumer's actual first purchase and use of the product or brand. Adoption—through a favorable experience on the first trial, the consumer's repeated purchase and use of the product or brand. For a totally new product, the sequence applies to the entire product category, but for a new brand competing in an established product category, it applies to the brand itself. In addition, the popularity of social media sometimes leads to an "advocacy" stage where loyal consumers recommend brands they have adopted. These steps can serve as guidelines for developing promotion objectives.
publicity tools
methods of obtaining non- personal presentation of an organization, product, or service without direct cost—are available to the public relations director. Many companies frequently use the *news release*, consisting of an announcement regarding changes in the company or the product line The objective of a news release is to inform a newspaper, radio station, or other medium of an idea for a story. A second common publicity tool is the *news conference.* Representatives of the media are all invited to an informational meeting, and advance materials regarding the content are sent. This tool is often used when new products are intro- duced or significant changes in corporate structure and lead- ership are being made. Nonprofit organizations rely heavily on *public service announcements (PSAs)*, which are free space or time donated by the media. For example, the charter of the American Red Cross prohibits any local chapter from advertising, so to solicit blood donations local chapters often depend on PSAs on radio or television to announce their needs.
Avertising
paid media insertion -pay for space in a magazine or ad time Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor. The *paid* aspect of this definition is important because the space for the advertising message normally must be bought. A full-page, four-color ad in Time magazine, for example, costs $265,100. An occasional exception is the public service announcement, where the advertising time or space is donated. The *nonpersonal* component of advertising is also important. Advertising involves mass media (such as TV, radio, and magazines), which are nonpersonal and do not have an immediate feedback loop as does personal selling. -this means marketing research is important before the message is sent *ADVANATGES:* It can be attention-getting and also communicate specific product benefits to prospective buyers. By paying for the advertising space, a company can control what it wants to say and, to some extent, to whom the message is sent. Advertising also allows the company to decide when to send its message (which includes how often). The nonpersonal aspect of advertising also has its advantages. Once the message is created, the same message is sent to all receivers in a market segment. If the pictorial, text, and brand elements of an advertisement are properly pretested, an advertiser can ensure the ad's ability to capture consumers' attention and trust that the same message will be decoded by all receivers in the market segment. *DISADVANATGES:* the costs to produce and place a message are significant, the lack of direct feedback makes it difficult to know how well the message was received
Repeat purchasers
people who tried the product, were satisfied, and bought again or successful products, the ratio of repeat to trial purchases grows as the product moves through the life cycle. Durable fax machines meant that replacement purchases were rare. However, it became common for more than one machine to populate a business as the machine's use became more widespread.
posttests
posttests are recommended to evaluate the impact of each promotion and the contribution of the promotion toward achieving the program objectives To fully benefit from IMC programs, companies must create and maintain a test-result database that allows comparisons of the relative impact of the promotional tools and their execution options in varying situations. Information from the database will allow informed design and execution decisions and provide support for IMC activities during internal reviews by financial or administrative personnel. The San Diego Padres baseball team, for example, developed a database of information relating attendance to its integrated campaign, which included a new logo, special events, merchandise sales, and a loyalty program. As many as three-fourths of businesses may individually test new communication elements such as digital advertising, while one-fourth of all businesses may assess "most of their communication tactics" using new and traditional measures of effectiveness For most organizations, the assessment focuses on trying to determine which element of promotion works better. In an integrated program, however, media advertising might be used to build awareness, sales promotion to generate an inquiry, direct mail to provide additional information to individual prospects, and a personal sales call to complete the transaction. The tools are used for different reasons, and their combined use creates a synergy that should be assessed on criteria such as coverage, cost, and contribution, as well as complementarity, and cross-effects. In addition, the effectiveness of IMC programs is strongly related to overall company performance.
brand extension
practice of using a current brand name to enter a different product class. For instance, equity in the Huggies family brand name has allowed Kimberly-Clark to successfully extend its name to a full line of baby and toddler toiletries. This brand extension strategy generates $500 million in annual sales globally for the company. Honda's established name for motor vehicles has extended easily to snowblowers, lawn mowers, snowmobiles, and business jets.
Order Taker
processes routine orders or reorders for products that were already sold by the company. The primary responsibility of order takers is to preserve an ongoing relationship with existing customers and maintain sales. 2 types: *Outside order takers* visit customers and replenish inventory stocks of resellers, such as retailers or wholesalers. For example, Frito-Lay salespeople call on supermarkets, convenience stores, and other establishments to ensure that the company's line of snack products (such as Lay's potato chips and Doritos and Tostitos tortilla chips) is in adequate supply. In addition, outside order takers often provide assistance in arranging displays. *Inside order takers*, also called order clerks or salesclerks, typically answer simple questions, take orders, and complete transactions with customers. Many retail clerks are inside order takers. Inside order takers are often employed by companies that use inbound telemarketing, the use of toll-free telephone numbers that customers can call to obtain information about products or services and make purchases. In business-to-business settings, order taking arises in straight rebuy situation Order getting involves a high degree of creativity and customer empathy and is typically required for selling complex or technical products with many options, so considerable product knowledge and sales training are necessary. In modified rebuy or new-buy purchase situations in business-to-business selling, an order getter acts as a problem solver who identifies how a particular product may satisfy a customer's need. Similarly, in the purchase of a service, such as insurance, an insurance agent can provide a mix of plans to satisfy a buyer's needs depend- ing on income, stage of the family's life cycle, and investment objectives.
cooperative advertising
programs by which a manufacturer pays a percentage of the retailer's local advertising expense for advertising the manufacturer's products. Usually, the manufacturer pays a percentage, often 50 percent, of the cost of advertising up to a certain dollar limit, which is based on the amount of the manufacturer's products purchased by the retailer. In addition to paying for the advertising, the manufacturer often furnishes the retailer with a selection of different ad executions, sometimes suited for several different media. A manufacturer may provide, for example, several different print layouts as well as a few broadcast ads for the retailer to adapt and use
4. Business Analysis
specifies what needs to happen for this to go to market "can we make money with this thing? What do the costs look like? What kinda investment is required, what do we expect the sales to be?" How quickly might we recoup our investment?" The stage of the new-product development process that specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections. This is the last checkpoint before significant resources are invested to create a prototype—a full-scale operating model of the product or service. The business analysis stage assesses the total "business fit" of the proposed new product with the company's mission and objectives—from whether the product or service can be economically produced to the marketing strategy needed to have it succeed in the marketplace. sales forcasting is a big thing This process requires not only detailed sales and profit financial projections but also assessments of the marketing and product synergies related to the company's existing operations. Will the new product require a lot of new equipment or technology to produce it or can it be made using existing machines? *Will it canabalize other products?* Carmakers in North America, Europe, and Asia had to address these and other questions when the initial business analysis for driverless vehicles began a decade ago. The business analysis included R&D and manufacturing expenditures, investments in the acquisition of technology, and production scheduling and product marketing timelines. *Business analysis brings us down to 7 products*
Identifying the Target Audience
the group of prospective buyers toward which a promotion program will be directed. The first step in developing the promotion program involves identifying the target audience To the extent that time and money permit, the target audience for the promotion program is the target market for the firm's product, which is identified from primary and secondary sources of marketing information. The more a firm knows about its target audience—including demographics, interests, preferences, media use, and purchase behaviors—the easier it is to develop a promotional program. A firm might use a profile based on gender, age, lifestyle, and income, for example, to place ads during specific TV programs or in particular magazines. Similarly, a firm might use online behavioral targeting
Core Product
the main benefits the product needs to deliver for drill, it needs to be able to make the hole for pen, it needs to be able to write Not gonna win competitive battles if all you have is core...bc people have more expectations
Prospecting
the search for and qualification of potential customers. Finding Leads Qualifying Prospects Establish Need/Want Ascertain Ability to Purchase Determine Purchase Authority 3 types of prospects: *lead*-name of a person who may be a possible customer. *prospect*-customer who wants or needs the product *qualified prospect*-individual wants the product, can afford to buy it, and is the decision maker
Personal Selling
the two-way flow of communication between a buyer and seller, of- ten in a face-to-face encounter, designed to influence a person's or group's purchase decision. However, personal selling also takes place over the telephone and through video teleconferencing and Internet-enabled links between buyers and sellers.
thinking about the product
think of product less as a product and more as what that product will help you with People don't buy products for the physical entity, they buy it for what that product is going to do for them. People don't like 4 inch drills, they like 4 inch holes people would glady switch to a drill that makes better holes...more value from these alternative actions who don't get up on what the product is, think about what it needs to be able to do
Mixed Branding
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 Diverse companies such as Del Monte, Whirlpool, and Dial produce private brands of pet foods, home appliances, and soap, respectively.
Types of social media content
∙*Educational content*. This content includes infographics, FAQs, tips and tricks, and ∙ how-to posts. ∙*Inspirational content*. This content includes quotes, amazing facts or trivia, personal sto- ries of triumph, and inspirational images. ∙*Interactive content*. This content includes quizzes and games, polls, virtual reality, and contests. ∙*Connecting content*. This content includes stories, behind-the-scenes images, and posts that thank fans or ask for opinions and feedback. ∙*Promotional content*. This content includes promotions, coupons, discounts, customer testimonials, and webinars. ∙*Newsworthy content*. This content includes the latest developments regarding a brand and topical coverage about an industry, product, or service. ∙*Entertaining content*. This content includes puzzles, viral videos, jokes, and comics.
performance metrics
∙*Users/members*.Individuals who have registered on a social networking site by completing the process involved, such as providing their name, user ID (usually an e-mail address), and password, as well as answering a few questions (date of birth, gender, etc.). ∙*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. ∙*Unique visitors*. The total number of unique visitors to a Facebook Page in a given time period; if someone visits three times in one day, he is counted only once. ∙*Average page views per visitor*. Page views divided by visitors in a given time period. ∙*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.
New IMC tools that have emerged over the years
*Sponsorships* *Product Placements* *Infomercials* *Branded Entertainment*
Relationship Marketing
An effort to develop a long-term, cost-effective link with individual customers for the mutual benefit of the customer and the organization. -don't just want to get the customer in the initial purchase, want a longterm relationships
Controlled Test Markets
A controlled test market involves contracting the entire test program to an outside service. The service pays retailers for shelf space and can therefore guarantee a specified percentage of the test product's potential distribution volume. IRI is a leader in supplying controlled test markets to consumer packaged goods firms like General Mills. Its service uses demographically representative cities to track sales made to a panel of households. In some cases the effectiveness of different TV commercials and other direct-to-consumer promotions can be measured.
Stock Keeping Unit (SKU)
Each of the different product items represents a separate stock keeping unit (SKU), which is a unique identification number that defines an item for ordering or inventory purposes.
Facebook can *increase brand exposure* by enabling convenient user posting of links, photos, and videos.
Relationship Marketing Approaches
Frequency marketing Database marketing
Branding
One of the key parts of the Product marketing mix factor A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.
Licensing
Process by which a brand can extend its reach by allowing other manufacturers to use that brand name licenses ability to use brand to another producer, and that producer pays royalties to the brand owner Mikey Mouse is best example
Sales Management Process
Selling must be managed if it is going to contribute to a firm's marketing objectives. Sales management consists of three interrelated functions: (1) sales plan formulation, (2) sales plan implementation, (3) salesforce evaluation
Trade-oriented sales promotions
Some of the sales promotions just reviewed are used for this purpose, but three other common approaches are targeted uniquely to these intermediaries: (1) allowances and discounts, (2) cooperative advertising, and (3) training of distributors' salesforces.
Multiple Branding
attaching different brand names to the different products we sell You do this because you are working in different markets or are trying to serve different segments Goal is to differentiate one product from another different P&G detergents to target different groups of people. Tide and cheer (color preserving) formated for different uses and are known for different things. Gain is known for its smells P&G has hella brands
Persuade
will try to persuade people that our product is the best option for them PSAs will try to persuade people to donate money to a cause or not start wild fires (not always meant to persuade people to buy something) Wells fargo tryna convince people that they have moved on from their sketchy past *Institutional Advertising* -an ad for a company that is not about any particular product, could be about what they are doing for the environment or some other social issue -called this bc it is advertising on behalf of the company and trying to affect your impression/attitude of the company.
Social Commerce
involves the use of social media (notably Facebook, Instagram, Twitter, and Pinterest) to browse and buy online without going to a company's website to conduct business. In essence, social commerce is the use of social networks in the context of e-commerce transactions. *different from social shopping* Social commerce focuses on the seller and purchase transactions. Social shopping focuses on the user or buyer shopping experience.
Cost per action (CPA)
"I will pay $5 for every purchase that originates from an ad on your site." Usually executed through third parties; Google AdSense offers this feature used by: Sophisticated advertisers who want to pay for success
Marketing Mix factors in the Decline stage
*(Price)* Prices continue to drop. Goal is to stay profitable *(Place)* Fewer places will sell them *(Product)* Only best sellers/Deletion *(Promotion)* Harvesting
KEY SOCIAL MEDIA PLATFORMS
--FACEBOOK -BRAND PAGES -"NATIVE ADS" -likes are meaningless -reactions are a little better -comments matter --YOUTUBE -BRAND CHANNELS -VIRAL VIDEOS -higher attention to ads -can give superbowl ads some more life -old spice guy made a unch of responses on youtube which also went viral and promoted the brand --TWITTER -MARKET INTELLIGENCE - what are people saying to eachother about our brand on twitter and about our competition -PLAYFUL DIALOGUE -REAL-TIME MARKETING -somebody on thier staff is wtching the grammys and gets a lil dialouge going -respond to bad publicity --INSTAGRAM -INFLUENCERS --TIKTOK -INFLUENCERS -CREATORS
Empathy
-Attitude of the service provider -feel like the service provider cares about you -Hard to make someone be empathetic -being a good listener -companies base their hiring process around it
"Gap model" of service quality
-How people perceive the quality of a service encounter Which influences how people respond to a particular service encounter -made up of customer expectations and customer perceptions When people go to a restaurant, they have expectations about how the menu is going to be, how the servers are going to treat you, etc. Once they are there they have perceptions about how it is *the difference between what is perceived vs what is expected is the quality gap* The goal is to close the quality gap & not fall short of customer expectations
Extension of Brand Equity
-We want strong brand equity because we want to engage in brand extension types: Using the same brand name on a different product than the initial product *Line extension*- new products with the same brand name that are in the same product line/category Doritos--all the different flavors under the same Doritos brand Oscar mayer bacon dogs(sill a hotdog, like parent brand) *Category Extension*- moving a brand into a different product catagory from its parent honda lawnmover, generator, (beyond just cars) *We need to consider fit as we extend into different catagories* --ben and jerrys lipbalm --porche suv --oscarmeyer gel mask *benefits of brand extension* -Instant recognition -makes it easier for people to try it bc perceived risk is lower *negatives* Primarily applies to category extension: as we extend the brand to lots of brand categories, we can dilute the brand image -now when people think of the brand they aren't going to think of the core set of associations that the parent brand has, they will now be distracted by some of the other things that carry -If the product fails, it could affect the brand 2 famous examples that stayed away from brand extensions due to risks anhieser-busch Unsure whether light beers were a fad, they ehtered with nattylight as opposed to budwieser light...once they saw it was a good market they entered with their flagship brand Cocacola-- did not start with diet coke, but with another brand name as not to risk the high value brand name they had
3 ways to manage a product through its life cycle
1) modifying the product, 2) modifying the market, and 3) repositioning the product
Product Item
A specific product that has a unique brand, size, or price. identified by SKU For example, Ultra Downy softener for clothes comes in different forms (liquid for the washer and sheets for the dryer) and load sizes (40, 60, etc.). Each of the different product items represents a separate stock keeping unit (SKU), which is a unique identification number that defines an item for ordering or inventory purposes.
Government sponsored
A third way to classify services is based on whether or not they are government sponsored. Although there is no direct ownership and they are nonprofit organizations, governments at the federal, state, and local levels provide a broad range of services. The United States Postal Service, for example, has adopted many marketing activities. First-class postage revenue has declined as postal service customers have increased their use of the Internet to send e-mail, pay bills, and file taxes. Rather than fight the trend, however, the U.S. Postal Service is embracing the Internet The Peace Corps is another example of a government-sponsored service, which often recruits marketing specialists with skills in social media marketing, branding, design thinking, and sustainability.
Trading up
Adding value to the product (or line) through additional features or higher-quality materials. Michelin, Bridgestone, and Goodyear have done this with a "run-flat" tire that can travel up to 50 miles at 55 miles per hour after suffering total air loss. Dog food manufacturers, such as Ralston Purina, also have traded up by offering super-premium foods based on "life-stage nutrition." Mass merchandisers, such as Target and Walmart, can trade up by adding a designer clothes section to their stores.
product advertisements
Advertisements that focus on selling a product or service and which take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder.
Specifying Promotion Objectives
After the target audience has been identified, a decision must be reached on what the promotion should accomplish. Consumers can be said to respond in terms of a customer path, or a hierarchy of effects
Competitive Parity
Allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market. It is important to consider the competition in budgeting. Consumer responses to promotion are affected by competing promotional activities, so if a competitor runs 30 radio ads each week, it may be difficult for a firm to get its message across with only 5 ads. The competitor's budget level, however, should not be the only determinant in setting a company's budget. The competition might have very different promotional objectives, which require a different level of promotion expenditures
Product (Service)
An important aspect of the product concept is branding. Because services are intangible, and more difficult to describe, the brand name or identifying logo of the service organization is particularly important when a consumer makes a purchase decision. Therefore, service organizations, such as banks, hotels, rental car companies, and restaurants, rely on branding strategies to distinguish themselves in the minds of consumers. Strong brand names and symbols are important for service marketers, not only as a means of differentiation, but also to convey an image of quality. A service firm with a well-established brand reputation will also find it easier to introduce new services than firms without a brand reputation
Publicity
Another form of promotion, publicity, has played a major role in the promotional strategy of many service organizations. Nonprofit organizations such as public schools, religious organizations, and hospitals, for example, often use publicity to disseminate their messages. For many of these organizations, the most common form of publicity is the public service announcement (PSA) because it is free. using PSAs as the foundation of a promotion program is unlikely to be effective because the timing and location of the PSA are under the control of the medium, not the organization.
Environmental Concerns
Because of widespread global concern about the growth of solid waste and the shortage of viable landfill sites, the amount, composition, and disposal of packaging material continue to receive much attention. For example, PepsiCo, Coca-Cola, and Nestlé have decreased the amount of plastic in their beverage bottles to reduce solid waste. Recycling packaging material is another major thrust. Procter & Gamble's Tide Eco-Box has 60 percent less plastics in its packaging, and its Spic and Span liquid cleaner is packaged in 100 percent recycled material. Other firms, such as Walmart, are emphasizing the use of less packaging material. Over the past decade, the company has worked with its 600,000 global suppliers to reduce overall packaging and shipping material by 5 percent.
Factors that contribute to new-product failures
Both marketing and nonmarketing factors contribute to new-product failures. -Insignificant point of difference -Incomplete market and product protocol before product development starts -Not satisfying customer needs on critical factors -Bad timing -No economical access to buyers -Poor execution of the marketing mix: brand name, package, price, promotion, distribution -Too little market attractiveness -Poor product quality
Customer Relationship Management Systems and Technology
CRM systems and technology consolidate customer and sales information in a single database so that salespeople and sales managers can more easily access, analyze, and manage a company's relationship with individual customers or accounts. These systems and technologies are designed with the goal of improving business relationships with customers, creating value for customers, assisting in new customer acquisition and current customer retention, and achieving profitable sales growth for companies Customer relationship management systems and technologies are tailored to the needs of companies. As a rule, these systems and technologies automate workflow processes and focus on salesforce automation, marketing automation, and customer service and support automation.
Off-Peak Pricing
Charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service. Airlines, for example, offer discounts for weekend travel, while movie theaters offer matinee prices.
Competitive shakeup
Cusp between *growth and maturity* stage when firms start to leave the market competitors get shaken out of market bc as market growth rate slows down, they are not selling very much and have better opportunities elsewhere
Expected Service
Customer expectations regarding dependability, courtesy, etc. We have to meet customer expectations when it comes to the product You have to meet customer expectations You expect cleanliness, dependability, politeness Chickfila falls short in expected service in terms of speed, but has high quality accuracy and politeness —their core would be providing food Things the customer expec
Decoder's frame of reference
Decoding is performed by the receivers according to their own frame of reference: their -attitudes -values -beliefs
Deletion
Dropping the product from the company's product line, is the most drastic strategy. Because a residual core of consumers still consume or use a product even in the decline stage, product elimination decisions are not taken lightly. For example, Sanford Corporation continues to sell its Liquid Paper correction fluid for use with typewriters in the era of word-processing equipment.
Salesforce Recruitment and Selection
Effective recruitment and selection of sales people is one of the most crucial tasks of sales management. It entails finding people who match the type of sales position required by a firm. Recruitment and selection practices will differ greatly between order-taking and order-getting sales positions, given the differences in the demands of these two jobs. Therefore, recruitment and selection begin with a carefully crafted job analysis and job description followed by a statement of job qualifications.
credence properties
Finally, services provided by specialized professionals such as medical diagnoses and legal services have credence properties, or characteristics that the consumer may find impossible to evaluate even after purchase and consumption. Research indicates that consumers search for much more information and they place an emphasis on trust, commitment, expertise, and competence when trying to evaluate services with credence properties In response to this need for more information, the Mayo Clinic uses an organized, explicit approach called "evidence management" to present customers with concrete and convincing evidence of its strengths
Development of the promotion program
Focuses on the four Ws: Who is the target audience? What are (1) the promotion objectives, (2) the amounts of money that can be budgeted for the promotion program, and (3) the kinds of promotion to be used? Where should the promotion be run? When should the promotion be run?
Social media
GOAL IS ENGAGEMENT MUST BE A DIALOGUE MUST BE NIMBLE HIGHLY MOBILE NEED DEDICATED STAFF
Tactic formulation (appeals)
How do we go about saying it strategy helped us figure out what we wanted to say, tactic formulation helps us figure out how we are going to say it ex: moes showed that they don't use microwaves
Brand development Index (BDI) Category development Index (CDI)
Indices to help marketers decide where they want to focus their market penetration efforts
Owned media
Is "owned and operated" by the brand—e.g., a website, Facebook page, Twitter feed. brands website
Unsought Products
Items that the consumer does not know about or knows about but does not initially want. funeral services
Augmented Service
J.C. Penney: "...it is the service the customer doesn't expect that endears..." We don't beat the competition by beating expectations Like when sales associate goes out of the way to help you with something -netflix socks augment/increase the value of the core service to the consumer
Jury Tests
Jury tests involve showing the ad copy to a panel of consumers and having them rate how they liked it, how much it drew their attention, and how attractive they thought it was. This approach is similar to the portfolio test in that consumer reactions are obtained. However, unlike the portfolio test, a test advertisement is not hidden within other ads.
Impression
Management of the physical environment for services is sometimes known as impression management
Services in the Future
Many of the changes will be the result of three factors: 1) technological development, 2)improved understanding of service delivery and consumption, ---New data and information about service consumers and providers is also leading to changes in service delivery and consumption and 3) the social imperative for sustainability.
For-Profit or Nonprofit Organizations
Many organizations involved in services also distinguish themselves by their tax status as for-profit or nonprofit organizations. *nonprofit organizations' *excesses in revenue over expenses are not taxed or distributed to shareholders. When excess revenue exists, the money goes back into the organization's treasury to allow continuation of the service. Based on the corporate structure of the nonprofit organization, it may pay tax on revenue-generating holdings not directly related to its core mission.
Message Content
Most advertising messages are made up of both informational and persuasive elements Information and persuasive content can be combined in the form of an appeal to provide a basic reason for the consumer to act. Although the marketer can use many different types of appeals, common advertising appeals include fear, sex, and humor. *Fear appeals* suggest to the consumer that he or she can avoid some negative experi- ence through the purchase and use of a product or service, a change in behavior, or a re- duction in the use of a product. *sex appeals* suggest to the audience that the product will increase the attractive- ness of the user *Humorous appeals* imply either directly or subtly that the product is more fun or exciting than competitors' offerings.
message factors
Objectives -what are we trying to communicate to our audience ex: trying to convince the audience that we are the most economical suv Strategy -general approach to reaching that objective. Tactics -operations we do to maximize our strategy
Open Inovation
Practices and processes that encourage the use of external as well as internal ideas and internal as well as external collaboration when conceiving, producing, and marketing new products and services. For example, PepsiCo recently formed "The Hive." Described as "a small entrepreneurial sort of agile group" which includes talent from both inside and outside the company, this group identifies and nurtures new-product concepts that would otherwise be overlooked or undervalued by existing policies and procedures.
merchandise allowance.
Reimbursing a retailer for extra in-store support or special featuring of the brand Performance contracts between the manufacturer and trade member usually specify the activity to be performed, such as a picture of the product in a newspaper with a coupon good at only one store. The merchandise allowance then consists of a percentage deduction from the list case price ordered during the promotional period. Allowances are not paid by the manufacturer until it sees proofof performance (such as a copy of the ad placed by the retailer in the local newspaper).
Sales Tests
Sales tests involve studies such as controlled experiments (e.g., using radio ads in one market and newspaper ads in another and comparing the results) and consumer purchase tests (measuring retail sales that result from a given advertising campaign). The most sophisticated experimental methods today allow a manufacturer, a distributor, or an advertising agency to manipulate an advertising variable (such as schedule or copy) through cable systems and observe subsequent sales effects by monitoring data collected from checkout scanners in supermarkets
Intangibility
Services are intangible; that is, they can't be held, touched, or seen before the purchase decision. Because services tend to be a performance rather than an object, they are much more difficult for consumers to evaluate. To help consumers assess and compare services, marketers try to make them tangible or show the benefits of using the service. For example, American Airlines's marketing focuses on the airline's "wider seats, noise-reducing headphones, and sleeping amenities." United focuses on the tangible benefits provided by its MileagePlus loyalty program, which allows participants to earn points that can be redeemed for airline tickets, electronics, and a variety of other products. Geico with a stack of cookies associated with the different benefits vs their competitors smaller stacks of cookies meryl lynch uses the bull logo to symbolize the strength of their services to help their clients make good investments
Trends in ad budget
Shift from pull promotions to push (trade) WHY? Growing retailer power -able to demand more concessions from manufacturers Increased promotion sensitivity -consumers have gotten used to things being on sale -wit for somethign to be on sale before buying Brand proliferation/ ad clutter -need to have a way to cut through all the other brands people have in their face at the store Short-term focus/ accountability -companies need to have certain projections for how their sales are going to be this semester. -need to hit their numbers to keep stock up, so they use promotions to grow sales numbers
Limited-service (specialty) agency
Specializes in one aspect of creative process; usually provides creative production work; buys previously unpurchased media space specialize in one aspect of the advertising process, such as pro- viding creative services to develop the advertising copy, buying previously unpurchased media (media agencies), or providing Internet services (Internet agencies). Limited-service agencies that deal in creative work are compensated by a contractual agreement for the services performed
developing account management polices
Specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out. These policies might state which individuals in a buying organization should be contacted, the amount of sales and service effort that different customers should receive, and the kinds of information salespeople should collect before or during a sales call. ex of account management policy in ch 21 notes
channel of communication
The means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver during the communication process.
Objective formulation
Survey tells them how much of the market is aware of them, know about them, like them, intend on litening to them, and actually listen to them *what stage do they focus on for their next promotional campaign* focus on the ratios between each level (previous/next) -the biggest ratio is what you want to affect, so you increase whatever the denominator of that is Using radio example from exam 2 quant SO NOW WE KNOW OUR OBJECTIVE IS TO INCREASE AWARENESS!!
"High involvement" Hierarchy of effects (applied to advertising) Think-feel-do
TFD people need to go through a series of stages to go from unawareness of a brand to an actual purchase When people are really involved in a decision, they will go thru these steps in order... -guides our thinking for hwo people make purchases in particular product classes These ads are meant to move people along these stages by giving them the right info *THINK* I. Cognition aka what do we think about the brand 1) AWARENESS 2) KNOWLEDGE *FEEL* II. Affect (how we feel about the product). Its the basis for the multi-attribute model 3) LIKING 4) PREFERENCE *DO* III. Conation (what do we do with respect to the brand) 5) INTENT to purchase 6) PURCHASE
Objective and Task
The best approach to budgeting is objective and task budgeting, whereby the company (1) determines its promotion objectives, (2) outlines the tasks it will undertake to accomplish those objectives, and (3) determines the promotion cost of performing those tasks. This method takes into account what the company wants to accomplish and requires that the objectives be specified Strengths of the other budgeting methods are integrated into this approach because each previous method's strength is tied to the objectives. For example, if the costs are beyond what the company can afford, objectives are reworked and the tasks revised. The difficulty with this method is the judgment required to determine the tasks needed to accomplish objectives.
Promotional mix in the Decline stage
The decline stage of the product life cycle is usually a period of phaseout for the product, and little money is spent in the promotional mix. ' The rate of decline can be rapid, as is the case when a product is replaced by an improved or lower-cost product, for example, or slow, as often happens when a group of loyal customers exists
"EXPERIENCE ECONOMY" BEYOND DELIVERING SERVICES TO STAGING EXPERIENCES:
The evolution of experiences Starbucks created the idea of a cup of coffee being more than that, but an experience in itself (in a "3rd" place)
Ancillary services
The level of ancillary services required by a product also affects the promotional strategy. Ancillary services pertain to the degree of service or support required after the sale. This characteristic is common to many industrial products and consumer purchases. Who will provide maintenance for the plane? *Advertising's* role is to establish the seller's reputation. *Direct marketing* can be used to describe how a product or service can be customized to meet individual needs. *personal selling* is essential to build buyer confidence and provide evidence of customer service.
Reach
The number of different people or households exposed to an advertisement. The exact definition of reach sometimes varies among alternative media. (expressed as a percentage of the total market) Because advertisers try to maximize the number of individuals in the target market exposed to the message, they must be concerned with reach Newspapers often use reach to describe their total circulation or the number of different households that buy the paper.
4 I's of service
There are four unique elements to services— make the marketing of services harder than the marketing of products intangibility, inconsistency, inseparability, inventory Teaching, nursing, and the theater are intangible, service-dominant activities, and intangibility, inconsistency, inseparability, and inventory are major concerns in their marketing. Salt, neckties, and dog food are tangible products, and the problems represented by the four I's are not relevant in their marketing.
Organizing the salesforce
Three questions are related to organization. First, should the company use its own salesforce, or should it use independent agents such as manufacturer's representatives? Second, if the decision is made to employ company salespeople, then should they be organized according to geography, customer type, or product or service? Third, how many company salespeople should be employed?
Creating customer value and competitive advantage through Packaging and Labeling
To a great extent, the customer's first exposure to a product is the package and label, and both are an expensive and important part of marketing strategy Despite their cost, packaging and labeling are essential because both provide important benefits for the manufacturer, retailer, and ultimate consumer. Packaging and labeling also can provide a competitive advantage. *Types of Benefits* 1) Communication Benefits 2) Functional Benefits 3) Perceptual Benefits
Salesforce automation (SFA)
Use of various technologies to make the selling function more effective and efficient Examples of salesforce automation include computer hardware and software for account development and analysis (including an account's purchase history and preferences), time management, order processing, delivery and follow-up, proposal generation, and product and sales training. *Its application is designed to free time for salespeople to be with customers building relationships, designing solutions, and providing service.* Sales presentation hardware and software are another application. For example, Toshiba America Medical Systems salespeople use laptop computers with capabilities to provide interactive presentations for their computerized tomography (CT) and magnetic resonance imaging (MRI) scanners. The computer technology allows the customer to see elaborate three-dimensional animations, high-resolution scans, and video clips of the company's products in operation as well as narrated testimonials from satisfied customers. Toshiba has found this application to be effective for both sales presentations and salesforce training.
User-generated content (UGC)
any form of online media content that is publicly available and created by consumers or end users To qualify as UGC, content must satisfy three basic criteria: 1) It is published either on a publicly accessible website or on a social media site, so it is not simply an e-mail. 2) It shows a significant degree of original or creative effort, so it is more than simply posting a newspaper article on a personal blog without editing or comments. 3) It is consumer-generated by an individual outside of a professional or commercial organization.
statement of job qualifications
aptitudes, knowledge, skills, and a variety of behavioral characteristics considered necessary to perform the job successfully. Qualifications for order-getting sales positions often mirror the expectations of buyers: (1) imagination and problem-solving ability, (2) strong work ethic, (3) honesty, (4) intimate product knowledge, (5) effective communication and listening skills, and (6) attentiveness reflected in responsiveness to buyer needs and customer loyalty and follow-up.
Formula Selling Format
based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect. A popular version of this format is the *canned sales presentation*, which is a memorized, standardized message conveyed to every prospect. Used frequently by firms in telephone and door-to-door selling of consumer products (for example, Kirby vacuum cleaners), this approach treats every prospect the same, regardless of differences in needs or preferences for certain kinds of information. "CANNED" SELLING EXAMPLES Ingratiation -you complement the value of the other person Foot-in-the-Door -ask for something small first Door-in-the-Face -ask for something really big, get told no, then come back with something much more reasonable
Pretesting an ad
pretests are conducted before the advertisements are placed in any medium. To determine whether the advertisement communicates the intended message or to select among alternative versions of the advertisement *Portfolio Tests* *Jury Tests* *Theater Tests*
Cost per thousand (CPM) m = mil (1000)
refers to the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000).
2 step flow of communications
relates to the vocalpoint thing: giving info to the first person hoping they spread it to the next information tended to flow thru the people that had radios mass media(radio)--> people with radios-->people without radios
7. Commercialization
roll the product out Major commitment of resources, for ads, supply chain, distribution, etc. (why we go thru all the steps trying to avoid mistakes) stage of the new-product development process that positions and launches a new product in full-scale production and sales. This is the most expensive stage for most new products. If competitors introduce a product that leapfrogs the firm's own new product or if cannibalization of its own existing products appears significant, the firm may halt the new-product launch. Companies can face disasters at the commercialization stage, regardless of whether they are selling business products or consumer products. Examples are Boeing's 787 Dreamliner and Burger King's french fries, which are discussed next.
Derived Demand
sales of business products frequently result (or are derived) from the sale of consumer products. For example, as consumer demand for Toyota cars (a consumer product) increases, the company may increase its demand for paint spraying equipment (a business product).
Deals
short-term price reductions, commonly used to increase trial among potential customers or to retaliate against a competitor's actions. For example, if a rival manufacturer introduces a new cake mix, the company responds with a "two packages for the price of one" deal. This short-term price reduction builds up the stock on the kitchen shelves of cake mix buyers and makes the competitor's introduction more difficult.
Frequency
the average number of times a person in the target audience is exposed to a message or advertisement. Like reach, greater frequency is generally viewed as desirable. Stud- ies indicate that with repeated exposure to advertisements consumers respond more favorably to brand extensions. When advertisers want to reach the same audience more than once, they are concerned with frequency This is because consumers often do not pay close attention to advertising messages, some of which contain large amounts of relatively complex information.
Decoding
the process by which the receiver interprets the sender's message, and transform them back to an idea during the communication process. Decoding is performed by the receivers according to their own frame of reference: their attitudes, values, and beliefs
Service-Profit chain
the relationships between internal marketing, internal service quality, employee productivity, and firm profitability have come to be known as the service-profit chain.
Direct Orders
the result of offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction. Online retailer zulily.com, for example, asks customers to create a list of their favorite brands and then sends them a message and a link to make the purchase when the brands are on sale
product bundling
the sale of two or more separate products in one package Microsoft Office is sold as a bundle of computer software, including Word, Excel, and PowerPoint.
CPM (cost per thousand impressions) M = Mille
the way we try to equate the places were we can place our advertising cost of running ad/# of thousands
netnography
use of online information about consumer opinions, experiences, and behaviors—to better understand service consumers.
Rating
used by Television and radio stations to describe their "reach" The percentage of households in a market that are tuned to a particular TV show or radio station. In general, advertisers try to maximize reach in their target market at the lowest cost.
Conditional Content
used on out-door digital billboards based on current events, weather, business conditions, and even sports scores. Radio stations, for example, can display the title of the song currently playing on their station, newspa- pers can display current headlines, and retailers can advertise umbrellas or sunscreen based on the weather forecast.
Reminder
used to reinforce previous knowledge of a product. The Flowers Victoria ad reminds consumers not to forget flowers on Valentine's Day. *Remind users to use the product/that the product has served them well in the past* Reminder advertising is good for products that have achieved a well-recognized position and are in the mature phase of their product life cycle. *prevent buyers remorse* Another type of reminder ad, reinforcement, is used to assure current users they made the right choice. For example, consider the tagline used in Dial soap advertisements: "Aren't you glad you use Dial? Don't you wish everybody did?
subliminal advertising
*Ambiguous stimuli* --eh you can kind of see it -jim bean whiskey phallus in the ad *Embedded stimuli* its definitely there, you can see them when they are pointed out (lower your threshold of perception) -phallus on little mermaid cover, M&Ms spelling out "sex" *Truly subliminal stimuli* -bellow human perception
Ad Tasks
Inform Persuade Institutional Advertising Sell Reinforce Remind
Core Service
"The right product, at the right place, at the right price, at the right time" the reason people get the service in the first place on the chart from segment 10 "assessing retailer service quality chart" if you look, the company falls short in fashon which is the core service it is supposed to be providing (don't have the best merchandise available for people to buy) people aren't going to care if everything else is good, if they can't get the thing they need in the first place they wont use the service
Share of Wallet
% of a customer's purchases in a particular area that they capture If Walmart has 60% of customer's grocery spending, they are goin to want to take it to 80%
Competitive (or persuasive),
Advertising that promotes a specific brand's features and benefits is competitive. The objective of these messages is to *persuade the target market to select the firm's brand rather than that of a competitor.* An increasingly common form of competitive advertising is *comparative advertising*, which shows one brand's strengths relative to those of competitors. The Progressive ad, for example, highlights its competitive rates compared to other auto insurers. Studies indicate that comparative ads 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. Firms that use comparative advertising *need marketing research to provide legal support for their claims.*
Aided Recall
After being shown an ad, respondents are asked whether their previous exposure to it was through reading, viewing, or listening. The Starch test shown in the accompanying photo uses aided recall to determine the percentage of those who (1) remember seeing a specific ad (noted), (2) saw or read any part of the ad identifying the product or brand (associated), (3) read any part of the ad's copy (read any), and (4) read at least half of the ad (read most). Elements of the ad are then tagged with the results, as shown in the photo.
Rebates
Another consumer sales promotion tool in Figure 19-6, the cash rebate, offers the return of money based on proof of purchase. For example, T-Mobile recently offered a $360 to $390 rebate to smartphone owners who would trade in their phone and add a new line. When a rebate is offered on lower-priced items, the time and trouble of mailing in a proof of purchase to get the rebate check often means that many buyers never take advantage of it. However, this "slippage" is less likely to occur with frequent users of rebate promotions. In addition, online consumers are more likely to take advantage of rebates.
Components of Brand Equity
Brands with high brand equity have very high: -brand awareness -favorable, stong, and unique associations -perceived as high quality -people who buy the brand exhibit strong brand loyalty *Awareness* Degree to which a brand is very highly recognized, people are aware of it and know about it. degree to which it is part of the culture *Associations* -care about the strength of the association, -care about the favorability of yhe association (is it good or bad) -care about uniqueness (helpswith positioning by having points of difference) -Strength, favorability, and uniqueness come together to form brand identity (image in the brand in the eye of the consumer). Marketers are incharge of managing the sets of associations a brand has. We associate idaho with potatos all brands are associated to something -Alexa associated to fun, creepy, convinient, exciting Nike chart showing other things mentioned alongside it on the internet(and how strongly related they are) Olay face oil===people didint want "oil" on thier face so they changed the name to olay *Perceived Quality* how do we percieve the quality of the brand relative to competitors in the product category For a brand to have high equity it needs to be perceived as a high quality brand *Loyalty* begins with repeat purchase (people who repeatedly purchase a brand, something they use a lot) Also conotes some emotional attachment That they feel highly about the brand, and theat they aren't just using it out of habit -people will go for things they ahve emotional attachment too -pepsi triggered more onthe fmri when not labeled, but coke triggered more when it was labeled
self-regulation
By imposing standards that reflect the values of society on their promotional activities, marketers can (1) facilitate the development of new promotional methods, (2) minimize regulatory constraints and restrictions, and (3) help consumers gain confidence in the communication efforts used to influence their purchases.
Maturity Stage
Characterized by a slowing of total industry sales or product class revenue. Also, marginal competitors begin to leave the market. Most consumers who would buy the product are either repeat purchasers of the item or have tried and abandoned it. Sales increase at a decreasing rate in the maturity stage as fewer new buyers enter the market. Profit declines due to fierce price competition among many sellers, and the cost of gaining new buyers at this stage rises. Products in this stage include: carbonated soft drinks and presweetened breakfast cereals. Marketer's goal is to extend the maturity stage for as long as possible
All You Can Afford
Common to many small businesses is all-you-can-afford budgeting, in which money is allocated to promotion only after all other budget items are covered. Fiscally conservative, this approach has little else to offer. Using this budgeting philosophy, a company acts as though it doesn't know anything about a promotion-sales relationship or what its promotion objectives are. As one company executive said in reference to this budgeting process, "Why, it's simple. First, I go upstairs to the controller and ask how much they can afford to give us this year. She says a million and a half. Later, the boss comes to me and asks how much we should spend, and I say, 'Oh, about a million and a half.' Then we have our promotion appropriation."
Branding Strategies
Companies can choose from among several different branding strategies: 1 multiproduct branding, 2 multibranding, 3 private branding, and 4 mixed branding Chart in ch11 notes
2 broad categories for classifying products
Consumer Products Business Products Some products can be considered both consumer and business items. For example, an Apple iMac computer can be sold to consumers for personal use or to business firms for office use. Each classification results in different marketing actions. Viewed as a consumer product, the iMac would be sold through Apple's retail stores or directly from its online store. As a business product, an Apple salesperson might contact a firm's purchasing department directly and offer discounts for large volume purchases.
usage barriers
The product is not compatible with existing habits ex: Industry analysts cite the usage barrier for disappointing electric car sales. They note that prospective buyers believe these cars are not compatible with existing driving habits.
Mobile Marketing
broad set of interactive messaging options that are used to communicate through personal mobile devices The convergence of the real and digital worlds has also contributed to the growth of mobile marketing This continuous connection present in mobile marketing has∙led to a variety of apps, such as: ∙Price-comparison searches. Scan product bar codes or QR codes and research 500,000 stores, synchronizing searches between your computer, your car, and your smartphone. ∙Location-based promotions. Use your GPS-enabled smartphone or car for location check-ins to receive discounts at stores. ∙Loyalty programs. Win loyalty points for selecting stores and receive discounts from them.
Types of sales promotion
intends to get a boost in short term sales performance -CONSUMER ("PULL") -TRADE ("PUSH")
Feature Bloat
tendency for some product developers to add additional features or functionality to a product that are not of any benefit to most consumers and unnecessarily add to the cost of the product. But, research shows that while feature bloat can increase the capability of a new product (relative to existing products) and encourage a purchase, the actual usage experience after purchase can result in consumer dissatisfaction, or feature fatigue.
Customer experience management
the process of managing consumers' interactions with the company, can be helpful to consider when organizations are screening new service ideas in the new-product process.
