Flashcards in Final Deck (70):
What are the 4 differences between a product and a service?
1. Intangibility (A service cannot be touched, held or seen)
2. Inseparability (Service's production is tied to its consumption)
3. Variability (Quality depends on who provides the service)
4. Perishability (A service cannot be stored)
What are the three types of service marketing?
1. Internal marketing (organization and employees)
2. External marketing (organization and consumers)
3. Interactive marketing (employees and consumers)
What are the 3 dimensions of the product?
2. Core product
3. Related services
What are the 4 aspects of the core product?
- Function (cellphone = fast, camera, screen)
- Form (size, shape, color...)
- Technical functions = protect the product, the way to open it
- Communication functions = flashy, to inform
- Technical (performance, reliability, conformity, durability)
- Perceived (by consumers)
- All material signs that allow a product or an organization to differentiate itself
What are the 5 related services?
5. After-sales service
What is a product portfolio, range, line?
Product portfolio = all products offered by a company.
Product range = a set of products of the same category or that meet the same type of need.
Product line = a group of products intended for a specific market or that solve a specific problem for the consumer.
What does cannibalization means?
The drop in sales of a current product caused by sales of a new product launched by the same company.
How to organize a product portfolio?
- By target segments
- By territories
- By types of use
- By distribution channels
What is the portfolio analysis tool?
- Market growth
- Relative market share
*Never use on its own, combine
What is a brand?
A name, a term, a design, a symbol or any other feature that identifies a seller's goods or services and distinguishes them from those of other sellers.
What is a private label?
A brand developed by and marketed for a retailer and distributed in that retailer's store exclusively.
What is brand equity?
The added value that a brand gives a product
- Customer-based approach (spontanesly or not)
- Price differential approach (ex. Apple more expensive, show prestige)
- Income-based approach (proportion of the company future income)
What are the two strategic brand decisions?
- Umbrella brand (appers on all products, easy to see, but hard to differentiate)
- House of brands (each brand in the portfolio is treated independently)
Brand extensions and launches...
- Existing brand, existing product = line extension
- Existing brand, new product = brand extension
- New brand, exist. prod. = multibrand approach
Ex. Starbucks Seatle brand for less expensive
- New brand, new prod. = New brand creation
What is brand alliance or cobranding?
Two brands partner to market a new product, line or range.
Ex. Oreo Cadburry
What are the 4 steps of the product lifecycle?
1. Introduction (low sales, high costs, no profit)
Draw attention and awareness, build a network
2. Growth (increasing sales, reducing costs, some profits)
Defend territory, expand range and lines, increase market share, expand network
3. Maturity (constant sales, reducing costs, increasing profits)
Optimize portfolio, maintain or increase market share, stimulate network
4. Decline (reducing sales, constant costs, reducing profits)
Contract range and lines, liquidate inventory, reduce budget, reduce network
What does price means?
The amount spent plus the time and psychological cost incurred to obtain a product or service.
What is the value?
Benefit = perception
Costs = psychological, time, money
The price needs to...
Be linked to the marketing strategy
- Target (clients price sensitivity, what they value...)
What are the environmental influences on pricing?
Internal environment :
- Company's costs (R&D, communication, fixed, variable, total)
- Existing product line
- Product life cycle
External environment :
- Economic (price perception, level of confidence in the economy)
- Legal (state and law - regulators and agencies ex ALENA, industry subsidy programs, legal environment ex interest rate)
1. More people complete a purchase if the items are at a different price
2. Price anchoring (put the product you want to sell near a more expensive one)
3. Test different level of pricing
What are the pricing objectives?
*Must be consistent with and subordinate to the company's global objectives and marketing strategies.
Pricing objectives -> Pricing strategies -> Pricing methods -> Applying and controlling pricing policies
What are the different types of pricing objectives?
1. Profit-oriented (profit maximization, acceptable profit, reasonable profit, target return)
2. Competition-oriented (market position - increase market share, maintain, erecting or maintaining entry barriers)
3. Sales- oriented (sales volume for short-term results)
4. Customer perception-oriented (product positioning)
5. Distribution-related (ex. Walmart)
What are the different pricing strategies?
1. Determined by competitive pressure
- Price leadership (you choose the price and the others follow)
- Competitive parity (same price than market average)
- Low-cost pricing (lowest price on the market)
2. Didctated by consumer preferences
- Quality signaling (prestige) pricing
3. Based on costs
- Cost-plus pricing
4. For a product line
- Complementary product (ex. Printer)
- Price bundling (product with a group of item)
- Customer value pricing (less expensive but with fewer options)
5. During introduction
- Skimming (high initial price)
- Penetration (low initial price)
6. Price discrimination
- Discounts (extra revenue)
- Early birds (improved cash flow)
- Last minute deals (use up spare capacity)
What are the pricing methods?
1. Cost-based (set on objectives, simple, doesn't consider consumer or competition, must know fixed, variable and total costs)
2. Competition-based (based on market share, price war, no idea about profit, not related to product)
3. Demand-based (profit maximization, at a given time, generally quantity is inversely proportional to the price)
4. Customer-based (what value is the consumer placing in the product)
What is the main purpose of a distribution network?
Make a manufacturer's product available to potential consumers in the form and quantity, and the time and place desired, to create a continuous business relationship between network members.
Reduce the gap between the consumers and the producers needs, while continuously optimizing the distribution network.
What are the 8 types of distribution functions?
1. Logistics (assortment and transportation of products)
2. Financing (facilitating transactions through financing options. Ex. offering a credit card)
3. Research (Availibility of info concerning the market and the clients)
4. Title transfer (transfer of risk)
5. Promotion (to influence purchase)
6. Sales (presentation of product to potential customer)
7. Customer service
8. Payment (transaction concluding the sale)
What are the two types of intermediaries?
1. Traders (buy merchandise)
1.1. Retailers (direct sales to final customers)
- Discount store or High-level service stores
1.2 Wholesalers (buys large qty and resells)
- allows producers to reach a larger customer base but limits their control
2. Agents (no risk transfer)
- the producer has a better control over his marketing
What is a distribution channel?
A network of interdependent organizations engaged in a process aimed at making a product or service available for use or consumption.
What are the different length of distribution channel?
- Better knowledge of the market and quick reaction in case of changes
- Influence of the internet
- Complicated and costly (all functions)
2. Indirect short (P-R-C)
- More control and effective cooperation
- Broader customer base
- Have to share profit
3. Indirect long (P-W-R-C)
- Frequently used for everyday use goods
- System fairly inflexible
- Need of an effective communication
4. Indirect ultralong (P-D-W-R-C)
What is a vertical marketing system (VMS)?
A professionally managed network with centralized management; their effort are coordinated, assuring savings on operations.
What are the 3 types of VMS?
1. Corporate VMS (one company owns every level of distribution and performs every function)
2. Contractual VMS
2.1 Voluntary Chain (Initiated by a wholesaler that organizes a group of retailers into a program that standardizes the way to operate)
2.2 Franchises (Agreement between a franchisor and a franchisee. Lump sum and royalties)
3. Administered VMS (power and influence of one member of the channel, ex. Walmart)
What is the intensity of distribution?
Number of intermediaries on each level of a channel.
What are the 3 types of intensity of distribution?
1. Intensive (extensive coverage, mass marketing, largest target possible)
2. Selective (availability when special attention, shopping and specialized goods)
3. Exclusive (product available at only one point of sale, niche or high-end positioning, optimal product presentation)
What are the 6 criterias to choose a channel?
1. Cost and profitability (forecast of sales, costs of channel, margins...)
2. Control (power to determine segmentation, targeting, positioning)
3. Image of the intermediaries (synergy in the way to represent the brand)
4. Sharing the functions (roles to share resp.)
5. Compatibility (coordination and cooperation with existing network)
6. Flexibility (economic dependency)
What is a multichannel?
Distribution mode that combines several distribution channels to reach different target markets.
What is an omnichannel?
Complete and transparent integration of all channels and points of contact to offer an optimized and personalized experience.
What are the words for removing and adding an intermediary?
Desintermediaration and reintermediaration
What is marketing communication?
The set of initiatives deployed to reach a target audience and transmit a message.
Consists of translating and expressing the desired positioning to the target segment in a language they will understand in order to attain communication objectives.
Must be in synergy with rest of marketing mix
What are the 4 steps of strategic planning? (Communication)
1. Situation analysis and diagnosis
- Internal and external environment, positioning, key benefits of product, consumer insight
- Objectives, performance indicators, key message, communication media, deployment timetable, budget and resources, contingency plan in case of failure
3. Creation and implementation
- Producing advertising materials
4. Deployment and follow-up
- Measuring and updating performance indicators
- Optimizing and adjusting initiatives
What is consumer insight?
The consumer's perception of an unresolved problem or dilemma in a product category that the brand offers.
What are the 6 communication objectives?
What is the hierarchical effects model of communication objectives?
Cognitive (increase awareness) -> emotional (change attitudes, influence purchase intent, stimulate trial) -> conative (drive brand switching)
What is the key message?
Encapsulates the promise of benefit that the business offers, to reach the target consumers. It refers to the main idea that the communication program must express.
What are the 3 types of media?
What is an integrated marketing communication?
Process of coordinating and integrating all marketing communication tools to maximize the impact of the message.
What are the 8 types of media?
2. Public and press relations
3. Direct and relationship marketing
5. Sales promotion
6. Digital and mobile marketing
7. Social media
8. Contact and experiential marketing
= placement of announcements and persuasive messages in time or space purchased.
*paid media (difficult to establish ROI and increased sceptimism)
- Outside-of-home advertising
What are the 4 key aspects of advertising?
1. Reach = percentage of the target group exposed at least once to a set of media during a certain period of time
2. Opportunity to see = number of times that the target population is exposed to a message
3. CPM = cost per 1,000
4. Share-of-voice = portion of the media-mix in a given category
= strategic management of relationship between an organization and its diverse publics
+ way to reach target, crisis management, credibility, cheaper
- no control over final message, unknown diffusion, hard yo measure effectiveness
Direct and relationnel marketing.
It directly reaches a target clientele, via direct mailing, telemarketing, etc.
Main tool is a database (CRM)
+selling tools, retention, advanced statistical analysis, precise measure of effectiveness
- strict regulation, requires technical resources
= financial support that a business provides to another one, main tool is event evaluation chart
+ emotional connection with specific target, team-building opportunities, social responsibility image
- low ROI possible, low to no control on the event
= media and nonmedia marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase demand or improve product availability
*push or pull
+ easy to put in place, easy to measure impact, push to action, low cost, expand database
- reduction of product's value LT, might reduce brand loyalty
Digital and mobile marketing.
1. Outbound marketing
+ reach target through search
+ increase awareness
+ contextual and behavioural target, retargeting, strong performance indicators
- bidding system, off-line effectiveness hard to demonstrate
2. Inbound marketing
*search engine optimization (SEO)
+ pull strategy, not expensive
- hard to get the Google algorithm
3. Mobile marketing
+ interaction with targets, geolocation
1. Simple observation
- Sources of dissatisfaction
- Conversion in innovations
2. Active participation
- Buying of advertising space
- Participation to conversations
- Reactions to news
- Consumer experience = Sales promotion + Direct marketing
- New points of contact
- Objective = reinforce brand affinities through relevant, informative, educational, useful of playful content
- Branded entertainment
What are the criteria for evaluating a creative idea?
1. Strategic criteria (pertinence, fit with target, comm objectives, promise of the message)
2. Communication criteria (attention value, attribution, comprehension, persuasion, capacity to evolve the brand, credibility, deployment potential)
3. Execution criteria (respect of visual identity of the brand, modernity value, technical budget feasibility, legal validity)
What are the communication agencies?
1. Integrated (generalists, offer all the services to produce and integrated communication plan)
2. Specialists (Digital, experiential, public relations...)
Organized around 3 main functions:
What is selling?
A form of communication between two people : a company representative and an existing of potential customer that can take place orally, in writing or electronically.
What are the 3 selling approaches?
1. Transactional (price is central, persuasion)
2. Consultative (to help the client bring value to the sale, find best solution for the client)
3. Relational (partnership, establish, develop and reinforce a LT relationship, emphasize on customer satisfaction)
What are the salespeople's activities?
Develop and manage personalized business relationships
- understand customers need
- designing solutions
- partner with clients
- gather marketing information
- complete administrative tasks
What are the 6 main types of salespeople?
1. Consultative (identifying a need and finding a solution)
2. New business development (prospecting)
3. Missionary (educate consumers)
4. Delivery (from prospecting to delivery)
5. Sales support (for complexe organizations with many products and services)
6. Key account (focusing on strategic clients $$)
What is the selling process? (8)
1. Prospecting (identify potential clients, solicit them, validate their interest, follow-up)
2. Pre-approach (review notes, set the objectives, establish customer profile, determine advangages and benefits of the business solution, prepare the presentation of business solution)
3. Approach (initial contact, general interest message, friendly conversation)
4. Needs assessment (SPIN, situation, problem, implication, need-payoff)
5. Presentation of a business solution (L-FAB-F, link, features, advantages, benefits, functioning)
6. Handling objections (acknowledge, identify needs, present a solution, validate)
7. Closing the sale and gaining customers commitment (summary of key benefits, purchased-related questions, protective techniques, unveiling new benefits)
8. Follow-up (thank customer, reassure, set next appointment, finish strong)
What is business development?
The creation of LT value for an organization from customers, markets, and relationships.
What are the pillars of customer relations?
1. Customer relationship management (CRM) software (to coordinate with every department, marketing, finance, accounting, sales...)
2. Customer service
What is the role of the sales force manager?
To guide the sales team and optimize their efficiency and performance
- size of the team
- sales forecasting
- structure of sales force
- recruitment and selection of salespeople
Who can sales force be structured?
2. Product or service-based
3. Market-based (ex. by buying behaviour)
4. Customer size-based
5. Salesperson availability
6. Sales task-based
7. Where salespeople are free to solicit
8. Team selling