Marketing Exam 2

First step of the Marketing Process

Research

Second step of the Marketing Process

Segmentation & Positioning

Third step of the Marketing Process

4 Ps

Fourth step of the Marketing Process

Sell the Product

What company has a simple menu that was beneficial to their business model?

Cane's

Market Segmentation

Grouping potential customers into groups (segments) that:

(1) have common needs

(2) will respond similarly to a marketing action. Similar behavior

Segmentation

Creates and delivers value

What company benefited from segmenting its customers by identifying people who didn't like hard liquor or beer and tailored their products to them?

White Claw

Segmentation Benefits

Business Benefits: Identification of unfulfilled needs

Customer Benefits: Tailored products and service for those customers

What are the different ways to segment markets?

Demographics, Geographics, Psychographics, Behavioral, Usage, (Needs, Preferences, Decision process)

Demographics

Gender, ethnicity, age, religion, education

Geographics

Urban vs. suburban, by country/region

Psychographics

Risk-taking vs cautious, personality

Behavioral

Purchase behavior, usage, customer behavior

Usage

recency, frequency, loyality, profitability.

Target the most loyal and the most profitable (usually the same group)

Needs, preferences, decision process

requires research, but if you know these, you can create the perfect marketing mix

How do you know which segments to target?

Evaluating attractiveness of each market segment, Selecting one or more segments to pursue, Designing marketing programs to serve segments.

Easiest group is not always the best group

Criteria in selecting target segments

Market Size (needs to be large enough to be profitable), expected growth (if small now, must expect growth), competitive position (less competition, more attractive), Cost to reach (Don't waste money), Company fit (Segment should fit with company objectives)

Value

perceived benefits - perceived costs

Re-positioning

Some brands shift how they want to be seen to stay relevant or reach new segments

Elements of a Positioning Statement

1. Defining the target market (Who? When? Where?)

2. The value

3. The evidence (why and how?)

4. The competitive set (relative to whom?)

Product

Provides a solution to a problem that we have

Characteristics of services

Intangibility, Inseparability, Inconsistency, Inventory

Intangibility

Something you can't touch

Inseparability

College Example: Even if you like all the classes you take at the U, but you hate the dorms, you will say you don't like the U because all aspects of the service are entwined

Inconsistency

Every class will be completely different

Inventory

You have to pay your workers no matter if there is work or not

First Step of New Product Development Process

Strategy Development

Second Step of New Product Development Process

Idea generation

Third Step of New Product Development Process

Idea Screening

Fourth Step of New Product Development Process

Business Analysis

Fifth Step of New Product Development Process

Product Development

Sixth Step of New Product Development Process

Test Marketing

Seventh Step of New Product Development Process

Product Launch (Most expensive because you can't take back)

Marketing Reasons for New-Product Failures

- Not satisfying a need on a critical factor

- Bad timing

- Too little market attractiveness

- Poor product quality

Points of Difference

Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competing brand

Points of Parity

Associations that are not necessarily unique to the brand but may be shared with other brands

Product Life Cycle Stages

Introduction

Growth

Maturity

Decline

Introduction

To Inform

Brand Awareness

Social Proof - makes people trust the brand (celebrities, seals of approval)

Growth

To persuade

Maturity

To remind

#1 goal is to remind you they are still there (Coca Cola, Budweiser)

Decline

To phase out

Two choices

1. Discontinue

2. Repositioning

High Learning Product

Tesla, iPhones: people are reluctant because they don't know enough about it; companies need to educate/guide consumers (tech)

Low Learning Product

low involvement purchases, no worry about buying it/how to use it (iPhone face ID commercial)

Fashion Product

Can last years

fashion is the one thing that comes and goes (trends)

Fad Product

Lasts weeks or months

silly bandz, fidget spinners, squishmallows, zigtech shoes, slap bracelets, Gangnam Style

Brand Equity

Added value a brand name gives beyond product benefits.

Gives brand competitive advantage

Consumers are often willing to pay a higher price for brand equity

Nike, Apple

Brand Personality

A set of human characteristics associated with a brand name

Pricing blog

Consumers purchase when perception of value is greater than price

Pricing Blog Steps

1. What is the goal of the product or business?

2. Conduct a thorough market pricing analysis. Similar to step 1, what's your company's position in the market?

3. Analyze your target audience

Psychology of Pricing

- decoy effect

- anchoring

- bait and switch

Decoy Effect

Uses a less attractive option (the decoy) to make a preferred, more profitable option seem more appealing

Common tactic at restaurants

It costs them nothing for a combo but we are usually willing to pay the few extra dollars

Anchoring

Discount Stores

They will always slap a sticker over the original tag so you can see the original price, and how much you are saving

Bait and Switch

Black Friday

When you bring them into the store with super deals and they end up buying something else

Communication

Process of conveying message to others. Requires source, message, channel of communication, receiver, encoding, and decoding

Integrated Marketing Communication

designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences

Why promote?

Awareness

Information

Attitude (or image)

Call-to-action

Awareness

people discover your product and brand, maybe you're launching a new product and want to share it with your audience or want to enter a new market

(Hey, look at me)

Information

communicate the direct features and benefits of your product or service to your target market

(IPhone commercial ex)

Attitude

Red Bull conveys their extreme sports attitude and persona to customers through sponsoring their events and in their advertisements

Call to action

incentivize them to buy your product or service now, limited time sale, black friday was a great example of this

(Black Friday)

Promotion Decision Process

Planning

Implementation

Evaluation

Inbound Marketing

Consumer Driven and based on content

Consumer-driven, timely, content-rich, solution based

Outbound Marketing

Marketer driven, directly from the company

Marketer-driven, disruptive, hard sell, product based

Product Advertising

Focused on selling a product

Institutional Advertising

Selling the company or brand image

Promotional Mix

Three main goals of the promotional mix

-Inform prospective buyer: Educate about product

- Persuade them to try: Call to action

-Remind them of the benefits

Advertising

Personal Selling

Public Relations

Sales Promotion

Direct Marketing

Advertising

It's mass

TV and Billboard

It's paid

It's efficient to get out to people

Personal Selling

Customized

High-involvement products

Salespeople

Cognitive buys

Public Relations

Mass

It is free

"No news is bad news"

Unable to control what they say

Sales Promotion

Mass

Get people to move

A call to action

Coupons, BOGO

Direct Marketing

Customized

Emailing Lists