Marketing Notes PDF

12.5.24 course review Exam is dec 10 at 14:00 45min, all MC Study def, concepts, large frameworks Early electric vehicle (EVs) ads focused on educating the public about the benefits of EVs. What type of advertising objective were these firms using? A) reminder advertising B) informative advertisin...

12.5.24 course review Exam is dec 10 at 14:00 45min, all MC Study def, concepts, large frameworks Early electric vehicle (EVs) ads focused on educating the public about the benefits of EVs. What type of advertising objective were these firms using? A) reminder advertising B) informative advertising C) persuasive advertising D) comparative advertising Executives at an automobile manufacturing company conducted a brainstorming session for selected employees. This session resulted in a large number of ideas for developing new cars after extensive R&D. The executives then planned to filter out the best ideas during the ________ stage. A) business analysis B) idea generation C) concept testing D) idea screening E) concept development *know every phase People undergoing cosmetic surgery cannot see the result before the purchase. This is an example of service ______ A) intangibility B) inseparability C) variability D) perishability E) heterogeneity Companies that set a low price for a new product in order to attract a large number of buyers and a large market share are using the ________ strategy. A) market-skimming pricing B) market-penetration pricing C) cost-plus pricing D) good-value pricing John Deere does very little promoting of its lawn mowers and garden tractors to final consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent dealers, and other channel members, who in turn sell John Deere products to final consumers. According to this information, which of the following promotion mix strategies is being used by John Deere? A) public relations strategy B) direct marketing strategy C) push strategy D) blitz strategy E) pull strategy Toothpaste, candy, and other similar items are sold in millions of outlets to provide maximum brand exposure and consumer convenience. This is an example of ________ distribution. A) exclusive B) selective C) intensive D) indirect E) corporate A market researcher is deciding how to select participants for a study. They want to ensure that every individual in the population has a known chance of being selected and that the results are less prone to bias and more generalizable. Which sampling method should the researcher use? A) Non-probability sampling, because it allows the researcher to handpick participants based on their judgment. B) Convenience sampling, because it is quicker and easier to select participants without strict guidelines. C) Probability sampling, because it uses random selection to ensure fairness and improve generalizability. D) Quota sampling, because it ensures that subgroups are represented but does not rely on random selection 11.28.24 sustainable marketing Sustainability “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” - UN World Commission on Environment and Development The main goal is to address the needs of the present while preserving or enhancing the ability of future generations to meet their needs Consumers have been promoting sustainable marketing Consumerism: organized movement to improve the rights and power of buyers in relation to sellers. Traditional consumer rights: The right not to buy a product that is offered for sale The right to expect the product to be safe The right to expect the product to perform as claimed There’s a call for additional consumer rights: The right to be well informed about the product The right to be protected against questionable products and services The right to influence products and services in ways that will improve “quality of life” The right to consume now in a way that will preserve the world for future generations  What role does marketing play in achieving sustainable development goals? Determine the needs and wants of consumers Create and offer value for buyers and capture value in return Focus tends to be filling the current needs of consumers -> now we want to find ways that meet current needs in a way that preserves the rights and options of future generation consumers Involves communicating and educating consumers and stakeholders Encouraging behavior change Building trust and credibility on the business (Transparency) Marketing efforts for Sustainability: Why is this needed? Shift consumer expectations Abide by regulatory pressures Long-term profitability Sustainable Marketing Principles Define the mission of the company in terms of broad social terms rather than narrow product terms Market both your offering and the socio-environmental aspects of your mission Deliver superior value to a well-defined consumer target – look for new and better ways to create value Make marketing decisions considering long-term interests of consumers, the business, and society at large. Focus on creating desirable products with both immediate customer satisfaction and that have long-run benefits (e.g. tasty and nutritious), try to create long term loyalty Challenges Often times sustainable products are offered at premium prices. Those products may not be as desirable Fear of how sustainable product quality will be like There may not be a readily available market for solutions that address sustainability challenges and consumer problems Trust and credibility on the line– many skeptical about the sustainability claims Benefits of a sustainable product may be intangible, or felt only in the long term How would you tackle these criticisms? Promoting overconsumption Bombarding consumers with advertising and Branding Criticism: Promotes materialism Promoting overconsumption Foster mindful consumption Focus on quality not quantity Criticism: Cultural pollution Critics accuse marketing practices as bombarding consumers with advertising and branding Relevant and effective advertising does not feel too pushy and provides entertainment and informational value Better targeting Greenhushing Opposite of greenwashing– businesses undercommunicate or stay silent about their sustainability efforts in fear of scrutiny or accusations that their efforts are insufficient Now there are more strict regulations on sustainability claims (e.g., EU’s Green Claims Directive) – companies should make the effort to abide by policies and stay authentic, transparent 11.19.24 marketing channels Value delivery network A network composed of the company, suppliers, distributors, and customers who partner with each other to improve the performance of the entire system in delivering value Partners Upstream partners: Supply raw materials, components, parts, information, finances, and expertise needed to create a product or service Downstream partners: Deliver goods or services to the customer We’ll focus on downstream today with channels Overview Nature of channels How do channel firms interact? What problems exist in channels? What role does distribution play in attracting Customers? Nature of channels Benefits of channels Channel benefits Role of intermediary: transform the product assortments made by producers into assortments wanted by consumers Using intermediaries can provide economies. Reduces the amount of work both producers (manufacturers) and consumers need to do. Matches supply and demand. Think about life without grocery retailers Channels (intermediaries) help with… Completing transactions Provide information helpful for consumers Helps deliver promotions Finds and engages with prospective buyers and existing customers Assembles products Fulfill transactions Transports and store goods Acquires and uses funds to cover the costs of the channel Ultimately bringing the goods to the consumer Information Needs Trying before buying Advice and demonstrations (demos) If product requires learning, then use of channel (retailer) can be useful instead of direct 2 consumer Information Needs Trying before buying Advice and demonstrations (demos) Price/product comparison Customization Logistical Needs Convenience Variety/assortment Immediacy of availability Needs Tradeoffs More intermediaries, difficult to get the information Discount channels, one-stop shops offer less information (e.g., Wal-Mart) Greater convenience, less customization Larger inventories, more difficult to find products Conflicts and strategies Conflicts Vertical conflict: A conflict between different levels of a distribution channel Vertical conflict often occurs when producer and distributor incentives are at odds Horizontal conflict: A conflict between two players at the same level of a distribution channel Horizontal conflict often occurs when two retailers’ incentives are at odds Vertical Conflict: Company/Store McDonald’s and its franchisees Franchisees have stronger incentives to cut costs McDonald’s makes money from franchisee royalties Franchisees make money on margins Ex) Dispute over $5 value meal deal Franchisees less concerned about how their actions will affect other stores in the network Vertical Conflict Resolution Producers and channels can have differential power Some distributors have brand power because of their associations (e.g. big department stores) Some retailers have logistical power due to size and reach (e.g., Walmart) Some products have power because of their popularity (e.g., Nutella) Vertical Conflict Resolution Transparency (share relevant data, sales trends) Collaboration and joint planning (develop shared objectives regarding customer satisfaction) Set clear boundaries and define roles clearly to prevent overlap Offer reward incentives for meeting service targets Offer training programs for channel members to meet brand standards Horizontal Conflict Multiple distributors at the same level compete for the same customers Manufacturer (producer) doesn’t want competition between customers across these two retailers Horizontal Conflict Resolution Product differentiation (e.g., different cuts/shirts) Different sizes (e.g., small sizes for express retailers and bulk sizes for Costco-esque retailers) Different promotions Different services (e.g., return policies) Horizontal Conflict Online retailers vs physical retailers Horizontal Conflict Physical store allows people trial and seeing the product, then people buy online Horizontal Conflict Retailers provide free “showrooming” Customers can come see products, test out, then find them online at lower prices Possible solutions to the showrooming problem Price matching Service improvement (e.g., store warranties) Charge fees to manufacturers (e.g., get paid for “showrooming”) Strategic Decisions Channel design decisions Distribution intensity Push versus pull Channel design Retail strategy Channel design decisions Analyze consumer needs Set objectives for each channel Decide on distribution intensity Number of intermediaries at each level Intensive distribution – stock products in as many outlets possible (e.g., toothpaste, candy, convenience products) Selective distribution – the use of more than one but fewer than all of the intermediaries that are willing to carry the company’s products (e.g., consumer electronics, furniture) Exclusive distribution – producer gives only a limited number of dealers the exclusive right to distribute its products (e.g. high- end luxury) Distribution Intensity Distribution intensity: How large/far-reaching is the distribution network? Having multiple outlets increases access But it also reduces exclusivity Push versus Pull How products go through the distribution channels Push: Manufacturers “push” products down toward Consumers. Direct marketing efforts to intermediary members (e.g., trade promotions, incentives, discounts offered to retailers/distributors to stock and sell products) Inventory-driven. Ensures widespread product availability. Effective when brand loyalty low, brand choice made at store, product purchases are impulsive Pull: Get consumers to come to the product  Direct marketing efforts to end consumers (e.g., consumer advertising and promotions) Effective when brand loyalty high, brand choice made before store visit, and consumers perceive brand differences Channel Design Channels are complex Channel decisions tend to be long-term and sticky Channel members earn a portion of the selling price Good strategy creates competitive advantage Currently there is a large shift to have e-commerce platforms where manufacturers directly meet Consumers. Retailing All the activities involved in selling goods or services directly to final consumers P&G’s “First Moment of Truth” – the critical few seconds that a shopper considers a product --- no longer only in stores Google defines “micro-moments” & “zero moment of truth” – Occurs before first moment of truth, and focuses on research and online influence. Online retailing and the blend between online vs offline is changing the moments where consumers decide to purchase in the consumer journey Retail Strategy Service Product lines Price Organization Positioning Segmentation and targeting Service Self service (e.g., Wal-Mart) Full service (e.g., car dealerships) Limited service (e.g., Best Buy) Store Types and Product Offers Specialty: narrow product focus (e.g., shoe stores) Department: broad product focus (e.g., Macy’s) Supermarkets: broad food and household product focus (e.g., Carrefour) Discounters/superstores: low price, high volume (e.g., Wal-Mart) Convenience: small selection of lots of kinds of products  Category killers: deep product assortment and competes heavily in specific category Like an opportunity to showcase kindles + book vibes, eventually closed it down cuz not financially viable and focus on other domains Omni channel retailing Creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping Click and collect Webrooming Showrooming New retail forms Pop-up stores – limited time usually for seasonal shoppers; create buzz in busy, high-rent areas Online flash sales – helps move inventory, create buzz Trend of retail convergence = Different types of retailers start to sell the same or similar products Due to price transparency online Increases competition Innovative retail formats – cashierless technology, personalized shopping, what else? 11.7.24 digital marketing Digital marketing Using digital media, data, technology to create, communicate, and deliver offerings with value to consumers Digital marketing is still marketing We need to understand the digital environment and the digital customer better Why is digital marketing Beneficial? In the digital environment, how do we Build awareness Convert potential customers to become actual customers (What information do we provide? When? Where? How?) Engage with consumers and develop a relationship Develop customer retention, satisfaction, and Loyalty What are some digital marketing challenges? Limited attention span Media fragmentation Competition Budget constraints Ever-changing technology Types of media Paid Media Company pays to display promotional content across search engines, social media, or websites Paid search ads (PPC) Display ads Offline traditional ads (TV, print) Owned Media Digital content owned by the company. Company website, blogs, emails, social media posts, offline retail stores Company has most control over Earned Media 13 Public exposure through word of mouth, customer reviews, social media mentions, etc that originate organically outside the company Goals and audience Figure out your target audience’s behavior! Plan around their online consumption habits and consumer journey  Which digital channels do they use? What content do they look for? What is a lead? People who are potentially interested in buying your product or service. Typically, leads have submitted personal information in exchange for an incentive How do we convert visitors into leads? Lead capture – give something before you ask Possible items to give (Lead magnets) in exchange for personal information Training video series Free trial Coupon – keep in mind timing of expiration date! Webinars eBooks White papers Educational material Cheat sheets Effective content marketing comes into play Have a plan for generating leads How many leads? Which type of prospects are you going for? Which media outlets? What is your lead magnet and landing page design? What type of contact information will you collect? How will you follow-up on communications? How often? At what point in time? Qualities of good lead magnets Should be relevant to your brand and offer your differentiating value proposition Should be something your target would be interested in and useful Should help to easily achieve something Easy to digest Accessible and can get right away Not all leads are equal Someone may be a “hot lead” (qualified lead; highly interested) or far from purchase (unqualified) To save sales and marketing resources, you go for quality rather than quantity “MQL” – Marketing qualified leads have shown interest in your products and services Profiling leads Lead scoring: Assign points to leads based on lead’s behavior and interaction with company content (can vary scores for different content). Used to gauge low to high interest. Points lost if the lead has inactivity. Lead grading: Assessing fit of the lead with the company’s targeted buyer persona based on profile demographic information (Letter grade from high to low) Lead nurturing A prospect may not feel comfortable to enter their contact information on their first visit. Lead nurturing: Stimulate more interest in prospective customers (leads) by providing engaging and relevant content It’s building a relationship with your leads Ways to nurture leads Send emails Time when you send them. Don’t email too many (once a week – don’t go more than that) Personalized emails better – segment the audience to know which content would resonate with one vs the another group Retargeting Ads on social media, search, etc. Content marketing Develop content useful to your prospects What content should I create? Channels and Strategies Search Engine Optimization (SEO) Paid Advertising Pay-per-click (PPC) ads (Search Ads) Display ads Social media Email marketing What’s involved Keyword research Keywords - words or phrases that get typed into a search engine) What keywords does your target audience use to search? Can utilize keyword research tool Google’s auto-complete feature on search box can help Google Trends Analyze competitor keywords through Spyfu.com, SEMRush.com, KeywordSpy.com or other similar sites Query intent matters Transactional intent – ready to purchase e.g., suit under 100 euros, buy Yonex tennis racket Commercial intent –likely searching products e.g., best running shoes Navigational intent – intention to go to a certain website or destination e.g., restaurant A’s address Informational intent – exploring and searching for knowledge e.g., how to create a marketing plan Branded vs Generic keywords Dove chocolate flavors vs. best chocolate flavors Difference is in their reach Branded searches target a more specific “narrow” segment of potential customers – yet more likely to convert Generic searches captures a broader audience, including those who may not be aware and looking for similar companies/products, those who are at the top of the purchase funnel Develop keyword list If keywords have high search volume, it means greater competition Long-tail keywords: specific, longer, detailed keywords have lower-volume search terms Diversify your website pages by making them relevant for valuable keywords Advantages of PPC (pay per click) Less waste – no cost until clicked Highly targeted (when displayed AND clicked) Faster results than SEO Predictable traffic – search engine algorithm changes have minimal impact on PPC  Technically easier than SEO Branding effects, even without click Disadvantages of PPC Competitive and expensive if not done effectively Requires specialist knowledge to set up effective Campaigns Assessing search ad effectiveness Impressions – the number of times an ad is seen by consumers (shows the ad reach) Search engines do not charge for impressions Click-through rate (CTR) – number of clicks per impression Measure of consumer’s revealed preference – people won’t click unless they find the site useful/interesting Conversion rate – the percentage of clicks that led to a desired activity (e.g. sign-up, subscription) or Purchase Display ads Display ads – main objective Gaining more awareness Used more as a top-of-funnel strategy May not directly be effective for conversion Impressions Impressions: the number of times an ad is shown to consumers = metric used to quantify the display of ads; measures an ad’s reach Note: even if the ad was displayed/served on a website, someone may not have paid attention to it. This is why impressions alone isn’t a reliable metric. Could additionally consider time in view, CTR, etc. Advantages of display ads Reach to drive awareness Allows for various targeting options Great way for retargeting (reminder ads) Can improve overall brand perception Disadvantages of display ads Relatively low CTR due to banner blindness (ignore anything that looks like an ad) Brand reputation can be damaged if ad gets misplaced in content that is inappropriate Relatively high costs or low efficiency Managing technology complexity Assessing the effectiveness of display ads Regardless of a click, the company incurs a cost when a consumer sees a display ad Impressions Click-through rate (CTR) Conversion rate Ad Targeting You want to place ads on appropriate websites and apps On Display Networks, you can target audience segments, specific placement websites, keywords, topics You can target specific demographics, languages, devices, locations. You can schedule ads for different time periods How to improve the effectiveness of display ads Use contextual ads – ads that match the website topic Use highly visible ads Use retargeting ads – display ads shown to consumers who have visited the website before Use morphing display ads – a portfolio of potential ads that have slightly different messaging. Served to users based on inferred cognitive style/preferences, pages viewed, etc. Have an effective ad copy Ad copy – what’s written in the ad Have a compelling headline Have a call to action (CTA) Highlight what makes you unique Be clear and concise Include prices, promotions, exclusives You want your customers to click! A/B testing – test your headlines Content Marketing 11.5.24 more pricing Bundle pricing Combine less popular stuff w/ more popular stuff Price adjustment strategies -​ discounts/allowances, promotional pricing, participative pricing (consumers influence price), segmented pricing (discriminate b/w segments to account for willingness to pay), dynamic pricing (change prices to react to variation in marketplace conditions), psychological pricing (account for psychology of price and numbers) What allows 10.10.24 sales promotions Sales Promotion Examples Free samples / bonus packs Discounts, coupons, and rebates Buy one, get one free Loyalty cards Digital coupons Games and special events Contests and sweepstakes Sales promotion objectives Stimulate purchase Invigorate a mature product Provide trial of new products Increase product/service usage Reward customers Help reinforce the product’s positioning and value Build long-term relationships Should i provide -​ Discounted prices OR added value? Discounted prices When? price-sensitive consumer target Need to clear inventory; need a fast response in sales High competition Need to drive purchase volume (e.g., holiday seasons) Why good? Fast impact on sales Easy and simple communication Attracts more people (deal-seekers) What risk? These deal-seekers may not stay loyal If over-used, may damage brand perception --- cheap Bed bath beyond, did whole discount strategy Added value Providing exclusive features as a reward Providing additional product or service for free for a limited time When and good for what? Build loyalty and increase brand perception You want to emphasize a unique feature, service (high differentiation) Build customer engagement What risk? May be harder to communicate than a price discount Slower impact on sales Customers may not perceive the added value as “worth” it Personal selling Personal Selling Actions Face-to-face communication Telephone Sales presentations and trade shows Virtual conferences What makes a good salesperson? Active listening Problem solving Confidence Relationship building Salesperson Motivation Bonuses and commission (well-designed) Autonomy Purpose Intrinsic rewards PRICING Price Amount of money charged for a product or service Sum of the values that customers exchange for the benefits of having or using the product/service Only marketing mix element that translates the value created for customers back into revenue and profits for the company Price plays a key role in influencing value perceived by consumers General Pricing Strategies Cost-based Cost-plus pricing Break-even (target profit) pricing Value-based Value-added pricing Good value pricing Competition-based Cost-Based Pricing Cost-based pricing determines prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk Takes into account both fixed and variable costs Fixed – costs that do not vary with production/sales Variable – vary directly with the level of production Cost-Plus/Markup Pricing Simplest pricing method: Adds a standard markup to cost Beneficial to sellers who are more certain about cost than demand Perceived as fair to buyers  Minimizes price competition But ignores demand and competition Typically, cost-plus approach is used to set a floor below which prices must not dip. Markup Pricing Example Toaster manufacturer Variable cost $10 Fixed cost $300,000 Expected unit sales 50,000 Manufacturer’s cost per toaster Unit cost = variable cost + (fixed cost/unit sales) = $10 + ($300,000/50,000) = $16 If manufacturer wanted to earn 20% markup on sales Markup price = unit cost/(1-desired return on sales) = $16/(1-0.2) = $20 Manufacturer would charge $20 per toaster; Profit of $4 per toaster. Break-Even Pricing Also called “target return” pricing What price should the company charge to reach revenue/profit level X? Break-even: total cost = total revenue Understand the different total cost and total revenue expected at different sales volume levels Break-even volume = fixed cost/ (price-variable cost) Break-Even Pricing Toaster manufacturer Variable cost $10 Fixed cost $300,000 If manufacturer wanted to earn 20% markup on sales Markup price = unit cost/(1-desired return on sales) = $16/(1-0.2) = $20 Manufacturer would charge $20 per toaster What’s the volume I need to break-even? Break-even volume = fixed cost/ (price-variable cost) $300,000/($20-10) = 30,000 units to break even Must sell more than 30,000 units to make a profit Value-Based Pricing Customer-driven Uses buyers’ perceptions of value rather than sellers’ costs Price set to match customer value If product price is < perceived value → customer want to buy cuz getting value How do we determine objective value? Objective value = measure of the benefits that the product delivers to the consumer relative to other products, regardless of whether the consumer recognizes those benefits Consider competitive alternatives (their prices, performance, costs) Consider the added value of your product (plus or minus) Determining perceived value What is the likelihood you would buy this product at a price of $30? At what price would you definitely buy this product How much would you be willing to pay for this product? How much of this product would you buy at a price of $1? At which price difference would you switch from product A to product B? Consider price sensitivity Consider who you are asking Who ultimately pays Level of competition People consider the aggregate cost of ongoing usage Value-added pricing Rather than cutting prices to match competition, add quality, services, and value-added features to differentiate offers and support higher prices Good-value pricing Offering just the right combination of quality and good service at a fair price Strategy 1: Offering less expensive versions of established brand products for thrift-conscious customers Google Nest Thermostats $249 for high-end Nest Learning Thermostat $129 for Nest Thermostat Strategy 2: Every-day low pricing (EDLP) e.g., Walmart Competition-Based Pricing Setting prices based on competitors’ strategies, costs, prices, and market offerings Benchmarking – compare your price to competitors Price-cutting (undercutting) Competition-Based Pricing If your competitors are small and all charging higher prices, you could charge lower prices to drive weaker competitors out of the market If there are large competitors dominating with low prices, you could possibly charge higher to a niche market by providing more value to an unserved market Other factors to consider when determining price Must align with product design, distribution, and promotion decisions The economy and economic conditions New product pricing  Price skimming: A firm charges a high introductory price, often coupled with heavy promotion; price gradually decreases Penetration pricing: A firm charges a relatively low price for a product initially as a way to reach the mass market Price Skimming Price skimming: A firm charges a high introductory price, often coupled with heavy promotion; price gradually decreases Price Skimming Product’s quality and image must support its higher price Does not have competitors that can easily come and undercut the firm’s price Lowering price gradually has only a minor effect on increasing sales volume and reducing cost. Penetration Pricing Penetration pricing: A firm charges a relatively low price for a product initially as a way to reach the mass market Penetration Pricing The goal is to get those attracted to become loyal, long-term customers Works well when the market is highly price sensitive (low price induces more market growth) 10.8.24 promotions Headspace vs. Calm: A Mindful Competition Due Monday night Framework for promotion Awareness → interest → desire (preference) → action Reminder ads -​ To maintain relations w/ customer -​ Remind consumers of need to purchase product Advertising strategy -​ Creative: create the message to deliver -​ Media planning: select media channels to show and when to show Keep in mind the new environment -​ Fragmented audience -​ So many options and information clutter -​ Cookie-cutter messaging doesn’t work -​ Question is how to make the advertising seamless and memorable That’s why cuz low attention enviro → advertainment -​ Make ads watchable as short films or social media posts Pay people to not wear their brand’s clothes Native advertising - ads that look in form and function like other natural content surrounding it on a web/social media platform Message -​ What do we want to say? -​ Effective ads are integrated w/ marketing strategy (identify customer benefits) -​ Creative briefs address target, insights, messaging strat, tone, visuals, etc -​ Ads should be unique and creative (but not lose sight of the main message) Format Emotion, chrome dad ad -​ Associate brand w/ emotion -​ Tap into inner emotions w/ brand reference Emotion vs reason Emotional appeals -​ Attitudes toward ad affect attitudes toward brand -​ Positive: humor, excitement to grab attention, warmth (children, animals, etc) -​ Negative: fear (right amount can motivate behavior) Media terms -​ Reach: % of ppl in target market exposed to ad during period -​ Frequency: # of times avg person in target market is exposed to message -​ Impact: value of message exposure through a given medium (vs another) -​ Engagement: ratings, readership, listenership, click through rates, etc PR actions -​ publicity/awareness -​ Public affairs -​ Corporate communication -​ Lobbying -​ Crisis management -​ Investor relations PR crisis strategies -​ Reaction strategy: respond after an issue or crisis has occurred -​ clarify or correct misinfo -​ Issue public apology -​ Respond to media inquiries -​ Defense strat: put up fight but give in where necessary, deny claims, present evidence the claim is unjustified -​ Accommodation strat: acknowledge issue and take steps to make amends -​ Proactive strat: anticipate potential risks and proactively prepare to address them 10.7.24 new product development Didn’t do good job if ppl want it Poor packaging, seemed like food product than shampoo product Confusion about look of buttermilk Not complete market for google glasses, seemed creepy and health about safety for eyes Ppl don’t know what it’s used for Tropicana orange juice New product introduction New product success (ACCORD Model for Product Adoption) Project: gather all info on company and branding and SWOT analysis -​ Identify 1-2 key competitors and what they’re doing -​ 10.3.24 products & services + new product failures Pokemon go Millennials & genz were target audience who grew up w/ pokemon Gamers too Based on the ingress platform which already did well On launch good interest spiked, then in a month it died Was way more popular than they expected Therefore it overloaded servers At first consumers liked it, then ppl complained it was too much time commitment, felt repetitive, didn’t want to aimlessly wander around, wanted trades and battling players or wild pokemon Problems w/ 3rd party sites on mapping data, rise of online forums, provided ways to cheat Pokemon taxi services like in manchester Aug 2016 Banned 3rd party sites cuz took toll on servers Employees too busy banning sites & fixing bugs to make new features Lost ⅓ of users Sept 2016, new downloads fell to 70k form initially 26 million Question 1 Why pokemon go became successful so fast Question 2 Reaction toward niantic’s stance toward 3rd party developers w/ shutting them down? Was this missed opportunity? Should’ve niantic partnered in aug 2016 w/ third party developer to improve pokemon go? What are possible pros and cons? Question 3 Was pokemon go a fad? What strategies could niantic implement to extend the game’s lifecycle or help keep the game fresh? Services Service characteristics Intangibility: can sense the service before trying it Variability: quality depends on who and where it’s done Inseparability: experience can’t be separability from the service deliverer Perishability: service experience can’t be stored for later use Marketing strats for services Service profit chain: link profits w/ employee and customer satisfaction -​ Incentivizes employees -​ Tie customer loyalty/satisfaction to employee pay -​ Superior employee selection and training Products and services together as an experience Ex. disneyland, eataly, southwest airlines New product failure New Product Failure Insignificant “point of difference” Example: Clairol’s Look of Buttermilk, Touch of Yogurt Do customers care about, need, or want the product? Is the product different enough? What is the “look of buttermilk”? New Product Failure Incomplete market and product definition Example: Google Glasses What consumer problem does it solve? New Product Failure Insufficient market attractiveness Example: Air freshener with bubble gum fragrance marketed as being able to get rid of scary creatures from a kids’ bedroom New Product Failure Poor timing Example: Nescafe Hot When You Want Self-heating coffee cans Push and shake -> hot coffee in can Trials began in May in the UK When autumn arrived, not hot enough 10.1.24 session 8 Products and services Today’s Plan Defining and classifying products Product line and mix Product life cycle Pokemon Go Services marketing Defining and classifying products Why? Need to classify products and services – because based on this classification your strategy will change Products versus Services Product: Anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want Service: Activities, benefits, or satisfactions that is essentially intangible and does not result in the ownership of anything Product line and mix 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 Product line length: Number of items in a product line Product mix: All the product lines and items that a particular company offers for sale Will have to know definitions for exam?? Product Line Length Filling: Adding more products within the existing range Stretching: Expanding product line beyond its existing range Product Line Stretching Downward (lower quality and/or price) Upward (higher quality and/or price) Both Product Mix Width: Number of different product lines  Length: Total number of items within the product lines Depth: Number of versions of each product in the line Consistency: Similarity of product lines in end use, product requirements, or distribution channels Increasing business Add new product lines (widen the product mix) Lengthen existing product lines  Deepen product mix by adding more versions of each product Pursue more or less product line consistency – strengthen reputation in one field or in several Product life cycle Introduction phase Lots of uncertainty Promotion strategy should build on awareness and educating customers on product Price may or may not cover production costs at the beginning Pricing that is initially higher than alternatives may stagger growth Introduction phase can be longer if consumer habit change and learning required is high Growth phase Early growth New competitive market entrants may enter  Promotion shifts to creating differentiation and preference Sales grow quickly and often many competitors share growth Apple charges higher price cuz targeting early adopters? Growth phase Late growth Fewer competitors as weaker competitive entrants from the early growth phase no longer maintain position in market Period where product modifications happen as competitive differentiation becomes even more important Aggressive distribution and promotion *now is when you make modifications to product Maturity phase Most sales come from repeat customers Product differentiation at this stage is difficult Distribution power is an advantage Market positions developed when maturity phase can be maintained Decline phase Initiated by growth of a new substitute product or change in customer needs Promotion targeted to remaining customers to save costs Product line reduced to save costs Maintain, harvest (reducing operating, maintenance, R&D, promotion costs) or drop Now competitors so will now become more competitive/lower on price to get more people/market share Innovators: first to adopt new tech; tech enthusiasts; risk-takers; willing to pay more for innovation Early adopters: opinion leaders Early majority: start of mainstream market. Pragmatists that wait to see how the technology pans out and becomes more mainstream. Still willing to pay somewhat high price. Late majority: makes first purchase in late growth and maturity phases of the product cycle. Not as tech savvy. More skeptical about new tech. Waits for price to fall. Laggards: purchases are governed by long-established habits. Product is at maturity phase by the time laggards buy or they don’t buy at all. What can you do to reduce this chasm? Target a specific niche within the early majority group where the risk of adoption is lower Addresses a critical pain point and then have that group be brand ambassadors Provide a full product solution (e.g., Apple’s ecosystem of apps along with the mac/iphone) Provide social proof (show evidence of benefits and case studies of product effectiveness) in campaigns How to extend the product life cycle Increase product usage among current users Give more reason for users to use the product Example: Campbell’s Kitchen phone app encourages more usage of Campbell food products by allowing exchange of recipes  Identify new users or markets Example: Prosthetic limb product for amputees -> can also diversify for amputees participating in athletic events Find new usage needs Example: Swatch – made watches a fashion accessory that you use (repositioning) 9.26.24 session 7 Why not ask everyone Sampling Who is participating in your research? A sample is a segment of the population selected for research to represent the population as a whole: Whom is to be studied? How many people should be studied? How should the people be chosen? Sampling Considerations What are you measuring? What’s the population? Budget Time What might the variance be in the population? Sampling Process Define the target population Determine the sampling frame (“empirical target population”) Select sampling technique(s) Determine the sample size goal Execute sampling Whom To Study First, define the population Example: What are consumers’ attitudes towards Galaxy S8? How Many To Study Depends on research question and design More is better Costs (time and money) increase as sample size increases Sampling Losses Why do they occur? Lack of motivation related to question Social desirability General lack of interest Loss Examples A group of randomly selected 50 Bocconi students is asked: Have you ever stolen something? Probability Sampling Simple random sampling Every member of the population has a known and equal chance of selection Randomly select Probability Sampling Systematic random sampling Starting point chosen randomly, then every n-th person is selected. Done for cost-saving reasons. Probability Sampling Stratified sampling Describe and divide population based on influential characteristics (e.g., age; mutually-exclusive groups) Randomly sample within strata Use when you want to ensure different subgroups are represented. Non-Probability Sampling Convenience sampling Sampling from “nearby”, people you have access to Relatively inexpensive Straightforward to execute Judgmental sampling Researcher uses his or her judgment to select population members who are good prospects for accurate information  Ideally shares similar knowledge or characteristics with target population Quota sampling Population is divided into subgroups, and a predetermined number (quota) of individuals from each subgroup is selected Non-random selection within each subgroup Must know population characteristics Online samples: qualtrics, surveymonkey Branding What is a brand? The name, term, sign, or design (or a combination) that identifies the product or its seller/maker and differentiates them from those of competitors. It represents everything the product means to consumers How do i build a strong brand? Brand Salience Who are you? How aware customers are of the brand Do customers recognize you? Brand Performance What are you? How well the product or service meets the functional needs of customers.  Product design and quality, pricing, etc. Brand Imagery What do you stand for? Abstract associations customers form about your brand Typically measured along with brand personality – the personality and lifestyle traits associated with the brand Emotional and social connection Brand Judgment What do I think about you? Perceptions of the brand quality, credibility, relevance and superiority Brand Feelings How does the brand make you feel? Emotional connection to the brand Brand Resonance What kind of relationship do we have? What about you and me? The ultimate goal is to develop a strong relationship between brand and customer Loyalty, sense of community How much customers start identifying with the brand Is the brand part of who I am? Does it reflect who I aspire to be? Does it allow me to signal these aspirations to others? Measurements for brand strength Brand equity – set of brand assets and brand perceptions that enhance (or decrease) the value of the product or service. High brand resonance associated with high brand equity Brand value – a quantitative measure of the brand’s financial value. Measuring this is difficult Brand Equity Improved perceptions of product performance Greater loyalty Less vulnerability to outside forces Increased marketing communication effectiveness Brand Strategy Decisions Brand positioning – what are the attributes, benefits, and beliefs and values that gives me competitive advantage? Brand associations Brand personality Brand name selection Brand sponsorship Brand development Brand extensions Rebranding New brands Building Associations -> road to brand resonance and brand equity! Colors Symbols Logos  Slogans Characters Musical jingles Packaging Promotions Brand experiences Brand name selection Brand Names Reflect benefits and qualities Easily pronounceable, recognizable, and memorable Distinctive, extendable, translatable Brand Name Examples 7-Eleven: Named for opening hours Nike: Greek goddess of victory Coca-Cola: Coca leaves and cola berries Starbucks: Named after Moby Dick character Intel: Integrated Electronics IBM: International Business Machines, shortened Durex: Combining durable, reliable, and excellence Where and how will i offer my brand? Brand Architecture: When you have many brands under your master brand, brand architecture shows how the brands relate to or are different from each other Brand Portfolios Collection of brands that fall under a larger, overarching 'brand umbrella' set by a company or conglomerate (master brand). Structured by level Company Brand Product Category of product Could have simple structure (e.g., Red Bull) Options Branded House House of brands  Endorsed brands Sub-brands Hybrid Brand management Line/Brand Extensions Starbucks into at home coffee Levi’s want to expand to suits Line/Brand Extensions Benefits Enhances company image Attracts new customers Allows people to trade up/convert Drawbacks Could weaken parent company Crowd out core brand Customer/retailer confusion New Brands Individual brands are limited in reach Competition can erode market share New brands may be needed to enter a new market, when current brand isn’t appropriate Extensions vs. New Brands New brands do not dilute or confuse existing brand New brands cannot capitalize on brand equity New brands are costly to build Successful Brand Extension Fit between parent brand and brand extension needs to make sense! Customers should benefit from it. Brand Extension Goals Ascertain what consumers know and like about parent brand Identify possible extensions Evaluate extensions (assess fit/other factors) Develop marketing programs and brand elements Measure success and effect on parent Brand Acquisitions to expand brand Effective way to grow given costs associated with new brand development – however, there must be congruence between the two brands Re-Branding Not only promotion Requires coherent messaging across entire marketing mix Product (packaging, features) Place (upscale vs. mass market retailer) Price (luxury vs. discount prices) Benefits of Brands Company benefits Marketing efficiency Building loyal consumers Brand extensions Competitive advantage Consumer benefits Interpret, store, and process information Improve decision confidence Psychological benefits 9.24.24 Survey Data Surveys are the most widely used method for primary data collection People are asked questions about their knowledge, attitudes, preferences, and Behavior You get what you collect… When you collect survey data, you will get the truth and mistakes You want to minimize the mistakes Mistakes can come in 2 ways: Measurement error Sampling error Overall Process of the Survey Design 1. Define your sample 2. Define what ‘bits’ of information you want 3. Draft questions 4. Decide ordering and randomization 5. Traps and Validation 6. Iterative Pilot and Re-evaluation, Implement Designing the right questions Do not ask people questions they do not understand or questions about issues they know nothing about Questionnaire Design Key tips: Remember your main objective Don’t ask a question unless it will give you useful information for your objective If there are multiple ways to ask respondents for a piece of information, pick the questions for which the respondents will likely a) know the answer and, b) be willing to tell you the answer When creating questions, think about the burden placed on the respondent Attitudes and attitude measurement Attitude is the most frequently measured variable/construct in marketing research Attitude: predisposition to respond or act toward that object in a favorable or unfavorable way Thing (product/service) Action (purchase of product X, smoking) Concept or idea (brand, the death penalty) Person (your friend, a car-seller) Types of Questions Open-ended question: encourages an answer phrased in the respondent’s own words Closed-ended question: asks the respondent to make a selection from a limited list of responses Scaled-response question: a closed-ended question designed to measure the intensity of a respondent’s answer Rank-order question: requires respondents to order items in terms of their appeal When told to rank earthquakes, focus changed from # killed to # affected Contrast effects On a scale from 1-10, how wrong are each of the following? Vandalism Murder Burglary Assault Response Mode Effects People’s attitudes can depend on the nature of the eliciting task “Task effects” violate procedure invariance: normative assumption that differences in procedures used to measure preference should not influence preference Some notes about open-ended questions Open-ended questions Open ended questions can generate insights, but are: more complicated to analyze  harder to respond to take longer to complete Use wisely! Sensitive questions The respondent may not be willing to answer the question... item nonresponse termination Distortion Sensitive Questions Embarrassing info is biased downward Build rapport, legitimize Counter biasing statement ° “Recent studies indicate that a man often uses his wife’s hair spray. Do you use your wife’s hair spray?” Other people approach ° “How common do you think it is for husbands in your age group to use their wife’s hair spray? Question order? Does it matter? YES Generally, participants are busy, distracted, bored, unmotivated, tired Priming the stereotype can prime/cause performance for specific stereotype performance Ask demographic questions at the end Sequence and Layout Decisions Demographics questions at the end Layout Guidelines Monotonic ordering of response options Sequence and Layout Decisions Demographics questions at the end Layout Guidelines Monotonic ordering of response options From general to specific or randomize ordering Think about order bias Layout decisions Open-ended questions at the end Demographics questions at the end Layout Guidelines Monotonic ordering of response options From general to specific or randomize ordering Think about order bias Sensitive or boring questions should not be first But open-ended goes before demographics Skip logic? Keep things as simple as possible (it will pay off when analyzing the data) If possible, include questions (demographics) that allow screening/splitting the data at the analysis phase If you are designing an experiment, then use branching Accordingly Traps and validation How do we deal with responders who Do not understand? Do not care? Are simply clicking through the survey? Bots designed to complete surveys 9.19.24 Marketing research Translate problems into research questions 9.17.24 Identifying markets Lukewarm starbucks coffee failed cuz target market wasn’t big enough Ex. Coca Cola Ex. spotify Ethics 9.10.24 Marketing strategy: marketing logic by which company hopes to create customer value and achieve profitable customer relationships Strategic planning: 1)​ Define comp mission 2)​ Set objectives/goals 3)​ Design bus portfolio 4)​ Plan marketing and other strategies Company’s mission Should address: -​ Who are we -​ What is our bus -​ Who are our customers -​ What do customers value? Market-oriented understanding -​ Realistically, what is (will) our company (be) about? -​ Fits the environment? -​ Based on company competencies? -​ Motivating for employees? Some examples of business and mission statements, there’s a difference Step 4: plan marketing and other strategies Introduction marketing Prof. jessica kim Does research on gun sales Microwave → microwaveable food Colgate toothpaste → started a microwaveable food brand (to encourage ppl to then buy toothpaste for it) Can you save bad product with good marketing? Good vs bad marketing, goofy dove body positive bottle shapes Defining marketing What marketing should not be: 1.​ Sales 2.​ Simple advertising 3.​ Fads 4.​ Tricking people into buying things they don’t need Defining marketing: process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return CMO survey topline report, what is marketing primarily responsible for in your company? -​ Top: Brand, digital marketing, advertising, social media, marketing analytics -​ Privacy, sustainability, distribution, stock market performance Marketing = value -​ Marketing focuses on needs & wants of buyer -​ Key to achieving organizational goals is delivering the desired satisfactions more effectively and efficiently than competitors Marketing should be: -​ Identification of what market will support -​ Marketing begins before product launch Marketing strategy 1)​ Define company mission 2)​ Set specific objectives & goals 3)​ Design business portfolio 50% Group project to identify and solve marketing problem for small business (presentation is Nov 21 or 26) + 50% final exam Final exam date: December 10, 2024 @ 14:00, 2pm