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This 4 page Class Notes was uploaded by Asli Acar on Monday April 25, 2016. The Class Notes belongs to MARK 220-01 at Georgetown University taught by Simon Blanchard in Spring 2016. Since its upload, it has received 10 views. For similar materials see PRINCIPLES OF MARKETING in Marketing at Georgetown University.
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Date Created: 04/25/16
Service Failure and Recovery When services do fail, recover fast! • Apologize (especially important for process failures) • Compensate (especially important for outcome failures) • Speed of recovery has a substantial impact on repurchases • Analyze what happened to eliminate future failures • Empower front line employees to take actions immediately • Marriot allows employees to spend up to $2500 to compensate for certain inconveniences Perception is reality! • 3 forces strongly influence how customers feel about a service encounter: 1 Sequence effects: How people recall experiences 2 Duration effects: how people process time 3 Rationalization effects: people want to make sense (what explanations for events) • How can firms optimize service interactions with consumers? Principle 1 – Finish Strong Principle 2 – Get the bad experiences out of the way early Principle 3 – Segment the pleasure, combine the Pain Principle 4 – Build commitment through choice Principle 5 – Give people rituals, and stick to them The product lifecycle (PLC) refers to the way product categories evolve over time, from their “births” to their “deaths.” Marketing strategies must change and evolve as a product moves through the PLC. Introduction Goals Get firsttime buyers to try the new product Sales Increase at a steady but slow pace Profits Negative or low High (to recover R&D costs) or Low (to attract large number of customers) Pricing Marketing Informing customers and creating Communications awareness Distribution Intensive personal selling to retailers and wholesalers Kellogg’s Offering :Healthy cereal breakfast in a portable and convenient format Target: Busy people who miss breakfast Introduction stage 50% share of the growing cereal bar market Decline Goals: Remain profitable and decide whether to keep or phase out product Sales Decline Profits Decline Pricing: May lower prices if the product will still be profitable Marketing Communications: Reduced to lower costs and maintain profitability Takeaways Products live and die, just like the rest of us! Marketers need to be aware of the product lifecycle, because marketing strategies and communications change depending on which stage the product is in The growth stage is fun and exciting, but it does not last forever Eventually, products and categories begin to die, so companies must develop new products and/or tap new markets Brand: A brand is a name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors Brand equity is the set of brand assets and liabilities linked to the brand, its name and symbol that add or subtract value to a product or service. Measuring brand equity • People have proposed a variety of different ways to measure brand equity • It can be measured at both the consumer level and at the market level • Consumerlevel example: willingnesstopay for branded vs. generic products Market value (see handout for conceptual example) • If we assume identical products between the generic and branded companies, how much more in sales are they getting because of the brand? • Forbes: http://www.forbes.com/powerfulbrands/list/ • Interbrand: http://interbrand.com/bestbrands/ • BrandZ: http://www.brandz100.com/ • On average, brands contribute 1/3 of firms’ total market value Memory: • Recall that memory is an associative network! • Your brand will be linked to many other concepts— associations that may or may not be helpful • Company (who makes the product) • Country of origin (where it is made) • Spokesperson or endorser • Sporting or cultural event