Fundamentals of Marketing
Fundamentals of Marketing MKT 305
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This 15 page Class Notes was uploaded by Mrs. Marisol Schuppe on Monday September 21, 2015. The Class Notes belongs to MKT 305 at Colorado State University taught by Nancy Boykin in Fall. Since its upload, it has received 105 views. For similar materials see /class/210062/mkt-305-colorado-state-university in Marketing at Colorado State University.
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Date Created: 09/21/15
Chapter 14 Integrated Marketing Communications Outline promotional mix 0 more than 4 0 advertising I definition 0 paying for an ad 0 whoever is paying for ad must be identified in the ad 0 non personal form of communication 0 per person reach cheap 0 cost number of exposed people 0 could be too expensive for some companies 0 control over what you say 0 no direct feedback 0 Was ad successful 0 public relationspublicity I anything that a company does to enhance imagePR o examples stockholders meeting anything with customers employees etc I anything that a company does to manage the publicity it getspubicity 0 news stories when media reports on your company 0 ex BP oil spill in gulf and how they handled the negative publicity 0 almost always negative 0 no control over publicity 0 personal selling I calling someone to make a sell I per person reach most expensive 0 300 per call on average I sales calls sales promotion 0 consumer or sales I targeting the final consumer I deals to retailers distributors etc not advertising anything that a company does to make a quick buck advertising has a more long term effect Coupons rebates sales More money spent here than advertising now days Very easily copied by competitors I Can become a major cost but can be detrimental to sales taken away Doesn t create long term customers 0 Sales promotional spiral I Negative phenomenon I Once you offer free stuff it becomes a minimum requirement integrated marketing communications IMC 0 what elements of promotional blend are you going to use 000000 0 0 what is most appropriate promotional elements 0 push vs pull 0 use one or both 0 usually both 0 push spending money to channel members I ie Distributors or retailers 0 Pull promoting to consumers Not in textbook 0 speculative presentation 0 to gamble 0 put together creative work to win over client for advertising 0 only way to win an ad account with a client 0 presentation reel old ways of winning an account now just a frosting on the cake dvd of compilation of best work done variety of ads easy method maybe part of the speculative presentation now days 0 llputting our account up for review 0 llwe are firing you as an ad company 0 Could be positive or negative I Depending on the ad company I Old company is negative I Potential new company is positive 0 Compete to win new ad account 0 Can t have competing companies in same ad agency 0 Considered conflict of interest 0 Ex Can t have McDonald s and Burger King account at same agency OOOOO Chapter 7 Outline Marketing Research Cannibalization 0 When you introduce a similar product to one that a company already has the new product eats the sales of the old product 0 Negative 0 No net increase in sales 0 To fight this I Attack a different target market and create a distinct position Consumer research defined steps in the marketing research process 0 Problem definition 0 Exploratory research on problem 0 Formulating a Hypothesis 0 Create a Research design I Who is your target market I How many people are going to be in the study I Select based on probability everyone has the same chance of being allowed to participate or not 0 Probability sampling is better because there is a higher confidence in responses and therefore a better speculation only when lists of your target market exists I What are you going to ask and how 0 Yesno have to too much in between 0 Collecting data I Primary 0 Develop data and generate info 0 Time consuming expensive I Secondary 0 Should always be gathered first 0 Fast cheap no expertise 0 Problem is it going to be unique to your problem Most likely not 0 Interpreting and Presenting the Research Information focus group interviews qualitative 0 most widely used 0 612 people at one time In depth interview 0 One on one secondary research projective techniques qualitative 0 highly qualitative o believe the participant that they are talking about someone else or something else 0 project own thoughts and feelings 0 use if you ask intimate questions 0 Likert scale 0 Stroneg disagree to Strongly agree 0 Quantitative and intensity of feelings I Can apply numerical values to responses 0 Semantic differential scale 0 7 point scale 0 Can be too wordy Other terms to be familiar with o universepopulation 0 all of the people that have the characteristics you are looking for in your research 0 sample 0 quantitative vs qualitative o Qualitative I Characteristic based research not as concrete more subjective 0 Quantitative I Number based numerical values I Observationweakesttechnique I Experiment least used 0 most often used type of experiment test marketfield experiment 0 test market test cityies by using real world risk analysis Usually a normal city demographically I Will people buy the product and test for about 612 months average 0 Wouldn t test technology products because you don t have 6 months to waste only inexpensive products are tested reasons NOT to test market 0 I if product is easily copied I if product is expensive and can be obsolete in a matter of months I if product is a fad I sabatoge discounting from competitors price I worst reason product is deemed perfect product by manufacturer I Survey 0 Most common 0 Likert Scale 0 exploratory vs conclusive research Qualitative vs quantitative Chapter 9 Outline product mix defined 0 everything your company makes product line defined 0 categories of similar products 0 ex Proctor and gamble line of soap line of detergent product item 0 individual items under a line I ex cool ranch doritos Product Classification Comes down to what your motivation 1 Convenience a Inexpensive b Used frequently c Found everywhere 2 Shopping 3 You shop around for best deal b More expensive c More important to consumer d Less frequently purchased e 2 types i Homogeneous 1 Product differentiation is unimportant 2 Price is more important ii Heterogeneous 1 Product differentiation is important and a factor in purchasing 3 Specialty 3 Accept no substitute b Has more purchasing power c Usually most expensive and higher quality d Image products 4 Unsought a People don t think about buying b Ex Coffins health care products insurance New product defined 1 New to the world 39 39 puduct a new products are new for 6 months b 10 of new products c True innovation never been created or developed d Product that changed way of life e Teach people about new product 2 New and improved continuous innovation 3 Existing product that got a quotmakeoverquot b But be a significant change to product c Has to offer new benefit that is readily observable d 60 of new products 0 services defined they are intangible products much more difficult to understand 0 generic approach 0 marketers don t agree 0 is no difference between service and good 0 still buying value and a benefit 0 business definition 0 marketers agree with this most 0 a service is an actperformance that is intangible and has no lasting result 0 continuum approach 0 most of what we buy is a combo of both good and service 0 Characteristics of Services 1 Intangibility a Intangibility is an issue b Did I get good service c Was the job actually good d Hard to judge quality of an intangible especially if we don t understand e Problem to solve is make services more tangible 2 nseparability a With a service you can t separate service from deliverer of service b Technical base plus functional base i How well was service performed plus attitude of deliver of service 3 Inventoryperishability a Services cannot be inventoried b Intangible c Ex of perishability for a service i Airplane that takes off with empty seats or empty seats at a concert d Manage demand to overcome problem i Give more incentive to consume service 4 Variabilityinconsistency a Inconsistency in quality or quantity i Because people are varied depending on time 0 Classification of Services 0 People or equipment based I Dentist doctor I Getting money out ofa bank pumping gas 0 Presence required I Must be there while service is performed 0 Need for service provides I Personal or business need 0 Service objective I For profit or nonprofit o Commitmentpower I Do you feel like you need the service 0 Degree I Ability to choose your service provider Steps in the New Product Development Process each step gets more expensivebiggest jump is step 3 to 4 Book has 7 steps are only responsible for 6 steps New product failure rate is very high 0 About 50 1 Generate ideas a Don t Get rid of anybody s ideas in this step b Money not spent 2 Screen ideas a Get rid of bad ideas before step 4 the better b Start objectifying ideas i Select screening criteria c Money not spent 3 Business analysis a Money starts to be used to develop b Number crunching on ideas i Breakeven sales analysis profitability c Get rid of bad ideas to save a lot of money 4 Product development a Make product or protoype b Huge leap in amount of money from step 3 c Use test i Inexpensive product can make a lot of them ii Focus group 5 Test marketing a Marketing research b Test in a city c Determine success d You can skip step five if you shouldn t use test marketing 6 Commercialization a By far the most expensive b Full scale manufacturing c Full scale distribution d Do research to see why it failed or succeeded Chapter 4 Outline Understanding Consumer Behavior Consumer Purchase Decision Process 1 Problem Recognition don t solve a problem when there is no problem Always done when making a pruchase Desirewant recognition Observe a needwant for certain product then recognize need for purchase Marketers job is to create a need or want for a product or solve a problem that doesn t exist 2 Information Search internal and external Internal always done scanning memory for information on what is needed and what brand or product you needwant External research via outside sources internet search reviews etc doesn t happen all the time for every product Usually the products we search are high investment 3 Alternative Evaluation product ladderevoked set Product ladder 35 choices for consideration of your favorite brand What you don t evaluate you don t buy 4 Purchase Decision 5 Postpurchase Behavior Evaluating the purchase after use Did you buy the right thing Was it the right product Do you feel guilty for buying it More expensive products have more post purchase evaluation Marketers must think about consumer thought of post purchase behavior Are people feeling remorse for my product What can I do to negate this 0 Easiest thing to do is not to oversell product and create too high expectations 0 Having difficult return policy 0 Could use advertising Consumer Involvement Highlow High When important purchases occur Typically high involvement Usually expensive or long term purchases or risky purchases High CognitionAttitudeBehavior Low CognitionBehaviorAttitude 0 Difference is you evaluate more before you buy in high involvement and evaluate less before purchase in low involvement 1 Extended 0 Take time to purchase high involvement 2 Limited 0 Usually buy same brands but may take some time to try something new 3 Routine 0 Always buy same brands over and over without thinking usually low cost frequent purchase Low involvement Psychological In uences 1 Motivation Maslow s Hierarchy of Needs 0 Lower level needs marketers don t worry about these in terms of stressing advertising 0 Physiological need water food safety 0 Higher level of safety 0 Higher level needs marketers advertise towards these 0 Social 0 Esteem needs 0 Selfactualization I Be all that you can be 2 Personality 0 Does influence what you purchase but it is hard to prove this 0 Not a great predictor 3 Learning Pavlov and his dog classical conditioning 0 Every time a stimulus is introduces to a person it conditions them to wantthinkdesire something that is associated with that stimulus Some things don t need conditioning but you can condition in Pavlov s theory every time the bell rang the dog would eat Take something known and pair it with something unknown Brands are the stimulus thoughts of what the brand means is the conditioned repsonse 0 Ex Nike stimulus makes people think of top of the line athletic wear 4 Attitudesattitude change most studied construct in marketing 0 Most studied variable in marketing research 0 3 parts 0 Reasonmotivation of attitude cognitive o Likedislike for certain products affect 0 Behavior conative 0 Better to have a negative attitude than no attitude at all Sociocultural Influences Collective behavior ofgroups How does it change when you are alone 1 Opinion leadership 0 Asking friends for advice of certain products but you only ask certain people about certain products 0 If you are an opinion leader for no more than 13 products 2 The power of buzz WOM 0 Word of mouth advertising 0 Far more credible If done it right way 3 Culture the broadest influence on consumption 0 Certain important values 0 Rights given to us 0 Materialism 0 Sub cultures 0 Usually age separate cultures 0 4 Subcultures Hispanics African Americans Asian Americans Chapter 11 Outline Pricing Products and Services Most easily copied aspect of 4 P s 0 With immediacy Differential pricing strategies 1 Oneprice vs variable price a One price i Pay what they charge ii No negotiation b Variable Price i Negotiate price ii Price discrimination 2 Second market discounting a Price different in different target markets b Ex Student discounts c Excess capacity is a requirement 3 Skimming 3 Selling at high price b When do you use i When consumers are price insensitive ii Production capacity is limited 1 Demand greater than supply iii Barriers to entry are high Competitive pricing strategies 1 Meeting the competition 3 Find out what your competition price are and charge the same 2 Undercutting the competition 3 Everyday lower price than competition 3 Penetration pricing 3 Exact opposite of skimming b Asking for a low price i Price sensitive ii Barriers to entry are low Product Line pricing strategies 1 Captive pricing 2 Leader pricing 3 Loss leader pricing 4 Low leader pricing 5 Bait and switch pricing 6 Price lining 7 Price bundling 8 Multiple unit pricing PsychologicalImage pricing strategies 1 Odd vs even a 199 not 2 dollars i People will buy more or buy product if price is odd ii Not proven b Even prices i Expensive pricing ii Or luxury 2 Prestige pricing Product Strategy Outline 0 Do need to manage and market your brands differently over time o Graphical depiction of sales over time 0 Demand curve for an entire industry or product categoryex Energy drink beer I Not a demand curve for an individual brand 0 Doesn t have to go through each stage I A lot of quotnew quot products go straight to market maturity 0 Different countries can be in different stages of same product 0 Prices tend to drop throughout stages 1 Introduction a Majority of products don t start here b Typically are new to the world c Brand new category to an industry that exists d Little to no competition in this stage e Must stimulate primary demand product demand i Tell us what product is ii Why do we need it how do you use it iii Educate 2 Growth a Sales are increasing b Most profitable stage i But not highest sales c A few more competitors d People are familiar with product e Stimulate selective marketing i Buy our brand ii Differentiate brand from others f Demand exceeds supply 3 Maturity a Sales are increasing but will start to decline b Most expensive stage for marketing c Most brands are in maturity d Brands that go straight into maturity i Ex Surf detergent 1 Tons of competitors 2 Detergent is known to consumers maybe new brand e Heavy use of comparative marketing f No growth industry but individual brand can still grow i Must steal market share g Heavy use of sales promotion h Can stay in this stage forever 4 Decline a 0 Can you extend the PLC 1 2 Limitations 1 2 3 Branding St 0 of the PLC rategy brand name logo distinctive packaging motto character brand mark value of branding how much value does your name have in market place monetary value of the trade mark brand equity 0 O O 0 value of brand 0 equation I brand loyalty I high brand awareness I perceived qualityvalue 0 compared to price I brand associations 0 product with brand I other brand assets 0 trademarks o trademark law 0 if you don t sue an infringement can be used against you 0 Lanham Act 1946 I Spelled out how to protect your brand I Register with US patent and TR office 0 distribution 0 patents Types of Brands 1 Manufacturer a Globally known b More expensive 2 Privatestore a Ex Safeway brand b Usually cheaper c Quality same price different 3 Generic a Not popular b Except drugs c Lower quality 4 Licensed 5 Captive a Store brand b But only place you can t find product is at one chain of stores Legal Protection for Branding Elements Can your trademark become too popular 0 Yes 0 Negative thing I There is no more brand differentiation amongst products 0 Ex Bandaid I When your company brand is used as the generic term for that product
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