Chapter 11 Flashcards

Question

Innovation Discontinuous+dynamically continuous Continuous

Answer 1

Innovation is vital for businesses to thrive long term Discontinuous innovation: brand new ideas that radically change how people live. examples include the first car, first plane, first television these require extensive customer learning which should guide the marketing process Dynamically continuous: characterized by market changes to existing products. examples include mp3 player and digital cameras. these types require a moderate level of consumer learning for significant benefits. Continuous innovation is a slight modification of an existing product. examples include new sizes, flavors, shapes, packaging, design. goal is to distinguish product from competition. the goal of a knockoff is to copy a competitor and offer a lower price.

Answer 2

Idea generation->idea screening->analysis->development->testing->commercialization Idea generation: somer experts estimate it takes 50 ideas for each new product that makes it to the market. ideas can come form anywhere-customer research, complaints, sales people, engineers, suppliers, competitors. Idea screening: Purpose of this stage is to weed out ideas that dont fit with the companys objectives and ideas that would be too expensive to develop. ex disney eliminates the idea of xrated chanel because it doesn't fit the mission. analysis: The purpose is to estimat ecosts and forecast sales for each idea to get a sense of potential profit and how it would fit within companys resources. Development: leads to detailed descriptions of each concept with specific product features. new product teams sometimes also make prototypes or samples that consumers can test. Testing: formal process of soliciting feedback from consumers by testing the product. Commercialization: introducing the product to the general market. 2 key success factors are gaining distribution and launching promotion. but a product that tested well doesn't mean instant success. ex coke tested its new one and found customers liked it better than original, but it failed in the market.

Answer 3

New products must spread throughout a market after they're introduced. the process is called diffusion. happens at different speeds depending on the consumer and product itself. Product adoption categories: some consumers like trying new things, others don't. these attitudes impact the rate that people are willing to adopt new products. first adopters are risk takers 2.5% of total. the laggards are about 16% and sometimes adopt products so late that earlier adopters have moved to the next thing. rest of pop falls in between.

Answer 4

Some products diffuse into the population more quickly than others. ex. apple ipods and segways came into the market @ same time, but ipods are a pop culture icon, segways on the fringe. 5 characteristics affecting rate of adoption and diffusion. the more characteristics a product has, the faster it'll diffuse into pop. Observability: How visible is it to other potential consumers? ex if you get a new car, whole neighborhood will know, and anyone seeing you on the street or highway. Trialability: how easily potential consumers can sample the new product. trial can be a good way to create new consumers which is why many grocery stores ill aisles with samples during popular hours. test driving, fragrances.. Complexity: consumers easily understanding the product and how it works. if the product confuses people or if they find it hard to explain to others adoption rates will slow. ex many people who test segways love the experience but have trouble explaining to others how it works or why its better than other options.

Answer 5

Compatibility: how consistent is your product with the existing way of doing things? cordless phones caught on instantly because they were consistent with peoples prior experiences, but better relative advantage: how much better are the benefits of your new product compared to existing products? as gas prices continue to climb, benefits of a hybrid car take on a much higher value relative to standard cars. as a result, demand skyrockets

Answer 6

The power to influence consumers-remind them, inform them, persuade them. best promotion goes further, building powerful consumer bonds that draw customers back again. great promotion works with a great product. marketers can direction control most promotional tools. from tv advertising to telephone sales, the marketer creates the message and communicates it directly to the target audience. ironically, marketers can't directly control the most powerful promotional tools. publicity like a comment ona talk show or a review in consumer reports and word of mouth, such as recommendation from a close friend. marketers can simply influence these areas through creative promotional strategies.

Answer 7

technology has empowered consumers to choose how and when they interact with media. canadians are adapting to their changes in tech faster than most countries. canadians are heavy internet users. almost every ca has access to high speed internet. internet has also affected tv viewing. many tv viewres are busy on the internet as they watch. change in tv habits has resulted in increase in the number of hours ppl are spending in front of the tv. ipad is anotehr technology that has an effect on where consumers get their marketing info. experts predict ipad won't be used for barcode or qr scanning like smartphones, but will increase internet surfing on the go. rising customer power and the fast pace of tech have created a growing need and stunning opp for marketers to zero in on the right customers, at the right time, w the right msg.

Answer 8

consumers are cluttered with advertising messages. given the level of clutter, smart companies use integrated marketing communication to coordinate their messages through every promotional vehicle-including ads, websites, sales people, creating a coherent impression in the midns of customers. consumers don't think about the specific source of communication; they combine or integrate the messages from all the sources to form a unified impression about your product. if you accuratley identify the key points of contact between your product and target market, you can focus on those areas w remarkable effectiveness. ex mcdonalds upbeat commercials, smiling employees, brightly striped unis, comapny spends millions to support its core message of fast tasty food in a clean friendly env. other companies are likely to encounter bulk of their customers through diff channels. you'ld prob learn about dell computers through website or word of mouth. dell invests in both areas. innovative user friendly website that allows novice users to creat customized systems and dell delivers great service and tech support...

Answer 9

in many companies completely different teams develop the different promotional areas. salespeople and brand managers have seperate agendas. disconnected outside agencies often handle web devlpt info also plays a role. to coordinate marketing msgs everyone who creates and manages them must have free access to knowledge about the consumer, product, competition, market, strategy of organization. some of this info like strategic goals will come from the top down.

Answer 10

promotional message begins with understanding how your product is different from and better than the competition. your Positioning statement-a brief statement that articulates how you want your target market to envision your product relative to the competiton-seldom translates directly into the promotional message. instead it marks beginning of creative development process, often led by ad agency creative professionals. big idea-meaningful believeable and distinctive concept that cuts through the clutter. big ideas are typically based on either rational or emotional premise: Rational: science: clinique: "allergy tested. 100% fragrance free" Price:Walmart:"save money, live better." Emotional: sex: axe: bom chicka wah wah. Security: allstate: you're in good hands. humor: mountain dew: do the dew. Funny ads are a consumer favorite, but humor can be risky

Answer 11

some big ideas translate well across cultures. ex mcdonalds. but some don't. debeers treid running ads in japan using stragtegy in the west-women smiling kissing their husbands who just gave them gifts. ads failed in japan bc a japanese woman would cry and be angry that the husband would spend money reserach should be first step

Answer 12

Once you've nailed the message, you need to communicate the big idea to your target market. the traditional communication tools or promotional channels include advertising, sales promotion, direct marketing, personal selling. new tools have emerged, like advergaming to new forms of internet advertising such as online video or minimovies. the combo is called your promotional mix.

Answer 13

promotional landscape has changed dramatically. consumer expectations skyrocketed. consumer tolerance for impersonal corporate communicatoin has fallen. digital tech has surged forward. ne wtools have emerged digital communications: internet advertising has been highly visible for more than a decade. industry has moved beyond banner ads and pop ups. now cel communications, email, online communities, social networks, blogs, podcasts, online vids. paid search advertising includes both sponsored links on google that relate to the topic you've searched and targeted google text ads a number of sites which are at the heart of googles financial success. companies spent most on search advertising. paid search seems to be especialy attractive during touch economic times bc it offers accountability-marketers can tell how well thier limited ad dollars are working. online vid advertising is another high growth area. includes popular pre roll ads-15-30 second spots before videos.

Answer 14

the paid integration of branded products into movies and tv, media. ex you always see coke in judges hand on american idol. james bond-omega, heineken beers, british airways the price tag for this exposure including commercial time is about 35 mil. media buyers negotiate product placement deals as part of a package including regular ads which reinforce the product appeared in the program. its also risky, if the show is a dud, the placement is worthless. cost is high which increases risk.

Answer 15

Advergaming:relatively new promotional channel that involved integrating branded products and advertising into interactive games. Buzz marketing: The active stimulation of word of mouth via unconventional and often relatively low cost tactics. other terms for buzz marketing are guerrilla marketing and viral marketing. essentially word of mouth marketing which now influences two thirds of all consumer product purchases. marketers pursue buzz for their brands with rising cost and diminishing effectiveness of more traditional media channels. innovative buzz campaigns are typically customer designed to meet their objectives and they often cost less. ex: dove: evollution promotion consisted of a 75 sec film showing a model being transformed, airbrushed etc. it was placed on youtube and shared by millions of women.

Answer 16

Sponsorships arent new but they're among fastest growing categories of promotional spending. Sponsorships provide a deep association between a marketer and partner. even though sponsors cant provide more than logo or slogan, consumers tend to view them in a positive light because they are clearly connected to events that matter to the audience. best sponsorship investments occur when the target audience for the marketer completely overlaps the target audience for the event. the high level of integration between sponsors and events provides valuable media coverage, justifying the hefty price. =a deep association between a marketer and a partner (usually cultural or sport even) which involves promotion of the sponsor in exchange for payment or provision of goods.

Answer 17

The formal definition of advertising is paid, non personal communication, designed to influence a target audience with regard to a product, service, organization or idea. major brands use advertising not only to drive sales but to build rep. tv remains number one advertising in media, w newspapers and radio following close behind.

Answer 18

sales promotion stimulates immediate sale activity through specific short term programs aimed at consumers or distributors. traditionally sales promo has been subordinate to other promotional tools, but spending has accelerated in the past decade. sales promotion falls into 2 categories: Consumer promotion: designed to generate immediate sales. premiums, promotional products, samples, coupons, rebtates, displays. Premiums: items consumers receive free of charge or lower cost in return for buying. fast food companies use premiums every time major studios release a family movie. makeup use gift with purchase. Promotional products are also gifts to consumers of merch that advertises a brand name. ex pizza restos give fridge magnets. works best when merch relates to brand samples: reduce risk of purchasing something new by allowing consumers to try a product befor ecommitting cash. frito lay gave pacakges of its new lays spicty ketchup away through a fb promotion. fb users who liked the brand would get a coupon for free chips.

Answer 19

Coupons offer immediate price reductions to consumers. instant copuons require even less effort bc they're attached to the package there in the store. goal is to entice consumers to try new products. downside is huge-marketers who depend on coupons encourage consumers to focus on price rather than value which makes it harder to differentiate between brands and build loyalty. categories with frequent coupons like soap and cereal too many consumers wait for the coupon in order to buy. they end up with great deals, but marketers pay the price in reduced profit. Rebates are common in car and electronics business, entice consumers with cash back offers. powerful tactic for higher priced items as rebates offer an appealing purchase motivator. rebates provide an incentive for marketers too; breakage. most people who buy a product because of the rebate don't actually follow through and do the paperwork to get the money. it means marketers can offer hefty discounts without coming up with the cash, so rebates arent a popular tool. Displays: generate purchases in store.experts agree consumers make most of the purchase decisions as they shop, so displays are crucial. marketers of consumer products often give prefabricated display materials to grocery stores and mass merchandisers to encourage promotion.

Answer 20

designed to stimulate wholesalers and retailers to push specific products more aggressively. special deals and allowances are the most common form of trade promotion. the idea that if you give your distributors a temp price cut, they'll pass the savings onto consumers via a short term special. trade shows another popular form of trade promo. trade shows give exhibitors a chance to display and promote their products to distributors. typically attract hundreds of exhibitors and thousands of attendees. espeically common in rapidly changing industries such as toys and consumer electronics. contests, sweepstakes, special events for distributors are other forms of trade promo soft drink company for ex might sponsor a contest to see which grocery store can build the most creative summer display for its brands

Answer 21

Public relations involves the ongoing effort to create positive relationships with all of a firms diff publics. including customers, employees, suppliers, community, general public, gov. PR aims to generate positive publicity-unpaid stories in the media that create a favorable impression about a company or its products. the endgame is to boost demand. for the most part media covers companies or products that it perceives as noteworthy. to get coverage for potential news a hot product for example or a major corp achievement, and present that news to the media. but finding news on a reg basis can be touch. to fill gaps innovative pr ppl will create news. ways to do that: launch a hall of fame: induct some luminaries from your industry, create a simple website, and send your press release to the media. repeat each year make a list: the best, worst, top 10.... create a petition: harness a growing trend or identify a need in your industry then launch your petition. more signatures, better publicity changes. Biggest advantage of publicity is that its usually credible. publicity is credible because most people believe that info presented by media is based on legit opinions and facts rather than on the drive to make money. downside: marketer has no control over how the media presents the company or its products. ex when old navy used ca model melissa molinaro in its material, kim k sued the company. the problem was she looked almost identical to kim. the vieo was successful w more than 2 mil viewers, but the news about the lawsuit was featured on news.

Answer 22

The worlds oldest form of promotion-person to person presentation of products to potential buyers. in todays competitive environment, selling means building relationships on a long term basis. creating and maintaining a quality sales force is expensive. so many canadians emplyed in sales because nothing works better than personal selling for high ticket items. in some companies sales team works directly w customers. salespeople range from order takers who process sales, to seekers who use creative selling to persuade custoemrs. most deptmt stores hire order takers who stand behind counter and ring up sales, some hire creative who actively garner sales by offering extra services like tasteful accessory recommendations. seperate category of sales people focus on missionary selling which means promoting goodwill for a company by providing info and assistance to customers. pharma industry hires a smlal army of missionary salespeople who call doctors to explain and promote their products even though the sales move through pharmacies. they follow 6 key stages...

Answer 23

1. prospect and qualify: prospecting menas identifying potential customers. qualifying means choosing those most likely to buy your product. choosing the right prospects make salespeople more efficient. in a retail env, everyone who walks in is a prospect so salespeople either ask qs or look for visual to qualify customers. 2. Prepare: before making a sales call, research is critical, especially in a business to business env. what are the prospects wants and needs? what are his or her current product lines? who are the key competitors? biggest internal and external challenges? how much time is prospect willing to give you? answer will help customize presentation for max effectiveness. 3. present: first impressions. buyers look for reasons to eliminate choices-weak first impression is a reason to eliminate you. your presentation itself should match features of your product to the benefits that your customer seeks. testimonials, letters of praise from satisfied current customers can push forward the sale by reducing risk for your prospect. in many categories, a demonstration can be the clincher. for some products, demonstration is a no brainer-test driving cars for example. in other categories, tech can help demonstrate products that are too big to move.

Answer 24

handle objections-key to success here is to view objections as opportunities rather than criticism. objections give you a chance to learn more about the needs of prospects and to elaborate on the bens of your product. you should def anticipate as many objections as possible and prepare responses. one response may be connecting prospects with others in your company who can better handle their concerns. also offers benefit of deepening ties between prospect and company. Close sale-closing the sale or asking the prospect to buy is at the heart of the selling process. it should flow naturally from prior steps, but often doesn't. it can be touch. if prospect is still reluctant to buy, you may want to offer another alternative or a special financial incentive. even if the prospect doesn't actually make the purchase, he or she may be willing in the future. follow up: sales process doesn't end when customer pays. quality of service and support plays a big role in future sales from the same customer and getting those sales is much easier than finding new prospects. 2 selling trends are gathering momentum-consultative selling and team selling.

Answer 25

consultative selling involves shifting focus from the products to the customers. on a day to day, practice involves deep understanding of the customers needs. active listening, consultative salespeople offer practical solutions to customer problems that use their products. while consultative selling generates powerful customer loyalty, its a big time effort and $ team selling is effective for large accounts. approach includes a group of specialists from key funcitonal areas of the company-not just sales but also engineering, finance, customer service and others. goal is to uncover opps and respond to needs that would be beyond the capacity of a single salesperson. in these situations, a key part of the salespersons role is to connect and coordinate the right network of contacts.

Answer 26

no rules for choosing the right combo of promotional tools. mix varies. best approach is to consider the following questions in developing the mix that works best for your products. Product characteristics: how can you best communicate features of your product?is it simple or complex? high or low priced? specialized, high priced might require an investment in personal selling, whereas a simple low cost product might lend itself to billboard. Product life cycle: where does it stand in its life cycle? are you developing awareness, generating desire? driving purchases? buildign loyalty? answers will impact promotional focus. ex if you're developing awareness, you might focus more on advertising, but if aiming to drive immediate sales, probably emphasize sales promo. Target audience: how big? where do they live? small audience would lend itself to personal selling or direct mail. audience expectations should play a role in promo mix decisions.

Answer 27

push vs pull: push strategy is a marketing approach that involves motivating distributors to push your product to the final consumers usually through heavy trade pomo and personal selling. pull involves creating demand from your final consumers so they pull your products through the distribution channels. many successful brands use a combo to acheive their goals. p&g recently launched a consumer marketing campaign for crest toothpaste ft an irresistibility iq quiz for club goers but also promotes heavily to dentists hoping they will reocmmend to patients. competitive env: how are competitors handling their promo strategies? would it make more sense to follow their lead or forge your own promo path? if all your comeptitors offer coupons for instance, your customers may expect you to offer as well. or if the env is cluttered, you might want to focus on emerging promo approaches such as advergaming. budget: what are your promo goals? how much will it take to achieve them? how much are competitors spending on each area of the mix? how much do you have for promo? even though the avail budget shouldn't drive the promo mix, it plays a crucial role especially for smaller businesses.

Answer 28

companies cant deliver on potential w out well oiled teamwork. operations group must focus on quality, accounting must focus on cost, finance must focus on funding. from a big pic standpoint, all groups must work towards same overarching goal: maximizing customer value. promo also requires coordination within the org and among outside suppliers who provide product and promo can come from any dept. marketers who stay ahead of the curve will only sharpen their competitive edge in the decade to come.

Chapter 11 Flashcards

(52 cards)