Principles of Marketing and Management Notes for February 9th and February 11th
Principles of Marketing and Management Notes for February 9th and February 11th BCOR 2001
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This 5 page Class Notes was uploaded by Robin Silk on Monday February 8, 2016. The Class Notes belongs to BCOR 2001 at University of Colorado at Boulder taught by Emily Edwards and Kevin McMahon in Winter 2016. Since its upload, it has received 53 views. For similar materials see Principles of Marketing and Management in Business at University of Colorado at Boulder.
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Date Created: 02/08/16
Principles of Marketing Class Notes with Professor Edwards Tuesday February 9th 2016 Ch. 11 Managing Brands, Products, & Services Started class with a discussion of Super Bowl advertisements 1. Product Lifecycle a. SPARK #6: Wonderbread i. Focus on the four stages of product lifecycles: Introduction, Growth, Maturity, and Decline ii. Introduction Phase 1. First company to commercially produce and market sliced bread (Around WWII) 2. The name Wonder Bread comes from looking at a sky filled with balloons that gives you a sense of wonder 3. The company targeted kids iii. Growth Stage 1. Rapid sales increase; increased competition. 60s and 70s 2. In the introduction phase Wonder Bread put vitamins and minerals in their bread but in the growth stage they stressed this factor, saying Wonder Bread was a great way to build a strong body. They promoted 12 ways to build strong bodies (with Wonder Bread) 3. TV was becoming very popular and a great way for companies to promote products, including Wonder Bread iv. Maturity Stage 1. Maturity started in the 80s 2. Cold War era; a lot of steel companies closed. Inflation was rising 3. Wonder Bread alters its marketing mix; introduces Wonder Light a. This featured less carbohydrates; very successful v. Decline Stage 1. Early 2000s: Health food craze a. People want gluten free items, less carbs, etc. b. Wonder Bread falls to the wayside in consumers minds 2. Wonder Bread’s unhealthy reputation lead to it declaring bankruptcy in 2012 3. Marketing mix has changed again; only four types of Wonder Bread available now compared to eight different types in the 80s 4. New packaging as well to communicate with consumers better vi. Brand Equity Brand perception from consumer perspectives 1. Initially Wonder Bread had a great deal of brand loyalty and a strong image. This changed over time 2. It is perceived as old and outdated; unhealthy, and not modern vii. Recommendations Moving Forward 1. Must be repositioned for newer generations of consumers 2. New marketing campaigns; more relevant ways to market that are more relevant to consumers 2. Product Adopters a. 3. Crossing the Chasm a. New product innovations face a “chasm” i. A gap between visionary customers (the first customers) and the customers who are a little more cautionary ii. This gap is between the early adopters and the early majority iii. If this chasm isn’t crossed, products fail 4. Factors Affecting The Speed of Adoption a. Compatibility Does it fit the needs of customers? b. Trialability Can potential consumers try it out? c. Relative Advantage New product compared to older, established ones d. Product Complexity How difficult is it to use? Simpler = faster e. Perceived Risk Consumers might be worried about costs, commitments, etc. 5. Why Do We Brand? a. By branding, we add additional value to products/services that a company offers i. Functional Value: Quality, Consistency, Convenience ii. Emotional Value: Personality, Values, Humor, Trust Thursday February 11th 2016 Chapter 13: Pricing Basics 1. Reminder: Don’t neglect research study participation (Sona) 2. Branding Types a. Corporate (Multiproduct) Branding i. This breaks down into two further subcategories 1. SubBranding: a company creates a second level of branding for its products, such as Burton Boom example from class 2. CoBranding: two or more companies come together and create a new product with both brand names i.e: a rockstar and burton collaborative energy drink 3. Protecting and Valuing Brand Equity a. Brand equity the way consumers perceive a brand and its products in relation to its competitors and the market situation has a financial advantage, and therefore a financial value. This makes it an asset. b. Brand equity can be different among product owners and nonowners i. i.e owners and nonowners of Mazda both see Mazda as exciting and playful, but only owners see Mazda as adventurous 4. Trademark Protection (Generic Brands) a. Brands go to great lengths to protect their image and their trademarks i. People think of tissues as Kleenex, most people call adhesive bandages “Bandaids” 1. This is positive to a point, but can be damaging if negative connotations are created Price Talks 1. The Failure of Tata Nano a. Marketed as the “world’s cheapest car,” people associated cheap with low quality b. Unfortunately this proved to be true and the car was very unsafe; it was poorly made i. Trying to position your product as the cheapest in a market can be dangerous and backfire 2. Price in Different Perspectives a. MacroEconomic Perspective i. Price allocates resources since consumers vote with their dollars b. MicroEconomic Perspective i. Price is a measure of the utility (value) an item provides to consumers c. Marketer’s perspective i. Price is a key lever for marketers to utilize in order to stand out from competition 3. Pricing Strategies In Marketing a. Several different strategies exist that can be utilized to stop consumers from fixating on price i. Changing the pricing structure basis i.e how long products will last (how many miles a set of tires will get you) ii. Willful overpricing stimulate curiosity; what makes the product worth more? iii. Partition prices into components People pay separately for chair legs vs chair back iv. Use the same price point for a product line with differentiations $99 for all different colors of a line of watches 4. The Pricing Process SPARK Presentation on Strategic Pricing Coffee a. Pricing Audit For Starbucks i. Offers different prices based on offerings ii. Starbucks position themselves as a premium brand and emphasize this in stores with unique signage iii. Like to try and deliver the store experience to consumers homes b. Pricing Objectives For Starbucks i. Starbucks has really strong brand equity and want to build off of this ii. Continue growing revenues iii. Adjust to increasing coffee bean costs and try to maintain profit margins c. Pricing Constraints For Competitors i. Competition convenience, on the go, brew at home ii. Coffee bean price fluctuation brought on by droughts 5. How Price Drives Demand a. Generally, as price increases, demand falls. The reverse is true too i. This is known as a shift along a demand curve b. If something happens to affect the amount of a good that consumers want the product : i. This is know as a shift of the demand curve 6. Price Elasticity of Demand a. Elastic Demand i. Small change in P causes a large change in Q ii. E>|1| b. Inelastic Demand i. Only big changes in P cause a change in Q ii. E<|1| c. This equation is used to derive elasticity
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