MKTG 1030 R Lecture Notes

MKTG 1030 R Lecture 1 What is Marketing? Creating - Product Communicating - Promotion Exchanging - Price Delivering - Place Seven Ps Value Proposition Benefits of buyers that meet their needs. Considers price and what they have to go through to receive it Pos...

MKTG 1030 R Lecture 1 What is Marketing? Creating - Product Communicating - Promotion Exchanging - Price Delivering - Place Seven Ps Value Proposition Benefits of buyers that meet their needs. Considers price and what they have to go through to receive it Positioning How your oAering’s product, price, promotion, and place compared to others in the marketplace Something that will help diAerentiate your product that it occupies in the mind of the consumer Good positioning COMPELLING DIFFERENTIATED People Targeting. Who is your target audience Why is identifying your target important and what happens if you do not target correctly? Promotion How you create awareness for your product or service EX. Advertising on TV, Billboards, magazines, Product placement in movies and TV, social media, Earned Media, Event Marketing, Sponsorship Place Delivering an oAering More than simply getting the product into the hands of the user  Making sure that the user understands how to get the most out of the product and is taken care of it he or she requires service late Value Delivered in part through a company’s supply chain Includes number of organizations and functions that mine, make, assemble, or deliver materials and products from a manufacturer to consumers Logistics Actual transportation and storage of materials and products The primary component of supply chain management Product A product is any item, or service that is sold to satisfy buyers want, need or both DiAerent kinds of products and services available. Branded and Unbranded Price What will the customer pay? What are the competitors charging? What are the costs? What is our desired margin? (% and $) Ways to Go to Market Production Orientation Companies competed by reducing production costs Mass-produced at a minimum cost Gave rise to the production era Selling Orientation Companies pushed their products by heavily emphasizing advertising and selling Use of persuasion techniques to convince consumers Price was paramount Gave rise to the selling era Product Orientation Companies focused on product innovation Customer is king Focus on fulfilling customers’ needs Gave rise to the production era Marketing Eras Value Era Companies emphasize creating value for customers – Customer-centric One-to-one era Companies compete by building relationships with customers one at a time and seek to serve each customer’s needs individually Transformative era Marketing is transforming complete companies and products to serve customers more completely Brand A unique name/image for an oAering in MIND of the target segment that promises a significant and diAerentiated benefit Brands allow a marketer to command a higher price, or deliver more volume than competitors, at a parity price Unbranded Products and Services2 Examples Sand Lumber Nail Salon Why is Marketing Important Everyone does some form of marketing Resume, clothing, LinkedIn profile Career Opportunities in Marketing?  Political and Legal Environment All organizations must comply with government regulations and understand political and legal environments in which they do business DiAerent government agencies enforce regulations that have been established to protect both consumers and businesses Sherman Act prohibits U.S. firms from restraining trade by creating monopolies and cartels The Federal Trade Commission (FTC) regulates deceptive advertising The Food and Drug Administration (FDA) regulates labeling of consumable products such as food and medicine Competitive Analysis Economic Factors include: Inflation Unemployment Interest rates Whether the economy is in a growth period or a recession Inflation occurs when the cost of living continues to rise and erodes the purchasing power of money During a recession, it is possible for both high-end and low-end products to sell well Demographic, Social, and Cultural Environments Constantly changing the global marketplace Includes Social trends (people’s attitudes toward fitness and nutrition)  Demographic characteristics (age, income, marital status, education, and occupation) Culture (relates to people’s beliefs and values) Technology Changes the way people communicate and the way companies do business Marketers increasingly use online ads and mobile marketing Organizations must adapt to new technologies to succeed Competitive Environment Natural resources are scarce commodities Consumers are becoming aware of this fact Green marketing involves marketing environmentally safe products and services Marketing is done in a way that is good for the environment Green marketing not only helps the environment but also saves the company money Tutorial 1 BRAND: Budweiser Tutorial 2 STP Marketing Model S – Segmentation Divide market into distinct groups of customers T – Targeting Select most eAective segments P – Positioning Lecture Week 2: People, Positioning, Market Segmentation What is Strategy How you get what you want  Starts with Objective Setting Objective – What you are trying to achieve What is Marketing Strategy Objective of a marketing strategy – Turn people in your target group into customers/consumers Developing a Marketing Strategy External Environment Secondary research (databases and trade journals) Primary Research (interviews/surveys with customers and consumers) Internal Environment Secondary research (business results and interviews/surveys with employees) Primary research (interviews/surveys with customers and consumers) Analytical Frameworks SWOT ANALYSIS  PESTEL ANALYSIS What is Marketing The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging oAerings that have value for customers, clients, partners, and society at large 7 Ps Value Proposition – Benefits buyers receive that meet their needs while considering the price they pay and what they have to go through to receive the benefit Positioning – how your oAering’s product, price, promotion, and place compare to others in the marketplace People = Targeting Product = Creating Promotion = Communicating Place = Delivering Price = Exchanging Segmentation Marketing Segments Dividing or segmenting people and organizations into diAerent groups of potential buyers with similar characteristics Use marketing mix to tailor products for the diAerent groups Targeting segments Selecting market segments to pursue with plans  Positioning Creating a preferred position of the company’s products in the minds of consumers Segmentation Bases Criteria used to classify and divide buyers into diAerent groups Helps firms get a full picture of its customers and create value for them Types of Segmentation Bases Behavioral – what benefits do customers want and how they use the product Benefits: segmenting buyers by the benefits that they seek from the product Usage: segmenting buyers by the frequency that they use/buy products Application: segmenting buyers by the way they use the products Tailor products to consumers for optimum results if they understand: Benefits they seek How often its purchased Usage situation (daily, weekly, monthly, holiday) Manner in which the product is used Demographic – profile of customers including age, gender, income, race, ethnicity, social class, education, ethnicity, family life cycle and size, nationality, religion. Used to segment markets because demographic information is publicly available in databases worldwide Most popular type of segmentation Geographic – where are the customers located and how can they be reached Divides buyers where they are located World region or country, Country region, City or metro size, Population density, Climate Geocoding plots geographic marketing information on a map Geodemographics (or neighborhood geography) combines both demographic and geographic information for marketing purposes Claritas’ PRIZM NE Proximity Marketing – new technology firms are using to segment and target buyers geographically within a few hundred feet of their businesses using wireless technology Psychographic – what do customers think about, value, and how do they live their lives Why consumers behave the way they do, what is high priority to them, and how they rank the importance of specific buying criteria. Frequently gathered through extensive surveys that ask people about their:  Activities Interests Opinions Attitudes Values Lifestyles VALS (Values, Attitudes, and Lifestyles) is a well-known psychographic survey Innovators: successful, sophisticated, take-charge people Thinkers: mature, satisfied, comfortable, well education Achievers: goal oriented, conservative, predictable, stable Experiencers: young, enthusiastic, seek variety and excitement Believers: conservative, conventional, believe in established codes Strivers: trendy, fun loving, seek approval, job vs. career Makers: practical, self-suAicient, suspicious of large institutions Survivors: few resources, concerned with safety, low motivation Segmentation in B2B Markets Fewer behavioral and needs-based segments in B2B markets than in B2C markets Business markets are made up of few hundred customers whereas consumer markets can be made of way more Businesses aren’t as fickle as consumers Behavioral segments in B2B markets include: A price-focused segment – small companies have low profit margins Quality and brand-focused segment – firms that want the best possible products and prepared to pay for them Service-focused segment – firms that demand high-quality products and have top- notch delivery and service requirements Partnership-focused segment – firms that seek trust and reliability on the part of their suppliers TAKEAWAYS FOR SEGMENTATION Targeted Marketing Versus Mass Marketing Targeted Marketing Known as diAerentiated marketing May diAerentiate some aspect of marketing for diAerent groups of customers selected Relatively new Mass Marketing Known as undiAerentiated marketing Evolved along with mass production Involves selling the same product to everybody People (Targeting) Who is the target customer or consumer Why is identifying your target important What happens if incorrectly identify your target What is Targeting Focusing your marketing eAorts on a specific group of customers or consumers (a market) Importance Focused eAorts tend to lead to better performance  Understanding where the “fish are biting” often leads to catching more fish Even the most successful companies in the world have to manage their resources What Makes a Good Target? Sizeable or large enough to be profitable given operating cost It is growing Not already swamped by competitors, or found a way to stand out in a crows It is accessible, or you can find a way to reach it Company has the resources to compete in it It “fits in” with your firm’s objectives Targeting Trend is toward more precise targeting Companies use the Internet or social media to track peoples’ Web browsing patterns and segment them into target groups Getting a read on potential target markets do not mean it has to involve technology Who to Target? Two Schools of though 1. Target a Firm’s Current Customers a. Finding and attracting new customers is diAicult and costly than retaining current b. Firms try to understand their customers by i. Surveying them ii. Hiring marketing research firms to do so iii. Utilizing loyalty programs c. Many firms use social media to develop and maintain closer relationships with their customers 2. Target New Customers/Consumers a. While more diAicult and potentially more expensive, where will you find more growth for your business? (New customers or current customers?) Sales growth comes from 1 of 2 places Selling more to existing customers Selling to new customers 2 kinds of new customers Currently using competitors’ products Just entered the market KEY TAKEAWAYS TARGETING Positioning How consumers perceive a product relative to the competition Companies want a distinctive image and oAering that stands out from the competition Perceptual map – two-dimensional graph that shows where your product stands relative to your competitors, based on criteria important to buyers Tagline, Slogan, or Selling Idea – catchphrase designed to sum up the essence of a product Repositioning – eAort to move a product to a diAerent place in the minds of consumers Old Spice was dying. By repositioning, it become a top brand among millennials and Gen Z TAKEAWAYS FOR POSITIONING Lecture Week 3 Consumer Behavior Considers the many reasons Personal, Situational, Psychological, and Social Why people shop for products, buy and use them, sometimes becoming loyal customers, and then dispose of them Why Do Consumers Buy? Companies spend billions studying consumer behaviours Data is collected through: Web visits Blogs Social networks Psych. Profiles Surveys Situational Factors Store location Physical Factors Can be controlled by design, others must be accommodated Atmospherics: Physical aspects of the selling environment retailers try to control Store layout Music played Lighting Temperature  Smell Uncontrolled: weather Crowding Social Situation Circumstances in which consumers may find themselves Obligation, expected behaviour, or a need to impress may compel purchases Time Reasons for Purchase Is it an emergency purchase? Is it a gift or for a special occasion? Is it going to help complete a task? Is it needed quickly? Mood Moods temporarily aAect their spending patterns Some people enjoy shopping and others do not A sour mood can spoil a consumer’s desire to shop Economic Situation People’s economic situation aAects what and how much they buy Reduce spending during economic downturns Stores with lower prices fare better during economic downturns than high-end stores Changes in Demand During the Pandemic  Personality Describes a person’s disposition Helps show why people are diAerent Encompasses a person’s unique trait “Big Five” Personality Traits Openness – How open are you to new experiences Conscientiousness – How diligent you are Extraversion – How outgoing or shy you are Agreeableness – How easy you are to get along with Neuroticism – How prone you are to negative states Self-Concept Marketers have had better lucky linking people’s self-concepts to their buying behaviour Self-concept is how you see yourself – negative or positive Ideal self is how you would like to see yourself Fitter More popular More eco-conscious People buy products to enhance how they feel about themselves Gender Women Tend to try on everything Shop ‘til they drop Men See what they want and buy it  Prefer sites with pictures of products Gender-based shopping di`erences appear to be changing Younger, well-educated men are more likely to shop for groceries than in the past Men today are more likely to buy diapers as well as change them Age Influences their purchase decisions Chronological age – person’s age in years Cognitive age – age a buyer perceived himself or herself to be Lifestyle Psychographics combine: Lifestyle traits of consumers and their personality styles Attitudes, activities, and values Motivation The inward drive people have to get what they need Mid-1900s, Abraham Maslow developed the hierarchy of needs Maslow’s Hierarchy of Needs Perception How people interpret the world around them Involves five external senses Taste Sight Hearing Touch Smell Retention factors Selective Attention – Filtering out irrelevant information Selective Retention – Forgetting information that contradicts your beliefs Shock Advertising – Surprising Stimuli that can increase retention Centers for Disease Control used shock advertising to try to convince Americans of the terrible toll smoking has on people’s health Research on shock advertising is mixed Subliminal Advertising – Stealthily embedded messages in media Movies, ads Banned by the Federal Communications Commission (FTC)  Opposite of shock advertising Learning Process by which consumers change their behaviour after they gain information or experience Operant (instrumental) conditioning – Type of behaviour that’s repeated when it’s rewarded Prizes and toys in Happy Meals Free sandwich after a certain number of purchases Free car washes when you fill up your car with gas Gamification – Building a game component into a product to encourage consumers to buy a product or use it more Attitudes Mental positions or emotional feelings Favorable or unfavorable evaluations Action tendencies people have about products, services, companies, ideas, issues, or institutions Societal Factors Culture Subculture Social Class Reference groups and opinion leaders Family Consumer Cultures Culture – group of people with shared beliefs, customs, behaviours, and attitudes Subculture – Group of people within a culture who are diAerent from the dominant culture but have something in common with one another such as: Common interests Vocations or jobs Religions Ethnic backgrounds Geographic locations  Social Class – group of people who have the same social, economic, or educational status in society Primary variable determining social class is occupation (income helps define social class) Reference groups and opinion leaders Family Most important determinants in buying behaviour Children Follow their parents’ behaviour Influence household purchases Nag their parents for certain products Risk in advertising children May alienate parents Consumer Decision-Making Routine response behaviour – Automatic purchase decisions based on limited information or information consumers have gathered in the past Impulse buying – Purchases that occur with no planning or forethought Low-involvement decisions – products that carry a low risk of failure or have a low-price tag High-involvement decisions – products that carry a high price tag or high level of risk Limited problem solving – Consumers have some information but search for a little more before buying Extended problem solving – consumers gather lots of information before buying Involvement in Buying Decisions Low involvement Routine purchase Inexpensive Low risk High involvement High risk, high price Extended problem solving Post purchase dissonance Stages in the Consumer’s Purchasing Process 1. Need Recognition 2. Search for Product Information 3. Product Evaluation 4. Product Choices and Purchase 5. Post purchase Use and Evaluation of Product 6. Disposal of the Product Awareness – Consumer realizes they have a need or problem Consideration – search for solutions and evaluates options Intent – Customer decides on a product or service Purchase – Consumer makes the purchase Post-purchase – Customer evaluated the quality and value of the purchase Post-Purchase Dissonance Situations where experiences do not match expectations and consumers rethink their decisions after purchasing products and wonder if they made the best decision Customer’s Journey Companies are developing customer journey “maps” to walk a mile in their customers’ shoes Company wants to get an idea of the emotion’s customers experience at each stage when they do business with it Are they happy? Disappointed?  Somewhere in between? Business to Business: Customers are Di`erent from Consumers Number sold Number sold to business markets and size of each transaction is much greater than consumer markets Size of each transaction for business customers is much greater Complexity Business products can be far more complex Custom building and retrofitting are common Personal selling With large transactions, personal selling is justified Agility of interactive personal selling allows changes to be made to meet conditions Demand for B2B Products Derived demand – derived from a source other than the primary buyer of a product Fluctuating Demand – small change in demand by consumers can have a big eAect throughout the chain of businesses that supply the goods and services it produces Joint Demand – Demand for one product increases the demand for another Companies influence their B2B sales by influencing consumers B2B Buyers Business buyers can be either nonprofit or for-profit businesses Four basic categories Producers – Companies that purchase goods and services that they transform into other products Businesses have to buy certain products to produce the goods and services they create Producers generally buy in large quantities Resellers – Companies that sell goods and services produced by other firms without materially changing them Large wholesalers, brokers, and retailers are typical resellers Large resellers wield considerable power over producers as they provide customers and influence prices Value-added resellers (VARS): companies that buy finished products from other companies, customize them in some way, and sell them at higher prices Institutions Governments State/local government buy huge amounts of products U.S. government is the world’s largest buyer of goods and services Each agency will have its own procurement policies Would-be sellers are asked to submit sealed bids – not always the lowest bid that’s accepted Selling to the government is not easy Regulations or specifications may be needed Decision cycles can be long and have large buying centers Some businesses avoid selling to the government because the perceived hassle (“red tape”) to too great to warrant the eAort  Other businesses, though, realize the government purchases can become a sustainable competitive advantage Purchasing Decisions in Business Markets Not always clear who makes the decision to buy when dealing with business customers Finding the decision maker is key – where to start in B2B sales can be like a scavenger hunt Several involved – tiers of B2B and B2C customers Dynamics of B2B Marketing Interpersonal factors among the people making the buying decisions have an impact on the products chosen B2B marketers are aware of these dynamics – influence the outcome B2B marketing is strategic Selling firms gather information about their customers and use that to their advantage Lecture Week 4 Marketing Research A process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem or define marketing opportunities Some marketing research studies are designed to find out what consumers’ problems are and to assess the suitability of diAerent proposes methods of resolving these problems Generate, Refine and Evaluate Potential Marketing Actions Select target markets Product research Pricing research Promotion research Distribution research Stage 1: Establish the Need for Marketing Research Cost of information may outweigh value of information Research takes time and costs money Is there need for marketing research? Stage 2: Define the Problem Marketing research should only be done when firms need to decide and do not have the information available to guide decision-making If the problem is incorrectly defined, all the steps that follow are wasted eAort Well-crafted problem statement should address the following key criteria 1. Clear identification of the problem 2. Context and background 3. Impact of the problem 4. Supporting data 5. Potential causes of the problem 6. Urgency and importance Stage 3: Establish Objectives State what the researchers must do Stage 5: Identify Information Types and Sources Primary Information  Information collected specifically for the problem at hand Secondary Information Information already collected: Syndicated data: Sometimes research companies collect information and make it available to all those who willing to pay a subscription Stage 8: Determine Sample Plan and Size Sample – drawn from an entire group or population Sample plan – describes how each sample element, or unit, is to be drawn from the total population Gives representativeness Sample size – determining how many elements of the population should be included in the sample Gives protectiveness Stage 10: Analyze Data Data analysis – entering data into computer files, inspecting data for errors, and running tabulations and various statistical test (quantitative) Stage 11: Communicate the Results Most important phases of marketing research Is the report, or its presentation, that properly communicates the results to the client What is “Big Data”? Quantitative Big Data – large amounts of data from multiple sources Popularized from numerous types and huge amounts of data to which companies now have access in real time In the NFL, big data can enhance player performance, improve fan engagement, drive strategic decisions, and create a more immersive fan experience and optimize organizational operations Categories of Research Quantitative Research Use of structured questions in which response options have been predetermined and a large number of respondents involved (generalization) BIG DATA Qualitative Research  Involving collecting, analyzing, and interpreting data by observing what people do and speak Thick data – Term used to emphasize the importance of gaining qualitative insights of phenomena to complement the quantitative knowledge provided by big data Why vs. What Why is for Qualitative research Uncovers the “why” behind behaviours and motivations, providing deep insights into human actions What is for quantitative research Focuses on the “what,” delivering measurable data and statistical analysis of trends Qualitative Method Observation Techniques Observation methods – Techniques in which phenomena of interest involving people, objects, and/or activities are systematically observed and documented When studying: In-depth Interviews Qualitative research method that involves one-on-one conversations to gather detailed insights from participants to answer research questions  Purpose – To explore participants’ thoughts, feelings, and behaviours in depth Di`erence from Focus Groups – In-depth interviews focus on individual experiences, while focus groups gather collective insights Focus Groups Small groups of people (usually 6-12) brought together and guided by a moderator through an unstructured, spontaneous discussion for the purpose of gaining information relevant to the research problem Information can be used to generate ideas, learn respondents’ “vocabulary” when relating to a product, or gain insight into basic customer needs and attitudes Ethnographic Research Term borrowed from anthropology to describe a detailed, descriptive study of a group and its behavior, characteristics, culture, etc. Done by immersing oneself in the daily life of a community to observe and interact with members (lived experience) Projective Techniques Involve situations where participants are placed in (projected into) simulated activities in the hopes that they will reveal things about themselves that they might not reveal under direct questioning Thematic Coding Process used in qualitative research to identify, analyze, and categorize patterns or themes within textual data, such as interview transcripts, open-ended survey responses, or focus group discussions Quantitative Method What is a Survey?  Involves questions posted to a large number of respondents using a predesigned questionnaire (qualitative research uses semi-structured interviews) Large number of respondents are required to represent important subgroups and ensure that a study accurately represents a larger population Basic Concepts in Measurement Measurement – Determining a description or amount of some property of an object that is of interest Properties – Specific features or characteristics of an object that can be used to distinguish it from another object Objective properties – observable and tangible (age, income) Subjective properties – unobservable and intangible. Must be translated onto a rating scale via development (happiness, satisfaction) Questionnaire Design Process Step 1: Decide on the types of questions to include (multiple-choice, open-ended, etc.) Step 2: Think about important factors related to the survey (audience and purpose) Step 3: Write each question clearly and carefully to avoid confusion Step 4: Organize the questions in a logical and easy-to-follow order Researcher should strive to minimize question bias Question bias – ability of a question’s wording or format to influence respondents’ answers Nike Quantitative  Uses surveys to collect customer feedback Surveys explore satisfaction levels, preferences for new features, and pricing insights Basic Concepts in Sampling Sample – A subset of the population that should represent the entire group Sample Unit – The basic level of investigation Probability Samples Ones in which members of the population have a known chance (probability) of being selected into the sample Non-probability Samples Instances in which the chances (probability) of selecting members from the population into the sample are unknown Representativeness: Sampling method determines if the sample represents the population. It is how you choose participants Random sampling is a probability method that ensures the sample is truly representative The way you select the sample is more important than its size for achieving representativeness Improving Reliability A larger sample size improves the accuracy and reliability of the results Larger samples help to generalize findings with more confidence Elements of a Marketing Research Report Storytelling A powerful way to present final findings in marketing research Helps to make data more engaging, relatable, and memorable Weave insights into a narrative to communicate complex findings in a way that resonates with decision-makers and stakeholders Ex. Meet Sarah, a busy mom who prefers shopping online to save time. Like Sarah, 50% of our customers choose online shopping for convenience." Storytelling adds depth and makes the findings actionable and relatable Tutorial Week 4 Lecture Week 5: Products, Service and Branding Product Most oAerings consist of a product, or a tangible good people can buy, sell and own Products have features which are characteristic of the oAering Service An action that provides a buyer with an intangible benefit Usually require that the consumer be physically present  Services are perishable; cannot be stored Many tangible products have intangible service components attached to them Price OAerings have a price that is paid for the product benefits Total cost of ownership (TCO) is the amount paid to own, use, and dispose of a product The RATER Model Used to focus marketers’ attention on key dimensions of services R – Reliability Ability to deliver a specific level of quality over a number of trials A – Assurance Degree to which the consumer can trust the service provider to live up to promises T – Tangibles Often signal to consumers that they have received a high-quality service, such as shampoo and the appearance of furniture during a hotel stay E – Empathy Service providers need to be able to put themselves into the shoes of customers to understand what is wanted and needed R – Responsiveness Service provider’s ability to respond to consumers’ interests and desires Product-Dominant Marketing Product dominance started with the industrial revolution Focus was on producing products cheaply Firms became product oriented, believing the best way to gain market share was with better products at lower prices Service-Dominant Marketing Integrates the product, price, and services of an oAering Marketers should consider what services it takes for the customer to acquire their oAerings, enjoy them and dispose of them Critics argue that the product-dominant approach also integrated services (though not price) For many pure products, the product-dominant approach can be helpful in bunding diAerent augmentations for diAerent markets Sharing Economy  Information technology allows owners of assets to increase utilization of their assets, whether for money or exchange of services Based on service-dominant logic Functions: Make it possible for anyone to share an asset Drive costs down and availability up Disrupt many established businesses Product Levels and Product Lines A product’s technology platform is the core technology on which it is built Some new oAerings take a technology platform and re-bundle its benefits Technology platforms are not limited to tangible products Knowledge can be a type of technology platform in a pure services environment Product Lines Group of related oAerings and is created to make marketing strategies eAicient Line Depth – Number of oAerings in a product line Line Extension – When a new but similar product is added to a line Line Breadth – A function of how many diAerent, or distinct product lines as a company has Product Mix – The entire assortment of products that a firm oAers Four General Categories of Consumer O`erings Convenience Little eAort in shopping EX. Bread Shopping Compares products often care about brand names Unsought Products that buyers do not want to shop until the need them Specialty Highly diAerentiated Available through limited channels The Basics of an O`ering Companies market oAerings composed of a combination of tangible and intangible characteristics for certain prices  During the Industrial Revolution, firms focused primarily on products and not so much on customers The service-dominant perspective to marketing integrates three diAerent dimensions of an oAering—not only the product but also its price and the services associated with it This perspective helps marketers think more like their customers, which helps firms add value to their oAerings An oAering is based on a technology platform, which can be used to create a product line. A product line is a group of similar oAerings A product line can be deep (many oAerings of a similar type) and/or broad (oAerings that are very diAerent from one another and cover a wide range of customers’ needs) The entire assortment of products that a company oAers is called the product mix Branding A name, picture, design, or combination of those items, used to identify a seller’s oAerings and diAerentiate them from competitors’ oAerings Product Lines Branding – The set of activities designed to create a brand and position it in the minds of consumers Also, an adjective that describes a product that has power If you are the owner of a brand, you can: Either command a higher price without losing volume Deliver more volume than competitors at the same price Brand name – The spoken part of a brand’s identity Brand mark – The symbol associated with a brand Brand extension – Utilizing an existing brand name or brand mark for a new product category Cannibalization – When a firm’s new oAering eats into the sales of one of its older oAerings Branding Strategy Two branding strategies House of Brands (P&G) Branded House (Colgate Toothpaste)  Seven Key Concepts of Marketing Management: 1. Value Proposition  2. People 3. Positioning 4. Product 5. Price 6. Promotion 7. Place Price Setting Price (3Cs) Customer Factors: What will the customer pay? (Sets the ceiling) Competitor Factors: What do competitors charge? Cost Factors: What are our variable costs? (Sets the floors) Pricing Strategy (Skim vs. Penetrate) 2 Pricing Strategies 1. Skimming – Start high and then gradually decrease – make money through margin) 2. Penetration - Start low and stay low – make money through volume Promotion Medium and objectives Message Rational  Emotional Fear Sex Humor Place Structure Two Structures Direct to customer (DELL) Indirect via retailers (HP) Process  Marketing Management Positions Brand Manager – Responsible for all business decisions regarding oAerings within one brand Product Manager – Has business responsibility for a particular product or product line Category Manager – Responsible for business decisions within a broad grouping of oAerings Market Manager – Responsible for business decisions within a market Vertical Market Manager – Responsible for a particular market segment or a vertical market Key Takeaways Brand – name, picture, design, or symbol, or combination of those items used by a seller to identify its oAerings and diAerentiate them from competitor’s oAerings Branding – set of activities designed to create a brand and position it relative to competing brands in the minds of consumers Important decision is to choose which brand a new oAering will be marketed A brand extension involves utilizing an existing brand name or brand mark for a new product or category (line) of products Cannibalization – when a company’s new oAering eats into the sales of one of its older oAerings Something to be avoided in most cases Also be a sign of progress because it means a company is developing new and better products