BUS 120 PDF

BUS 120 CHAPTER 1 Focusing on consumer needs and wants - Need - Occurs when a person feels deprived of basic necessities - Want - A need that is shaped by a person's knowledge, culture, and personality Creating customer value - Customer value proposition...

BUS 120 CHAPTER 1 Focusing on consumer needs and wants - Need - Occurs when a person feels deprived of basic necessities - Want - A need that is shaped by a person's knowledge, culture, and personality Creating customer value - Customer value proposition - Unique combination of benefits received by targeted buyers that will satisfy their needs; this includes quality, price, convenience, delivery, and both before sale and after sale service - Creating products with added value is often achieved through: - Product design - Pricing strategies - Service elements Appealing to target markets - Target market - Specific group or segments of existing and potential consumers to which marketers direct their marketing efforts Coordinating the marketing mix - Marketing mix - 4 p’s, product, price, place, promotion - Product - Attributes that make up a good, service, or idea, including product design, feature, color, packaging, warranty, and service levels - Price - What is exchanged for a product, including the expected regular retail or sale price - Place - Distribution channels, retail formats, and merchandising used to sell a product - Promotion  - Communication tools needed to inform customers about a product, including advertising, public relations, sales promotion, direct response, event marketing, sponsorship, online approaches, personal selling The marketing process - Marketing process - Process of; - 1) identifying consumer needs - 2) managing the marketing mix to meet these needs - 3) Reaching potential consumers or the market - Marketing - Process of planning and managing goods, services, or ideas to meet consumer needs and organizational objectives. - Exchange - The trade of things of value between buyers and sellers so that each benefits What can be marketed - Good - Product you can touch and own, tangible - Service - Intangible, an activity, benefit, or satisfaction you cannot touch - Idea - Concept that typically looks for support (ex. Awareness campaigns) What is a market - Market - Potential customers with both the willingness and the ability to buy Evolution of business philosophies - Production orientation - Focusing organizational efforts on the manufacture of goods - Sales orientation - Focusing organizational efforts on selling as many products as possible  - Marketing orientation - Focusing organization efforts to collect and use info about consumer needs in order to create customer value - Relationship marketing - When organization create long term links with customers, employees, suppliers, and other partners to increase loyalty and customer retention - Customer relationship management - The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction - Share of wallet - Percentage of a customer's purchases that a company has in a specific product category - Customer lifetime value - Potential sales that will be generated by a customer if that customer remains loyal to the company for a lifetime - Corporate social responsibility CSR - When organizations voluntarily consider the well-being of society by taking responsibility for how their business impact consumers, customers, suppliers, employees, shareholders, communities, the environment, and society in general - Greenwashing - Deceptive use of marketing practices to give the impression that a good, service, or organization is environmentally friendly - Societal marketing concept - Marketing programs that focus on the consumer and the well-being of society New and evolving marketing practices - Evolving marketing areas - 1) digital marketing - 2) augmented reality - 3) experiential marketing (experience) - 4) influencer marketing - 5) partnership marketing - 6) metrics and analytics - 7) new marketing regulations and ethical considerations  Digital marketing - digital marketing - Use of digital technology to reach consumers through computers, gaming devices, out of home electronic screens, or mobile devices such as smartphones and tablets - Content marketing - Creating and sharing expertise, information, or branded content that is designed to inform and engage with tools such as research papers, ebooks, infographics, how-to videos, blogs, webinars, e-newsletters, case studies, and events that can readily be found with search engines. - Mobile marketing - Set of practices that enables organizations to communicate and engage with their audiences in an interactive and relevant manner through any mobile device or network - Social media - A form of online media that allows members to create their own network of friends and contacts to share comments, articles, opinions, videos, and images as a form of self-expression. - Social media marketing - Reaching out to consumers online through social media networks Augmented reality - Augmented reality - Combining things in the real world with computer generated info, allows people to enjoy experiences that are often more immersive than the real world alone offers Experiential marketing - Experiential marketing - Creates opportunities for consumers to directly interact with brands Influencer marketing - Influencer marketing - Using Celebrities and influencers to promote Partnership marketing - Partnership marketing (affinity marketing) - Creation of formal associations between brands that will result in incremental business for both brands that could not have been achieved separately  - Strategic alliance - Long term arrangement between companies with similar values and marketing objectives that extends beyond short term promotional offers into long term formal business agreements Metrics and analytics - Metrics - Numeric data that are collected and grouped to track performance, often present in spreadsheets and dashboards - Dashboards - The visualization of data and key performance indicators using graphs, charts, and numbers so that numerical info tells a story that is insightful and easy to use and understand - Analytics - The process of taking metrics data and applying smart thinking and technology to gain actionable insights that can help produce better business decisions CHAPTER 2 The marketing environment - Marketing forces: - 1) social forces - 2) Economic forces - 3) technological forces - 4) competitive forces - 5) regulatory forces Situation analysis SWOT - Situation analysis - Taking stock of a firm’s or product’s past performance, where it is now, and where it is headed - SWOT analysis - Assessment of how well an organization or brand is servicing its businesses and target markets by evaluating its internal strengths and weaknesses, and its external opportunities and threats An environmental scan  - Environmental scan - Process of continually acquiring info on events occurring outside an organization to identify trends, opportunities and threats to a business Social forces - Social forces - Demographic characteristics of the population and its culture - Demographics - Statistical data on a population according to characteristics such as gender, age, ethnicity, income, education, and occupation - Baby boomers - Generation born between 1946-1965 - Generation X - Born between 1966-1980 - Generation Y (millennials) - Born between 1981-1996 - Generation Z - Born between 1997-2012 Culture - Showrooming - Using mobile devices in store to check online competitive product reviews and prices, which results in the online purchase of a cheaper product - Cord cutters - People who decide to cancel cable and satellite tv and focus on online viewing - Binge watching - Watching two or more episodes of tv in one sitting - Social TV - Watching TV programming while adding comments on social networks Economic forces - Economy - The collective income, expenditures, and resources that affect the cost of running a business or a household - Macroeconomic forces - The state of a country's economy as a whole, as indicated by its growth rates, inflation rates, unemployment rates, and consumer confidence indexes  - Gross domestic product GDP - Total dollar value of all goods and services produced in a country within a specified time period - Inflation - When the cost to produce and buy products and services gets higher as prices rise - Recession - A time of slow economic activity with two consecutive periods of negative growth - Interest rates - The amount charged as a fee for borrowing money, normally expressed as a percentage per year - Unemployment rate - Measures the share of the labour force that is not working - Microeconomic forces - The supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase - Gross income - Total amount of money made in one year by a person, household, or family unit, before taxes - Disposable income - Balance of income left after paying taxes, income that is used for spending and savings - Discretionary income - Money that consumers have left after paying taxes and buying necessities Technological forces - Technological forces - Inventions from science or engineering research - Internet of things - The network of products embedded with connectivity enabled electronics Competitive forces - Competitive forces - Alternative products that can satisfy a specific market’s needs - Direct competitors - Similar products sold in the same category - Indirect competitors  - Products competing for the same buying dollar in a slightly different but related category - Monopoly - Only one company sells in a particular market - Oligopoly - Occurs when a few companies control a market - Monopolistic competition - Large number of sellers compete with each other, offering customers similar or substitute products - Perfect competition - Many sellers with nearly identical products and little differentiation Regulatory forces - Regulations - Restrictions placed on marketing practices by government and industry associations - Online behavioural advertising - Use of web based programs to track consumers online activity so as to deliver ads that correspond to browsing interest CHAPTER 3 Customer purchase decision process - Purchase decision process - Stages that a buyer passes through when making choices about which products or services to buy - 5 steps in the purchase decision process: 1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision a. Chosen brand, whom to buy, when to buy 5. Post purchase behaviour Involvement and problem solving variations - Involvement - Personal, social, and economic significance of a purchase to the consumer - Routine problem solving (low involvement) - Low prices, frequently purchased products, not much thought in purchase - Limited problem solving (medium involvement) - Rely on past experience more than external info, may pay attention to new varieties - Extended problem solving (high involvement) - Exists in high involvement purchase situations, high priced items - Uses all steps in the purchase decision process Customer purchase decision process influencers - Customer touchpoints - Marketers product, service, or brand points of contact with a customer from start to finish in the purchase decision process - Customer journey map - Visual representation of all the touchpoints a customer comes into contact with before, during, and after a purchase - Psychological influences - Motivation - Personality - Perception - Learning - Values, beliefs, attitudes - Lifestyle - Marketing mix influences - Price - Product - Place - Promotion - Socio-cultural influences - Personal influence - Reference groups - Family - Culture - Subculture - Situational influences - Purchase task - Social surroundings  - Physical surroundings - Temporal effects - Antecedent states Situational influences on customer decisions - 5 situational influences - Purchase task - Consumers approach to buying for a certain reason (gift, own use) - Social surroundings - People present when a purchase decision is made may affect what is purchased - Physical surroundings - Decor, music, crowding in retail stores may alter how purchase decisions are made - Temporal effects - Time of day or amount of time available - Antecedent states - Consumers mood or amount of cash on hand can influence purchase behaviour Psychological influences on customer behaviour Motivation and personality - Motivation - Energizing force that stimulates behaviour to satisfy a need - Physiological needs - Basic needs to survive - Safety needs - Freedom from harm, financial security - Social needs - Friendship, belonging, love - Esteem needs - Status, respect, prestige - Self actualization needs - Personal Fulfillment - Personality - Persons character traits that influence behavioural responses - Perception - One person views a porsche as an achievement, while another sees it as showing off  - Selective perception - Brain organizes and interprets info and filters info so that only some of it is understood or remembered - Selective exposure - People pay attention to messages that are consistent with their attitudes and beliefs, and ignore messages that are inconsistent - Selective comprehension - Interpreting info so that it is consistent with your attitudes and beliefs - Selective retention - Customers do not remember all the info they see, read, or hear, even minutes after exposure to it - Perceived risk - Anxiety felt when a customer cannot anticipate possible negative outcomes of a purchase - Strategies to ease perceived risk: - Obtaining seals of approval - Securing endorsements from influential people - Providing free trials of the product - Providing illustrations - Providing warranties and guarantees Learning - Learning - Behaviours that result from repeated experience or reasoning - Behavioural learning - Process of developing automatic responses to a type of situation through repeated exposure - Drive - Need that moves an individual into action - Cue - Stimulus of symbol that one perceives - Response - Action taken to satisfy drive - Reinforcement - Reward - Stimulus generalization - Response brought about by one stimulus is generalized to another stimulus - Stimulus discrimination - Ability to perceive difference among similar products - Cognitive learning  - Making connections between two or more ideas or simply observing the outcomes of others behaviours and adjusting your own accordingly - Brand loyalty - Favourable attitude toward and consistent purchase of a single brand over time Values, beliefs, and attitudes - Attitude - Tendency to respond to something in a consistently favourable or unfavourable way - Beliefs - Consumers perceptions of how a product or brand performs Attitude change - 3 approaches to try to change customer attitudes - Changing beliefs about the extent to which a brand has certain attributes - Changing the perceived importance of attributes - Adding new attributes to the product Lifestyle - Lifestyle - Way of living that reflects how people spend their time and resources (activities), what they consider important in their environment (interest), and how they think of themselves and the world around them (opinions) - Customer behaviour - Actions a person takes when purchasing and using products and services Socio-cultural influences on customer behaviour Personal influence - Opinion leaders - Individuals who have social influence over others - Word of mouth - People influencing each other in personal conservations - Buzz marketing - Brand becoming popular as a result of people talking about it to friends and neighbours - Product seeding  - Hiring people to talk up a brand to others - Viral marketing - Online version of word of mouth Reference groups - Reference group - Group of people who influence a person's attitudes, values, and behavior - Membership group - Group to which a person actually belongs. Ex. frats, sororities, social clubs, family - Aspiration group - Group a person wishes to be a member of or wishes to be identified with - Dissociative group - Group a person wishes to distance from because of differences in beliefs or values Family influence - Consumer socialization - Process by which people acquire the skills, knowledge, and attitudes necessary to function as customers - Family life cycle - Families progression from formation to retirement, with each phase brining distinct needs and purchasing behaviours - Family decision making - Joining decision making - Most decisions are made by both parents - Spouse dominant - One spouse has more influence on the purchase decision - Five roles exist: - Information gatherer - Influencer - Decision maker - Purchaser - User Culture and subculture - Culture - Set of values, ideas, and attitudes that are learned and shared among the members of a group  - Subcultures - Subgroups within a larger culture that have unique values, ideas, and attitudes Global cultural diversity - Cross cultural analysis - Study of similarities and differences among consumers in two or more societies - Values - Society’s values represent socially preferable modes of conduct or states of existence that tend to persist over time - Customs - Norms and expectations about the way people do things in a specific country or culture - Cultural symbols - objects , ideas, or processes that represent a particular group of people or society - Language - Back translation - Retranslating a word or phrase back into the original language by a different interpreter to catch errors CHAPTER 4 The role of marketing research - Marketing research - Process of defining a marketing problem and opportunity, systematically collecting and analyzing info, and recommending actions Five step market research approach 1. Define the problem 2. Develop the research plan 3. Collect relevant info 4. Develop findings 5. Take marketing actions Step 1 define the problem - Objectives - Specific, measurable goals  - Measures of success - Criteria or standards used in evaluating proposed solutions to the problem Step 2 develop the research plan - Constraints - In a decision, the restrictions placed on potential solutions to a problem Determine how to collect data - Two elements to consider in deciding how to collect data - Concepts - Ideas about products or services - Methods - Approaches that can be used to collect data to solve all or part of a problem - Sampling - Process of gathering data from a subset of the total population rather than from all members of that particular group - Probability sampling - Selecting a sample so that each element of a population has a specific known chance of being selected - Nonprobability sampling - Selecting a sample so that the chance of selecting a particular element of a population is either unknown or zero Step 3 collect relevant information - Data - Facts and figures related to the project that are divided into two main parts: secondary and primary data - Secondary data - Facts and figures that have already been recorded by a third party - Can be internal or external - Primary data - Data that is original and specifically collected for a project Secondary data internal - Marketing input data - Relate to the effort expended to make sales - Marketing outcome data - Relate to the results of the marketing efforts Advantages and disadvantages of secondary data - Advantages - Time saving because data has already been collected and published or exist internally - Low cost, free or inexpensive census reports - Disadvantages - Out of date - Definitions or categories might not be quite right for a researchers project - Data collected for another purpose may not align with the researchers purpose Primary data - Observational data - Facts and figures obtained by watching how people actually behave, which can be collected by mechanical, personal, or neuromarketing methods - Mechanical methods - National tv ratings - Personal methods - Watching in person - Mystery shopper - Neuromarketing methods - Observe responses to unconscious stimuli Primary data asking people - Questionnaire data - Facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviours Idea generation methods-coming up with ideas - In-depth interviews - Detailed interviews where a researcher questions an individual at length in a free flowing conservation style in order to discover info that may help solve a marketing problem - Focus groups - A qualitative research technique where a small group of people meet for a few hours with a trained moderator to discuss predetermined areas Idea evaluation methods-testing an idea - Conventional questionnaires - Personal survey - Mail survey  - Telephone survey - Online survey Primary data-other sources - Social media - Panels - A large sample of respondents that voluntarily complete questionnaires on a regular basis so that researchers can assess changes in behaviour and attitudes - Omnibus survey - Voluntary participation of respondents in routine research surveys that allow marketers to add a small number of questions to an existing survey to receive cost effective data - Experiment - In marketing, changing a variable involved in a customer purchase to find out what happens - Test market - In-market localized approach, or short term online destination, used to test the success of promotional offers, new services, or new product launches Advantages and disadvantages of primary data - Advantages - More flexible - More specific - Disadvantages - Expensive - Time consuming Step 4 develop findings Analyze the data - Big data - Term used to describe a large amount of data collected from and variety of sources - Information technology - All of the computing resources that collect, store, and analyze the data Data mining and predictive modeling - Data mining  - The processing of large amounts of data using sophisticated software to find insightful correlations and patterns that lead to better business decisions - Predictive modelling - Based on statistical models that use data mining and probability analysis to foretell outcomes Analytics - Analytics - Refers to the process of taking metrics data and applying smart thinking and technology to gain actionable insights that can help make better business decisions - Can help segment customers, plan and forecast, manage risk, take corrective actions - Descriptive analytics - A type of analytics that focuses on what has happened - Web analytics - Measurement and analysis of website data, ex. Page views, time on site, bounce rate, new visitors, returning visitors, referral traffic - Social analytics - Real time measurement, interaction, and analysis of social media to assess social media campaign performance, message resonation and amplification, consumer sentiment, and common themes - Social listening - Research that monitors public online consumer conversations on social media sites such as social networks, blogs, and forums - RFM analysis - The rating of customers on the basis of how recently product were purchased (recency), how often they were purchased (frequency), and the dollar value of transactions (monetary value) - Predictive analytics - Combination of data from varied sources to reveal patterns that are modeled to predict what might happen in the future Metrics - Dashboards - Visualize data using graphs, charts and numbers easy to use and understand - Key performance indicators KPI’s - Types of metric that are used to evaluate performance  - Rules of metrics - Easy to understand - Available on a regular basis - Actionable and impact the business - Market share - Percentage of sales volume for a product relative to the entire sales volume of the category in which it competes; ratio of firm’s sales to the total sales of all firms in the industry - Brand development index BDI - Index that shows how well a brands sales are developed in a region relative to the region’s population size Sales forecasting techniques - Sales forecast - Total number of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts - 3 sales forecasting techniques: - Judgment of the decision maker - Surveys of knowledgeable groups - Statistical methods Judgements of the decision maker - Direct forecast - Estimating the value to be forecast without any intervening steps - Lost horse forecast - Starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact and making the final forecast Surveys of knowledgeable groups - Survey of buyers intentions forecast - Ask prospective customers if they are likely to buy the product during some future time period - Salesforce survey forecast - Asking the firm's salespeople to estimate sales during a forthcoming period Statistical methods - Trend extrapolation  - Extending a pattern observed in the past data into the future CHAPTER 5 The nature and size of organizational markets - Business marketing - Marketing products to firms, governments, or nonprofit organizations - Organizational buyers - Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale - Includes all buyers in a nation except ultimate consumers - Organizational buyers are divided into 4 different markets: - Industrial - Ex. car manufacturing company - Buys many parts from suppliers and reprocesses them to develop a car - Reseller - Buy physical products and resells them without reprocessing - Government - Federal, provincial, regional, and municipal agencies that buy goods and services - Nonprofit - Organizations that do not have profit as a goal but seek to provide goods and services for the good of society Measuring industrial, reseller, government, and non-profit markets - North american industry classification system NAICS - Provides common industry definitions for canada, mexico, and united states which facilitate the measurement of economic activity Content marketing - Content marketing keeps potential customers engaged by ensuring that relevant and valuable content is available at various touch points Characteristics of organizational buying - Market characteristics - Demand for industrial products is derived  - The number of business customers is typically small, and their purchase orders are typically large - Product or service characteristics - Products or service are technical in nature and purchased on the basis of specifications - Many goods and purchased raw or semi finished - Heavy emphasis is placed on delivery time, technical assistance and post sale service - Buying process characteristics - Technically qualified and professional buyers follow established purchasing policies and procedures - Buying objectives and criteria are typically spelled out, as are procedures for evaluating sellers and their products or services - Multiple buying influences and multiple parties participate in purchase decision - There are reciprocal arrangements, and negotiation between buyers and sellers is commonplace - Online buying over the internet is widespread - Marketing mix characteristics - Personal selling to organizational buyers is used extensively, and distribution is very important - Advertising and other forms of promotion are technical in nature - Price is often negotiated, evaluated as part of broader seller and product or service qualities and frequently affected by quantity discounts Derived demand - Derived demand - Demand for industrial products and services driven by demand for consumer products and services - Inelastic demand - Demand for products does not change because of increases or decreases in price - Fluctuating demand - Demand for business products and services changes more than demand for consumer product and services Organizational buying criteria - Buying criteria - Price - Ability to meet the quality specifications required - Ability to meet required delivery schedules  - Technical capability - Warranties and claims policies - Past performance on previous contracts - Product facilities and capacity - Supply partnership - Relationship between a buyer and supplier that adopts mutually beneficial objectives, policies, and procedures The organizational buying process and the buying centre - Organizational buying behaviour - Process by which organizations determine the need for good and then choose among alternative suppliers - Stages of the buying decision - Problem recognition - Info search - Evaluate alternatives - Purchase decision - Post purchase behaviour The buying centre - Buying centre - Group of people in an organization who participate in the buying process - Roles in the buying centre - Users - Influencers - Buyers - Deciders - Gatekeepers - People that stand between the sales reps and deciders (ex.assistants) - Buy classes - Three types of organizational buying situations: straight rebuy, modified rebuy or new buy - Straight rebuy - Reorders product or service from suppliers without checking with users or influencers  - Modified rebuy - Purchasing a product it has experience with but modifies its specifications, price, delivery schedule, or supplier - New buy - Buying the product or service for the first time B2B market segmentation - Type of customer - Size of customer - Type of buying situation - Customer location - Benefits sought Prominence of online buying in organizational markets - 3 major reasons online buying is prominent - Buyers have much more knowledge at their fingertips about the seller’s product than in the past - Web based tech has been shown to substantially reduce buyer order processing cost - Reduce marketing cost and broaden potential customer base for many types of products and services E-marketplaces - E-marketplaces - Online trading communities that bring together buyers and supplier organizations Online auctions in organizational markets - Traditional auction - Occurs when a seller puts an item up for sale and would be buyers bid in competition with each other - Reverse auction - Occurs when a buyer communicates a need for something and would be suppliers bid in competition with on another CHAPTER 6 Market segmentation - Consumer market B2C - Goods, services, and ideas that a person can purchase, use, or support for personal use - Business market B2B - Products that are purchased either to run a business or to be used as a component in another product or service - Market segmentation - The grouping of prospective buyers into groups that have common needs and respond similarly to marketing programs - Product differentiation - Positioning a product to a target group so that it appears distinct from competitive offerings Forms of market segmentation - Mass marketing (walmart) - Marketing a product with broad appeal to the entire market without any product or marketing differentiation - Segment marketing (petsmart) - Marketing of a wide range of different products and brands to specifically meet the needs of an organization’s varied target markets - Niche marketing (expensive car) - Marketing a limited product line to a narrow but profitable segment of the market that is of marginal interest to major competitors - Individualized marketing (custom coke cans) - One to one marketing that involves customizing offers and, in some cases, products to fit individual needs Target market profiles and personas - Target market - Specific group or segment of existing or potential consumers to which marketers direct their marketing efforts - Target market profile - Description of the target market that contains specific info about the target group in 4 areas: - Geographics  - Where do they live or work? Country, region, province, city size, population, urban, suburban, rural - Demographics (easy to identify) - Age, family, gender, marital status, income, occupation, education, ethnic background, home ownership - Psychographics (difficult to identify) how they feel or think - Personality traits, lifestyle values and approaches, leisure activities, hobbies, interest, media habits, tech usage - Behaviouristics (what people do) - How does the target market use and interact with the product - How and why - Brand loyalty - Favourable attitudes that a consumer has over time toward a brand, results in purchase commitment Personas - Personas - Character descriptions of a typical customer in the form of fictional character narratives, complete with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with a brand Steps in market segmentation - Six step segmentation process 1. Identify consumer/customer needs and common characteristics in the market (look through customer/consumer perspective) 2. Cluster common consumer/customer variables to create meaningful market segments 3. Estimate the size and feasibility of each segment 4. Identify the segments to be targeted, marketers should use the following criteria to select a target market: a. Market size b. Expected growth c. Competitive position d. Compatibility with the organization's objectives and resources e. Cost of reaching the segment 5. Take actions with marketing programs to reach the segments 6. Monitor and evaluate the success of these programs compared with objectives Positioning - Product positioning  - The impression of the product you want to establish in consumers minds relative to their needs and the competition - 3 factors in product positioning - Image (how it looks) - Positioned as leaders, contenders, or rebels in the market - Trusted, prestigious, thrifty - Product attribute - Features that differentiate them from competition - Price - “Everyday low prices” Walmart - Positioning statement - Formalized statement that identifies the image a branded product represents in the market and what sets it apart from the competition - 4 elements in statement: - The target market and need - The branded product name - The category in which the product competes - The brands unique attributes and benefits Repositioning - Repositioning - Changing the place a product occupies in consumers minds relative to competitive products to more accurately meets consumer needs Positioning maps - Positioning maps (perceptual maps) - Visual representations of how products in a category are positioned in consumers minds - 3 steps to discover the perceptions in the minds of potential customers: - Identify the important attributes for a product or brand class - Discover how target customers rate competing products or brands with respect to these attributes - Discover where the companies product or brand is on these attributes in the minds of potential customers CHAPTER 7 Types of products  - Non durable goods (food, fuel) - Item that does not last and is consumed only once, or for a limited number of times - Durable good (car, appliances) - Item that lasts over an extended number of uses - Service (banking, doctor, concert) - Intangible activity, benefit, or satisfaction, experience - Primary service (airline flying from A to B) - The main service - Supplementary service (flight food/drinks, entertainment) - Additional services from the primary service - Virtual services (online gaming) - Services that exist only online and have no person to person interaction - Service continuum - Range from tangible goods to intangible services Uniqueness of services - Four I’s of services 1. Intangibility - Services are intangible, cannot be held, touched, or seen before a purchase 2. Inconsistency - Quality of service is dependent on the people who provide it, and it can therefore differ in consistency - Quality varies with each person's abilities, experience, motivation, personality 3. Inseparability - Cannot separate the service provider from the service - Without the provider there is no service 4. Inventory - Services cannot be stored and sold and later time - Sporting ticket cannot be stored and sold later, resulting in loss of revenue - Idle production capacity - Service is available when there is little demand - Supply of service exceeds demand - (cashiers middle of day during week will be less than during a weekend Product elements  - Core product - benefit that a consumer receives from having the product - Cars core benefit is transportation - Actual product - The physical good or service that a customer purchases - Includes brand, design, features - Augmented product - Additional features and attributes that accompany a product - Warranty, delivery options, repair facilities Packaging and labelling - Function - Storage - Be conveniently used (ketchup bottle) - Protects - Efficient to transport - Communication - provides product info directions, nutritional contents, best before dates - Brand image - Packing and labeling allow customers to differentiate their products from competitors, reflect products position Product lines and product mixes - Product line - Group of similar products that are closely related because they satisfy a similar need and are directed at the same general target market - Coca cola has a soft drink line, juice line, water and hydration, alcohol - Product mix - All the product lines marketed by a company - Product mix width - Number of different product lines offered by a company - Product line length - The total number of products or brands in a product line - Product line depth - Assortment of different versions of each product sold within its product lines Consumer and business products - Consumer products - Products purchased for their personal use by the ultimate consumer - Business products  - Products that are purchased either to run a business or to be used as a component in another product or service, (also called industrial goods or organizational goods) Consumer products - Convenience products (bread, gum, chips) - Items purchased frequently that are inexpensive and require minimum risk and shopping effort - Shopping products (airline tickets, phones, clothing) - Items that require comparison shopping between different brands and an investment of shopping time - Specialty products (rolex watch) - Items for special occasions that require a specific product or brand and require considerable time and effort to purchase - Unsought products (home insurance for people who don't own a home) - Unknown items or those of no interest to the purchaser Business products - Production goods and services (raw materials, car door hinges, lumber) - Items used in the manufacturing process that become part of the final product - Support goods and services - Items used to assist in producing other goods and services - Installations: buildings, fixed equipment - Accessory equipment: tools, office equipment - Supplies: stationary, office supplies - Services: transportation, maintenance, repair, advisory service Branding - Brand - Name, phrase, symbol, design uniquely given by a company to a product to distinguish it from the competition - Brand equity - The value of a brand that results from the favorable exposure, interactions, and experiences that consumers have with a brand over time - Brand elements - Trustworthiness - Engagement - Leading edge - Stand out, unique, innovative, forward thinking  - Corporate citizenship - Caring image, have the ability to connect with consumers by instilling pride - Presence - Covid 19 - Global brands - Brands sold in a variety of international markets and that enjoy wide recognition in these markets Brand strategies - Individual brand (tide, only for laundry) - When a company uses a brand name solely for a specific product category - Family brand (crest, toothpaste, mouthwash, floss - When a company uses a brand name to cover a number of different product categories - Brand extensions - When new goods or services are introduced under an existing brand name - Sub-brand (porsche gt3:high end, porsche boxster: low end - Brand that uses the family brand name as well as its own brand name and identity so that it can take on the strengths of the parent brand but also differentiate itself Protecting brands - Patents - Used to legally protect new technologies, unique processes, or formulations from usage by other companies - Canada: protected for a period of 20 years - Copyrights - Used to legally protect origins written works, sound recordings, or forms of communication from being copied by others - Canada: protected for creators lifetime plus 50 years - Trademarks - Used by other people or organizations to protect brand images, names, slogans, and designs from usage by others - Protected for 10 years, can be renewed Brand loyalty  - Brand loyalty - Favorable attitude toward and consistent purchase of a single brand over time Brand personality - Brand personality (harley: masculine, defiance, rugged) - Set of human characteristics associated with a brand Brand names - Key points in choosing a brand name: - The name should suggest the product benefits (easy off: oven cleaner) - The name should be memorable, distinctive, positive - The name should fit the company or product image (duracell: reliable, longlasting battery) - The name should have the ability to be legally protected (must be trademarkable to product the company's name and investment) - The name should be simple Types of brands - Manufacturers brand - Brand owned and produced by the manufacturer - Private label brand (store brand) - Brand owned by a retailers that contracts its manufacturing to major suppliers, and then sells the product at its own retail stores under its store brand name - (mastercraft: canadian tire) - Generic brand - Product that has no branding and is produced as a cheap alternative to a manufacturers or private label brand - (dollarama sells knockoff crocs with no branding at all) CHAPTER 8 The product life cycle - Product life cycle - Stages that a new product goes through, introduction, growth, maturity, decline - Introduction stage - Product is first introducer to its intended target market  - Profits minimal due to slow sales growth, high product development cost, high levels of marketing spending needed to launch the new product - Price skimming (TV, electronic device, gaming device) - Pricing strategy where a company charges a high price initially and lowers the price over time - Helps recover research and development cost - Penetration pricing - Low price used to enter the market and to encourage rapid acceptance of an innovation or to combat a competitive threat - Listing fees - Price needed to be paid to place your product on a retailers shelf or ecommerce platform - Growth stage - Increase in competition and a rapid rise in sales and profits - Maturity stage - Slowdown of sales growth and profit, incline levels off, competition - Longest stage - Decline stage - Sales and profits steadily drop overtime - Delete - When a company discontinues a product - Harvest - A company keeps a product but reduces marketing support in an attempt to gather some minor profits - High learning product (dvd to online movie streaming) - Significant consumer education is required for these products, longer introductory period - Low learning product (apple watch) - Little consumer education is required, short intro stage - Fashion product - The life cycle for fashion is short and recurring, going from intro to decline within 2-3 years, only to resurface again a few years later - Fad - Novelty products with very short product life cycles that experience immediate rapid growth, followed by an equally rapid decline Product life cycle strategies  - Modifying the product - Product improvements (healthier food options) - Changing the product to better meet consumers changing needs - Line extensions (cheerios adding chocolate peanut butter cheerios - The addition of a new item to an already existing product line - Modifying the market - Finding new customers - Increasing a products use from existing customers (campbell soup advertises more during the winter) - Creating a new use situation(rice krispies promoting its use to make rice krispies squares - Repositioning a product - Repositioning to meet changing consumer needs - Introducing a new product - Apple introduces new phones every year with new technology and design New products - Minor innovations (new and improved toothpaste) - Minor product modifications that require no adjustments on behalf of the consumer - Continuous innovations (electric cars) - New products with more than just a minor product improvement, but that do not require radical changes by the consumer - Radical innovations (drones) - New product that involve the introduction of a product that is entirely new and innovative to the market - Least common The adoption curve - Adoption curve - The sequential diffusion and acceptance of an innovation into the market by consumers - Innovators (accepts new offering sooner rather than later) - Venturesome, higher education, use multiple info sources - Early adopters (Accepts new offerings sooner rather than later) - Leaders in social settings, slightly above average education - Early majority (respond after the product is well established in the market) - Deliberate, many informal social contacts - Late majority (responds after the product is well established in the market) - Skeptical, below average social status - Laggards (reluctant, late purchaser, never purchase) - Fear of debt, neighbors and friends are info sources  - Barriers that can deter consumers from adopting a new product: - Usage barriers - Product is not consistent with existing usage habits - Value barriers - No incentive to change - Risk barriers - The existence of physical, economic, or social risks if the product is purchased - Psychological barriers - Cultural or image differences New product development - Why new product/services fail - Insignificant point of difference - Incomplete new concept definition - Insufficient market attractiveness - Poor execution of the marketing mix - Bad timing Approaches to new product development - Strategic approaches to growth - Market penetration - Finding ways to make current products appeal to current customers - Market development - Reaching new customers with a current product - Product development - Reaching current customers with a new product - Diversification - Reaching new customers with a new product New product development process - New product development process - Sequence of steps that a firm takes to develop a new product idea and take it to the market - Step 1: new product development strategy - Setting the new product strategic direction for the company as a whole, and the precise objective for the project at hand - Step 2:idea generation - Developing a pool of new product ideas - Step 3: Screening and evaluation - Reduces the list of ideas down to a list of promising concepts  - Concept tests - External evaluations of a new product idea, rather than the actual product itself - Step 4: business analysis - Financial projections on the impact of bringing the new product to market and selling it in the future - Step 5; Development - The new product idea is turned into a prototype for further consumer research and manufacturing tests - Step 6: test marketing - Offering a new product for sale on a limited basis in a defined geographic area to assess its success - Step 7: commercialization - When the new product is brought to market with full-scale production, sales, and marketing support