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Marketing Final > Marketing Final > Flashcards

Marketing Final Flashcards

1
Q

Marketing

A

Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return.

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2
Q

The Marketing Process

A
  1. Understanding consumer needs
  2. Designing customer-driven marketing strategies
  3. Constructing integrated marketing programs that delivers superior value
  4. Building customer relationships and creating satisfaction
  5. Capturing firm value
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3
Q

Marketing Myopia

A

• Focusing on product offerings rather than the needs the product is supposed to solve
o Companies should strive to continuously evolve and adapt to customers’ needs or they will fail
o Very successful companies often anticipate changes and strive to be a few steps ahead of the market

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4
Q

Marketing Strategy

A 
Understand the playing field 
Determine a strategy
Marketing Mix
Build and maintain relationships 
Extract value
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5
Q

Goals of Marketing

A

Two goals:
• Attract new customers through offering superior (perceived) value
• Keep and grow current customers by continually delivering satisfaction
(exceed expectations)

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6
Q

SWOT Analysis

A

Strengths, Weaknesses – Internal
Opportunities, Threats – External
Do not confuse opportunities with courses of action

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7
Q

Setting objectives/outcomes (SMART)

A 
Specific
Measurable 
Achievable/Assignable 
Realistic
Timely
Example of a strong objective statement: Our objective is to spend 12 percent of sales revenue between 2003 and 2004 on research and development to introduce at least five new products in 2004.
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8
Q

Customer Value

A
  • Customer Value is perceived value

* May not be “real” or “true” value

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9
Q

Designing A Customer Driven Marketing Strategy

A

o Which customers will you serve? (Target Market)
▪ Divide the market into segments of customers (market
segmentation), and then select which segment to go after
(target marketing)
o How best can you serve these customers? (Value Proposition)
▪ Firms target customers through differentiation and positioning

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10
Q

Marketing Segmentation

A

Dividing a market into distinct groups of buyers with different needs, characteristics, or behaviours.

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11
Q

Market Targeting

A

Evaluating each market segment’s attractiveness (based on relevant criteria) and deciding which one(s) to pursue.

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12
Q

Market Positioning

A

Arranging for a product to occupy a clear, distinctive, and desirable place in consumers’ minds relative to competing products.

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13
Q

Market Differentiation

A

Providing a clear difference between the value your offering creates vs. your competitors’ offering.

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14
Q

Marketing Mix (Four P’s)

A

• Consists of the four Ps; a set tools used to implement marketing strategies
Product: what you are offering to the market
Price: how much you are charging to the market
Place: how you are making your product available to the market
Promotion: how you are communication and persuading consumers to purchase your product
• Product and Price define your target customers while Promotion and Price define your intended positioning.

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15
Q

How to build and maintain relationships

A

• Relating with more carefully selected customers
• Relating more deeply and interactively
o Customer engagement marketing
▪ Making the brand a more meaningful part of customer’s lives
by fostering direct and continual involvement o Consumer-generated marketing
▪ Brand exchanges created by customers; customers shape their own brand experiences
• Satisfaction creates Loyalty
• Marketers must be concerned with the lifetime value of the customer –
both their loyalty and profitability

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16
Q

Butterflies

A
  • Good fit between the companies offerings and consumers needs
  • High profit Potential
  • Low loyalty
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17
Q

Strangers

A
  • Little fit between the companies offerings and consumer needs
  • low profit potential
  • low loyalty
  • short term customers
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18
Q

True Friends

A

These are the customers you should invest in

  • Good fit between the companies offerings and consumers needs
  • Highest profit Potential
  • High loyalty
  • long term customer
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19
Q

Barnacles

A
  • Limited fit between the companies offerings and customers needs
  • low profit potential
  • high loyalty
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20
Q

Marketing Metrics

A 
▪ Marketing ROI
▪ Brand Awareness
▪ Brand Loyalty
▪ Sales
▪ Market Share
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21
Q

Doing Segmentation

A
  1. BenefitsSought(PrimaryNeed)
  2. Geographic(location)
  3. Demographic(age, gender, lifecycle, education, sex, income)
    4.Psychographic(sharedattitudes,behaviours,lifestyles,values,personality
    traits)
  4. Behavioral(attitudetowardproduct,userstatus,loyaltystatus,userrate)
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22
Q

Geographic Segmentation

A

Dividing a market into different geographic units such as nations, states, regions, countries, cities, or neighborhoods

Where does your target market live?

- World region or country
- Region of country
- Provinces
- City
- Population size
- Neighborhood
- Density
- Climate
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23
Q

Demographic Segmentation

A

Dividing the market into groups based on observable demographic characteristics of the population

What does your target market look like?

- Age 
- Gender
- Family size
- Life cycle
- Income
- Occupation
- Eductaion
- Ethnic or cultural group
- Generation
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24
Q

Age Cohort/ Lifecycle

A
  • Member of the same age cohort
    • Share significant experiences (especially during their adolescence/ young adulthood) that shape their social values, attitudes and preferences.
    • Confront crucial life changes (graduation, family, empty next, retirement at roughly the same time).
    • Have similar demand for products (e.g., new parents) and similar life patterns and projects (e.g., newly retired).
    • Common preference /demand for products, brands and marketing appeals.
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25
Q

Psychographic Segmentation

A

Answer the question(s): what does your target market like and how do they live?

Dividing a market into different groups based on:

- Shared attitudes
- Behaviors (social roles)
- Lifestyles
- Values, motivations, opinions, and activities
- Personality traits

** helpful for developing the marketing mix

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26
Q

Behavioural Segmentation

A
  • Divide market into groups based on consumers product-related behaviour such as knowledge, attitudes, use, or response to a product
	User status
	Usage rate
	Loyalty status
	Attitude toward the product
	Occasion
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27
Q

Characteristics of a good segment

A 
▪ Measurable
▪ Actionable
▪ Sustainable
▪ Differentiable 
▪ Accessible
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28
Q

Product Positioning

A

Product Positioning

- Positioning: a complex set of perceptions, impressions, and feelings thaht consumers have for the product compared with competing products
- Arranging for a product to occupy a clear, dinstinctive, and desirable place in consumers minds
- Products or brands position is facilitated by the marketing mix
- Positioning involves creating association in memory between our product offering and the elements we think are important
- In psychology this is known as a schema - an associative network of related concepts and ideas 
- We want the schema for our products to be distinctive, positive, and easily recalled
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29
Q

Posible points for differentiation

A
  • Product: features, performance, style, design
    • Services: speed, convenience, careful delivery
    • Channel: cover, product availability, expertise
    • Brand image: convey benefits and positioning
    • People: hiring, training better people
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30
Q

Meaningful differentiation is

A
  • Important
    • Distinctive
    • Superior
    • Communicable
    • Pre-emptive
    • Affordable
    • Profitable
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31
Q

Products should not be:

A
  • Under-postioned: failing to really position the company at all
    • Over-positioned: giving buyers too narrow a picture of the company
    • Confused: leaving buyers with a confused image of a company
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32
Q

Repositioning

A
  • An attempt to change the image consumers have of a brand or company
    • Rebranding is sometimes necessary when consumers have developed a schema that is inconsistent with the primary needs of the segment
    • Can be difficult to change schemas significant
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33
Q

The Positioning Map

A
  • Positioning maps show consumers perceptions of brands compared to competitors on important buying dimentions
    • It is a means of displaying or graphing in two or more dimentions, the locations of products, brands, or groups of products in customers minds
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34
Q

Value Proposition

A

• The benefits provided by the brand/product
• The value proposition is designed to reach consumers so they can process
the message
• Create associations by delivering a consistent message and product + repeat the message

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35
Q

Position Statements

A

• Position statements summarize the company or brand positioning
• “To (target segment and need) our (brand) is (concept) that (point of
difference)
• “To upscale families who desire a worry-free driving experience, Volvo is
the car that offers the utmost in safety and dependability because every Volvo we build is the sum total of 80 years of focus on safety.”

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36
Q

Consumer Behavior

A

• The study of psychological processes including consumers’ emotional, mental, and behavioral responses that have to do with selecting, using, and disposing of products and services.

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37
Q

Simple Consumer Behavior Model

A

Stimuli→Buyer’s Black Box→Responses

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38
Q

Steps to Analyze a case

A
  1. Define the problem
  2. Analyze the situation
    1. SWOT Analysis
    2. Customer Analysis
    3. Competitor Analysis
    4. Financial Analysis
  3. Set SMART objectives
  4. Evaluate courses of action (alternatives analysis)
  5. Recommendation and implementation
    The “solution” should always address the “problem”
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39
Q

Factors influencing consumer behaviour

A
  1. cultural
  2. social
  3. Personal
  4. Psychological
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40
Q

Cultural Factors influencing consumer behaviour

A
  1. Culture
  2. Subculture
  3. Social class
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41
Q

Social Factors Influencing consumer behaviour

A
  1. Reference Groups
  2. Family
  3. Roles and Social Status
  4. Opinion Leaders
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42
Q

Personal Factors Influencing consumer behaviour

A
  1. Age and life cycle stage
  2. Occupation
  3. economic situation
  4. lifestyle
  5. Personality and self Concept
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43
Q

Psychological factors influencing consumer behaviour

A
  1. Motivation
  2. Perception
  3. Learning
  4. Beliefs and attitudes
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44
Q

Culture

A
  • A shared set of values, norms, and customs in society
  • Shapes our beliefs, perceptions, expectations and identity
  • Learned from family, religious organizations, school, peers, colleagues, society
  • Shifts in culture may expose new opportunities for marketers
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45
Q

Sub-culture

A

Groups of people with shared values based on common life experiences and situations.

  • Subcultures can act as a distinct market segment: they have similar needs and make similar consumption decisions
  • Examples: hippy, preppy, yuppie, hipster
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46
Q

social class

A
  • Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors: informs tastes and preferences
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47
Q

Reference Groups

A
  • Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors: informs tastes and preferences
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48
Q

Using Reference Groups

A
  • Link products to members of apirational reference groups (e.g celebrities)
  • Encourage word of mouth to increase influence of membership group
  • Associate competitor product with dissociative reference group
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49
Q

Family

A
  • They have an important influence on consumption choices
  • Individual family members may serve different functions in the decision process: information gatherer, influencer, decision maker, purchaser, user
50
Q

Roles and Social Status

A
  • Roles: parts, activities, or functions individuals are expected to perform according to personal or others expectations ie commerce student, boss, athlete
  • Status: general impression and esteem given to a role by society ( social status is different form social class)
51
Q

Opinion Leaders

A
  • An opinion leader is a person within a referenece group who is frequently able to influence others attitudes or behaviors due to their knowledge, expertise, personality, or other characteristics
52
Q

Motivation

A
  • The reasons for action
  • They usually drive people to satisfy needs that are significantly pressing and to direct the individual to find satisfaction
53
Q

Perception

A
  • The process by which sights, sounds, smells, tastes and textures are selected, organized and interpreted by consumers
    • Selective Attention: consumers screen out information
    • Selective Distortion: people interpret information to fit
    with their beliefs
    • Selective Retention: people retain points to support attitudes
    • Subliminal ads?
    • How can we get consumers to process/pay
    attention?
    • Frequent Exposure
    • Make the physical characteristics of a product
    more salient
    • E.g. Packaging, contrast, color, size, movement
    • Create surprise or novel experience • E.g. humor appeals
54
Q

Big Five Personality Traits

A
  • Openness
  • Consciousness
  • Extraversion
  • Agreeableness
  • Neuroticism
55
Q

Self Concept

A

How a person views him/herself.

• Customers can use brand personalities to project their self- concept or identity.

56
Q

Maslow’s Hierarchy of Needs

A

Basic Needs:

  1. Physiological Needs ( food, water, warmth, rest)
  2. Safety needs (safety, security)

Psychological Needs

  1. Belongingness and love (intimate relationships, friends)
  2. esteem (Prestige and feelings of accomplishment)

Self fulfillment needs

  1. self-actualization (achieving ones full potential, including creative activities)
57
Q

Consumers Decision Process

A
  1. need recognition
  2. Information search
  3. evaluation of alternatives
  4. decision
  5. post purchase behaviour
58
Q

Need Recognition

A
  • Triggered by internal or external stimuli
  • Internal stimuli may be a personal need or motivation
  • External stimuli may be an advertisement which makes the consumer aware of need (they didn’t know they had).
59
Q

Information search

A

• Internal search
o Facts you already know o Cognitive associations
• External search
o Commercial sources: advertising, sales, people, webpages, packaging, displays
o Public sources: mass media, consumer rating organizations, internet blogs
o Experiential sources: using the product
o Personal sources: friends, family, co-workers

60
Q

Evaluation of Alternatives

A
  • Careful weighing of attributes

* Intuition, “gut” feelings, and impulse decisions

61
Q

Purchase Decision

A
  • Influenced by other people

* Unexpected situational factors arise (competitor’s price, product not in stock)

62
Q

Post-Purchase Behaviour:

A

Post-Purchase Behaviour:
• Exceeds expectations = Very Happy
• Meets expectations = Happy
• Doesn’t meet expectations = Sad
• Promise only what you can deliver, and deliver what you promise
• Build long-lasting and profitable relationships
• Positive word-of-mouth can influence your happiness after purchase

63
Q

Market Research:

A

Market Research: the process of designing gathering analyzing, and reporting information that may be used to solve a specific marketing problem.

64
Q

Problems with Market Research

A

Problems with Market Research
• Customers are not always good at telling you what they like, need, or want
• Data OVERLOAD

65
Q

The Market Research Process

A
  1. Define the problem and research objectives
  2. develop a research plan
  3. collect and analyze the data
  4. Interpret and report the findings
66
Q

Participant Observation:

A

In-person observation in natural environment

67
Q

Non-participant Observation

A

Non-participant Observation involves observing participants without actively participating.

68
Q

Mechanical Observation

A

Observation techniques involving mechanical observers either in conjunction with, or in place of, human observers.

69
Q

Product

A

• Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need.

70
Q

Three levels of product

A
  1. Core - customer value, want, or need
  2. Actual Product - Brand name, features, quality level, packaging, design
  3. Augmented Product - after sale service, warranty, product support, delivery and credit
71
Q

Convenience product class

A
  • Frequent purchase, little planning, little comparison or shopping effort, low customer involvement
  • Low price
  • Widespread distribution, convenient locations
72
Q

Shopping Product Class

A
  • Less frequent purchases require more shopping effort and price, quality, and style comparisons
  • Higher priced than convenience goods
  • Selective distribution in fewer outlets
  • Advertising and personal selling by producer and reseller
73
Q

Specialty Product Class

A
  • Consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
  • Strong brand preference and loyalty, little brand comparisons, and low price sensitivity.
  • High price and exclusive distribution
  • Carefully targeted promotion by producers and resellers
74
Q

Unsought Product Class

A
  • Little product awareness and knowledge (or if aware, sometimes negative interest).
  • Pricing and distribution vary.
  • Aggressive advertising and personal selling by producers and resellers.
75
Q

Individual Product Decisions

A

• Product Attributes, Branding, Packaging (Packaging operates as a five second commercial), Labeling, Product Support Services

76
Q

Product Line Decisions

A
  • Group of Products that are closely rated because they function similarly, are sold to the same customer groups, are marketed through same types of outlets, and fall within given price ranges.
  • Product line decisions are based on the line length (the # of products in a line)
  • Product lines are managed by stretching and filling

o Line stretching – Adding products that are higher or lower priced than existing products in the line
▪ A company may stretch up or down to attract a new TM or respond to a competitor

o Line filling – Adding more products within the present price range
▪ To attract different segments
▪ Risks include: Choice overload

77
Q

Product Mix Decisions

A
  • Product Mix (All of the product lines and items that a particular seller offers for sale)
  • Width (Number of different product lines)
  • Depth (variants in line)
  • Consistency (relatedness of lines)
78
Q

Product Development

A
  • Original, “new to the world” products
  • Product improvements
  • Product modifications
  • New brands
79
Q

How are new Products developed?

A
  1. Research and development

2. Acquisition

80
Q

Why are new products important?

A

They bring new solutions to customers’ needs
• Provide a source of growth for companies
But:
• New products are often risky and expensive
• High rate of failure

81
Q

Reasons for failure in product development

A
  • Poor consumer insights/marketing research o Misunderstood customer preferences
  • Problems in product development
  • Problematic marketing mix
  • Competition
  • 9 out of 10 products fail, so successful products must meet or exceed expectations.
82
Q

Buyers adoption Process

A
  1. awareness ( Aware but lack information)
  2. Interest ( Seeks information about the new product)
  3. evaluation (Decides whether or not to try product)
  4. Trial (Tries product to estimate its value)
  5. Adoption (Buy and make full use of product)
83
Q

Features that influence adoption

A
  1. Compatibility
    • Can the benefits be easily observed or described to others?
    Complexity
    • Is the innovation difficult to understand or use?
    Communicability
    • Does the innovation fit the values and experience of the target market?
    Divisibility
    • Can the innovation be used on a trail basis?
84
Q

Product Development Life cycle stage

A
  • FIRST STAGE
  • Idea generation
  • Idea screening
  • Concept development and testing
  • Marketing strategy development
  • Business analysis
  • Product development
  • Test marketing
  • Commercialization
85
Q

Introduction Life cycle stage

A

Characteristics
SECOND STAGE
• Sales are low and costs per customer are high
• Negative profits (only “innovators are buying)
• Few competitors Marketing Goal
• To create awareness about the product and encourage trial
Strategies
• Product: Basic product delivers on the core need
• Price: Price skimming or penetration pricing
• Distribution: Selective distribution
• Advertising: Build product awareness among early adopters and dealers
• Sales Promotion: Heavy sales promotion to entice trial

86
Q

Growth Life Cycle Stage

A

Characteristics THIRD STAGE
• Rapid growth in sales; Average costs per customer
• Rising profits (Attracted early adopters and crossed “chasm” to attract early majority)
• Growing number of competitors Marketing Goal
• Maximize market share Strategies
• Product: Offer product extensions, service, warranty
• Price: Maintain (enjoy increasing demand with little competition)
• Distribution: Build intensive distribution; Maximize availability
• Advertising: Build awareness and widen interest to more markets
• Sales Promotion: Take advantage of heavy consumer demand

87
Q

Maturity life cycle stage

A

Characteristics FOURTH STAGE
• Sales peak and level off
• Cost per consumer are low and profits are high
• Attracted early and late majority adopters
• Competitors have declined and stabilized (copy-cats are gone)
Marketing Goal
• Maximize profit while defending market share
Strategies
• Product: Diversify/modify product
• Price: Price to match or beat competitors
• Distribution: Modify/intensive to beat competitors
• Advertising: Modify/Stress brand differences and benefits
• Sales Promotion: Modify/ Encourage switching from competitors

88
Q

Decline life cycle stage

A 
Characteristics - LAST STAGE
• Declining sales; declining profits; low costs per customer
• Customers are “Laggards”
• Low and declining number of
competitors Marketing Goal
• Reduce expenditure and cost to minimize losses
• “Harvest” the product
Strategies
• Product: Phase out weak items
• Price: Maintain or reduce price
• Distribution: Phase out; Few
selective outlets
• Advertising: Reduce to minimal level
• Sales Promotion: Reduce to minimal level
89
Q

What is a brand

A
  • A brand is a name, term, symbol, design, or combination of all of these, that identify a seller’s product and differentiates it from competitors’ products.
  • Brands are tied to products, but more importantly – they are tied to ideas and needs
90
Q

Brand Equity

A
  • The dollar amount attributed to the perceived value of a brand, based on the intangible qualities that create that perceived value
  • Differentiation – superior to competitors
  • Relevance – meets customer needs
  • Knowledge – awareness of the brand
  • Esteem – respect and “liking” of the brand
91
Q

Brand Awareness

A

• Brand awareness is related to the strength of the brand in memory as reflected by consumers’ ability to recall or recognize the brand under different conditions.

92
Q

Brand Image

A

brand image (defined as consumer perceptions of and preferences for a brand, as reflected by the various types of brand associations held in consumers’ memory).

93
Q

Brand Performance Measures

A 
o Relative Satisfaction or Attitudes towards the Brand 
o Awareness
o Commitment/Loyalty
o Relative Perceived Quality
o Availability
94
Q

Three levels of brand positioning

A
  • Product Attributes/Functional (Least effective, easy to copy)
  • Benefits (Associates name with desirable benefit)
  • Beliefs and Values (Taps in to emotions (emotional branding)
95
Q

Brand development strategies

A
  1. Line extension
  2. Brand Extension
  3. Multibrands
  4. New Brands
96
Q

Line Extension

A 
• Introduce additional items in the same product category under the same name (e.g. new flavours, forms, colours, and sizes).
• Benefits:
o Low cost and low risk
o Increases variety for consumers o Use excess capacities
o Command more shelf space
• Risks:
o Over-extending brand
o Cannibalizing existing products
97
Q

Brand Extension

A

• Use a successful brand name to launch a new product in a new category
• Benefits:
o Instantrecognition
o Faster acceptance
o Saves on advertising costs
• Risks:
o Dilutes the image of the “flagship” product o Failures can impact the core brand image

98
Q

Multibrands

A

Multibrands
• Multiple product variations with a different brand name in the same product category
• Benefits:
o Establish different features to appeal to different customer
segments
o Increase shelf space
o Capture larger overall market share
• Risks:
o Potentially lower the market share of each brand
o Higher costs
o Spreading yourself too thin

99
Q

New Brands

A 
• New brand used in new product category
• Benefits:
o Diversification of portfolio
o Can create distinct positions/associations
• Risks:
o Spread resources too thin
o High costs
100
Q

Brand Communications

A

o Focus on reinforcing the brand’s position or image

o TV, Social Media, Website, Print

101
Q

Brand Experiences and touch-points

A

Touchpoints allow consumers to interact with the brand, and form brand experiences
▪ Experiences can be sensory, affective, cognitive, and/or behavioural
o Experiences should be positive and consistent

102
Q

Brand Icons and Characters

A

o Brand icons or characters aide companies with their brand communications
o Icons are associated with the brand (design, image, shape), while characters can speak, interact, and have personality.

103
Q

Brand Stories

A

o Brand Stories
o Branded content – any information or story written and produced by a brand
o Branded entertainment – is a way for brands to partner with
entertainment producers to create entertainment, usually a video to highlight the brand (e.g. The Lego Movie)

104
Q

Brands and Social Media

A

o Brands and Social Media
o Build platforms upon which brands can engage with consumers directly, and consumers can interact with each other
o Enables members to form stronger bonds with each other, ultimately leads to a strong brand community with a sense of belonging

105
Q

Price

A
  • Narrow Definition: The amount of money charged for a product or service.
  • Broad Definition: The sum of all values that consumers exchange for the benefits of having or using the product or service.
  • Price is simply one aspect of consumer’s perception of value.
106
Q

Why is pricing so important?

A

Price and the Marketing Mix

• Only element of the marketing mix to produce revenues (other elements
represent costs)
• Most flexible to change
• Directly impacts the firm’s bottom line
• Form impressions based on price

Common Pricing Mistakes
• Reducing prices too quickly to get sales (i.e. long term effects of sales
promotions are generally negative)

Willingness to Pay
• Associating price with value

107
Q

Cost-based pricing

A

• Set price based on costs for producing, distributing, and selling product plus a fair rate of return for effort and risk
o Example: cost-plus pricing: adding a markup to good/service • Pros:
o Sellers are more certain about costs than demand o Prices are similar and competition minimized
o Simplifies pricing choices
o Perceived as fairer for buyers and sellers
• Cons:
o Largely ignores demand and competition
o Possibly leaves money on the table (profits could be higher)
• Process:
o Design a good product
o Determine product costs
o Set price based on costs
o Convince buyers of product’s value

108
Q

Value-based Pricing

A

• Uses buyers’ perceptions of value rather than seller’s costs to set price
o Requires developing features that add value to the market offering (differentiation allows higher pricing)
o Examples: Everyday low pricing, Value added pricing.
• Process:
o Assess customer needs and value perceptions
o Set target price to match customer perceived value
o Determine costs that can incurred
o Design product to deliver desired value at target price

109
Q

Market skimming pricing

A

• Set a high initial price for a new product to “skim” revenues layer by layer from the market
o Price is higher than industry average
• Company makes fewer, but more profitable sales
• When to use:
o Product’s quality and image support a higher price
o Costs of smaller volume cannot be so high they cancel the advantage of charging more
o Competitors should not be able to enter market and undercut price
• Prestige pricing (a variation): Price remains high due to the perception of prestige.

110
Q

Market penetration Pricing

A

• Set a low initial price in order to penetrate the market and get a large volume of sales.
o Price set between average variable cost and average industry price.
• Can attract a large number of buyers quickly and win a large market share
• When to use:
o Market must be highly price sensitive, so a low price produced more
market growth.
o Production and distribution costs must fall as sales volume increases o Low price positioning must be sustainable to keep out competition

111
Q

Pricing Adjustment strategies

A

Discounts and Allowances: Reward and incentivize customer response

Promotional Pricing: Temporarily pricing below list price to create buying excitement and urgency

Geographical Pricing: Account for geographic location of customers (e.g. delivery charges)

International Pricing: Adjust for international markets

Dynamic Pricing: Adjust continually to meet characteristics of individual consumer and situations

112
Q

The Promotion Mix

A
  • Advertising (indirect and non personal)
  • Sales Promotion (usually indirect and non personal)
  • Direct Marketing (direct and somewhat personal)
  • Personal Selling (direct and face to face)
  • Publicity and Public Relations (usually indirect and non personal)
113
Q

Personal selling

A

• Face to face contact with consumers designed to inform and persuade consumers to buy
• Salespeople: One of the oldest professions in the world.
• Pros:
o Develop a relationship with the customer
o Effectives at changing consumer preferences, beliefs, and actions
• Cons:
o High costs
o Involved a long-term commitment

114
Q

Personal selling is more important if

A
  1. product has a higher price
  2. product is custom made
  3. product is technically complex
  4. there are few customers
  5. customers are concentrated
115
Q

Advertising and sales promotion is more important if

A
  1. product has a lower price
  2. product is standardized
  3. product is simple to understand
  4. there are many customers
  5. customers are geographically dispersed
116
Q

Sales Promotion

A 
• An activity or material that offers a direct incentive to purchase
• Enhance awareness
• Encourage purchase
o Pulls people in
• Consumer Promotions
o Objective: short-term sales
o Ex. Free samples, contests/sweepstakes, rebates, coupons 
• Pros:
o Attracts attention
o Strong incentive to purchase o Sense of immediacy
o Fear of missing out
o Encourages trial
o Boost staggering sales
o FastROI
• Cons:
o ShortLived
o Danger of harming brand
o Unlikely to build loyalty/relationships
117
Q

Direct Marketing

A

• The practice of delivering promotional messages directly to potential customers on an individual basis
• Traditional direct marketing focused on catalogues and telemarketing
• With internet and digital media advances, the direct selling model has dramatically altered
• Direct marketing offers both communication with customers and a way to distribute products
• Pros:
o Less Public
o Immediate communication
o Customized/Tailored
o Allows for interaction
o Well suited for building long-term relationships
• Cons:
o One-way communication
o SPAM
o Requires updating
o Privacy issues/concerns

118
Q

Public Relations

A

• Communicate with key audiences
• Managing, protecting, and enhancing the reputation and image of a brand/company
• Engage consumers and make them part of the brand’s story
• It’s an iterative process
o Customization and consistency of messages
o Monitor the actions and opinions of stakeholders o React to potential threads opportunities

119
Q

Planned Product replacement

A

Planned insertion of a brand/product into the media for the purpose of influence viewers. This allows for opportunities for cross-branding.

120
Q

Pro’s of Public Relations

A

• Pros:
o Generate buzz at every stage of the purchase decision-process o Reach elusive audiences & overcome selective exposure
o Overcoming negative bias towards advertising
o Positive image of the company
o Relatively high “bang for the buck”

121
Q

Cons of public relations

A

o Little control
o Company can look disingenuous
o Difficult to measure
o Cannot fully compensate for bad or unethical practices

Marketing Final (1 decks)

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