Marketing today focuses on the management of customer relationships over time. The sender is sending a message encoded in a symbolic form (words, sounds, and illustrations) to another party. This message is sent through different communication forms to the receiver, who then has to decode this message to interpret the meaning in their own way. This receiver is the actual customer, and after seeing this message will develop some form of a response, whether positive or negative. The goal of the company that sends out the message is to obtain feedback from the consumer, therefore completing the communications circle. This communication circle will hopefully be uninterrupted, however there is always a possibility for the receiver to get a different message than what the sender intended. This noise can cause the receiver to miss the key points of the message and therefore cause the message to be rendered useless.
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a) On the website for the fast food company Burger King, the company is sending a message to the consumer. The message states that if they wish to purchase their famous chicken fries, now would be the time to purchase them since they are only sold for a limited time. They even added coupons on the website for customers to print out for the chicken fries. The message is speaking directly to the customer. What this creates is a situation where the sender, Burger King, is able to bring their message to a personal level with the receiver or potential future customer. The customer then decodes this message in their own thoughts, understanding that they could actually receive a deal on a great item that is only sold for a limited time. Hopefully, the customer goes through the action of going to the website and printing out the coupon and uses the coupon. This is the response that they make upon receiving the message and depending on the customer they could potentially receive feedback. There is always going to be potential for noise dealing with business to this high magnitude.
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b) Burger King is sending a message to a mass audience when they say that they can save customers half off of their chicken fries if they print out the coupons from their website. The coupon is available to any online shoppers, and relays a message to the consumer through the decoding process that if they were to spend money on one meal, the customer might as well use the coupon as well. This message will then generate a response from the customer who could decide that it is not worth it to spend the extra money to get the discount or spends the money to get the discount. Depending on the customer, Burger King might then receive feedback from the consumer on their opinion of this discount offer through a survey at the end of the purchase, or the customer relaying this opinion to an Burger King employee. The potential for noise within this message is still possible. Don't forget about the age old question of What is the meaning of a hypothesis in psychology?
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My website that I have chosen was the homepage for the show company Vans. The strengths that I have noticed right off the bat as a consumer would be the many options of shoes I can choose from, if I were there in order to buy shoes. They have the classic checkerboard shoes as well as the brand new slip on shoes just created. Also, I do love how on their website they place the price of the shoe right there below it so it is very easy to find. This is convenient because with many Michael Jordan shoes the prices for the shoe can be hard to find. The last strength that I really admire is the fact that they have on the home page an announcement that states that there is free shipping and free returns. As a consumer this is nice because I realize that the company is not so after my money that they are rude to us who pay their bills. They do what they can in order to make the billing process easy and convenient. One huge strength from a marketing perspective could be that they are still involved in skateboarding after all these years. This creates a sense of loyalty to our customers. On the homepage is a slideshow of young kids skateboarding which is cool for the parents to see because they were raised in the 60's when skateboarding was just becoming popular. Also, it is great to see their slogan, "Off the Wall”staying the same for the past 50 years. Weaknesses from a consumer and a marketing
perspective would be that the page is so boring. The colors in the background are an off white paleish color that loses the attention of the customer. There is nothing on the homepage expect the slideshow, which is cool but not anything that really makes me want to visit frequently. There are about four different shoes that are displayed on the opening page which is good for the customer to get a sense of the shoes that are being sold. However, the option of shoes they have chosen could be greater. One of my suggestions for improving the website is to add new colors to the background like a blue or red with nice designs. Something that won't put customers to sleep when they first arrive. Second, I would add more to my slideshow that illustrates how involved Vans is in the community. Vans has hundreds of skate tournaments every year where the benefits go to the Wounded Warrior Project. I would add more community based things in my slideshow if a slideshow is going to be the main attraction of the opening page. Last, I would add better shoes to the opening display on the home page. It is nice that they have the classics on there, I would keep that. The new shoes that they display are not that great. They have really nice shoes so I do not understand why they do not put their best products out there to grab the attention on the customers. I would add the new shoes that everyone loves like the new Chauffer 2.0, Chima Fergusons, and the Van Doran Era, which are the newest type of skate shoe by Vans. If you want to learn more check out What is the meaning of pleistocene global sea levels?
This material begins with the section on competitive positions. Competitive positions is described as the firms that are competing in a given target market, at any point in time, which differ in their objectives and resources. The section then begins to break down the market share that different companies can hold and the title which are given to these companies. The largest share of the market is in the hands of the market leader. Then is the market challenger, which is close to the leader and is straining to increase its share of the industry. The next greatest shareholder within the market are the market followers, who do not want to do more than to hold onto the share of the industry that they currently have. The smallest percentage of the market is held by the market nichers, who hold the remaining percentage of the market and are often overlooked by the rest of the industry. There are different strategies that are used by the market leader, who typically has control of the price changes, newproduct introductions, distribution coverage, and promotion spending. The leader is often recognized as a dominant force by the competition, and are typically either challenged, imitated, or avoided altogether. In order to remain the leader, the company must take one of three actions The three actions are being to expand total demand, protecting their current market share through offensive or defensive actions, or to expand their market share further.
Market leaders can expand the market by developing new users, new uses, and more usage of its products. They usually can find new users or untapped market segments in many places. They can also expand the markets by discovering and promoting new uses for the product, or by encouraging more usage of a product by convincing people to use the product more often or using more per occasion. In order to protect their market share, a company must first protect itself against competitors’ attacks. It must fix or prevent from weaknesses that could provide opportunities for competitors. It must always fulfill its value promise and work tirelessly to keep strong relationships with valued customers.
Its prices must also remain consistent with the value that customers see in the brand. The best response for the leader is continuous innovation, and refusing to be content with the way things are as well as leading the industry in new products, customer services, distribution effectiveness, promotion, and cost cutting. It keeps increasing its competitive effectiveness and value to customers. The leader can also expand their market share which can potentially lead to very large sales increases. Studies have shown that on average, profitability rises with increasing market share. However some studies have found that many industries contain one or a few highly profitable firms, several profitable and more focused firms, and a large number of mediumsized firms with poorer profit performance. It appears that profitability increases as a business gains share relative to competitors in its served market.
The market challengers are the firms that are second, third, or lower in an industry and are sometimes large. These runnerup firms can adopt one of two competitive strategies: one being to challenge the market leader and other competitors in an aggressive bid for more market share, or they can play along with competitors and not cause a small scene in the market. They must first define which competitors to challenge and its strategic objective. They can attack the market leader, or simply take more market share away. Challengers often have what some strategists call a “secondmover advantage,” in that they are able to observe what has made the leader successful and improve upon it. Alternatively, the challenger can avoid the leader and instead challenge firms its own size or smaller local and regional firms. These smaller firms may be underfinanced and not serving their customers well. If the challenger goes after a small local company, its objective may be to put that company out of business. The important point remains: The challenger must choose its opponents carefully and have a clearly defined and attainable objective. The challenger may launch a full frontal attack, matching the competitor’s product, advertising, price, and distribution efforts. It attacks the competitor’s strengths rather than its weaknesses. If the market challenger has fewer resources than the competitor, a frontal attack makes little to no sense. Thus, many new market entrants avoid frontal attacks, knowing that market leaders can head them off with ad blitzes, price wars, and other retaliations. Rather than challenging headon, the challenger can make an indirect attack on the competitor’s weaknesses or on gaps in the competitor’s market coverage.
Not all runnerup companies want to challenge the market leader. If the challenger’s lure is lower prices, improved service, or additional product features, the market leader can quickly match these to defuse the attack. The leader probably has more staying power in an allout battle for customers. A follower can gain many advantages. The market leader often bears the huge expenses of developing new products and markets, expanding distribution, and educating the market. By contrast, as with challengers, the market follower can learn from the market leader’s experience. It can copy or improve on the leader’s products and programs, usually with much less investment. Although the follower will probably not overtake the leader, it often can be as profitable. A follower must know how to hold current customers and win a fair share of new ones. It must find
the right balance between following closely enough to win customers from the market leader but following at enough of a distance to avoid retaliation. Each follower tries to bring distinctive advantages to its target market, location, services, financing. A follower is often a major target of attack by challengers. Therefore, the market follower must keep its manufacturing costs and prices low or its product quality and services high. It must also enter new markets as they open up.
Almost every industry includes firms that specialize in serving market niches. Instead of pursuing the whole market or even large segments, these firms target sub segments. Nichers are often smaller firms with limited resources. But smaller divisions of larger firms also may pursue niching strategies. Firms with low shares of the total market can be highly successful and profitable through smart niching.
The main reason is that the market nicher ends up knowing the target customer group so well, that it meets their needs better than other firms that casually sell to that niche. As a result, the nicher can charge a substantial markup over costs because of the added value. Whereas the mass marketer achieves high volume, the nicher achieves high margins.
Nichers try to find one or more market niches that are safe and profitable. An ideal market niche is big enough to be profitable and has growth potential. It is one that the firm can serve effectively. Perhaps most importantly, the niche is of little interest to major competitors. And the firm can build the skills and customer goodwill to defend itself against a major competitor as the niche grows and becomes more attractive. The key idea in niching is specialization. A market nicher can specialize along any of several market, customer, product, or marketing mix lines. The nicher can specialize in serving a given customer size group. Many nichers specialize in serving small and midsize customers who are neglected by the majors. Many do not pay much mind to the small and midsize customers but that is what the nicher sometimes relies on. Some nichers focus on one or a few specific customers selling their entire output to a single company. Still other nichers specialize by geographic market, selling only in a certain locality, region, or area of the world. Qualityprice nichers operate at the low or high end of the market. Service nichers offer services not available from other firms. Niching carries some major risks. For example, the market niche may dry up, or it might grow to the point that it attracts larger competitors. This is exactly why many companies practice multiple niching. By developing two or more niches, a company increases its chances for survival. Even some large firms prefer a multiple niche strategy to serving the total market.
In the United States sports brands selling industry, the market leader is Nike. They are able to control the majority of the market share while managing to continue to expand their share of the market. In order to keep the margin that they hold over the competition, they must be able to protect the market share that they do have through continuing to fulfill their value promise. If they are unable to do this, then as market challengers, Under Armor, Adidas, and Reebok would be able to make a move on Nike. They would have to most likely launch an indirect attack, looking to find value within the weaknesses of Nike. With Adidas being the number two sports brand chain however, they would most likely struggle to be the company that could overtake Nike. The only chance that
they have is managing to find a way to increase their per store sales, seeing as their sales are much lower than Nike. While the best way to do this might seem to get into a war with Nike in order to show that they are a better alternative, they do not have the resources to match up with Nike in a full frontal attack. Meanwhile the market followers within the industry are primarily made up of sporting brands such as Jordan, Champion and Patagonia. These followers are simply going off of the ideas of the market leader in this industry, and are working to make sure to learn from the leaders and gain as many customers as possible without launching into competition with either the leader or the challengers. The market nichers in the United States fast food industry would be chains such as Columbia, North Face, and the newer company Calia. These companies specialize in special target markets, with stores that are located in specific areas of the country. These companies know that where they are located is where they are safe, and are able to maintain the statusquo with their loyal customer base.
1) High Advertising and Promotion Costs – This is not the case with International Paper, as most consumers have never heard of this company yet are using their products nearly every day. This company is ranked number 111 on the Fortune 500 list, and produces over $26 billion worth of paper products per year.
Deceptive Practices International Paper releases reports on all of their company practices ranging from their environmental impact to their economic and social performance. The company is routinely developing ways to lower their economic footprint, and show this in
their reports that include air missions, environmental performance, health and safety, solid waste, as well as environmental certifications.
Harmful, or Unsafe Products International Paper realized that there was an issue with the paper cups that were on the market, in that they were being made from an unsustainable resource. With this in mind, they designed an entirely new cup that had a lining made from plants that was called the ecotainer.
Planned Obsolescence International Paper has made it their goal to largely invest in processes that will save the environment as well as save the company money to make the products that they currently do. The demand for their products is not only already very large, but is still growing with no realistic alternatives being possible in the near future.
Poor Service to Disadvantaged Customers The products that International Paper offers are widely available at very low prices. The typical costs of envelopes, paper, paper cups, etc. is very low and can be found at nearly any store. There is not a consumer on the market that could argue that the service that they are provided by International Paper is worse than the next consumer.
Cultural Pollution Consumers feel that there is too much advertising occurring in this world, and yet there are many people who have never heard of International Paper. They
do not make advertisements to the mass media, yet they continue to produce products that everybody uses.
2) International Paper recognizes that with their philosophy of being transparent with their consumers, it is highly beneficial to their company strategy to continue to impress. They have managed to continue to revolutionize their processes and it has paid off both in their finances and their marketing. They run the company with the philosophy that taking care of the environment and taking care of their business are interdependent. Through taking care of the environment with methods of conservation and their awareness of their environmental footprint, they have managed to develop methods of eliminating some of the demand needed for resources which has in turn eliminated costs for the company. When the company makes an investment to reduce their footprint, they have lowered their own costs after this initial investment which causes the company to always come out ahead in the end.
3) When gauging the environmental stability of International Paper, it can be seen that the company is taking steps towards greening as well as beyond greening. The company has worked to prevent pollution from occurring, managing to cut their greenhouse emissions by 40% over the last decade, as well as creating a new cup that is completely biodegradable. This new cup technology that they created by changing the lining from a petroleum base to a plant base is an example of the product stewardship that International Paper has. They strived to make a product that would have as minimal impact on the environment as possible, from the factory to the waste facility. Looking toward the future, International Paper has invested in technology that allows them to recover and reuse the steam in their facilities, which leads to the amount of coal needed to be dramatically reduced. The company also created technology to filter the wastewater coming out of their plant in Brazil. A part of this wastewater facility is to strengthen their sustainability vision. Replacing their previous facility that used ponds allowed the company to invest back into the environment by turning their ponds into a natural habitat for the wildlife that lives in that area. International Paper also works closely with the National Park Foundation, the National Recycling Coalition, and the Conservation Fund; working to replenish and strengthen the environment that they depend on.
4) International Paper is able to practice enlightened marketing through their efforts as a green company. The consumers in today’s market are focused on the environment and desire to use companies which are conscientious of the issues in our world today. For their efforts they have been consistently recognized as one of the most admired companies with the Fortune 500 list, as well as managing to receive a Climate Leadership award from the EPA. One of the greatest marketing moves that they have made was in the development of their ecofriendly cup, where they were able to make a completely biodegradable cup that would reach millions of coffee drinkers throughout the world. This cup is one in which would show the world the dedication that the company has to cleaning up the world around us.
5) International Paper has managed to show that in order for them to be environmentally friendly, they are actually able to cut costs. By using methods that allow for the reuse of steam, they have been able to save an enormous amount of money on the cost of coal. A onetime investment by the company of $2.8 million managed to save the company an
estimated $2.4 million per year. Meanwhile in just one of their plants in Savannah, Georgia, the company was able to save over $600,000 per year after investing $900,000 into reducing their demand for steam. This shows that if a company will dedicate the money to being environmentally friendly, they can save money in the long run through reducing the demand for resources that they need.