Final exam

Posted on Nov 8, 2022 in Other subjects

–Advertising: any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Includes broadcast, print, internet, mobile, outdoor and other forms. Pros: reaches masses at low cost per exposure; repeats message many times; creates consumer trust (view of advertised products as more legitimate). Cons: promotes impersonally, one-way; costs are high for some media types. analyse the ads, won`t have an essay. Target marketing, AIDA

–Advertising media: the vehicles through which advertising messages are delivered to their intended audiences. The major steps in the selection are: determining reach, frequency, impact and engagement; choosing among major media types; selecting specific media vehicles and choosing media timing. New social media, characteristics. Super fast, cheaper to distribute, generally enable engagement with the customer, you can do targeting. Some not good: difficult to identify geographic segmentation (you don`t know where they are exactly), stupid mistakes and they don’t recognize what they`re doing until later. Advantages and disadvantages (billboard, radio as well + new media).

–AIDA: attention, interest, desire, call to action.

–Bundled pricing: sellers combine several of their products and offer the bundle at a reduced price. Combine products to sell a combo that the combined price is cheaper than the sum of the individual product, to sell the hole combo.

–Broadcasting: advertising media, associated with radio and television. Now companies are moving from broadcasting to narrowcasting – still “broadcasting” but to a niche marketing. Very low price per exposure, but very high total price, because you reach millions of people, usually available to big companies, to small companies its out of reach.

–Captive pricing: setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console. Setting a price for products that must be used with the main product. For example, razor blades for the razor and ink jet printers and the ink for it.

–Catalogs: direct marketing through print, video or digital catalogues that are mailed to selected customers, made available in stores or presented online. Direct marketing. Old form, the new form is online sites, such as amazon.

–Comparative advertising: a company directly or indirectly compares its brand with one or more brand presenting the advantages of your product comparing to the competitors` products. But often it invites competitor responses, resulting in an advertising war or their can even file complaints with the self-regulatory national advertising division of the council of better business bureaus or even file false-adverting lawsuits.

–Competitive pricing: one of the new products pricing strategies, setting medium price, matching the competitors`. Competing using the other p`s. setting prices based on competitors` strategies, costs, prices and market offerings, consumers will base their judgments of a product`s value on the prices that competitors charge for similar products first the company should ask how does the company`s market offering compere with the competitors` ones in terms of customer value, next how strong are current competitors and what pricing strategies are they using? So the company have to decide if it should charge a high price, low price or the same price as competitors. compare your price with somebody else. Competition based price: skimming pricing, penetration pricing and competitive pricing.

–Consumer generated content: many companies are now tapping consumers for marketing content, message ideas or even actual ads. It can incorporate the voice of consumer into brand messages and generate grater consumer engagement. Example WhatsApp, product review on Facebook. The customer generates it.

–Convenience products: describe each category

–Cost plus pricing: is the simplest pricing method, adding a standard mark-up to the cost of the product. Generally, doesn’t make sense. Ignores consumer demand and competitor prices, it`s not likely to lead to the best price. But is famous because sellers are more certain about costs than about demand and because when all firms use this pricing method, prices tend to be similar, minimizing price competition. Take your cost and charge some amount more.

–Consumer products: convenience products, specialty products, shopping products, unsought products.

1.Convenience goods: products/services that customers usually buy frequently, immediately and with a minimum of comparison and buying effort. Are usually low priced and marketers place them in many locations to make them readily available when customers need them (ex: coffee at 7-eleven). Drugstores, grocery stores and convenience stores.

2.Shopping products: less frequently purchased consumer products and services that shoppers compare carefully on suitability, quality, price and style. Consumers send much time and effort in gathering information and making comparisons. Ex: furniture, clothing, used cars, major appliances, hotel and airline services. Usually are distributed through fewer outlets but there`re deep sales support to help customers in their comparison efforts.

3.Specialty products: consumer products and services 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 car, services of medical or legal specialists, high-priced photographic equipment, designer clothes. Buyers are usually willing to travel great distances to buy it, usually they don’t compare specialty products.

4.Unsought products: consumer products that the consumer either doesn`t know about or doesn’t normally think of buying. Most major new innovations are unsought until the consumer becomes aware of them through advertising. (ex: life insurance, preplanned funeral services, blood donations). Require a lot of advertising, personal selling and other marketing efforts.

–Creative strategy (message execution strategy): the best approach, style, tone, words and format to grab target market`s attention and interest. what they are trying to tell you in the ad?

–Direct marketing: engaging and interacting directly with carefully target individual consumers and consumer communities to both obtain an immediate response and cultivate lasting customer relationships, includes direct mail, catalogues. without agents, retailer, wholesales, it`s calling a company directly. Example apple store, Microsoft store.

–Differentiation: Dick defined differentiated marketing (when a firm decides to target several market segments and designs separate offers for each, separated marketing plans, separated segments, separated advertising campaigns. Ex P&G markets 6 different detergent brands), a marketing strategy, niche selling, mass marketing are other strategies. Is basically “don`t compare my product using price, because its different in a lot of ways”. But differentiation is basically explaining to the customer how your product is different than your competitor product (unique selling proposition).

–Dynamic pricing: adjusting prices continually to meet the characteristics and needs of individual customers and situation (ex: UBER, putting some prices ex vegetables down in afternoon).

–Experience: ???

–Fad products: extremely popular for a very short period of time then disappear almost completely.

–Fashion products: tend to grow slowly, remain popular for a while and then decline slowly.

–Grass roots marketing: buzz marketing, try to get people talking to people, try to get viral.A company wants to generate marketing by consumers talking to consumers, for ex movies – trailers, mary kay.

–Informative advertising: is used heavily when introducing a new product category, the objective is to build primary demand. Communicating customer value, suggesting new uses for a product, building a brand and company image, informing the market of a price change, telling the market about a new product, describing available services and support, explaining how a product works, correcting false impressions. companies may inform the public about the nature of their products, the benefits they have, usually after pressure, for example pipeline companies. Government do it usually.

–Junk mail:

–Mass media: broadcast television, radio, magazine, outdoor ads. Reach a huge number of consumers, but you can waste your money with it.

–Market segmentation: diving a market into distinct groups with distinct needs, characteristics or behaviour, using those factors: demographics (age, gender, income, education), geographic (region, country), psychographics (social class, lifestyle) and behavioural (consumer knowledge and attitude).

–Mass marketing: a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer, it focus on what is common in the needs of consumers. less common used, usually unsought products. You don`t actually target, you try to reach everyone.

–Micro marketing: tailoring products and marketing programs to specific individuals and local customer segments (small area, small group). small nich marketing, target a focused group.

–Marketing communication mix (promotion mix):  it`s the specific blend of advertising, public relations, personal selling, sales promotion and direct marketing tools that the company uses to engage consumers, persuasively communicate customer value and build customer relationships. Marketers can use 2 basic promotion mix strategies: push promotion or pull promotion. Advertising, sales promotion, direct sales, public relations …

–Media (media types):

–Message execution strategy (creative strategy):

–New marketing communications model: consumers are better informed, and more communications empowered, marketing strategies are changing, marketers are shifting away from mass marketing, the digital technology is changing the communication between consumers and the company. More specialized and highly target media to engage smaller customer segments with more specialized and interactive contend. Business are shifting even-larger portions of their marketing budget to online, social, mobile and other new media. It’s a shifting mix of traditional mass media and a wide array of online, mobile and social media that engage more-targeted consumer communities in a more-personalized, interactive way. p. 469.

–Narrowcasting: streaming to a small targeting audience. The opposite of broadcasting.

–Packaging: The activities of designing and producing the container or wrapper for a product. It protects the product from breakage, tampering and heft, provides information about the product, can be used as a promotional tool to describe the benefits of the product and identify the brand. Whether or not a particular product`s packaging is excessive or recyclable can make the difference between whether a consumer purchases that product or not. Marketers are exploring options or sustainable packaging – meets the requirement of the product while minimizing the environmental, economic and social impacts of the product and its package.  Functions: protect the product, market the product (attract attention, describe the product), provide convenience to customers and address environmental concerns. Labelling: identifies the product or brand, describe several things about the product – who made, where, when, its contents, how is to be used, how to use safely -, important element in broader marketing campaigns, satisfies legal requirements. Components of a label:  brand name, illustration, directions of use, UPC (universal product code – bar code), volume/weight of product, company name and contact information, nutritional information. part of the product, place to put a label (label importance)

–Penetration pricing: setting a low initial price in order to penetrate the market quickly and deeply (attract a large number of buyers quickly and win a large market share). The high-sales volume results in falling costs, allowing the companies to cut their prices even further. For this to work, the market must be highly price sensitive (low price – more market growth), production and distribution costs must fall as sales volumes increases and the low-price positioning must be sustainable. low prices, keep competition out. After that, raise your price.

–Perceived value: customer`s evaluation of all the benefits and all the costs of a marketing offering, but they often don’t judge values and costs accurately or objectively, so they act on perceived value. How customers perceive value. Quality and price are associated.

–Permission based marketing: ask permission to deal with customers.

–Personal selling: personal customer interactions by the firm`s sales force for the purpose of making sales and building customer relationships. Includes sales presentations, trade shows and incentive programs. Face to face selling, you must use it especially with technological complex products.

–Persuasive advertising: the company objective is to build selective demand, they try to persuade consumers that its brand offers the best quality for their money, it wants to engage customers and create brand community, some of those has become comparative advertising. Building brand preference, persuading consumers to purchase now, encouraging switching to a brand, creating customer engagement, changing customer perceptions of product value, building brandcommunity.

–Positioning: price and quality. Positioning grid (price and quality) determine how the product would be perceived relative to competitors`. It`s the place the product occupies relative to competitors` product in consumers` minds. Marketers are usually trying to find a section unoccupied to market on the positioning grid instead of keep fight with the competitors in overcrowded sections.

–Price: the amount of money charged for a product or service. Is the sum of all the values that customers give up to gain the benefits of having or using a product or service. Is the only element in the marketing mix that produces revenue, all other represents costs. is not the same thing as cost. It`s the amount charged, determined by the marketing department, tax are not included.

–Pricing strategy: customer perceptions of the product`s value set the ceiling for prices. If the customers perceive that the price is greater than the product`s value, they will not buy the product. Product costs set the floor for prices. If the company prices the product below its costs, company profits will suffer. In setting its price between these two extremes, the company must consider a number of other internal and external factors, including competitors` strategies and prices, the company`s overall marketing strategy and mix, and the nature of the market and the demand. Three major pricing strategies: customer value-based pricing, cost-based pricing and competition-based pricing.

1.Customer Value-based pricing: pricing decisions must start with customer value. When consumers buy a product, they exchange something of value (the price) to get something of value (the benefits of having or using the product). Customer-oriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures this value. It uses buyers` perceptions of value, not the seller`s cost, as the key to pricing. Price is considered along with the other marketing mix variables before the marketing program is set. There`re 2 types of value-based pricing: good-value pricing and value-added pricing.

1.1Good-value pricing: offering just the right combination of quality and good service at a fair price. In many cases it involves introducing less expensive versions of established, brand-name products (ex: Armani – Armani Exchange). In other cases it involves redesigning existing brands to offer more quality for a given price or the same quality for less. An important type of good-value pricing at the retail level is “everyday low pricing (EDLP)”, it involves charging a constant, everyday low price with few or no temporary price discounts. “High-low pricing” involves charging higher prices on an everyday basisbut running frequent promotions to lower prices temporarily on selected items.

1.2Value-added pricing: companies attach value-added features and services to differentiate their offers and justify higher prices.

2.Cost-based pricing: involves setting prices based on the cost for producing, distributing and selling the product plus a fair rate of return for its effort and risk. Companies with lower costs can set lower prices that result in smaller margins but greater sales and profits. Other companies intentionally pay higher costs so they can claim higher prices and margins. Is often product driven. The company designs what it considers to be a food product, adds up the costs of making it, and sets a price that covers costs plus a target profit. Marketing must then convince buyers that the product`s value at that price justifies its purchase. If the price turns out to be too high, the company must settle for lower mark-ups or lower sales, both resulting in disappointing profits. A company`s costs take 2 forms: fixed and variable.

2.1Fixed costs (or overhead): are costs that don’t vary with production or sales levels (ex: rent, heat, interest salaries).

2.2Variable costs: vary directly with the level of production. (ex: packaging, plastic), those costs tend to be the same for each unit produced.

2.3Total costs: are the sum of the fixed and variable costs for any given level of production. Marketers must charge a price that will at least cover the total production costs at a given level of production.

2.4Cost-plus pricing (or mark-up pricing): is the simplest pricing method, adding a standard mark-up to the cost of the product. Generally, doesn’t make sense. Ignores consumer demand and competitor prices, it`s not likely to lead to the best price. But is famous because sellers are more certain about costs than about demand and because when all firms use this pricing method, prices tend to be similar, minimizing price competition.

2.5Break-even pricing (or target return pricing): setting price to break even on the costs of marking and marketing a product or setting price to make a target return. Break-even volume = fixed costs/(price – variable costs), total revenue will equal total costs, producing no profit. The higher the price, the lower the manufacturer`s break-even point will be. But it fails to consider customer value and the relationship between price and demand. (↑ price = ↓ demand, and the market may not buy even the lower volume needed to break even at the higher price).

3.Competition-based pricing: setting prices based on competitors` strategies, costs, prices and market offerings. Consumers will base their product`s value judgments on the prices that competitors charge for similar products. No matter what price marketers charge, they must give customers superior value for that price.

–Print ads:

–Product: anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes tangible objects, services, events, persons, places, ideas, organizations or a mix of those. Includes services.

–Product circle: Core problem-solving/core customer value: when designing products, marketers must first define the core problem-solving benefits or services that consumers seek. (ex: core product of beauty products – feeling beautiful, core product of smartphones – constant connectivity). Basically, what the buyer is buying (answer is satisfaction of the need). Actual product: the second step is turning the core benefit into an actual product – the physical device with all its features and associated brand name and packaging. The actual product. Augmented product: marketers must consider it. The additional services and benefits that go with it. (ex: core product of a smartphone is constant connectivity, actual product is an Iphone, the augmented product is the Iphone plus a calling plan and data plan. Create costumer value and the most satisfying customer experience. What are the additional services and benefits. core problem, actual product, augmented product.

–Product life cycle: is the course that a product`s sales and profits take over its lifetime. It involves 5 stages: product development, introduction, growth, maturity and decline. In theory all products follow the PLC, though some well-established and mature products (ex: coca-cola and tide) may stay in the mature stage indefinitely and never decline. Many products that are introduced to the market and fail can be viewed as having skipped their growth and maturity stages and gone directly to decline, and some products that enter the decline stage are saved by revitalizing them or somehow make them “new and improved”, which sends them back to the introduction stage.

1.Introduction stage: starts when the new product is launched, many new products fail during this stage, some take off very quickly, others can linger for years in this stage before experiencing growth.

2.Growth stage: if the new product satisfies the market, it enters in this stage, in which sales will start climbing quickly. Early adopters will keep buying and later buyers will start following their lead. Competitors will release their versions of the new product; the first market will need to make improvements or lower prices to compete. Profit increases and promotion costs are spread over a larger volume and unit manufacturing costs fall. Marketing strategy is to sustain the growth as long as possible, perhaps by adding new features or models, or by targeting new marketing segments, or adding new distribution channels.

3.Maturity stage: normally lasts longer than the previous stages, most products are in the mature stage. Sales growth slows or levels off. The main marketing goal is to prevent it from declining. Marketers must be constantly developing strategies and managing marketing programs to keep their product consistently profitable (modifying the market – increase consumption by finding new segments –, modifying the product – changing quality, features, style or packaging – or modifying the market mix – improving services, adjusting prices or running a sales promotion).

4.Decline: some products sales will decline, and they will be replaced by different new products. Some marketers decide to maintain their declining products without change in the hope that competitors will leave the industry. Another strategy is repositioning the declining products and try to appeal to a new segment. If decline is unpreventable, marketers may decide to harvest the product – reducing various costs: plant and equipment, maintenance, advertising – and hoping that sales hold up, it will increase the company`s profits in the short run. Declining products, sometimes, can be sold to another company or simply liquidated.

Promotion: activities that communicate the merits of the product and persuade customers to buy it (advertising).

–Promotion mix (marketing communications mix): specific blend of advertising, public relations, personal selling, sales promotion and direct marketing tools that the company uses to engage consumers, persuasively communicate customer valueand build customer relationships. Marketers can use 2 basic promotion mix strategies: push promotion or pull promotion.

–Promotional pricing: temporarily pricing products below the list price and sometimes even below cost to increase short-run sales. A seller may simply offer discounts from normal prices or use special-event pricing in certain seasons. Sometimes they offer cash rebates to customers who buy the product from dealers within a specified time. Some offer low-interest financing, long warranties or free maintenance.  It can have adverse effects, used too frequently and copied by competitors, price promotions can create costumers who wait until brand go on sale before buying it or constantly reduced prices can erode a brand`s value in the eyes of customers. lower the price to try to get customers to the store, make money with the relationship.

–Psychological pricing: sellers consider psychology of prices, not only simply the economics, for example customers usually perceive higher-priced products as having higher quality. Another aspect is reference prices – prices that buyers carry in their minds and refer to when looking at a given product, for example a company can display its products next to more expensive ones to imply that it belongs in the same class (ex: prices like 1,99 instead of 2,00 and prices like 7,43). more price, more quality. 1,99 price not 2,00 and 2,33 not 2,50.

–Public relations: building good relations with the company`s various publics by obtaining favourable publicity, building up a good corporative image and handling or heading off unfavourable rumours, stories and events.Includes press releases, sponsorships, events and webpages.

–Pull strategy: the producer directs its marketing activities toward final consumers to induce them to buy the product from the retailer. So customers will demand the brand from retailers, because they cannot buy it direct from the producer. try to make the consumers ask to the retailer to stock the product. For ex bear can. The company target directly the consumers, but they cannot buy the product directly, they have to go to the retailer to ask for it.

–Push strategy: pushing the product through marketing channels to final customer. The producer induces their channel members to carry the product and promote it to final customers. push the product to the retail, make it the only choice for the final consumer. For ex push the retailer to only buy your Coke, its focus on pushing the retailor, not the final consumer.

–Repositioning: move to another place on the positioning grind. Increase or lower the price, change marketing appeal, try to change client`s opinion.

–Retailer: sells directly to the consumer.

–Service: an activity, benefit or satisfaction offered for sale that is essentially intangible and doesn`t result in the ownership of anything. intangible

–Sales promotion: short-term incentives to encourage the purchase or sale of a product or service. Includes discounts, coupons, displays and demonstrations. Short term promotion to increase sales.

–Skimming:setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price. The company makes fewer but more profitable sales. It makes sense only under certain circumstances: the product`s quality and image must support its higher price and enough buyers must want the product at that price, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more, and competitors shouldn’t be able to enter the market easily and undercut the high price. high price, consumer has no other choice because there is no competitors. You cannot keep it forever.

–Spam

–Segmented pricing: setting a product or service at two or more pries, where the difference in prices is not based on differences in costs. It takes several forms: customer-segment pricing (different customers pay different prices, ex: cinema discount for elderly), product-form pricing (different version of the product is priced differently but not according to differences in costs (ex: business class, executive class airplane), location-based pricing (different prices for different locations, but the cost is the same. Ex: seats in the arena) and time-based pricing (varies the price by season, month, day, even hour. Ex: matinee prices on cinemas). For this to work the market must be segmented and the segments must show different degrees of demand, the segmented price must be legal, the costs of segmenting and watching the market cannot exceed the extra revenue obtained and it must reflect real differences in customers` perceived value. for example, students pricing on museums

–Target marketing: a set of buyers sharing common needs or characteristics that the company decides to serve. Look at 3 factors to choose the segments: segment size and growth, segment structural attractiveness and company objectives and resources. Also analyse Porter`s 5 forces: competitors, new entrants, substitute products, relative power of buyers and relative power of suppliers.

–Technological expectations:

–Viral marketing: try to make people share the ads.

–Word of mouth marketing (WOM): speaking directly, face to face, try to make people talk to their neighbors about the product for example.