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Marketing 301 – Exam 2 (Coupland)

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Strategic Planning
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Process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities
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Steps in Strategic Planning
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1. Define the company mission 2. Setting company objectives and goals 3. Designing the business portfolio 4. Planning marketing and other functional strategies
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Misson Statement
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a statement of the organizations purpose – What it wants to accomplish in the larger enviroment
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Good mission statements are:
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– Market Oriented – Realistic – Specific – Motivating – Illustrative of distinctive competencies
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Mission Statement Leads To:
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– Detailed support objectives for each level of management – Must be measurable
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Business Portfolio
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The collection of businesses and products that make up the company
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Portfolio Analysis
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The process by which management evaluates the products and businesses that make up the company
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Strategic Business Units (SBU’s)
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SBU can be a company division, product line within a division, or sometimes a single product or brand
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BCG Matrix (image)
BCG Matrix (image)
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BCG Matrix
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Stars- High Market Growth, High Market Share (disney Merchandise) Cash Cows- Low Market growth, High Market Share (Disney Parks) Question Marks- High Market Growth, Low Market Share (Disney Cruises) Dogs- Low Market Growth, Low Market Share (Disney Movies)
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Criticisms of BCG Matrix
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– Limited number of variables – Ignores interrelationships between businesses (ex: disney movies are dogs)
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The Product/Market Expansion Grid
The Product/Market Expansion Grid
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Market Penetration
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making more sales to customers without changing the product – this can be achieved by price, place, and promotion EX) price-free wi-fi, Place- everywhere in main cities, Promotion – different promotional opportunities
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Market Development
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growth by identifying and developing new markets for current products EX) Demographic (senior citizens, children, blue collar) or geographic (china has different needs)
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Product Development
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offering modified or new products to current markets Ex) Starbucks coffee in cans, or Starbucks energy drinks
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Diversification
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start up or buy businesses outside of current products and markets Ex) Starbucks just acquired Evolution Fresh, they are using it as an in to the health and wellness industry
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4 C’s
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– Clients (customer wants and needs) – Communications (interactions between client and organization) – Costs (cost of satisfying client) – Convenience (how and where does the customer want to purchase)
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Strategy Formulation Steps
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1. What do we know? 2. What do we want to accomplish? 3. and 4. How will we do it?
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Value Chain
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The series of internal departments that carry out value creating activities to design, produce, market, deliver, and support a firms products
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Marketing Control
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Measuring and claiming the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved
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Benefit Segmentation
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Dividing the market into segments according to the different benefits that consumers seek from the product
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Marketing Management Analysis
Marketing Management Analysis
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Planning – Develop strategic plans, develop marketing plans Implementation – Carry out the plans Control – Measure the results, evaluate results, and take corrective action
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Contents of a Marketing Plan
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– Executive Summary – Current Marketing Situation – Threats and Opportunities Analysis – Objectives and issues – Marketing Strategy – Action programs – Budgets – Controls
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SWOT Analysis
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an overall evaluation of a companies strengths, weaknesses opportunities, and threats
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Strengths Include:
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– internal capabilities – resources – positive situational factors that may help the company serve its customers and achieve objectives
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Weaknesses Include:
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– internal limitations – negative situational factors that may interfere with the company’s performance
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Opportunities Include:
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– positive factors or trends in external environment that the company could use to their advantage
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Threats Include:
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– negative external factors or trends that may present challenges to performance
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The 4 P’s of the Marketing Mix
The 4 P's of the Marketing Mix
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Product: goods and services combination the company offers to the target market Price: the amount of money customers must pay to obtain the product Promotion: refers to activities that communicate the merits of the product and persuade target customers to buy it Place: includes company activities that make the product available to target consumers
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Marketing Implementation
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the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives – execution is normally the hardest part – implementation ends up being more about personal relationships – Successful implementation depends upon: 1) company culture. 2) employees shared beliefs and values. 3) organizational structure. 4) reward systems
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Marketing Control
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evaluating the results of marketing strategies and plans and taking corrective actions to ensure that objectives are attained
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Steps in STP
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1. Market Segmentation – identify bases for segmenting the market, develop segment profiles 2. Target Marketing – develop measure of segment attractiveness, select target segments 3. Market Positioning – develop positioning for target segments, develop a marketing mix for each segment
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Marketing Segmentation
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dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
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Geographic Segmentation
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dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
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Demographic Segmentation
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dividing a market based on demographic variables such as age, gender, family size, family life cycle, race, generation
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Psychographic Segmentation
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dividing a market based on social class, lifestyle, or personality characteristics
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Behavioral Segmentation
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divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product
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Occasion Segmentation
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– a type of behavioral segmentation – dividing the market into segments according to occasions when buyers get the idea to buy,
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Benefit Segmentation
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dividing the market into segments according to the different benefits that consumers seek from the product
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Intermarket Segmentation
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segments of consumers who have similar needs and buying behavior even though they are located in different countries
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Requires for Effective Segmentation
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– Measurable: can be identified and measured – Accessible: can be reached and served – Substantial: large and profitable enough – Differentiable: separate from other segments – Actionable: can be marketed to by our company
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Marketing Targeting (Targeting)
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Choosing the segment that is most attractive to your organization Ex) you can choose senior citizens, families, children, etc
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Evaluating Market Segments
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Internal: – Does the segment fit with our objectives and resources? External: – How big is the segment? What is its growth potential? – What is the competitive climate like? Are there lots of substitute products? – How much power do suppliers and customers hold?
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Target Market
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a set of buyers sharing common needs or characteristics that the company decides to serve
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Target Marketing Strategies
Target Marketing Strategies
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Undifferentiated (mass) Marketing
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when a firm goes after the whole market with one offer rather than focusing on one specific segment of the market
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Differentiated (segmented) Marketing
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targets several market segments and designs separate offers for each Ex) Old navy is owned by a company which owns a lot of different other brands
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Concentrated (Niche) Marketing
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targets a large share of one or a few small segments or niches Ex) tetramin owns majority of fish food Ex) southwest owned its niche in the beginning but then expanded
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Micromarketing
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tailoring products and marketing programs to suit the tastes of specific locales and/or individuals – Local Marketing – Individual Marketing Ex) lion needs or lion tutors
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Positioning
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– the key concept to be communicated to the target consumer – the place the product occupies in the consumer’s mind relative to competing products
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Competitive Advantage
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differentiate your brand based on: – product – services – channels – people – image
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Product Differentiation
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brands are differentiated on features, performance, or style and design Ex) Bose- design and sound quality
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Services Differentiation
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speedy, convenient, or careful delivery Ex) bank open 7 days a week including evenings
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Channels Differentiation
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differentiate based on the way they design their channel’s coverage, expertise, and performance Ex) amazon and geico set themselves apart with smooth functioning direct channels
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People Differentiation
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hiring and training better people than their competitors Ex) disney world trains their workers to make sure they are courteous, competent, friendly, and upbeat from hotel workers to monorail drivers
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Image Differentiation
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should convey a product’s distinctive benefits and positioning Ex) lebron shoes, ritz carlton hotels, mcdonalds, must live up to their image/reputation
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Vertical Differentiation
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one product is clearly better Ex) energy star TV
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Horizontal Differentiation
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“Better” is a matter of opinion Ex) heinz purple ketchup
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Positioning Statement
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– a statement that summarizes company or brand positioning – slogans are based on positioning
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Form of Positioning Statement
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To (target segment and need) our (brand) is (concept) that (point of difference)
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Product
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anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
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Service
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a form of a product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything
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Levels of Products and Services
Levels of Products and Services
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1. Core Customer Value 2. Actual Product 3. Augmented Product
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Core Customer Value
Core Customer Value
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– addresses the question: What is the buyer really buying? – when designing products, marketers must first define the core, problem-solving benefits or services that consumers seek – based on maslows needs
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Actual Product
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– product planners must turn the core benefit into an actual product – they need to develop product and service features, a design, a quality level, a brand name, and packaging
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Augmented Product
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build this around the core customer value and actual product by offering additional consumer services and benefits
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Consumer Product
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a product bought by final consumers for personal consumption
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Convienence Product
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a consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort Ex) candy, magazines, laundry detergent
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Shopping Product
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a consumer product that the customer in the process of selecting and purchasing usually compares on such attributes as suitability, quality, price, and style Ex) hotels, furniture, clothing, appliances
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Specialty Product
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a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Ex) specific brands of cars, designer clothes, gourmet foods
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Unsought Product
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a consumer product that the consumer either does not know about or knows about but does not normally consider buying Ex) life insurance, funeral services, blood donations
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Other Types of Products
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Industrial Organizations People Places Ideas
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Industrial
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a product bought by individuals and organizations for further processing or or use in conducting a business
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Organizations
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for profit (businesses) and non profit (schools, churches, etc)
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People
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politicians, entertainers, pro athletes, doctors, lawyers etc
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Places
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Tourism, country-of-origin, immigration, etc
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Ideas
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public health campaigns, environmental campaigns
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Three Levels of Product Decisions
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1. Individual Product Decisions 2. Product Line Decision 3. Product Mix Decisions
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Individual Product Decisions
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Product Attributes–Branding–Packaging–Labeling–Product Support Services
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Product Quality
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the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
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Product Style and Design
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Style – describes the appearance of the product Design – related to usefulness, goes deeper than style
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Branding
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a brand is a name, term, sign, symbol, or design or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitiors
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Brand Equity
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the positive effect that knowing the brand name has on customer response to the product High brand equity provides: – greater awareness and loyalty – basis for strong, profitable customer relationships – willingness to pay a premium for the brand
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Brand Positioning
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Based on: -Product attributes – benefits – beliefs and values
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Brand Name Selection
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Desirable qualities: – suggests product’s benefits and qualtieis – easy to pronounce, recognize, and remember – distinctive – extendable, not limited to one particular product – translates easily into foreign languages – capable of being registered and legally protected Protect Brand Names: – generalization voids trademarks legal protection – must include the word “brand” and include the registered trademark symbol
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The Law of Shape
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the ideal shape for a logo is horizontal
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Brand Development Strategies
Brand Development Strategies
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Line Extension Brand Extension Multibrands New Brands
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Line Extension
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extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
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Brand Extension
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extending an existing brand name to new product categories
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Multibrands
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Multiple brands by the same company in the same product category
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New Brands
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used when existing brand names are either unsuitable for brand extension or the company doesn’t want to dilute them
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The Law of the Word
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a brand should strive to own a word in the mind of the consumer
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Four Services Charactersitics
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1. Intangibility 2. Variability 3. Inseparability 4. Perishability
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Intangibility
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services cannot be seen, tasted, felt, heard, or smelled before purchase Ex) people getting medical surgery can’t see the result before the purchase
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Variability
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quality of services depends on who provides them and when, where, and how Ex) marriott has a great reputation but an employee behind the counter can be cheerful while the other employee behind the counter could be grumpy
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Inseparability
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services cannot be separated from their providers; if a service employee provides the service, then the employee becomes a part of the service
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Perishability
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services cannot be stored for later sale or use Ex) hotels and resorts charge lower prices in off season and higher prices during season
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Packaging
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the activities of designing and producing the container or wrapper for a product
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Labeling
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– identifies the product or brand – supports the brand’s positioning – adds personality to the brand
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Product Lines
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a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given ranges Ex) nike produces many lines of shoes and apparel and marriott offers several types of hotels
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Product Line Decisions
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Product line length: – the number of items in a product line Adjust length by: – Stretching: lengthens its product line beyond its current range – downward – upward – both directions – filling: adding more items within the present range of line
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Product Mix Decisions
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Product Mix: the set of all product lines and items that a particular seller offers for sale Product Mix Dimensions: – Length: the number of items in a line – Width: the number of different product lines carried – Depth: the number of versions offered of a product in a line – Consistency: how closely related various lines are
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New Product Development
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the development of original products, product improvements, product modifications, and new brands through the firm’s own research and development efforts
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Why New Products?
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– New products are crucial for the health of the enterprise – Rejuvenate
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New Product Development Process
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1. Idea Generation 2. Idea Screening 3. Concept Development and Testing 4. Marketing Strategy Development 5. Business Analysis 6. Product Development 7. Test Marketing 8. Commercialization
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Idea Generation
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– the systematic search for new product ideas – External Sources: – customers, competitors, distributors, suppliers, outsourcing partners – Internal Sources: – Company Employees at all levels
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Idea Screening
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screening new product ideas to spot good ones and drop poor ones as soon as possible
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Concept Development
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translate your product idea into a detailed concept stated in meaningful consumer terms Ex) what will the consumer get out of this product? Ex) A (descriptor of product) that provides (benefit/feelings/results) Ex) “A convenience restaurant that provides high quality, fresh, made-to-order food” – Sheetz
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Concept Testing
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testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
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Marketing Strategy/Development
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– designing an initial marketing strategy for introducing this car to the market – Three Parts: 1. describes target market; the planned value proposition; and sales, market-share, profit goals in first few years 2. outlines products planned price, distribution, and marketing budget for first year 3. describes long run sales, profit goals, marketing mix strategy
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Business Analysis
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a review of sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objective
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Product Development
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developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
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Test Marketing
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the stage of new product development in which the product and its proposed marketing program are tested in realistic marketing settings
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Commercialization
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– “launch” – introducing a new product into the market – must develop a market rollout plan (where to go next?)
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Product Life Cycle
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the course of a product’s sales and profits over its lifetime – begins when the company finds and develops a new product idea
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Introduction
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– period of slow sales growth as the product is introduced in the market – profits are non existent in this state because of the heavy expenses of product introduction – Objective=create product awareness and trial
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Growth
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– period of rapid market acceptance and increasing profits – Objective=maximize market share. The growth in sales will lead to a number of competitors entering the market, fighting over initial customers
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Maturity
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– period of slowdown in sales growth because the product has achieved acceptance by most potential buyers – profits level off or decline because f increased marketing outlays to defend the product against competition – Objective=defend market share. Try to get customers to switch to your product
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Decline
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– the period when sales fall off and profits drop – Objective=reduce expenses to stay profitable, milk the product and invest elsewhere. If able to, “restart” PLC, otherwise look for a way out on time
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Style
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A basic and distinctive mode of expression Ex) homes can be colonial, ranch; clothing can be formal and casual
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Fashion
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a currently accepted or popular style in a given field Ex) business attire transformed into business casual; ugg boots
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Fad
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a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity Ex) pet rocks, cabbage patch kids, beanie babies
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Problems with the PLC model
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– Reality is never as “clean” and clear as the PLC curve – It can be hard to even identify which stage of the PLC a product is really in – Hard to forecast the length of each stage of the PLC – Strategy is both a result and a cause of the PLC