MKTG 445 – Flashcards

Marketing efforts that require little capital (also known as virtually free promotion) the tactical use of low-cost, unconventional tactics to get your message out to the intended audience. Out-thinking. not out-spending your competitor!

Information dispersal occurs through the individual network hubs, talk show hosts such as Howard Stern and Oprah Winfrey. In other instances fans spread "sticky" information over community webs with potential for exponential growth in the message's exposure and influence. When the message Spreads like a virus, multiplying and mutating rapidly as large numbers like-minded people market to each other via "word of mouse" (via the Internet)' it is referred to as viral marketing. Techniques that use pre-existing social networks to produce increases in brand awareness

Hotmail, Ebay and Google's Gmail. In 2007, Google was ranked as the world's top brand - it has become an everyday name despite using relatively little advertising and instead relying on word-of-mouth.

a linear process with information passing from one individual to another, then to another -the oldest method of marketing in a snail-mail world. Revival of WOM in the new millennium has resulted in a highly intense and interactive form of WOM - buzz (think of bees in a beehive literally and figuratively). All word of mouth marketing techniques are based on the concepts of customer satisfaction, two-way dialog, and transparent communications. The basic elements are: • Educating people about your products and services • Identifying people most likely to share their opinions • Providing tools that make it easier to share information • Studying how, where, and when opinions are being shared • Listening and responding to supporters, detractors, and neutrals

Revival of WOM in the new millennium has resulted in a highly intense and interactive form of WOM - buzz (think of bees in a beehive literally and figuratively). Cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. Buzz marketing uses high profile entertainment or news to get people to talk about the brand Marketers are able to create a buzz by generating excitement and a kind of missionary zeal around product releases with local market influences and trendsetters. Buzz is the aggregate of all these conversations, both online and offline. It is important to give people a reason to talk (i.e., give them something that can be passed along)-something tangible (e.g., a sticker) or intangible (e.g., word of a secret sale).

Enterprise Rent-A-Car takes boxes of donuts and friendly smiles" to auto repair shops, and this is known to result in a burst of new referrals. Or a restaurant owner has a big party and invites every hairdresser in town for a free meal, leading to lots of talking the next day.

Guerilla marketing is the creative placement of an advertisement in unexpected places, using Low-cost methods, effective communications: cooperative efforts, and networking: leveraging resources, using self-energy and imagination

Guerrilla warfare marketing strategies are designed to circumvent the need for direct frontal attack such as that engaged in by Pepsi and Coca-Cola in their battle for market share leadership in cola drinks. Instead,the guerrilla strategists use various tactics to wear the opponent down Over multiple rounds of attack. 1. The aim is not to conquer but to outlast the Opponent. Guerrilla forces never win wars, but their adversaries often lose them. This type of strategy entails a series of sporadic attacks in short interval bursts (i.e., surgical strikes), all of which involve five principles:A guerrilla force is divided into small groups that "track the target at its weak 2. They use manifold moves in terms 'of multiple surge-strike-retreat-hide sequences. with the guerrilla teams disappearing between each strike by blending In with the general population or retreating to a remote place. remaining under the radar to the extent possible. 3. They preserve their resources-they never attack the enemy's main force but form short-term alliances to gain an edge and never act like" market leader, regardless of the level of success achieved. 4. They use unorthodox methods that are flexible and can adapt to unforeseen Situations, whether on the offensive Or defensive. 5. They are Willing to withdraw quickly and completely. "Know your enemy and know yourself and victory will always he yours" is their dictum.

1.CRM - Customer Relationship Management. 2. Pay to say marketing 3. Search Marketing 4. Nero Marketing

1. Relationship marketing relies on customer relationship managemnet (CRM) software and databases to collect customer information for ongoing campaigns such as Delta Airlines frquent flyer program in which loyal customers earn extra air miles. The opposite of traditional interruption marketing. which has resulted in communication overload and consumer backIash permission marketing encourages the customer to share personal information that enables the marketer to redfine the company's segmentation and targeting efforts, With a commitment to respect privacy concerns, the marketer gains permission to engage in a dialogue that the customer actually wants. In return the customer receives information from the company based -on previously stated preferences and tailored to time, location. and personal characteristic over time the relationship strengthens and deepens. 2. Pay-to-Say marketing - third party bloggers diffuse brand information on the internet. 3. Search Marketing - uses technology-enhanced methods that allow potential buyers to find them , and the information they want, faster. 4. Nero-marketing is a new method in which functional magnetic resonance imaging (MRI) technology is used to detect information that consumers is not cognitively aware of, but that affects the purchasing decision-making process. It is used as a marketing research method to under stand the brain's responses while being exposed to marketing communication messages.

According to the American Marketing Association (AMA) a brand Is a name, term, sign symbol, or design, or a combination of them intended to Identify the goods of services of one seller or group of sellers and to differentiate them from competitors. A brand offers a complex blend of functional, symbolic, and emotional values and benefits, regardless of the simplicity or complexity of the product itself.

Marketing's new role is encouraging people to talk about a brand. Getting customers to tell friends, family, and co-workers about a brand can potentially translate into new sales leads. new customers. increased sales. and improved brand awareness--as well as get the brand noticed by the media. Brands must address need, wants, wishes and desires, Powerful and imaginative ideas matter--ideas that are "made to stick."~ These ideas are simple. unexpected, concrete, creditable and emotion and they tell stories.

A badge, image or logo found on an electronic commerce Web site that indicates the Web site is a member of a professional organization or that the Web site has passed security tests. The trustmark shows approval branding of a well-known third company. Some common e-commerce trustmarks include those for SSL security, Better Business Bureau, Chamber of Commerce, hacker-free, and others. May also be written as trust mark. In the sea of choices and multiple new offerings, from numerous new and existing companies consumers Instinctively turn to brands they know and trust. But trust is a fragile thing. One misstep and all the years of carefully controlling the brand's image and millions of dollars spent to keep consumers informed are gone with the blink of an eye, compromising what has become a company's most precious competitive asset. Beyond the ever-present internal challenges related to internal functional coordination, brands also face ongoing threats From external Forces. A marketplace shift from surplus demand to surplus supply-together with increasingly fragment dispersed markets, proliferation of media options amid declining mass media popularity, and complicated segmentation efforts - increased cost dramatically. However: it was the power shift from company (4 P's) to customer (4 C's) and the significant decline in brand loyalty that finally forced companies to reexamine the role of trust marks and relationships in the late I990s.

The customer community can also serve as a co-creator of value by acting as customer evangelists: for example. the Harley-Davidson ownership groups (also known as HOGs) actively recruit others to the Harley community and lifestyle--- persuading them in the process to purchase one of the many Harley products beyond the actually motorcycles. The manufacturer of the motocycle has little to do with the brand message when Harley - Davidson's weekend warriors hit the road. Outside of formal events sponsored and organized by the manufactured, the owners of the Harley control the image and community around the brand. Other companies that have created Outspoken evangelists for the brand include Southwest Airlines, Krispy Kreme, and the Dallas Mavericks. These companies now have a small army of unpaid, but passionate, missionaries who act as surrogate marketing team for the brand.

The word Juju is associated with an aura, energy, karma or some magical properties. It originated form West Africa. Marketing Juju is the holy grail of marketing-- the elusive and much-sought-after solution that promises the brand everlasting vitality. Marketing JuJu will protect the brand against the marketing vampire that wants to suck the life out of it on behalf of the competitor. The good news is that marketing juju doesn't cost a lot of money --- all you need is plenty of creative mojo! Juju is derived from a brand that has a radiant sense, motivational qualities and a deeply mythic allure that touches the human spirit. Desire to make meaning out of something is universal Must be part of people's lived space Requires imagination, inspiration, intuition and inspiring ideas to connect their heart to their minds.

What do Apple. Nike, and Harley·Davidson have in common with the hells Angels and the Unification Church? These organizations all exemplify the characteristics of a tight community or cult; they Consider themselves to be different from mainstream society in some fundamental way. A cult brand is one "for which a group of customers exhibit a great devotion or dedication." Its ideology is distinctive and it has a well·defined and committed community. It enjoys exclusive devotion (i.e .. not shared with another brand in the same category), and its members often become voluntary advocates. other examples of very successful cult brands include Star Trek, Oprah Winfrey, Volkswagen Beetle, Jimmy Buffet, Vans Shoes. and Linux. The dynamics underlying these tribal-like communities is kinship-a sense of belonging.

In the words of the creator of the love mark concept, Kevin Roberts (CEO of Saarchi & Saatehi Worldwide) said, "A Lovemark is a brand that has created loyally beyond reason,' it is infused with mystery, sensuality, and intimacy, and that you recognize immediately as having some kind of iconic place in your heart. Whereas trustmarks operate at a brand level a Lovemark acts at a human Level--the brand is no longer part or the products identity but has become transformed apart or the individual's identity. Examples: Brands like Harley-Davidson, Saturn. JetBlue, and Nike make their customers feel unique important and part of an exclusive group-this leads to long-term relationships between a brand and its users. Another company that has created a lovemark is Stonyfield Farm. Its organic dairy products from "happy cows" that could be adopted by kids as part of a campaign fused consumer education and promotion stirred the hearts alike of the younger and older generations alike

Value can be uniquely co-created by the customer based on personal meaning derived from interactions with the brand. Customers might act as collaborators, competitors, and or co-developers. An example in which the customer acts as collaborator is that of TiVo, which acts as an intelligent digital video recorder that analyzes the user's tastes and interests based on a personal Viewing history. These results are then used to evaluate the programming available on accessible channels, select programs the user will most probably enjoy, and record these when they are broadcast without the need for any user intervention. This adaptive learning process with the experience network is the basis for real-time action. Other examples include Sony's PlayStation (PS2) and Nintendo's wii. Customers also act as competitors of other customers when they are price setters, as is the case of products purchased on Price line and eBay. An experience scenario that is becoming increasingly popular involves customers as co-developers of products (e.g .. Build-a-Bear Workshops, NIKEiD) or co-producers of the service experience (e.g., Southwest Airlines and Cafe TuTu Tango [see what's waiting at WWW.cafetututango.com. Another example is the cable, satellite networks, Current TV, in which 30% of the content is "viewer-generated. In this scenario, the company and customers are participants in the experience-the Company provides the physical resources. while the customer makes the experience happen as a result of engaging the resources provided. The example in Exhibit 9-3 describes a novel dining experience at the restaurant Dans le Noir? in France - describes a novel dining experience at the restaurant at .. France, where the blind are feeding the blind-literally. This co-created experience is a Source of unrivaled value.

1. Ideological Spaces - cognitive domain, Brand as a powerful conveyor of ideas. 2. Community Space - Affective domain, The reciprocal space is set up through interactions, connections and encounters within a social niche of like-minded others through voluntary associations or communal relationships where perspectives are negotiated and translated. A brand can be part of a social network if it resonates with its members' preferences and shared values. 3. Representational Space - Symbolic domain, Brand as personal signifier and social text - a "symbol of who I am" with a meaning that is easily understood by others. Individuals celebrate being him-or herself. 4. Transformational Space - Experiential domain, People engage in experiential encounters that have a life-transforming effect on their personal and social wellness. Brand facilitates achievement of aspirations in the quest for self-actualization. Page 185

Value Innovation is the cornerstone of blue ocean strategy. Value innovation is the simultaneous pursuit of differentiation and low cost. Value innovation focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space. Because value to buyers comes from the offering's utility minus its price, and because value to the company is generated from the offering's price minus its cost, value innovation is achieved only when the whole system of utility, price and cost is aligned.

1. Price is value: 2. Price is variable: 3. Price is variety: 4. Price is visible: 5. Price is virtual:

1. Price is Value: The amount a customer is willing to pay, is a statement of the amount of value they perceive in the product or service Examples: The customer who pays $9.50 for a garden salad in one restaurant and $3.00 for the same salad in another restaurant is, in each instance, making a statement regarding the value he or she sees himself or herself getting. 2. Price is variable: absolute amount of payment, the components of payment, what is actually being paid for, the time of payment, the form of payment, terms of payment and the personal doing some or all of the paying. Examples: Include varying the absolute amount of payment, the components of payment, what is actually being paid for, the time of payment, the form of payment, the terms of payment. and the person doing some or all of the paying. 3. Price is variety: sell multiple products and services. Bundles, higher versus lower margins 4. Price is visible: customers see and are aware of prices of most things. Sends signals to customer about value, image, product availability, demand, exclusivity etc... 5. Price is virtual: an item's price is arguably the easiest and quickest to change, with many companies able to make adjustments to their price schedules instantaneously in response to market conditions, especially in an electronic age. Technology Is one way to achieve real-time pricing but there are many examples of long-standing pricing practices that result in prices that are set at thee time of Purchase and can be quickly changed (e.g., negotiated pricing,spot markets, and black markets).

Entrepreneurs should consider pricing approaches that are more market based and reflective of a willingness to assume calculated risks, be proactive and be flexible. Thus, those responsible for company pricing actions should regularly apply the following key questions to business operations: • How novel is our pricing approach? Are we creating value for the customers the ways that we price? What sorts of assumptions are our prices predicated upon, and do those assumptions reflect the contemporary and emerging marketplace and technology? • Are we sufficiently proactive in terms of price increases, decreases, or changes in the various components of price? pro activeness implies a willingness to act quickly and to take the lead in instituting price moves relative to competitors. It implies a preference to undo competitors rather than cooperate with them. • Do we pursue pricing actions that intail a degree of calculate risk in terms of customer response, distributor receptivity, and competitor reaction? Such risk-taking does not imply single, dramatic pricing actions. Instead, efforts must be managed in the sense that the firm pursues a number of different price moves and is continually experimenting with the components of price and conducting pricing test markets in various market niches. • Are we sufficiently flexible in tailoring prices to different markets, segments, and key accounts? Does this flexibility enable the firm to get much closer to its customers in terms of understanding the sources of value a given customer realizes from the company's offerings, and the trade-offs customers will make between price and various product attributes?

The overall approach managers bring to making and implementing price. All related decisions, including their underlying attitudes and assumptions.

1. More's Law 2. Metacalfe's law 3. Coasian economics 4. Flock-of-bird phenomenon 5.Fish tank phenomenon

1. More's Law - dictates that the speed of the microprocessor doubles ever 18-24 months, at constant cost. This "law has be valid for more than three decades, ever since Gordan Moore first established Intel corporation in 1969 and placed the first processor chip with 2,300 transistors inside a calculator. The implication of this for industries is clear - computing power will continue to increase exponentially and, given the constant cost function of Moore's Law this will be at less relative cost. The diffusion of this technology will increase and a greater diversity of technologies will be introduced, creating a technological "snowball effect" 2. Metacalfe's law governs the way networks function. That is, the value created by any technology is a function of the number of its "adopters": and to what extent they can be interconnected easily. In the early period, where the "innovative adopters" take up the new technology, the initial value is limited because the take-up is limited. 3. Coasian economics, outsourcing is an activity that is explained by coasian economics. An expression named afters its pioneer Ronald Coase. In 1937 Coase observed a feature of market behavior where transactions cost were apparent These were considered to be market inefficiencies that add to the price of a product or service to gauge its market performance. Therefore, this approach is able to explain relative cost of performing activities within the firm (in-sourcing) relative to sourcing these activities for the market (outsourcing). 4. Flock-of-bird phenomenon.A feature of the new communication technologies of the late 1990's was that, in many cases, these technologies did not "belong" to any one institution, nor were they controlled by any particular authority. When one observes a flock of birds flying in formation,one is tempted to speculate where there is or could be a "head fish". Naturalist with explain that flocking is a natural phenomenon and that there is indeed no "head bird" in charge. 5.Fish tank phenomenon theoretically anyone can be seen by the world (internet). As a result, there is an immense amount of junk on the internet. It is tempting to suggest that perhaps the internet should be left to large organizations so that we may enjoy the creative capability and resources of these institutions. There is an enormous about of junk out there, but there will also be creativity of unlimited potential (individuals). This means that many firms may find themselves threatened by small start-ups that were previously unable to gain access to the market. No longer will it be good enough to merely observe one's close and known competitors. In the future, the competitors could be anyone and anywhere.

1. Advertianment - comibnation of traditional advertisement with entertainment componets. Earlier days this included product placement in movies/tv show (ex. the movie ET). Later developments in branded entertainment involved featuring a company's product or brand name directly in the script. (ex. Windex in My Big Fat Greek Wedding) 2. The emergence of new media As traditional mass media lose their footing, replacements --> internet and new media formats. Chat rooms, video games, online stores, user generated content sites (youtube), social networking sites (myspace, facebook) and community-supported information services (wiki). not limited to internet could be (3d billboards) 3.consumer -generated media (CGM) Could also be called WOM, buzz, user-generated content, the consumer is undeniably an important force to be reckoned with in all communications - especially the consumers new media of choice. CGM "encompasses the millions of consumer - generated comments, opinions, and personal experiences posted in publicly available online sources on a wide range of issues, topics, products, and brands". CGM originates from blogs, message boards and forums , public discussions (Usenet newsgroups), discussions and forums on large email portals (yahoo, aol, msn), online opinion /review sites and services, and online feedback/complaint sites. 4. mobile marketing ecosystem. the scale and scope of mobile users compared to other devices ( computers, tvs, landlines,email boxes) is huge. 2/3 of 2.7 billion, 1.8 billion are active text-messaging users. advertisement for mobile users in 2007 was 3 billion and expected to grow to 19 billion by 2011. example is American Idol, first to use text as a voting system.

1. Bootstrap/ grassroots methods - Marketing activities in this category are typically tactical in nature , unconventional low cost, not by the book, and extremely flexible. Example: Sony used "fake tourist" to help market their new camera phone. 2. Conversation starter methods - WOM is essential a linear procces with infomrating passing form one idvididaul to anther , then another. Success in this category depends on the marketer's ability to capture the attention of consumers (and the press) tpo the point where talking about a vradn becomes entertaining, fascinating, and newsworthy. Example: Google: in 2007 it was ranked as the worlds top brand. became an everyday name relying on WOM. 3. Technology-facilitated methods - Different technologies are used to manipulate information from, about, and to the customer. Relationship marketing relies on customer relationships management software (CRM) and databases to collect information for ongoing campaigns. Example:Delta Airlines frequent flyer program in which loyal customers earn air miles. (permission marketing) 4. Visionary Methods - Marketing practices in this category are more strategic and typically involve corporate imagination to create and dominate new markets. Example: Fidelity Investments unlocked a vast new market by packaging sophisticated investment vehicles for middle-income investors, thereby overturning traditional assumptions and leading customers rather than simply following them.

1. Brand as Product/Company Identity - A seal of authenticity, a source of differentiation from competing products, a guarantee of quality and a mark of distinction. 2. Increasing Brand Relevance: From Product Identity to Trustmark - Words that provide psychological benefits such as comfort, convenience, simplicity, timeliness...Strong continuous feedback loop that reinforces a level of trust. Provides necessary reassurance to alleviate choice fatigue. 3. Brand as Relationship Builder - Relationship with brand as an object (via the product) or with the company Based on three components: liking, yearning and decision/commitment. Eight possible customer-brand relationships: Nonliking, liking, infatuation, functionalism, inhibited desire, utilitarianism, succumbed desire, and loyalty. 4. Brand as Experience Provider - Brand is viewed as an experience provider and a source of interaction within a customer community. Strategic experiential marketing (SEM) framework Sense: create sensory experiences Feel: appeal to customers' inner feelings Think: appeal to the intellect to engage Act: aim to introduce bodily experiences Relate: integrate to relate to "ideal self" 5. Brand as Lovemark - "A lovemark is a brand that has created loyalty beyond reason; it is infused with mystery, sensuality and intimacy and that you recognize immediately as having some kind of iconic place in your heart." (Kevin Roberts) 6. Brand as a Character in a Story- A product needs something beyond the brand - an added value, an idea, mythic images - a "story" that is real and enticing about the origin, history or potential use of the item. An authentic story can provide powerful emotional connections that maintain and reinforce brand identity and personality by imbuing the corporate brand with human characteristics, values, word, and actions.

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Price structure is concerned with the conditions, time and form of payment. Formal discount structure, time payment schemes and trade-in allowances. e-commerce 1. Differentiated pricing by time of day, week or month or type of customer 2. Using customer data to optimize pricing with switching barriers 3. Technology to de-menu pricing 4. Better differentiation 5. Finding customers willing to pay higher prices 6. Establishing electronic exchanges 7. Efficient ways to negotiate prices 8. Maximizing revenue and price