Marketing Unit 1 PDF

Marketing Unit 1 Creating Customer Value and Engagement WHAT IS MARKETING? Marketing: is a set of strategies and activities (within a process) by which companies acquire and engage customers, build strong customer relationships, and create superior customer value in order to capture value fro...

Marketing Unit 1 Creating Customer Value and Engagement WHAT IS MARKETING? Marketing: is a set of strategies and activities (within a process) by which companies acquire and engage customers, build strong customer relationships, and create superior customer value in order to capture value from customers in return. MARKETING GOALS Attract new customers by promising superior value What do you have to do to attract new customers? Grow current customers by delivering satisfaction What do you have to do to maintain the current customers? FIGURE 1.1. THE MARKETING PROCESS: CREATING AND CAPTURING CUSTOMER VALUE Marketing creating and capturing customer value (Create) Needs different than wants Wants: Form of human needs shaped\ by culture and individual\ personality. Demand: Human wants that are backed by buying power What does this means for the marketing process? Is enough knowing what are the needs and wants of the marketplace for selling products/services? What does this means for the marketing process? Needs: the fundamental desires or requirements that drive consumer behavior. States of felt deprivation  Marketing Myopia: Paying more attention to the specific products/services than to the benefits and experiences produced. Forget that a product/service is only a tool to solve a consumer problem à If a new product comes to satisfy the customer's needs better or less expensively. They will have the same need but will want the new product. Customer value: Difference between the values that the consumer gives to the fact of taking, owning or using the product, and what he considers are the costs of obtaining it. Born from perception. Value that the\ consumer gives to\ the fact of taking - Price (Objective) (Subjective) Marketers must be careful when setting the level of expectations. Too low: Easier to disappoint buyers. Too high: Satisfies buyers, but fails to attract enough buyers. Customer Satisfaction: Value that the\ consumer gives to \> Price\ the fact of taking = (Strategic\ Marketing) Marketing Management: The art and science of choosing target markets and building profitable relationships with them. Selecting customers to serve The company must first decide whom it will serve.\ It does it by: Market Segmentation:\ Dividing the market into segments of\ customers.\ Target Marketing : Selecting which segments it will go after Choosing a Value Proposition: The company must also decide how it will serve targeted customers: how it will differentiate and position itself in the marketplace. Value Proposition: Set of benefits or values it promises to deliver to consumers to satisfy their need. Operational Marketing or Marketing Mix (Action) Company's marketing strategy: The marketer develops an integrated marketing program that will actually deliver the intended value to target customers The marketing program transform the marketing strategy into action: firm's marketing mix. Marketing Mix: Set of marketing tools the firm uses to implement its marketing strategy (Product, Price, Place, Promotion) Integrated Marketing Program: A comprehensive plan that communicates and delivers intended value. Engaging Customers and Managing Customer Relationships ( Engage) Customer Relationship Management (CRM): Narrowly, It involves managing detailed information about individuals customers and carefully managing customer touchpoints to maximize customer loyalty. STRATEGIES FOR ENGAGING CUSTOMERS I 1\. Ensure Customer-satisfaction: Customer satisfaction: Customer service champion L.L.Bean was founded on a philosophy of complete customer satisfaction. "If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund." 2\. Customer Involvement. Making the brand a meaningful part of consumers' conversations and lives by fostering direct and continuous involvement in shaping brand conversations, experiences and community. Internet and social media: Today's consumers are better informed, more connected and more empoweredthan ever before. Customer-Generated Marketing: Some companies ask consumers for new product and service ideas. Other companies invite consumers to play a role in shaping ads and social media content 3\. Marketing by attraction: Companies can no longer rely on marketing by intrusion.\ Instead, they must practice marketing by attraction: creating\ market offerings and messages that engage consumers rather\ than interrupt them Product Placement Guerrilla Marketing Influencers Engaging Costumers and Managing Customer Relationships The final step consist on capturing value in return in the form of\ sales, market share, advocacy and profits. - The key is to capture value from customers a lot of times and not just once à Customers should be satisfied - Satisfied customers remain loyal and talk favorably to others about the company and its products. - Loyal customers spend more and stay around longer. - Research: It is five times cheaper to keep an old customer than acquire a new one. - Losing a customer means losing the entire stream of purchases that the customer would make over a lifetime of patronage Building the Right Relationship with the Right Customers Some loyal customers can be unprofitable, and some disloyal customers can be profitable. \- Which customers should the company acquire and retain? The company can classify customers accordingly to their potential profitability and manage its relationship with them accordingly. Each group requires a different relationship management Strategy 1.5 Customer Relationship Groups.  Strangers: Low potential profitability and little\ projected loyalty. Little fit between the company offerings\ and their needs Strategy: Do not invest anything in them: make\ money in every transaction. Butterflys: Potentially profitable but not loyal. Good fit between the company's\ offerings and their needs. Efforts to convert butterflies into loyal customers are rarely\ successful Strategy: Create satisfying and profitable transactions\ with them for the moment. Then it should move on and\ cease investing in them until the next time around. True Friends: Profitable and loyal. Strong fit between their needs and the\ company's offerings. Strategy: Make continuous relationship\ investments to delight these customers and engage,\ nurture, retain and grow them. Barnacles: Highly loyal but not profitable. Limited fit between their needs and the\ company's offerings à MOST\ PROBLEMATIC! Strategy: Improve their profitability by selling them more, raising their fees, or reducing service to them.If they cannot be made profitable, they should be\ fired. Conclusion: Different types of customers require different\ engagement and relationship management\ strategies. The goal is to build the right relationships with the\ right customers. Figure 1.6 An Expanded Model of the Marketing Process. Marketing Unit \# 2 Objective \# 1 Define the major steps in designing a\ customer-driven marketing strategy Market segmentacion: Divide total market into smaller segments Targeting: Select the segments or segment to enter Differenciation : Differentiate the market offering to create superior customer value Positioning: Position the market offering in the mind of target costumers Market segmentation requires\ dividing a market into smaller\ segments with distinct needs,\ characteristics, or behaviors\ that might require separate\ marketing strategies or mixes. Objetive \#2 List and discuss the major bases for\ segmenting consumer and business\ markets. Selecting Customer Market Requirements for effective segmentación Segments costumer markets: Geographical Segmentacions: It divides the market into different geographical units such as nations,regions, states, countries, cities, or even neighborhoods. A company may decide to operate in one or a few\ geographical areas or operate in all areas but pay\ attention to geographical differences in needs and wants Many companies today are localizing their products,\ advertising, promotion, and sales efforts to fit the needs of\ individual regions, cities, and neighborhoods. Demographic Segmentacion: It divides the market into segments\ based on variables such as age, life-\ cycle stage, gender, income,\ occupation, education, religion,\ ethnicity, and generation. Age and life-cycle stage: segmentation divides a market into\ different age and life-cycle groups. Gender segmentation: divides a market into different segments\ based on gender. Example: It has long been used in clothing, cosmetics, toiletries, and\ magazines. Income segmentation: divides a market into different income segments Example: The marketers of products and services such as automobiles,\ clothing, cosmetics, financial services, and travel have long\ used income segmentation Phycographic Segmentacion: It divides consumers into different\ groups according to lifestyle or\ personality characteristics.\ Widely used in travel, activities,\... People in the same demographic group can have\ very different psychographic characteristics Behavioral Segmentacion: It divides a market into segments\ based on consumer knowledge,\ attitudes, uses of a product, or\ responses to a product. Occasions: Examples: Different donuts for different\ occasions: Christmas, Easter,\ Mother's day, Halloween,.. Benefits Soughts: Basic Sportswear\ Specialty Sportswear\ Stylish Sportswear\ Trendy Sportswear,.. User Status: It consists of grouping\ buyers into groups of\ users, former users,\ potential users, first-time\ users and potential users of\ a product. It serves to reinforce and retain\ regular users, attract non-target\ users and reinvigorate relationships\ with former users. Usage rate: It serves to reinforce and retain\ regular users, attract non-target\ users and reinvigorate relationships\ with former users. intensive consumers\ represent a small\ percentage of the market\ and a high percentage of\ total consumption Loyalty Sttattus: segmentation according to\ customer loyalty/non-\ loyalty Segmenting consumer markets. Marketers rarely limit their segmentation analysis to\ only one or a few variables. Rather, they often use\ multiple segmentation is used to identify smaller,\ better-defined target groups. Requierements for effective segmentacion Measurable: The size, purchasing power and profiles of segments\ can be measured, For instance, the left-handed segment is difficult to\ measure. Differenciatabe: The segments are conceptually distinguishable and\ respond differently to different marketing mix\ elements and programs If, for example, men and women respond in the same\ way, they do not constitute separate segments Substancial: The market segments are large or profitable enough\ to serve, For example, it would not be profitable to develop\ vehicles for people over 2.10 meters tall. Actionable: Be able to design effective programs to attract and\ serve segments and decide how many and which ones\ to serve best. For example, a company may identify several\ marketing programs but may have too few marketing\ personnel to design campaigns for each segment BUYER PERSONA Buyer Persona is a detailed and semi-fictional representation\ of an ideal customer based on market research and some\ assumptions. It goes beyond demographic information to include characteristics such as\ goals , challenges, behaviors and preferences à EMPATHY MAPBuyer Persona is a detailed and semi-fictional representation\ of an ideal customer based on market research and some\ assumptions.\ \ The main purpose is to better understand and empathize with the target\ audience, enabling businesses to tailor their marketing strategies, products\ and services to meet the specific needs of ideal customers. By creating detailed representations of their target audience, companies\ can make more informed decisions that positively impact their marketing,\ product development and overall customer satisfaction. Objetive \# 3 Explain how companies identify attractive\ market segments and choose a market-targeting\ strategy. Once you have segmented the market, before deciding which\ one of them you are going to serve, you need to reflect\ regarding: Segment size and growth: The largest, fastest-growing segments are not always the\ most attractive ones for every company.\ Smaller companies may target segments that are smaller and\ less attractive, in an absolute sense, but that are potentially\ more profitable for them Segment structural attractiveness: Structural factors that affect long-run segment\ attractiveness include strong and aggressive competitors, new\ entrants, substitute products, power of buyers relative to\ sellers, and powerful suppliers who can control prices,\ quality, or quantity of ordered goods and services Company objectives and resources: Some attractive segments can be dismissed quickly because they do not fit with the company's long-run objectives. Or\ the company may lack the skills and resources needed to\ succeed in an attractive segment.\ \ A company should only enter segments in which it\ can create superior customer value and gain\ advantages over its competitors. A target market: is a set of buyers\ who share common needs or\ characteristics that the company\ decides to serve Strategies: Undifferentiated marketing (or mass marketing). The company designs a product and a marketing program\ that will appeal to the largest number of buyers. Focuses on common needs rather than what's different. Difficulties arise in developing a product or a brand that will\ satisfy all consumers. Mass marketers often have trouble competing with more-\ focused firms that do a better job of satisfying the needs of\ specific segments and niches. Differentiated marketing: Goal is to achieve higher sales and stronger position More expensive than undifferentiated marketing The company must weigh increased sales against increased costs when deciding on a differentiated marketing strategy Concentrated Marketing (Niche Marketing): A firm goes after a large share of one or a few smaller segments\ or niches. Can be highly profitable: higher margins Involves higher-than-normal risks: if the segment turns sour, if\ large competitors decide to enter in the same segment,... à Better diversify Micro marketing: Micromarketing is the practice of tailoring products and\ marketing programs to suit the tastes of specific individuals\ and locations Local marketing It involves tailoring brands and promotion to the needs and\ wants of local customer segments. Examples: Cities, Stores, Neighbor Individual Marketing It involves tailoring products and marketing\ programs to the needs and preferences of individual\ customers Also known as:\ One-to-one marketing\ Mass customization STRATEGY: 1. Segmentacion (Considering) 2. Target Segmentacion (Choosing) 3. Differentiation 1. Differentiation: If a company positions its products/services as\ offering the best quality and service promised. à Companies must live the advertising tagline. Staples\' research revealed that it needed to differentiate based on \"a\ simpler shopping experience.\"\ \ For more than a year, the company remodeled its stores\ and inventory, trained its employees and even simplified\ communications with its customers [](https://www.google.com/url?sa=i&url=https%3A%2F%2Fawilliamsbus306.wordpress.com%2Fmarketing-principles%2Fvalue-proposition%2F&psig=AOvVaw12EmQSx-Zn70A7I_rLJyc3&ust=1737539523846000&source=images&cd=vfe&opi=89978449&ved=0CBQQjRxqFwoTCKiX3qLFhosDFQAAAAAdAAAAABAE) More for more: Offer the most exclusive good or service\ at a higher price to cover higher costs They claim to offer superior quality, workmanship, durability,\ performance or style and charge accordingly. It gives prestige to the buyer, symbolizes status and a sublime\ lifestyle. Vulnerable to imitators claiming the same quality at lower\ prices More for the same: Attack the \"More for More\" positioning by introducing a\ brand that offers similar quality at a lower price. Advertisement: \"It may be the first time in history that trading\ in a \$72,000 car for a \$36,000 car will be considered a good\ deal.\" Lexus dealers offered their customers better service\ experiences à Mercedes owners switched to Lexus and Lexus\ repurchase rate is 60% (double that of the industry More for less: Ideal Strattegy Offering a better selection, better service and lower prices. In the long run, it is difficult to maintain this \"best of both\ worlds\" strategy. These companies may fail in the face of\ more focused competitors The same for less: Offer the same brands but with deep discounts based on\ superior buying power and higher cost operations Offer imitation brands but at a lower price to draw customers\ away from the market leader. Less for much less: Few people need, want or can afford \"the best\" in everything\ they buy. They often settle for less than optimal performance\ or forgo some of the wonders in exchange for a lower price. Cancel \"unnecessary\" amenities and reduce their prices. Differentiation To simplify the buying process, consumers\ organize products, services, and companies into\ categories and "position" them in their minds\ compared with the ones from competition. A product's positioning is the complex set of perceptions,\ impressions, and feelings that consumers have for the product\ compared with competing products Positioning Consumers position products with or without\ the help of marketers. But marketers do not\ want to leave their products' positions to\ chance. They must plan positions that will give their products the\ greatest advantage in selected target markets, and they must\ design marketing mixes to create these planned positions. Products are made in factories, but brands\ happen in the minds of consumers Positioning maps show consumer perceptions of marketer's\ brands versus competing products on important buying\ dimensions. Positioning maps are\ individual and based\ on previous\ experiences Positioning Statement It summarizes company or brand positioning using this\ form:\ To (target segment and need) our (brand) is (concept) that\ (point of difference). Communication and Positioning Maternal or Paternal Afiiliate bond They privilege those things that are\ aimed at their family group.\ They privilege the traditional, the affective and the\ emotional.\ Sublime values, high appreciation for homemade, nutrition,\ health, care, protection Rational Bond They need support for their decisions, valid and\ verifiable reasons.\ They prefer purchases that show them as intelligent, they do\ not like waste, they do not accept being wrong.\ Values: Rationality, Price, Utility, Convenience, Community Bond Refers to the social sensitivity that exceeds\ the family group and even friends.\ They participate in group activities more often than other\ segments without a specific benefit.\ Values: Tradition, Loyalty, Nationalism, Group,... Symbologic Bond They privilege the image they want others to\ have of themselves and their family group.\ Their way of life is more conditioned by those who constitute\ their reference group, whom they want to resemble and with\ whom they want to be identified.\ Values: Status, Prestige, Class, Elegance,... Choosing the positioning is often easier than implementing\ the position Establishing a position or changing one usually takes a\ long time. Maintaining the position requires consistent performance\ and communication Unit 3 A Definitions Product: Product is anything that can be offered in a\ market for attention, acquisition, use, or\ consumption that might satisfy a need or\ want Products include more than just tangible objects. Also include\ services, events, persons, places, organizations and ideas or a\ mixture of these Services are a form of product that consists\ of activities, benefits, or satisfactions and\ that is essentially intangible and does not\ result in the ownership of anything Examples include banking, hotel, airline travel, retail, wireless\ communication, and home-repair services A company's market offer often includes both tangible goods\ and services At both extremes, the market offer may consist on: Pure tangible good: soap, toothpaste or salt. Pure services: doctor's exam, financial services,.. Levels of Product and Services Product planners need to\ think about products\ and services in three\ levels. Level 1: The most basic level (core\ customer value) addresses what is the\ buyer really buying? It is what the consumer is really\ buying. The basic need Level 2. Product\ planners must turn the\ core benefit into an\ actual product When product features\ are developed, the basic\ product becomes the real\ product.\ Neuromarketing and\ Sensory Marketing Level 3. Product\ planners must\ build an augmented product\ around the core benefit and actual\ product by offering additional\ consumer services\ and benefits What if my company sell services? NOTE: in cases where the company provides a service,\ we cannot talk about packaging or design of the\ product, but we can talk about the rest of the things:\ quality of the service, brand and logo.\ However, packaging and design could make a\ difference in delivering a letter with an invoice, or in\ the small details: menu, service card,... Product and Service Classifications Consumer Products (B2C) (Final Consumption) Products and services\ bought by final consumers\ for personal consumption.\ Classified in: - Consumer Products: (Placement) Products and services that the customer usually buys\ frequently, immediately, and with a minimum\ comparison and buying effort à LOW CUSTOMER\ INVOLVEMENT. They are low-priced and marketers place them in\ many locations to make them readily available when\ customers need or want them - Shopping products (Promotion) (Rational) Less frequently purchased consumer products and services\ that the customer compares carefully on suitability, quality,\ price, and style. Consumers spend much time and effort in gathering\ information and making comparisons. Sales support and clear advertising messages are very\ important to help customers in their comparison efforts - Specialty products (Promotion) (Placement) (Symbologistic) Consumer products and services with unique\ characteristics or brand identification for which a\ significant group of buyers is willing to make a special\ purchase effort. Strong brand preference and loyalty; little comparison\ of brands, low price sensitivity. It has the highest price and an exclusive distribution in\ only one or a few outlets per market area. Buyers normally do not compare specialty products. They\ invest only the time needed to reach dealers carrying the\ wanted products - Unsought products (Promotion by personal selling) Consumer products that the consumer does not know\ about or knows about but does not normally think of\ buying Aggressive advertising and personal selling by the\ producer and resellers [](https://www.google.com/url?sa=i&url=https%3A%2F%2Fcindylinardi.wordpress.com%2F2019%2F02%2F12%2Fchapter-8-products-services-and-brands%2F&psig=AOvVaw3onaG-NTr1bg4Lm2xeoVuB&ust=1737719511937000&source=images&cd=vfe&opi=89978449&ved=0CBQQjRxqFwoTCMCgmOXji4sDFQAAAAAdAAAAABAR) Industrial Products (B2B) For further processing or for\ use in conducting business Examples: Materials and parts: include raw materials as well as\ manufactured materials and parts. Capital Items: Industrial products that aid in the buyer's\ production or operations, including installations and accessory\ equipment. Supplies and Services: Supplies include operating supplies\ and repair and maintenance items and Business Services\ include maintenance and repair services and business\ advisory services Main Distinction between Consumer product and Industrial Product: The main distinction is based\ on the purpose for which the\ product is purchased Individual Product and Service Decisions Product Attributes: (Product Quality) The characteristics of a product or service that bear on its ability to\ satisfy stated or implied customer needs. One of the marketer's major positioning tools. It is closely linked to customer value and satisfaction (Product Features) If "more for more"\ à More / better features Competitive tool for differentiating the company's product from\ competitors' products A company can be offered with varying features, creating higher\ level models by adding more features. The company should assess each feature's value to customers versus\ its cost to the company. à Features that customers value highly in\ relation to costs should be added (Style and design) If "more for more"\ à Better style and design. Style: Simply describes the appearance of the product. It can be eye\ catching or yawn producing. Design: It goes to the very heart of the product à Contributes to a product'\ usefulness as well as to its looks Design begins with observing customers, understanding their needs,\ and shaping their product experience Branding: If "more for more"\ à Stronger brands A name, term, sign, or design or a combination of these, that\ identifies the products or services of one seller or group of\ sellers and differentiate them from those of competitors Consumers view a brand as an important part of a product,\ and branding can add value to a consumer's purchase. Consumers attach meanings to brands and develop brand\ relationships à Brands have meaning well beyond a\ product's physical attributes. Packaging: If "more for more"\ à More\ creative/innovative/distinguish packaging The activities of designing and producing the container or wrapper\ for a product Poorly designed packages: \- Hard-to-open packages: packaging with finger-splitting wire twist-\ ties or sealed plastic clamshell containers that cause "wrap rage"\ and send thousand of people to hospital - Overpackaging: creates an incredible amount of waste, frustrating\ those who care about the environment. - Product safety - Enviormental Concern Labegging and logos Labbegging and logos range from simple tags attached to products to complex\ graphics that are part of the packaging. They perform several functions:\ \ 1. Identify the product or brand, describe attributes, and provide\ promotion.\ 2. Describe several things about the product: who made it, where it was\ made, when it was made, its contents, how it is to be use and how to use it\ safely.\ 3. Help to promote the brand and engage customers. Labels and logos must be redesigned from time to time. Companies should take great care to craft simple, easily recognized logos\ that quickly identify their brands and trigger positive consumer\ associations. In a digital world, brand logos are not longer static symbols placed on a\ printed page à They have to be adapted to meet the needs of new digital\ devices and interactive platforms: mobile apps and social media. Product support services: Product support services are an important part of the\ customer's overall brand experience. Keeping customers happy after the sale is key to building\ lasting relationships. The first step in designing support services is to survey\ customers periodically to assess the value of current services\ and obtain ideas for new ones After assessing the quality of support services, steps\ can be taken to fix problems and/or add new services\ that will delight customers and yield profits Product Line Decisions Product Line: A group of products that are closely related because they\ function in a similar manner, are sold to the same customer\ groups, are marketed through the same types of outlets, or fall\ within given price ranges. The major product line decision involves product line length---\ the number of items in the product line The line is too short if the manager can increase profits by\ adding items The line is too long if the manager can increase profits by\ dropping items Managers need to analyze their product lines periodically to\ assess each item's sales and profits and understand how each\ item contributes to the line's overall performance A company can expand its product line modifying the number\ of items in the product line in two ways: 1. Line Filling: Involves adding more items within\ the present range of the line It could mean offering\ different colours and\ designs of the same\ product Reasons for line filling: Reaching Extra product Satisfy Dealers Using Excess Capacity Be the leading full time company Plugging holes to keep out\ competitors Problem: If line filling is overdone if it results in\ cannibalization and customer\ confusion The company should ensure\ that new items are noticeably\ different from existing ones 2. Line stretching: When a company lengthens its\ product line beyond its current range The company can stretch its line downward, upward or both\ ways. Reasons for line stretching downward: - To plug a market hole or to respond to a competitor's\ attack on the upper end.\ - To add lower-end products to attract new entry-level buyer\ segments - To add prestige to\ their current\ products. - To reap higher\ margins. Product Mix Decision Product Mix or\ Product Portfolio: An organization with several product lines has a product mix. Consist of all the product lines and items\ that a particular seller offers for sale A product mix has four important dimensions: Width: The number of different product lines the\ company carries. Depth: Number of versions offered of each product in\ the line Consistency: How closely the various product lines are in end\ use, production requirements, or distribution\ channels Length: Total number of items the company carries\ within its product lines Learning Objetive \#3 Identify the four characteristics that affect\ the marketing of services and the additional\ marketing considerations that services\ require. MARKETING STRATEGIES FOR SERVICE FIRMS In a service business, the customer and the front-line service\ employee interact to co-create the service Effective interaction depends on the skills of front-line service\ employees and on the support processes backing these\ employees Because services differ from tangible products, they often\ require additional marketing approaches: Service-Profit Chain\ Internal Marketing\ Interactive Marketing Service-Profit Chain: 5 links Refers to the chain that links service firm profits with\ employee and customer satisfaction. Internal service quality.\ Satisfied and productive service employees.\ Greater service value\ Satisfied and loyal customers.\ Healthy service profits and growth Because services differ from tangible products, they often\ require additional marketing approaches: Internal Marketing: Means that the service firm must orient and motivate its\ customer-contact employees and supporting service people to\ work as a team to provide customer satisfaction. Everyone in the organization should be customer-centered. Internal marketing should precede external marketing Interactive Marketing: Service quality depends heavily on the quality of the buyer-\ seller interaction during the service encounter In service marketing, service quality depends on both the\ service deliverer and the quality of the delivery Service marketers have to master interactive marketing skills\ and "passion to serve". Today, as competition and costs increase and as productivity\ and quality decrease, more services marketing sophistication is\ needed. Service companies face three major marketing tasks: Service Differentiation Service Quality Service Productivity With intense competition, service marketers often complain\ about the difficulty of differentiating their services from those\ of competitors. To the extent that customers view the services of different\ providers as similar, they care less about the provider than\ the price. The solution to price competition is to develop a\ differentiated:\ Offer\ Delivery\ Image A firm can differentiate itself by delivering consistently\ higher quality than its competitors provide. Service providers, need to identify what target\ customers expect in regard to service quality. It is harder to define and judge than a product quality Customer retention is perhaps the best measure of\ quality: a service firm's ability to retain its customers\ depends on how consistently it delivers value to them Service Productivity: Service firms are under great pressure to increase service\ productivity Ways to do it: Train current employees better or hire new ones who will\ work harder or more skilfully Increase the quantity of their service by giving up some\ quality Employ Technology BRANDING Learning Objective\#4 Discuss branding strategy. The\ decisions companies make in\ budling and managing their\ brands. Brand Equity and Brand Value Building Strong Brands Managing Brands Brand Strategy: Some analysis see brands as the major enduring asset of a\ company, outlasting the company's specific products and\ facilities. Conclusion: In some cases, the brand is more valuable than the\ totality of all these assets Brands represent consumers' perceptions and feelings about a\ product and its performance à Brands should must be carefully developed and managed. Brand Equity "Differential effect that knowing the brand name has on\ customer response to the product or its marketing" CONCLUSION: Preferences are\ not only based on taste, brand\ also makes a difference A powerful brand has high brand equity. à Measure of the\ brand's ability to capture consumer preference and loyalty Positive brand equity derives from consumer feelings about\ and connections with a brand. à Strong brands are built\ around an ideal of improving consumers' lives in some\ relevant way. A brand with high brand equity is a very valuable asset Brand Valuation: Process of estimating the total financial value of a brand Measuring such value is difficult Brand Value: Total financial value of a brand High Brand Equity Many competitive advantages: High level of consumer brand awareness and loyalty More leverage in bargaining with resellers.\ Easier launch of line and brand extensions.\ Defense against fierce price competition. Powerful brands provides the basis for building strong and\ profitable customer relationships. BUILDING STRONG BRANDS The major brand strategy decisions involve the following\ steps: Brand Positioning: Marketers can position brands at any of three levels 1. Product or Service Attributes Speed, reliability, quality and convenience of pack\ delivery Least desirable level for brand positioning à\ Competitors can copy the attributes. 2. Benefites Consists in associating its name with a desirable benefit. 3. Beliefs and values Stronger brands go beyond attribute or benefit\ positioning engaging customers on a deep, emotional\ level à The brand is about more than efficient package\ deliveries: it is about what those packages deliveries\ mean to the people shipping and delivering them Conclusion: Brands that connect with consumers on an emotional level\ can inspire substantial loyalty Customers don't just like these brands, they have strong\ emotional connections with them and love them\ inconditionally BRAND NAME SELECTION A good name can add greatly to a product's success Finding the best brand name is a difficult task. It begins with a careful review of the product and its\ benefits, the target market, and proposed marketing\ strategies. At the end, naming a brand becomes part science, part art,\ and a measure of instinct. Desirable qualities: Suggest something about the product's benefits and qualities. Easy to pronounce, recognize and remember Translate easily into foreign languages. Be distinctive. Be extendable: Amazon. Capable of registration and legal protection: cannot be\ registered if it infringes on existing brand names Trends: One decade ago: quirky names: Yahoo, Google. Today: build brand around names that have a real meaning:\ Silk (Soy Milk), Smartwater (Beverages) Brand name that will eventually become identified with the\ product category: Klennex, Post-it,. Zip-loc.\ à Available names are hard to find. BRAND SPONSORSHIP A manufacturer has four sponsorship options: Manufacturer's brand /National Brands: Sell the company's products under its own brand names Reduces marketing costs and facilitates lower-cost launching of\ new products. Difficulty of using the same brand, with a certain image and\ personality for very different products. It is more difficult to create a strong personality for a brand\ with different products. The image of one product can be\ undermined by another Private Label /Store Brands: Sometimes, manufacturers with excess production capacity\ are willing to package large quantities at low prices. The distributor can use the name of the store chain or create\ a new brand name. The chain store brand may not be the right image for\ certain products Licensed brand License names or symbols previously created by other\ manufacturers, names of well-known celebrities or\ characters from popular movies and books. For a fee, any of these can provide an instant and proven\ brand name Co-branding: The practice of using the established brand names of two\ different companies on the same product. Advantages: Each brand operates in a different category à The\ combined brands create broader consumer appeal and\ greater brand equity BRAND DEVELOPMENT A company has four choices when it comes to developing\ brands:  Line Extension: When a company extends\ existing brand names to new\ forms, colours, sizes, ingredients\ or flavours of an exiting product\ category. A company may introduce line extensions as a low-cost, low-risk way to introduce new products. Entail some risk: an overextended brand name might cause consumer confusion or lose some of its specific meaning. At some point, additional extensions might add little value to a Line Work best when it takes sales away from competing brands, not when it "cannibalizes" the company's other items. Brand Extensions: Extends a current brand name\ to new or modified products in\ a new category Extend its retail coffee shops by adding: Package supermarket coffees. Chain of teahouses. Single-serve home coffee. Merchandising Compared with building new brands, extensions can créate inmmediate new-product familiarity and acceptance at lower development costs Also, involves some risk: The extension may confuse the image of the main brand. A brand name may not be appropriate to a particular new product. Multibrands: Companies often market many different brands in a given product category. It offers a way to establish different features that appeal to different customers segments, lock up more reseller shelf space and capture a larger market share A major drawback is that each brand might obtain only a small market share, and none may be very profitable. à The company may end up spreading its resources over many brands instead of building a few brads to a highly profitable level. New Brands: A company might believe that\ the power of its existing brand\ name is waning, so a new\ brand name is needed or it may\ create a new brand name when\ it enters a new product\ category for which none of its\ current brand names is\ appropriate. Offering too many new brands can result in a company\ spreading its resources. Are now pursuing megabrand strategies: weeding out weaker or barely-growing brands and focusing their marketing money on brands that can achieve the number one or number two market share positions with good growth prospects in their categories. Unit 3 **Neuromarketing Colors and Shapes** SUMMARY HARVARD READING: Well-designed logos can offer substantial benefits to brands. à Increase the interest of consumers, differentiate brands from competitors, facilitate brand recognition, influence investor's decisions and convey what a brand is about. Is better to have a descriptive vs non-descriptive logo? Increase the interest of consumers, differentiate brands from\ competitors, facilitate brand recognition, influence investor's\ decisions and convey what a brand is about. Is better to have a descriptive vs non-descriptive logo? Descriptive logos: Makes brands appear more authentic in\ consumers' eyes.\ More favorably impact consumers' evaluations of\ brands.\ More strongly increase consumers' willingness to\ buy from brands\ Boost brands' net sales more. Its effect is reduced when the brand is familiar. (They do not need the extra information provided) They are not appropriate when the description of the product/service generates negative feelings. They are not appropriate when the company is selling unrelated products and services. NEUROMARKETING: DEFINITION \"The practice of using technology to measure brain activity in consumers and using that information in product development and communications.\" The purchase decision takes about 2.5 seconds. During this time, between 80% and 95% of decisions are made unconsciously. Objectives: Identify the emotional impact generated by the product,\ service, brand,\...\ Predict consumer behavior at the time of purchase.\ Understand and meet customer needs and expectations. WHAT DOES NEUROMARKETING MEASURE? It measures brain waves and three components are taken: Attencion The easiest to capture in an ad. Often this variable is high. Excitement It goes up and down permanently. This is good, because if the emotion is high for a long time it can cause exhaustion, which would cause the person to get tired of the advertisement. Memory Most difficult component to capture. If successful, it means that the ad is good. How do we connect with the consumer\'s brain? By Colors and shapes PSYCHOLOGY OF COLORS Color more striking and exciting to the human eye. Able to increase the heart rate of people. Increases appetite Negative: Affects performance when concentration is required. It excess, it transmits danger. Blue: Color of trust and loyalty. Associated with calm and security brands of\ insurers, banks, financial institutions. Decreases heart rate. Increases relaxation and productivity \--\> study\ rooms, offices, massage rooms,\... Green: Easier color for the human eye to process. Associated with three things: growth, nature and\ money. Relaxing, that\'s why it is seen in spas and places\ to de-stress. Gray: It communicates strength, robustness and\ longevity. Steel, stones,\... Excellent alternative combined with white. Gives a touch of modernism to things. Brown: Symbolizes the organic and earthly It can add an organic touch to your project Widely used in cafeterias White: Simple, light, minimalist Associated with purity, cleanliness and clarity. Colors for offices. Especially in small places Yellow: Color of optimism and happiness.´ It releases a quantity of serotannin in the which stimulates the brain in a way that more positively. Small amounts In excess, makes babies cry. Black: Power and authority Elegance and safety. Ideal for the gym if you want to transmit Strength Orange: Attention-getting generator. Fun, Ambition and youth. It also generates hunger. NEUROINSIGHTS FOR ADVERTISING a. Eyes are everything: They are the first thing we see (eyes are the door to the soul) i. Geico gecko The brain opens up to new things Simplicity is more attractive Curved and round organic shapes Different vision of the genres a. The brain is metaphorical: The brain likes these things, because we like feeling clever (don\'t make them too hard to understand)