Marketing Exam 2

what is the role of brands for consumers?

Take on personal meaning, become part of identity, set and fulfil expectations, reduce risk, simplify decision making

what is the role of brands for companies?

Create brand loyalty, Simplify product handling, Offer legal protection, Secure competitive advantage 

what is brand equity?

the positive differential effect that knowing the brand name has on customer response to the product or its marketing

brand value

total financial value of a brand

Brand Strategy Decisions

brand name selection, brand sponsorship, brand development

brand name selection

selection and protection, it suggest benefits and qualities, easy to remember, distinctive, extendable, translatable, and capable of registration and legal protection

brand sponsorship

manufacturer, private brand, licensed brand, cobranding

brand

a name, term, sign, or deisgn and it identifies make or seller of a product

branding

creating meaningful difference between products

manufacturer’s brand

ford, apple

private brand

kirkland at Costco, 365 at whole foods

licensed brand

one firm allows another to use its brand names in exchange for a fee by contract

cobranding

two established brand names of different companies are used on the same product to create superior market value

What are the disadvantages of co-branding?

risky if customer bases are very different, consumer expectations of cobrands are higher, overexposure and dilution, reputation risk

What are the advantages of co-branding?

multiple brands lend more credibility, allows company to expand its existing brand into another category, learn how a partner brand reaches and understands customers

how do you be successful in cobranding?

Both need brand equity, logical fit, aligned values and goals

brand development

line extensions, brand extensions, multibrands, new brands

line extension

uses current brand name to a new product within existing product categories like new flavors, colors, sizes, ingredients (listerine)

brand extension

Extend current brand name to a new or modified product in a new product category  like dyson vacuum and dyson blowdryer

multibrands

many different brand names in an existing product category like gain and tide

new brands

use new brand name because none of current brand names are appropriate or the power of existing brand name is waning

what are the key advantages and disadvantages for brand development strategy: brand extension? 

the advantage of brand extension is you borrow existing brand equity and faster consumer acceptance but poor fit weakens parent brand equity

what are the key advantages and disadvantages for brand development strategy: multibrands? 

you can target different segments and capture more shelf space but each brand gets small market share and not very profitable

what are the key advantages and disadvantages for brand development strategy: new brands? 

you protect parent brand equity from failure but building brand recognition takes longer and more expensive

findings of private label blind taste test

Willingness to pay a brand premium is driven by an information barrier, not actual product quality

new product development process (in china people massage parrot’s ears)

idea generation, concept testing, product development, market test, product launch, evaluation of results

why do new products fail?

no clear new benefits, inconsistent brand extension, product design problems, product incorrectly positioned, priced, or advertised

How do firms develop and launch new products?

the stage gate model approach

idea generation

source of new product ideas (internal R&D, R&D consortia, licensing, brainstorming, outsourcing, competitors products, customer input)

concept testing

process in which the product concept is presented to and evaluated by a group of target consumers which triggers the marketing research process through interviews and surveys

product concept

Brief written description of a product idea stated in meaningful consumer terms

product development

prototype: first physical form of service description of a new product using alpha or beta testing

alpha testing

evaluation of the product prototype within the firm, functionality and whether meets intended need and occurs internally

beta testing

tests the product prototype with potential customers in real use settings; performance, potential issues based on user feedback

market test

test the market for the new product with a trial batch of products with premarket tests or market marketing

premarket tests

Predict adoption and determine potential demand before launch with a group of potential consumers (customers exposed to marketing mix, survey and collect data, firm makes decision)

test marketing

Evaluate actual sales, marketing effectiveness in a real market setting (more costly, estimate demand, product launch in limited geographic area)

when is test marketing most likely?

for new products with large investment, uncertainty about product or marketing program

when is test marketing unlikely?

simple line extension, copy of competitor product, low costs, management confidence

diffusion of innovation

innovators, early adopters, early majority, late majority, laggards

innovators

Venturesome , risk-taking, highly knowledgable, multi-info sources

early adopters

not as risk-taking as innovators ; opinion leaders , value social acceptance

early majority

deliberate and cautious, spend more time in decision

late majority

skeptical, peers are primary sources, below average social statusla

laggards

traditional, fear of debt, neighbors and friends are info sources

product life cycle

describes the stages that a new product (category) goes through from beginning to end

what are the different stages of product life cycle

introduction, growth, maturity, and decline

what are the characteristics of product life cycle?

consumers and competitors, product and price, promotion, and place

what is the marketing objective for introduction under PLC

build awareness

what is the marketing objective for growth under PLC

maximize market share

what is the marketing objective for maturity under PLC

maximize profit while defending market share

what is the marketing objective for decline under PLC

reduce expenditure while leveraging brand

what is promotion?

communications and incentives

communication

Informs relevant marketing entities about the specifics of the offering like advertisements or PR

incentives

Tools that enhance the value of the offering by reducing costs and/or increasing benefits like sales promotion

Integrated Marketing Communications (IMC)

Represents the promotion dimension of the four Ps; Encompasses a variety of communication disciplines (e.g., advertising, personal selling) in combination to provide clarity, consistency, and maximum communication impact

what are the three elements of integrated marketing communications?

consumer, communication channels, evaluation

what is the goal of integrated marketing communications

to provide a consistent, clear, compelling message across the communication disciplines to target audience

what is the communication process?

sender, encoding, message (communication channel aka media), decoding, receiver provides feedback to sender; noise from the environment

how marketing communications influence consumers

hierarchy model of responses with cognitive stage, affective stage, behavioral stage (think, feel, do)

what is the AIDA model

awareness, interest, desire, action

awareness

gain attention of consumer measured by aided recall, top of mind awareness

interest

increase interest to further investigate the product

desire

i like it to i want it, build emotional preference for brand

action

ultimate goal of integrated marketing communications, physical actions and behavioral change (subscribe, download, purchase)

what is the AIDA model best for?

high involvement and high differetation products like cars and houses since consumers think then feel then act

what are the limitations of AIDA model

customers don’t always follow a linear path; relate to impulse and habitual purchases

what are the communication channels used in IMC strategy?

advertising, sales promotion, online/direct marketing, personal selling, public relations

above the line marketing

mass audience reach, build brand awareness, harder to measure ROI/exact impact, uses mass media channels like TV and billboards

below the line marketing

targeted individuals, response drive, easier to measure, uses direct channels like sales promotion/direct marketing

what are the media types?

paid media, owned media, earned media

paid media

they are firm controlled like paid advertising influencer partnerships

earned media

consumer controlled and other controlled which means consumer initiated and shared media like reviews/ratings/public relations

owned media

firm controlled using websites, social media channels, brand channels, and subscriber list

what is advertising

it is a paid form of communication from an identifiable source designed to inform, persuade, and remind

what is the most visible form of marketing communications?

advertising

advertising

communicates and inform value and reasons to purchase

what does sales promotion give and mean?

it provides incentives which can target both end user consumers or channel members, used with other forms of IMC, and there is short term and long term sales promotion

short term incentives sales promotion

encourages immediate purchases but may only attract price sensitive/brand switchers, weaken brand loyalty and encourage consumers to buy on deals, and stockpile

long term incentives sales promotion

build repeat purchases and retention with loyalty programs that offer ongoing incentives

personal selling

Direct, personal interaction by a firm’s sales force to make sales and build customer relationships

what is the difference between advertising and personal selling

advertising is one to many while personal is one to one. there is a two way communication between buyer and seller and its more flexible and more expensive than other promotions

what is the difference between advertising and public relations

advertising is paid, controll communication while PR is earned, credibility communication.

what is the role of public relations

build and maintain positive brand image, manage crises and negative publicity, maintain relationships with media and stakeholders

what is the importance of public relations?

consumers more skeptical of advertising, builds credibility and trust, and support other promotional efforts by generating earned media and general goodwill

Public Relations Tools

publications, annual reports, medial relations (press), electronic media (websites, social media)

what are the three advertising objectives?

inform (build brand awareness) persuade (motivate consumers to take action), and remind ( remind consumers of a product or prompt purchase)

informative advertising

communicating customer value, inform new product or feature, explain how a product works or new uses, announce a price or design change like new iphone launch explaining features

persurasive advertising

encourage purchase now or switch brands, build brand preference, change perceptions of product value, create customer engagement. example is brand comparison ads

reminder advertising

Encourage repeat purchases, Maintain relationships and loyalty, Keep brand top-of-mind, Remind where/how to buy. Example: Coca-Cola ads during holidays

how does each advertising objectives relate to product life cycle

informing is to introduce a new product category and build awareness and primary demand would be introduction. persuading is important with increased competition to build preference and differentiate from competitors under growth/early maturity. Reminding is important with mature products and maintain relations and encourage repeat purchases under maturity

steps for planning and executing an ad campaign

identify target audience, set adveristing objectives, determine budget, convey the message, evaluate and select media, create ads, assess impact

convey the message

what makes you different from the compeition; unique selling proposition delivered by informational appeal or emotional appeal

why is emotional appeal more effective than informational appeal?

it captures more attention, create stronger connections, and consumers often feel before they think and persuasion is emotional in nature

evaluate and select media

media mix: which channels and how often. goal is to reach the right audience efficiently using mass media or nich media

search ads

paid vs. organic / branded and generic

why do companies bid on branded keywords?

defensive strategy to maintain top visibility for your brand and offensive strategy to increase visibility by appearing in both paid and organic results. it also increase total clicks to brand

why do companies bid on generic keywords?

customer acquisition to attract and reach new customers and increase awareness

why is choosing the right mix of channel matter?

because each channel serve different objectives

advertising requires strategic decisions

target audience, objective, message, media, evaluation