marketing midterm 2

strategic brand management

build, measure, and manage brands to maximize their value

brand

a name, term, sign, symbol, or design, or a combination, that identifies the maker or seller of a product

branding

creating meaningful differences between products

brand equity

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

brand value

the total financial value of a brand

3 major brand strategy decisions

brand name selection, brand sponsorship, brand development

brand sponsorship considerations/options

manufacturer, private brand, licensed brand, co-brand

brand development considerations

line extensions, brand extensions, multibrands, new brands

licensing

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

co-branding

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

co-branding advantages

attract new customer segment, complementary strength, expansion, learn from partner brand

co-branding disadvantages

risky w/ differing customer bases, high expectations, overexposure & dilution, reputation risk

line extension

use current brand name to a new product within existing product categories (new flavors, colors, sizes, ingredients, etc.)

brand extension

extend current brand name to a new or modified product in a new product category

multibrands

introduce many different brand names in an existing product category

new brands

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

(dis)advantages of brand extension

leveraging established brand, alignment, risking dilution

(dis)advantages of multibrands

different segments, none might be super profitable

(dis)advantages of new brand

protects parent brand from failure, more expensive

why do new products fail?

no clear new benefits, incongruent brand extension, product design problems, product incorrectly positioned/priced/advertised, overestimation of market size, costs of product development, competitive actions

why develop new products beyond core business?

diversification & reducing risk

product development process

(1) idea generation, (2) concept testing, (3) product development, (4) market testing

idea generation

sources of new product ideas

(product) concept

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

concept testing

process in which the product concept is presented to and evaluated by a group of target consumers (potential buyers or users)

prototype

first physical form or service description of a new product, still in rough/tentative form

alpha testing

evaluation of the product prototype within the firm (functionality & whether meets intended need, 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

premarket tests

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

test marketing

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

diffusion of innovation stages

innovators, early adopters, early/late majority, laggards

innovators

venturesome, risk-taking, highly knowledgeable, 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 status

laggards

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

stages of product life cycle (PLC)

introduction -> growth -> maturity -> decline

PLC - marketing objective

build awareness -> maximize market share -> maximize profit while defending market share -> reduce expenditure while leveraging demand

PLC - product

one/few basic products -> more versions -> diversify brand/models -> best sellers, phase out weak items

PLC - price

skimming or penetration -> gain share -> defend share -> stay profitable

PLC - promotion

inform, educate -> build interest in mass market -> reminder-oriented -> minimal promotion

PLC - place

limited -> more outlets -> max outlets -> fewer outlets

what is promotion?

communications & incentives

communications

informs relevant marketing entities about the specifics of the offering

incentives

tools that enhance the value of the offering by reducing costs and/or increasing benefits

integrated marketing communications (IMC)

represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines in combination to provide clarity, consistency, & max communication impact

IMC elements

consumer, communication channels, evaluation

the communication process

sender -> encoding -> message (communications channel) -> decoding -> receiver

receiver -> feedback -> sender

all impacted by noise from the environment

hierarchy model of responses

cognitive stage (think), affective stage (feel), behavioral stage (do)

AIDA model

awareness, interest, desire, action

awareness

gain the attention of the consumer (aided recall, top-of-mind awareness)

interest

increase interest to further investigate the product, persuade that it's worth investigating

desire

like it -> want it, build emotional preference for the brand

action

ultimate goal of IMC, physical actions & behavioral change

what products are the AIDA model best for?

high involvement and high differentiation products

AIDA limitations

customers don't always follow a linear path

communication channels used in IMC strategy

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

push strategy

focuses heavily on retailers, wholesalers, and salespeople through personal selling and trade promotion

pull strategy

focuses on the consumers through advertising, sales promotion, online and social media

above the line (ATL) marketing

mass audience reach, build brand awareness & reputation, difficult to measure exact impact, uses mass media channels

below the line (BTL) marketing

targeted engagement, response driven & conversion focused, easier to measure & test, uses direct channels

media types

paid, owned, and earned media

paid media

firm-controlled, (paid) advertising, influencer partnerships

owned media

firm-controlled, web properties, brand social channels, email subscriber list

earned media

consumer-controlled & other-controlled, consumer-initiated and shared media, public relations

click-through rate (CTR)

clicks/impressions

conversion rate

conversions/clicks

return on marketing investment (ROMI)

(gross margin - marketing expenditure)/marketing expenditure

advertising

paid form of communication from an identifiable source designated to inform, persuade, and remind

sales promotion

provides incentives, can target both end user consumers or channel members and be short or long-term

short-term incentives

encourages immediate purchases, protect demand against compeition

long-term incentives

build repeat purchases & retention, loyalty programs

loyalty programs

offer ongoing incentives to customers who make multiple purchases over time

personal selling

direct, personal interaction by a firm's sales focre to make sales and build customer relationships

advertising vs. personal selling

one-to-many vs. one-to-one

public relations (PR)

earned, credibility-based communication intended to build & maintain positive brand image as well as manage crises/negative publicity

PR tools

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

steps of planning & executing an ad campaign

(1) identify target audience, (2) set advertising objectives, (3) determine advertising budget, (4) convey the message, (5) evaluate & select media, (6) create ads, (7) assess impact

step 1 - identity target audience

decide who you're trying to reach to shape the message and determine the media

ad objectives

derived from the overall marketing objectives (typically pull strategy)

3 ad objectives

inform, persuade, remind

informative advertising

build brand awareness, inform new product or feature, explain how a product works & its uses, announce a price or design change

persuasive advertising

encourage purchase now or switching brands, build brand preference, change product value perceptions, create customer engagement

reminder advertising

encourage repeat purchases, maintain relationships & loyalty, keep brand top-of-mind, remind where/how to buy

unique selling proposition (USP)

an abbreviated value proposition, common theme or slogan in an ad campaign

informational appeal

focus on facts, features, benefits (rational)

emotional appeal

focus on feelings, resonate with emotion

media mix

which channels + how often w/ the goal of efficiently reaching the right audience

digital marketing

all marketing activities through online channels

paid (search ads)

firms pay to appear at the top of the search

organic links

ranked by relevance to search (not paid)

branded keywords

include the firm's brand name

generic keywords

category or product terms

why bid on branded keywords?

defensive strategy (maintain visibility) & offensive strategy (increase visibility & total clicks)

why bid on generic keywords?

customer acquisitions & increase awareness

price

the amount of money charged for a product/service or, more broadly, the sum of all values that customers exchange for the benefits of having/using the product/service

price in relation to the marketing mix

only element that generates revenue, most flexible

reference prices

external (visible comparison) and internal (remembered from experience/memory)

5 Cs of pricing

company objectives, customers, costs, compeition, channel members