MKT 3013 Principles of Marketing Study Guide for Exam 2 [Chpts. 8, 9, 10, 11 and 12]
MKT 3013 Principles of Marketing Study Guide for Exam 2 [Chpts. 8, 9, 10, 11 and 12] MKT 3013
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This 18 page Study Guide was uploaded by EMOJI on Monday September 12, 2016. The Study Guide belongs to MKT 3013 at University of Oklahoma taught by Pravin Nath in Spring 2016. Since its upload, it has received 12 views. For similar materials see Intro to Marketing in Business at University of Oklahoma.
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MKT 3013 Principles of Marketing Prof. Pravin Nath Study Guide for Exam 2 [Chpts. 8, 9, 10, 11 and 12] What is marketing research and for what purposes is it undertaken? Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information and recommending actions. Marketers conduct research to reduce the risk of improving marketing decisions to assess what consumers want and will buy. The fivestep marketing research approach leads to marketing actions. Lessons learned from past research mistakes are fed back to improve each step DEMAND FORECASTING SEGMENTATION MARKET TRACKING NEW PRODUCT TESTING AD PRETESTING What are the steps of a marketing research project? 1. Define the problem set research objectives and identify possible marketing actions. a. Research objectives are specific, measurable goals the decision maker seeks to achieve in conducting marketing research. b. Measures of success are criteria of standards used in evaluating proposed solutions to the problems. Different research outcomes, based on the measure of success, lead to different marketing actions. 2. Develop the research plan specify the constraints on the marketing research activity, identify the data needed for marketing actions, and determine how to collect the data. a. Constraints in a decision are the restrictions placed on potential solutions to a problem. Ex. Limitations on time and money available to solve problem. b. Identify data needed for marketing actions effective marketing research studies focus on collecting data that will lead to effective marketing actions. c. Determine how to collect data determining how to collect data is useful marketing research data is often as important as collecting the data. Two elements to decide how to collect data. i. Concepts ideas about products or services. New product Concept a picture or verbal description of a product of service the firm might offer for sale, often used to find out about customer reactions to a potential new product. 1 ii. Methods are the approaches that can be used to collect data to solve all or part of a problem. Special methods vital to marketing include: sampling and statistical inference. 1. Sampling often used by selecting a group of distributors, customers or prospects asking them questions and treating their answers as typical of all those whom they are interested. 2. Statistical inference generalizes the results from the sample to much larger groups of distributors, customers or prospects to help decide on marketing actions. 3. Collect relevant data obtain secondary and primary data 4. Develop findings analyze the data and present the findings a. Findings should be clear and understandable for managers to make actions 5. Take marketing actions make action recommendations, implement action recommendations and evaluate results a. Evaluate the decision itself and the decision process used Why is defining the problem such an important step? Marketers have to be clear on the purpose of the research that leads to marketing actions. If the objectives are too broad, the problem may not be researchable. If they are to narrow, the value of the research results may be seriously lessened. This is why marketing researchers spend so much time defining a marketing problem precisely and writing a formal proposal that describes the research to be done. It is needed to set research objectives Need it in order to identify possible marketing actions What are the three kinds of research? 1. Exploratory research provides ideas about a vague problem. 2. Descriptive research generally involves try to find the frequency with which something occurs or the extent of a relationship between two factors. 3. Causal research tries to determine the extent to which the changes in one factor changes another one. When is it more appropriate to use exploratory, descriptive and causal research? See above #13 What are concepts and methods? Concepts ideas about products or services. New product Concept a picture or verbal description of a product of service the firm might offer for sale, often used to find out about customer reactions to a potential new product. Methods are the approaches that can be used to collect data to solve all or part of a problem. Special methods vital to marketing include: sampling and statistical inference. 2 1. Sampling often used by selecting a group of distributors, customers or prospects asking them questions and treating their answers as typical of all those whom they are interested. 2. Statistical inference generalizes the results from the sample to much larger groups of distributors, customers or prospects to help decide on marketing actions. What is the difference between probability and nonprobability sampling? What are the pros and cons of each? 1. Probability: Using precise rules to select the sample such that each element of the Population has a specific known chance of being selected Randomly drawing from entire college 2. NonProbability: using arbitrary judgments to select the sample so that the chance Of selecting a particular element may be unknown. Drawing from small class, introduces bias What is secondary and primary data? What are the ways in which each can be collected? What are the pros and cons of each? Data: facts and figures pertinent to the project. 1. Secondary data are facts and figures that have already been recorded before the project at hand. Internal data o Inputs budgets, financial statements, sales call reports, outcomes o Outcomes actual sales and customer communications External data (outside the firm) o U.S. Census reports o Trade association studies o Business periodicals o Internetbased reports Pros: tremendous time savings because data has already been collected and published and the low cost, such as free in the census. Cons: data may be out of date, definitions or categories might not be quite right for a researcher’s project, may not be specific enough. 2. Primary data are facts and figures that are newly collected for the project. Observational data facts and figures obtained by watching either mechanically or in person, how people actually behave. o Mechanical methods ex. National TV ratings (Nielsen) “crosstelevision ratings” combine existing TV ratings with online ratings 3 o Personal methods “Jennifer” becoming a “mystery shopper” aka trying new products, because it gives clients unique marketing research that can be obtained no other way. Watching consumers and recording them Gillette/P&G ex. in book, ethnographic research specialized observational approach in which trained observers seek to discover subtle behavioral and emotional reaction s as consumers encounter products in their “natural use environment”. o Neuromarketing methods Global brand expert Martin Lindstrom used brain scanning to analyze the buying processes of more than 2,000 participants. Campbell Soup changed labels due to this research. Questionnaire data facts and figures obtained by asking people about their attitudes, awareness, intentions and behaviors. o Idea generation methods coming up with ideas “Individual interview” involves a single researcher asking questions of one respondent. “Depth interview” researchers ask lengthy, freeflowing questions to probe for underlying ideas and feelings. “Focus groups” are informal sessions of 6 to 10 past, present or prospective customer in which a discussion leader, or moderator, ask for opinions about the firm’s products and those of its competitors, including how they use products and special needs they have that these products don’t. o Idea evaluation methods testing an idea, involve conventional questionnaire methods such as personal, mail, telephone, fax and online “Personal interview surveys” enable the interviewer to be flexible in asking probing questions or getting reactions to visual material. “Mail surveys” usually biased because those most likely to respond have had especially positive or negative experiences with the product or brand. “Telephone interviews” allow flexibility, unhappy respondents may hang up. “Online surveys” email and internet, most consumers have internet connection and an email account, “popup” surveys “Mall intercept interviews” are personal interviews of consumers visiting shopping centers Foundation for all questionnaires Openended questions allows for respondents to express opinions, ideas or behaviors in their own words without being forced to choose among predetermined alternatives. Closedend/fixed alternative questions require respondents to select one or more response options from predetermined choices. Dichotomous questions yes or no (only options) 4 Semantic differential scale fivepoint scale which opposite ends have one/two words adjectives that have opposite meanings. Likert Scale the respondent indicates the extent to which he or she agrees or disagrees with a statement Marketing research questions must be worded precisely so that all respondents interpret the same question similarly. Electronic technology has revolutionized traditional concepts of interviews or surveys. Other sources of data o Social media Social media metrics conversation velocity, share of voice and sentiment. These metrics are tracked by electronic search engines that comb the internet for consumers’ behaviors and “brand mentions” to calculate share of voice and determine whether these brands mentions appear to be “positive”, ”neutral”, or “negative” Marketing researchers want to generate content in real time. o Panel and experiments Panel is a sample of consumers or stores from which researchers take a series of measurements. Experiment involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect. Marketing drivers independent variable in marketing experiments often one or more of the marketing mix elements, such as a product’s features, price or promotion Change in purchases dependent variable Test markets (where experiment takes place) when product is offered for sale in small geographic area to help evaluate potential marketing actions. o Information technology involves operating computer networks that can store and process data. External and internal data sources are organized into “data warehouses” Use computers to query data warehouse with marketing query and questions Sensitivity analysis= “what if” in query of warehouse to determine the hypothetical product or brand driver Brand driver factors that influence the buying decisions of a household organization—can affect sales o Data mining the extraction of hidden predictive information from large data bases to find statistical likes between consumer purchasing patterns and marketing actions. Pros: Primary data is more flexible and more specific to the problem being studied. Observational data both useful and flexible, advantages to questionnaire data ability to 5 ask followup questions, online surveys have minimal costs and turnaround time is much quicker than traditional methods, facetoface (mall surveys) decrease cost of personal interviews Cons: Disadvantages of primary data are usually far more costly and tie consumer than secondary data. Observational data is costly and unreliable when different observers report different conclusions when watching the same event, reveals what people do, but not why. Questionnaire data (individual interview) is expensive, (personal interview surveys) costly, consumers block “popup” surveys or label as “spam/junk” mail; consumers can take the survey multiple times. Mall surveys may not be the targeted consumer base. Analyzing primary data using cross tabulation cross tab is a method of presenting and analyzing data involving two or more variable to discover the relationships in the data. Pro: simple format permits direct interpretation and an easy means of communicating data to management. Offers great flexibility and can be used to summarize questionnaire, observation and experimental data. Con: the can be misleading if the percentages are based on too few observations. Can hide relations shops because it usually only shows two or three relationships. What is the difference between qualitative and quantitative research? What are the pros and cons of each? Qualitative research individual interviews and focus groups Quantitative research surveys Pros: Primary data is more flexible and more specific to the problem being studied. Observational data both useful and flexible, advantages to questionnaire data ability to ask followup questions, online surveys have minimal costs and turnaround time is much quicker than traditional methods, facetoface (mall surveys) decrease cost of personal interviews Cons: Disadvantages of primary data are usually far more costly and tie consumer than secondary data. Observational data is costly and unreliable when different observers report different conclusions when watching the same event, reveals what people do, but not why. Questionnaire data (individual interview) is expensive, (personal interview surveys) costly, consumers block “popup” surveys or label as “spam/junk” mail; consumers can take the survey multiple times. Mall surveys may not be the targeted consumer base. Describe the different types of surveys/questionnaires. “Personal interview surveys” enable the interviewer to be flexible in asking probing questions or getting reactions to visual material. “Mail surveys” usually biased because those most likely to respond have had especially positive or negative experiences with the product or brand. “Telephone interviews” allow flexibility, unhappy respondents may hang up. 6 “Online surveys” email and internet, most consumers have internet connection and an email account, “popup” surveys “Mall intercept interviews” are personal interviews of consumers visiting shopping centers Describe different types of questions/scales? What are openended and closedended questions? What is a Likert scale? What is a semantic differential scale? Openended questions allows for respondents to express opinions, ideas or behaviors in their own words without being forced to choose among predetermined alternatives. Closedend/fixed alternative questions require respondents to select one or more response options from predetermined choices. Dichotomous questions yes or no (only options) Semantic differential scale fivepoint scale which opposite ends have one/two words adjectives that have opposite meanings. Likert Scale the respondent indicates the extent to which he or she agrees or disagrees with a statement What is experimental research? Experiment involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect. Marketing drivers independent variable in marketing experiments often one or more of the marketing mix elements, such as a product’s features, price or promotion Change in purchases dependent variable Test markets (where experiment takes place) when product is offered for sale in small geographic area to help evaluate potential marketing actions. What are sales forecasting techniques? Sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing effort. 1. Judgments of the decision maker a. Direct forecast involves estimating the value to be forecast without intervening steps b. Losehorse forecast involves 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. 2. Surveys of knowledgeable groups a. Survey of buyers’ intentions forecast involves asking prospective customers if they are likely to buy the product during some future period. b. Salesforce survey forecast involves asking the firms sales people to estimate sales during forthcoming period. 7 3. Statistical methods a. Trend extrapolation which involves extending a pattern observed in past data into the future. b. Linear trend extrapolation when the pattern is described in a straight line. What is market segmentation? What are market segments? A business segments its markets so it can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits. Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action. Marketing segments are relatively homogenous groups of prospective buyer that result from the market segmentation process. Groups are similar in consumption behavior. Why is market segmentation important? A business segments its markets so it can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits. The existence of different market segments has caused firms to use a marketing strategy of product differentiation. Product differentiation includes changes in marketing mix actions, such as product features and advertising along with physical changes. Segmentation links need to action links various buyers needs and the organization’s marketing program. Leads to tangible marketing actions that can increase sales and profitability. Using market product grids the framework to relate that market segments of potential buyers to products offered or potential marketing actions. Explain the steps in segmenting and targeting a market (note: understand what happens in each step rather than trying to memorize them and the order in which they are) 1. Group potential buyers into segments a. Set criteria to use in forming segments i. Simplicity and costeffectiveness of assigning potential buyers to segments ii. Potential for increased profit iii. Similarity of needs of potential buyers within a segment iv. Difference of needs of buyers among segments v. Potential of a marketing action to reach a segment b. Ways to segment consumers i. Geographic ii. Demographic iii. Psychographic iv. Behavioral 2. Group products to be sold into categories 3. Develop a marketproduct grid and estimate the size of markets 8 4. Select target markets a. Criteria in selecting the target segments i. Market size ii. Expected growth iii. Competitive position iv. Cost of reaching the segment v. Compatibility with the organization’s objectives and resources 5. Take marketing actions to reach target markets a. Immediate segmentation strategy b. Keeping an eye on the competition c. Future strategies What are the criteria to use in forming segments? Segment when it expects that this extra effort will increase its sales, profit and return on investment DO NOT SEGMENT when expenses are greater than the potentially increased sales from segmentation. What are the ways of segmenting consumer or organizational markets? Three segmentation strategies 1. One product and multiple market segments when an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the extra costs of developing and producing additional versions of the product. (separate promotional campaigns or new channel of distribution) 2. Multiple products and multiple market segments Ford’s SUV, pickup trucks and cars all in the automobile market. This strategy is effective if it meets customers’ needs better, doesn’t reduce quality or increase price and adds to Ford’s sales revenue and profits. Downside of auto industry resulted in (1) lower prices to through producing a higher volume and fewer models (2) higher quality because of the ability to debug fewer basic designs. 3. Segments of one, or mass customization means tailoring product or services to tastes of the individual customers on a highvolume scale. Is the next step beyond buildtoorder (BTO) meaning manufacturing a product when there is an order from a customer a. BTO trims workinprogress inventories and shorten delivery times to customers Cannibalization when new products or new chains steal customers and sales from older, existing ones. What is geographic segmentation? Geographic region, city size, statistical area, mediatelevision and density What is demographic segmentation? Demographic gender, age, race/ethnicity, life stage, birth era, household size, marital status, income, education and occupation 9 What is psychographic segmentation? Psychographic personality, values, lifestyle, needs What is behavioral segmentation? Behavioral retail store type, direct marketing, product features, usage rate, user status, awareness/intentions What is benefit segmentation? What is usage segmentation? Usage segmentation (behavioral segmentation) is the quantity consumed or patronage— store visits—during a specific period, varies amongst consumer groups. Aka frequency marketing focused on usage rate (ex. frequent flyer miles) What is the 80/20 rule? 80/20 rule is a concept that suggests 80% of a firm’s sales are obtained from 20% of its customers. What is a marketproduct grid and how is it useful in segmentation and targeting? Using market product grids the framework to relate that market segments of potential buyers to products offered or potential marketing actions What are the criteria to use in picking target segments? Criteria in selecting the target segments Market size Expected growth Competitive position Cost of reaching the segment Compatibility with the organization’s objectives and resources What is synergy in the context of choosing segments to target? Explain marketing and product synergies. The key to successful product differentiation and marketing segmentation strategies is finding ideal balance between satisfying a customer’s individual wants and achieving organizational synergy. Organizational synergy the increased customer value achieved though performing organizational functions such as marketing or manufacturing more efficiently. o Ultimate criterion: customers should be better off as a result of the increased synergies o Market synergies run horizontal on the grid, new firms often focus on a single customer 10 o Product synergies running vertically produce what every segment or most purchase Balancing act between the two saves money on marketing, production goes up and conversely What is positioning? What is repositioning? Product positioning refers to the place a product occupies in consumers’ minds based on important attributes relative to competitive products. Product repositioning change the place a product occupies in a consumer’s mind relative to competitive products. Differentiation positioning seeks leescompetitive, smaller market niche in which to locate brand Positioning a product 2 approaches 1. Writing a positioning statement 2. Using a perceptual map What is perceptual mapping and why is it used? What are the elements that makeup a perceptual map? A perceptual map a means of displaying in two dimensions the location of products or brands in the minds of consumers (chocolate milk ex.) Elements include: 1. Identifying the important attributes for a product or brand class 2. Discover how target customers rate competing products or brand with respect to these attributes 3. Discover where the company’s product or brand is on these attributes in the minds of potential customers 4. Reposition the company’s product or brand in the minds or potential customers What are tangible and intangible attributes in the context of a product? Tangible is a good that a consumer’s five senses can perceive Nondurable is an item consumed in one or a few uses, such as food products and fuel Durable is one that usually last over many uses, such as appliances, cars and smartphones Marketing action depends on the type of good whether commercial or personal marketing Intangible service or benefits that an organization provides to stratify customers’ needs in exchange for money or something else of value. o Services are 50% of the US GDP What is a product line? Why do firms develop product lines? What is a product mix? Width of product mix? Depth of product line? Product Item? Product line is a group of products or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets 11 Product item a specific product that has a unique brand, size, or price Product mix consists of all the product lines offered by an organization What are durable and nondurable goods and how are they different? Nondurable is an item consumed in one or a few uses, such as food products and fuel Durable is one that usually last over many uses, such as appliances, cars and smartphones Consumer goods may be classified as convenience, shopping, specialty or unsought. What are the differences among them? 2 broad categories: consumer and business products Consumer products are products purchased by the ultimate consumer o Convenience product toothpaste, cake mix, ATM cash withdrawal, relatively inexpensive, distribution is widespread and found at many outlets, promotion stresses price availability and awareness, substitutes in exchange for brand, frequently purchased, little time or effort spent shopping o Shopping product cameras, TVs, briefcases, airline tickets, fairly expensive, large number of service outlets, promotion stresses differentiation from competitors, brand specific preferred, but will accept substitutes, infrequent purchases, need to compare options o Specialty product RollsRoyce, Rolex watches, heart surgery, usually very expensive, very limited distribution, promotion stresses uniqueness of bran and status, very brand loyal will not accept substitutes, infrequent purchases requires extensive search and decision time o Unsought product burial insurance, thesaurus, price varies, often limited distribution, promotion stress that awareness is essential, substitutes are accepted, infrequent purchases, some comparison when shopping Business goods may be classified as production goods or support goods. Further, support goods may be classified as installations, accessory equipment, supplies and services. What are the differences among them? Business products are products organizations buy that assist in providing other products for resale Sales of business products are often the result of derived demand o Derived demand sales of business products frequently result (or are derived) from the sale of consumer products\ Either components or support products o Components items that become part of the final product i.e. raw materials o Support products items used to assist in producing other products and services Installations buildings, fixed equipment Accessory equipment tools, office equipment Supplies stationery, paper clips and brooms 12 Industrial services maintenance, repair and legal services How can we think about classifying newness of products from the consumer’s point of view? How does this impact the marketing emphasis for products at different levels of newness? Consumer’s perspective o Continuous innovation consumers don’t need to learn new behaviors o Dynamically continuous innovation minor changes in behavior are required o Discontinuous innovation involves making the consumer learn entirely new consumption patterns to use product Explain the steps in the new product development process and identify key activities within each of the stages (note: understand what happens in each step rather than trying to memorize them and the order in which they are). 1. Newproduct strategy development is the stage of the newproduct process that denies the role of for a new product in terms of the firm’s overall objectives. Firm uses SWOT analysis and environmental scanning to assess strengths and weaknesses relative to the trends it identifies as opportunities and threats 2. Idea generation developing a pool of concepts to service as candidates for new products. a. Open innovation find and execute creative new product ideas by developing strategic relationships with outside individuals and organizations. b. Employee and coworker suggestions c. Customer and supplier suggestions i. Crowdsourcing involves generating insight leading to actions based on ideas form massive numbers of people d. R&D Labs e. Competitive products f. Smaller firms, universities and inventors i. Inventor crowdfunding—a way to gather an online community of supporters to financially rally around a specific project that is unlikely to get resources from traditional sources. 1. Crowdfunding a. Crowdrise charitable causes b. Crowdtilt anything c. Rally nonprofits d. GiveForward medical causes 3. Screening and Evaluation internally and externally evaluates newproduct ideas to eliminate those that warrant no further effort a. Internal approach i. Customer experience management (CEM) the process of managing the entire customer experience within the company 13 b. External approach i. Concept tests external evaluations with customers that consists of preliminary testing of a newproduct idea rather than an actual product 4. Business Analysis specifies the features of the product and the marketing strategy needed to bring it to the market before significant resources are invented to create a “prototype” a. This stage assesses the total “business fit” of the proposed product with the company’s mission and objectives 5. Development turns the idea on paper into a prototype 6. Market testing involves exposing actual products to prospective customers under realistic purchase conditions to see if they will buy. Three kinds of markets: a. Standard sells through normal distribution channels in a number of test market cities b. Controlled contracting the entire test program to an outside service c. Simulated to save time and money they simulated customers are asked questions about usage Test markets do not work when consumers can’t see what they are buying i.e. buildings, jet engines 7. Commercialization process that positions and launches a new product in full scale production and sales, most expensive stage What is a protocol in the context of new product and new product development? The outcome of the SWOT analysis that identifies the strategic role the product might have in the firm’s business portfolio What are the various sources for ideas in the idea generation stage of new product development? a. Open innovation find and execute creative new product ideas by developing strategic relationships with outside individuals and organizations. b. Employee and coworker suggestions c. Customer and supplier suggestions i. Crowdsourcing involves generating insight leading to actions based on ideas form massive numbers of people d. R&D Labs e. Competitive products What is test marketing? What makes a market a likely candidate for test marketing? When does test marketing not work? Market testing involves exposing actual products to prospective customers under realistic purchase conditions to see if they will buy. Three kinds of markets: 14 Standard sells through normal distribution channels in a number of testmarket cities Controlled contracting the entire test program to an outside service Simulated to save time and money they simulated customers are asked questions about usage Test markets do not work when consumers can’t see what they are buying i.e. buildings, jet engines What are the stages of the product life cycle (PLC)? What are the implications of the stages of the product life cycle for marketing management? What are some of the actions that marketers take to manage the PLC? 1. Introduction stage a. Primary demand the desire for the product class rather than for a specific brand b. Selective demand the preference for a specific brand c. Pricing can be either low or high i. Skimming price high ii. Penetration pricing price low d. Gain awareness, limited distribution, promotion to inform and educate 2. Growth stagerapid increase in sales, increasing rate of new people, but also repeat customers a. Changes in product in growth stage occur to differentiate from competitors i.e. smartphones, tablet devices 3. Maturity stage slowing of total industry sales or product class revenue, stagnating 4. Decline stage occurs when sales drop a. Numerous products in the decline stage tend to consume a disproportionate share of management and financial resources b. Either deletion or harvesting i. Deletion dropping the product from the company’s product line (most drastic strategy) ii. Harvesting is when a company retains the product but reduces marketing costs What is product deletion? What is harvesting? What is skimming and penetration pricing? Which stage of the PLC are these tactics associated with? Skimming price high Penetration pricing price low Deletion dropping the product from the company’s product line (most drastic strategy) Harvesting is when a company retains the product but reduces marketing costs Decline Stage How does the length and shape of the product cycle change to produce alternative PLCs? 15 Length no set time it takes for a product to move through the life cycle Shape depends on the product o Highlearning product extended introductory period, because education is required o Lowlearning product begins immediately because little learning is required o Fashion product has ups and downs depends on style of the times o Fad product rapid sales the rapid decline novelty items Consumers fall into different categories depending on the length of time it takes them to adopt a new innovation. What are the categories, and the characteristics associated with people in the various categories? Product class entire product category or industry Product form variations within product class Innovators venturesome Early adopters leaders in social settings Early majority many informal social contacts Late majority skeptical Laggards fear of debt, informed by friend What is a brand name? What are the characteristics of a “good” brand name? Brand name is any word, device or combination of these used to distinguish a seller’s products or services Characteristics o Name should suggest the product benefits o The name should be memorable, distinctive and positive o Name should fit the company or product image o Name should have no legal or regulatory restrictions o Name should be simple What is brand equity? What are the characteristics of brand equity? What is brand personality? Brand equity the added value a brand name gives to a product beyond the functional benefits provided. o Brand equity proves a competitive advantage o Consumer are often willing to pay a higher price for a product with brand equity o Establish positive brand awareness, establish a brand’s meaning, elicit the proper consumer response to brand’s identity and meaning o Create a consumerbrand connection achieve active loyalty Brand licensing contractual agreement whereby one company allows its brand name or trademark to be used with products or services What are the alternative branding strategies? How are they different from each other? 16 Multiproduct a company uses one name for all of its product in a class “family branding” o Product line extensions using existing brand name to enter a new market segment in product class o Subbranding combines corporate and family brand with a new brand to distinguish products (Gatorade and G2 ex.) o Brand extension using existing brand name to enter a different product class o Cobranding the paring of two brand names of two manufacturers on a single product (Hershey and Chips Ahoy! Ex.) Multibranding gives each product a distinctive name o Fighting brands confront competitor brands Private reseller branding, when it manufactures products but sells them under the brand name of the wholesaler or retailer Mixed product under own brand name and resellers What are the benefits of packaging? Communication label information it conveys to the consumer, directions, legal requirements Functional provides storage, convenience or protection or ensuring product quality Perceptual package and label shape, color and graphics distinguishing one brand from another, convey a brand’s positioning and build on brand equity Challenges: Connecting with customers Environmental concerns Health, safety and security issues Cost reduction Warranty a statement indicating the liability of the manufacturer for product deficiencies What are the 4 I’s of services? How do they make services uniquely different from products? How do products differ from services based on the manner in which consumers evaluate them? Intangibility services cannot be held, seen before purchase decision Inconsistency cannot develop pricing, promotion or delivering services if quality is inconsistent Inseparability consumer cannot separate the deliverer of the service from the service its self Inventory problems exists when inventory is perishable and there are costs associated with handling inventory What is idle production capacity? What are inventory carrying costs? What is capacity management? What is offpeak pricing? 17 Idle production capacity which is when the service provider is available but here is o demand for the service Offpeak pricing consist of changing different prices during different times of the day or during different days of the week to reflect variations in demand for service One way to classify services is by delivery by people or equipment – what is meant by this? Another way is in terms of inventory carrying costs – what is meant by this? What are some other ways in which services are classified? What is meant by the service continuum? Delivery by people or equipment o Equipmentbased automated (ATM), operated by relatively unskilled operators (dry cleaners), operated by skilled operators (airlines) o Peoplebased unskilled labor (lawn care), skilled labor (plumbers), professionals (accountants) For profit or nonprofit organizations Service continuum the range of productdominant to servicedominant offerings What is a customer contact audit? What is meant by service gap analysis? What is meant by a service failure and how can firms monitor them? Customer contact audit a flowchart of the points of interaction between consumers and service providers Gap analysis differences between the consumer’s expectations and experience o Reliability o Tangibility o Responsiveness o Assurance o Empathy What are the additional 3 Ps for services? People o internal marketing based on the notion that a service organization must focus on its employees or internal market o CEM customer experience management physical environment o way service is delivered and where the firm and customers interact process o refers to the actual procedures, mechanisms, and flow of activities by which service is created and delivered Capacity management service component of marketing mix integrated with efforts to influence consumer demand 18
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