Week 8 Notes (Tuesday, 10/20/15 and Thursday, 10/22/15)
Week 8 Notes (Tuesday, 10/20/15 and Thursday, 10/22/15) 241
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This 7 page Class Notes was uploaded by JacksonB on Thursday October 22, 2015. The Class Notes belongs to 241 at Brigham Young University taught by Swenson in Summer 2015. Since its upload, it has received 24 views. For similar materials see Marketing Management in Business at Brigham Young University.
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Date Created: 10/22/15
BUS M 241 Swenson Tuesday 102015 Products and Branding Three Components of Brand Positioning 1 Competitive frames of reference What s the nature of the competition and the target market you re aiming for 2 Points of Difference PODS How is the product desirable to the consumer How is it distinguishable from competitors 3 Points of Parity POPs How does the product qualify to be in that particular market How does it negate PODs from the competitors Example Visa Visa competes With American Express and Mastercard Its POD is that it is accepted everywhere The other firms have a POD of status and prestige so Visa s POP is to offer Gold and Platinum cards Example Starbucks Starbucks competes With fast food chainsconvenience stores McDonald s 711 etc supermarkets and local cafes Starbucks POPs include promoting their high level of convenience negates the fast food chainsconvenience stores and supermarkets and the price negates local cafes Its PODs include a cooler image than supermarkets or fast food chainsconvenience stores and being more convenient than local cafes Example Toaster Strudel Pillsbury decided to introduce the Toaster Strudel into the market The early ads were ambiguous about the target market People found the German theme confusing thought Toaster Strudel was a special snack and weren t sure how this new food could fit into their eating habits Toaster Strudel needed to establish the brand s category membership by comparing and contrasting itself to Pop Tarts PODs and POPs A new series of ads clarified that Toaster Strudels are like Pop Tarts POP but better bc of their juicy filling and doityourself icing POD Takeaways Consumers need to understand what the new brand is replacing How is it better than what we re used to Building on an important quality can lead to better brand positioning and eventually better brand equity If you want to be in the middle of the action in a company be by the product Scott Pulsipher Nothing in this world is so powerful as an idea whose time has come Victor Hugo Product a bundle of attributes that satisfies consumers wants or needs Consumer Products products purchased by the final consumers for personal consumption Convenience Products relatively inexpensive products that require little effort to buy milk candy bars etc Shopping Products slightly more expensive requiring slightly more shopping effort washing machine Specialty Products extensive search effort involved consumers are slow to accept a substitute favorite restaurant Unsought Products products the buyer doesn t actively seek burial plots BusinessIndustrial Products products used for further processing and operation of a business Materials and Parts Products used in the manufacturing process that eventually become part of the final product packaging Capital Items products that aid in production or operations copier Supplies and Services maintenance items and services pencils accounting services Product Item specific version of a product Campbell s chicken noodle soup Product Line group of closely related product items all Campbell s soup avors Product Mix all products an organization sells Campbell s Soup Pepperidge Farm V8 etc Product Life Cycle course of a product s sales and profits over its lifetime Four Premises for Product Life Cycle Products have limited lifetimes Sales go through distinct life phases Sales and profits can vary throughout these phases PP Pi Different marketing strategies are required for different phases Product Life Cycle Phases Introduction inform people that the product exists Growth improve quality as awareness grows Maturity maximize profits modify marketing mix P9P Decline maintain harvest or drop the brand Products have competitive angles aspects that make them unique to similar products Five Dimensions of a Competitive Angle 1 Need to Believe What significant problem does the product solve that your target audience cares about and is Willing to pay for Reason to Believe how effective is the product at solving the Need to Believe problem Blows Away Expectations Quantifiable Evidence 9593 Unique Product Claim BUS M 241 Swenson Thursday 102215 Products and Branding continued Five Dimensions of a Competitive Angle continued 3 4 Blows Away Expectations which situations does your product dominate in Quantifiable Evidence what is the relevant info you use to support or enhance the product claims Unique Product Claim how is your product distinctly differentmore memorable than competitors and better at solving the problem Your unique claim must be valued by the customers New Product Development Process 1 80 Idea Generation ideas for new products come from employees customers competition etc Idea Screening don t miss the boat reject a good idea or sink the ship accept a bad idea Concept Testing testing out a potential product with customers possibly the most important step Marketing Strategy deciding how to market this potential product Business Analysis forecasting the profitability of the product Product Development creating the actual product Market Testing testing the actual product in sample markets 26 cities that are representative of the entire market where we measure how successful it is Example Wendy s Big Classic Wendy s tested various buns sauces lettuce and tomato slices for over nine months in six cities Eventually they decided on the best combination of ingredients for the Big Classic Business products are tested inhouse alpha testing by your most valued customers beta testing and with dealers and distributors Product ideas break down most often at the Concept Testing stage Sometimes products need to be reinvented Example Domino s Domino s was considered lowquality pizza People were highly critical of their ingredients crust tasted like cardboard Domino s took the criticism into account and did a complete overhaul of their pizza recipe The result was a much better more satisfying pizza Services vs Products Services are intangible they can t be displayed or communicated to customers Solution tangible cues diplomascertificates highquality furnishings etc Services are inseparable consumer and provider are part of the service Solution stress care and quality and provide extensive training Variability service quality depends on who provides it and when and where it is provided Solutions standardize the service approach Services are perishable services cannot be stored anywhere Solution balance supply and demand based on predictions Pricing Everything is worth what its purchaser will pay for it Syrus Consumers are incredibly pricesensitive Of the four Ps in the marketing mix product place price promotion price is the most complex Price money or other considerations exchanged for the ownership or use of a product service Price can have a huge impact on a product s success or failure If a product is priced incorrectly it could fail and never recover Competition is based heavily on price Price allows us to compare vastly different products boat vs TV Profit Total Revenue Total Costs Profit Price Quantity Fixed Cost Variable Cost Quantity We need cost data to determine price Fixed Costs costs that do not vary with output Variable Costs costs that vary with output Unit MarginU nit Contribution Price Variable Cost per Unit Percent Margin Price Variable Cost per UnitCost Don t forget to pay the 10 fee for Stukent You ll need it for the next assignment