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Definition
defines the life of a product in four basic stages’ introduction, growth, maturity, and decline.
• Total industry sales revenue increases greatly within the intro & growth stages as the product moves through the consumer adoption process.
• PLC works best when marketing manager’s focus on historical precedent. |
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| come and go quickly, often reaching only a limited number of individuals but creating a lot buzz in the marketplace. |
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| sales are low, profits are nonexistent, and unclear if market will accept the product. |
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| a company that takes the risk and introduces a new product, creating a new product category. |
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| companies use one of two ways |
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| can’t lack important features or be poorly designed |
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| High price to market (more widely used) |
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| Low price, to gain large % of market and discourage competitors from entering to encourage customers to buy. |
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| First you need to inform and educate people of the products benefit, characteristics, and features. Second you need to motivate customers to buy the product. |
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| Adopt fairly wide distribution network at product release but limit product availability. Second is to limit distribution but increase product availability. |
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| Most dramatic increase in sales revenue. Rapid expansion cause of competitors and customers learn, understand, and begin to adopt product |
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| new products generally have more features and better design. Next-generation products introduced in an effort to maintain market leadership. Product models diverge. |
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| New models with new features set at high price. Old models decrease in price. |
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| Brand is linked to key product features and highlight differentiation b/w company’s products and competitors. |
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| distribution broader. Companies face challenge in expanding the market while maintaining expected levels of product quality and customer service. |
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| has most established products |
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| Relative Market Expansion |
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| product category sales continue to grow but at a rate significantly less than the growth stage. |
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| market starts to lose customers and competitors begin to feel the pressure of overcapacity in the market |
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| period of no growth as the market reaches saturation. |
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| Price pressure as companies lower prices to increase sales. |
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| companies follow different strategies depending on their market and product position. Quality improvements made and additional features. Focused on cost management. |
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| maximum capacity reached with variety of outlets targeted and wide range of target markets |
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| marketing is very high because of the need to support brand and reinforce key product differentiations. |
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| Sales decline. New products and better technology introduced that leave old products nonexistent or in smaller markets |
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| Sales decline, product investment and support is cut back, which leads to reduced distribution channels. |
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| one of the first items cut. Product improvements more focused. |
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| Price competition b/w competitors. Costs are higher than price which causes price pressure. |
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| eliminating future investment and letting product lose market share until it’s deleted |
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low market share, modest customer support, and little or no chance of growth expensive.
o Product Deletion |
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name, term, sign, symbol, or design, or combo of them, intended to identify the goods or services of one seller or groups of sellers and to differentiate them from those of competitors.
•Must be real, identifiable, and meaningful differences among products. |
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| an integral part of the product development process because companies know that successful new products result from a well-conceived branding strategy |
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1. Brand conveys info about the product.
2. Brands educate the customer about the product.
3. Brand role helps reassure the customer in the purchase decision. |
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1. They offer legal protection for the product though a trademark.
2. Brand offers an effective and efficient methodology for categorizing products. |
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Competitor Brand Roles
1. Brands provide competitors with a benchmark.
2. Build products targeted specifically at the market leader |
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Definition
Competitor Brand Roles
1. Brands provide competitors with a benchmark.
2. Build products targeted specifically at the market leader |
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| summary of unique qualities attributed to the brand. |
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| set of assets linked to a brand’s name and symbol that adds to the value provided by a products or service to a firm or that firm’s customers |
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| Customers develop of number of emotional, psychological, and performance associations with a brand. |
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| Brands convey a perception of quality that is either positive or negative. |
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| Strongest form of brand equity. |
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| foundation of all other brand relationships. Signals a familiarity and potential commitment to the brand. |
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Brands possess other assets such as trademarks and patents that represent a significant competitive advantage.
Benefits of brand equity are quality, brand connections, and brand loyalty. |
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| Perceived quality benefit/customers |
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Definition
| companies can extend range, lead to a price premium opportunity, and excellent differentiator in the market. Gives customer a reason to buy |
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| Brand Connections benefit/customers |
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Definition
| customer’s process, store, and retrieve product info. Strong brands generate more positive attitude toward product |
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| Brand loyalty benefit/customers |
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Definition
| Don’t spend much time searching for info and spend less time in purchasing decision. Retention, Referral, and Repeat Customer. |
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| separate the company from the brand, which insulates the company if there is a problem with the brand. |
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| synergy among members. Negative event of product causes negative publicity for entire brand. |
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| expanding into new product categories. |
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| sold around country under same brand. |
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| offering other manufacturers the right to use the brand in exchange for a set fee or percentage of sales. |
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| joins two or more well-known brands in a common product or takes two brands and markets them in partnership. |
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| a product in the sense that it represents a bundle of benefits that can satisfy customer wants and needs, without physical form. |
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| intellectual property, consulting, hospitality, travel, law, health care, education, technology, telecommunication, and entertainment. |
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| New Dominant logic for marketing |
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Definition
| implies a shift in worldview from the traditional goods versus services dichotomy to recognition. |
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| goods easily experienced through senses |
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| produced and consumed at the same time and can’t be separated from its provider |
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| service quality can only be as good as that of the provider him/herself. |
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| service can’t be stored or saved up for future use. |
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| ability to provide service dependably and accurately and deliver what was promised |
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| knowledge and courtesy of employees, and the ability to convey trust and build a customer’s confidence in the quality of the service |
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| physical evidence of a service or the observable aspects that help customer form advance opinions about the service. |
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| caring and individual attention a service provider gives to customers. |
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| willingness and ability to provide prompt service and to respond quickly to customer requests. |
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| designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. |
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| treating employees as customers |
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| they place the customer at the center of everything that takes place both inside and outside the firm. |
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| employees believe that understanding and satisfying customers, whether internal or external to the firm, is central to doing their job well. |
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| Customer expectations management |
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| concept that it’s better to underpromise and overdeliver than the reverse scenario. |
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| low tendency to consider switching to other providers. |
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| willingness and ability on the part of a customer to participate in communicating the brand message to others within his or her sphere of influence. |
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| aspects of an offering that are physically observable before consumption. |
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| aspects of an offering that can be evaluated only during or after consumption. |
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| would require customers to have expertise not generally shared by the public. |
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| providers such as doctors, lawyers, accountants, even plumbers. |
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| represents a formalization f the measurement of customer expectations of a service compared to perceptions of actual service performance. |
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| Face-to-face time b/w customer and service provider |
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| identification and measurement of differences in five key areas of the service delivery process. Helps identify emerging problems in service delivery to ensure service quality. |
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Definition
| borrows concepts from manufacturing and operations management to actually map out a complete pictorial design and flow chart of all the activities from the first customer contact to the actual delivery of the service |
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| overarching system of formal and informal relationships within which the firm participates to procure, transform, and enhance, and ultimately supply its offerings in final form within a market space. |
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| the participating suppliers, customers, and other stakeholders in which the members of the network combine capabilities according to their expertise and the competencies required from the situation. |
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| Network org. or Virtual org. |
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Definition
| eliminates many in-house business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value. |
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| to be in a position to be maximally flexible, adaptable, and speedy in response to the many key change drivers affecting business today such as rapidly shifting technology, discontinuous innovation, fickle consumer markets, and relentless market globalization. |
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| take title to the product. |
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| don’t take title to the product. |
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| portrayed as the first example in each exhibit, has no intermediaries and operates strictly from producer to end-user consumer or business user. |
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| Contains one or more intermediary levels, as represented by all the other examples within each exhibit. |
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| Physical distribution or logistics |
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Definition
| integrated process of moving input material to the producer, in process inventory through the firm, and finished goods out of the firm through the channel of distribution |
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| occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements. |
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| they take in products from multiple sources and transform it, often through sorting |
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Definition
| they accumulate products from several sources and then make those products available down the channel as a convenient assortment for consumers |
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| Transportation and storage |
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Definition
| most commonly provided channel intermediary activities. |
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Definition
| performed by intermediaries include a variety of activities that help fulfill completed transactions and also maintain the viability of the channel relationships. EX: financing, market research, risk-taking, and other services. |
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Definition
| the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries. |
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| Insourcing or third-party logistics |
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Definition
| the handing over of one or more of a company’s core internal functions to other companies that are experts in those areas allow the firm to better focus on its core business |
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| how to get goods back to a manufacturer |
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| communication to inform, persuade, or remind |
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| paid form of relatively less personal marketing communications often through a mass medium to one or more target markets |
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Definition
| provides inducement for an end-user consumer to buy your product or for a sales person or someone else in the channel to sell it |
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Definition
| systematic approach to influencing attitudes, opinions, and behaviors of customers and others |
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Definition
| one-to- one personal communication with a customer by a salesperson, either in person or electronically in some way that provides two-way dialogue |
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| an interactive marketing system that uses one or more advertising media to affect a measurable response and/or transaction at any location |
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Definition
| an internet-driven relationship between companies, their brands, and customers |
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Term
| Promotion mix strategies – |
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Definition
| involves decisions about which combination of elements in the promotion mix is likely to best communicate the offering to the marketplace and achieve an acceptable ROI for the marketer, given the product and target markets involved |
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| The effectiveness and efficiency of promotional strategies are |
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Definition
| often tracked on the basis of a promotional campaign |
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Definition
| attributes promotional expenditures to a particular creative execution aimed at a particular product or product line during a specified time period |
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| Integrated marketing communications (IMC) – |
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Definition
| a strategic approach to communicating the brand and company message to targeted customers in ways that are clear, concise, and consistent and yet are customizable as needed to maximize the impact on a particular audience |
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| Differences between Traditional Promotion Mix and IMC decision making: |
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Definition
• TPM separate assessment of whether to invest in promoting the offering through one or more of the promotion mix elements
• TPM implies that the elements are developed separately and they are necessarily viewed holistically as central to the brand; they are later combined to provide a promotion strategy
• In IMC, each element is impacts the others and the whole is likely more than the sum of the parts
• IMC has a strong focus on a unified branding message and theme that occurs throughout the process
• IMC is an inherently more strategic approach to communicating with customers by consistently communicating the right message to the right customers at the right time via right media |
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Definition
Many media choices
• Efficiently reaches large numbers of customers
• Great creative flexibility |
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Definition
Shotgun approach reaches many outside the target
• Oversaturation of ads lessens impact
• High production costs |
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• Stimulates purchase directly through incentive to buy
• Serves as an effective accompaniment to other promotion forms |
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Definition
• Can lead customers to continually wait for the next coupon, rebate, etc
• Brand may be impacted by price-cutting image |
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• Unpaid communication seen as more credible than paid forms
• Association of offering with quality media outlet enhances brand |
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• Low control of how the message turn out
• Highly labor intensive cost of mounting PR campaigns |
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• Strong two-way communication of ideas
• Directly eases customers confusion and persuades purchase |
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• Very expensive cost per customer contact
• Salesperson may go “off message” from brand to secure the sale |
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| Direct Marketing and Interactive Marketing Pros |
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Definition
• Message customization without high costs of personal selling
• Strong relationship building especially when customer can control the interaction |
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| Direct Marketing and Interactive Marketing Cons |
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Definition
• Spam and other unwanted correspondence when targeting is poorly executed
• Reliance on CRM and database marketing requires constant updating |
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Definition
promotional and distribution strategy in which the focus is on stimulating demand within the channel of distribution
• Typically relies on a combination of personal selling and sales promotion directed toward s channel members |
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Definition
promotional and distribution strategy in which the focus is on stimulating demand for an offering directly from the end user
• Advertising, consumer-directed sales promotion, PR, or direct and interactive marketing can be combined in various ways to target end users, creating demand that results in the channel making an offering available for purchase |
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| the application of marketing concepts and strategies inside an organization |
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| Marketing management is very difficult |
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Definition
| If members aren’t knowledgeable about the organization’s offering, don’t understand who the customers are, and can’t effectively articulate the brading message, successful |
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| the process of exchanging information and conveying meaning from one party to another |
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| the source of the message; generally the organization whose offerings are the subject of communication |
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| the sender translates an idea to be communicated into a symbolic message consisting of words, pictures, numbers, and gestures in preparation for transmittal to a receiver |
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Definition
| places the communication into some channel or medium so that it can make its way to the intended receiver |
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Definition
| takes place when the receiver interprets the meaning of the message’s symbols aas encoded by the sender |
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| the individual who is the target of the communication |
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| the receiver can communicate reactions back to the sender |
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| the distortion or interference that can occur at any stage of the communication process |
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| – a model designed to illustrate the hierarchy of effects in the context of consumer response to marketing communications. It states that the effects build in this order: Attention, Interest, Desire, and Action |
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Definition
o If target customers are unaware of an offering, most of the investment in communication must be raising awareness and gaining their attention
o Developing awareness for a whole new set of customer needs and wants as well as revealing that your product exists to address those needs and wants
o Marketing managers hope to use promotions to gain awareness of their offering with the innovators and early adopters |
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o Inform customers more specifically about what a product offering can do for them- how it helps fulfill needs and wants
o Must begin to touch customer’s “hot buttons” |
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o Customer has to move past a need and begin to really want the product
o Promotion feeds desire through strong persuasive communication
o At this stage, sales people and interactive/direct marketing often enter promotion mix
o Messages are altered to influence customers to feel they can’t do without the items
o Innovators and early adopters show of their purchases to holdouts |
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Definition
o This stage is the purchase itself
o To stimulate purchase, marketers often rely on sales people, accompanied by some form of sale promotion, to close the sale |
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| Elements of the marketing manager role in promotional strategy: |
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Definition
1. Identify Targets for Promotion:
2. Establish Goals for Promotion
Goal 1: To inform
• Indicate features when introducing new products or making products modifications
• Provide explanation of product functionality
• Articulate what a company and its brands stand for in order to develop a clear image
• Discuss various uses and applications for the product |
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Definition
Impact customer perceptions of a product, especially in comparison to competitor’s products
• Get customers to try a product, hopefully resulting in a more permanent switch from a competitor
• Influence customers to purchase right now due to some strong benefit or need
• Drive customers to seek more information online or through a salesperson |
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Definition
• Maintain a customer relationship with a brand
• Provide impetus for purchase based on some impending event |
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Definition
| when customers become bored with an existing advertising campaign |
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| Advertising response function |
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Definition
| an effect in which, beyond a certain ad spending level, diminishing returns tend to set in |
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| Institutional Advertising |
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Definition
| advertising that promotes industry, company, family, of brands, or some other issues broader than a specific product |
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Definition
| advertising designed to increase purchase of a specific offering |
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Definition
| tends to stimulate primary demand. Tends to to be used during the introductory and early growth stages of the PLC when it is important to gain purchase by innovators and early adopters |
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Definition
| it is used to build sales of a specific brand. The appeal often shifts to more emotion and the goal is persuasion as well as providing info |
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Definition
| two or more brands are directly compared against each other on certain attributes. Is common during the maturity stage of the PLC, as attempts at shaking out weaker competitors are generally part of the marketing strategy |
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Definition
| measures the percentage of individuals in a defined target market that are exposed to an ad during a specified time period |
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Definition
measures the average number of times a person in the target market is exposed to the message
• The greater the reach and higher frequency, the more expensive the overall advertising campaign will be |
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Definition
| the way an advertisement communicates the information and image |
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| Seven broad categories of advertising media are avilable |
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Definition
o Television
o Radio
o Newspaper
o Magazines
o Outdoor
o Direct mail
o And the internet |
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Definition
the level of competing messages on that medium
o Consumers are bombarded with so many messages that they become confused or have difficulty distinguishing what ad goes with what brand |
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| The Role of the Creative Agency |
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Definition
| Focuses on a single industry or on a particular area of promotion such as print, media, or product placement |
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Definition
• It is designed to augment other forms of promotion and is rarely used alone because initiative relies on other media forms such as advertising and direct or interactive marketing as a communication vehicle
• Can be aimed directly at end-user consumers, or it can be targeted to members of a channel on which a firm relies to sell product |
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| Sales Promotion to Channel Members |
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Definition
• Channel members like distributors, brokers, agents, and other forms of middlemen
• Purpose is to stimulate them to push your product, resulting in more sales in the channel and ultimately to end users |
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Term
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Definition
| an industry-or-company-sponsored event in which booths are set up for the dissemination of information about offerings to members of a channel |
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| Cooperative advertising and promotion |
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Definition
| when a manufacturer provides special incentive money to channel members for certain promotional performances |
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Definition
| a remittance of monies to the consumer after the purchase of the product |
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Definition
• Is often executed through publicity – an unpaid and relatively less personal form of marketing communications usually through news stories and mentions at public events
• PR is a specialized field |
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Term
| Major responsibilities of a PR department: |
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Definition
o Gaining product publicity and buzz
o Securing event sponsorships
o Managing a crisis
o Managing and writing news stories
o Facilitating community affairs
o Managing relationships with members of the local, national, and global media
o Serving as organizational spokes person
o Educating consumers
o Lobbying and governmental affairs
o Handling investor relations |
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| Gaining Product Publicity and Buzz |
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Definition
• This can provide major boost to sale
• Many new products have benefited from the initial awareness generated by a well-placed story in a publication or on a web site frequented by targeted customers
• Buzz – (word of mouth communication) is the communication generated about a brand in the marketplace |
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Term
| Securing Event Sponsorships |
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Definition
| • Having your brand and company associated with events in the sports, music, arts, and other entertainment communities, can add tremendous brand equity and also provide substantial exposure with the right target customers |
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Term
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Definition
| • A planned, coordinated approach for disseminating information during times of emergency and for handling the effects of unfavorable publicity |
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Definition
| an interactive marketing system that uses one or more advertising media to affect a measurable response and/or a transaction at any location. |
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Term
| Direct marketing includes |
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Definition
| direct mail, catalogs, telemarketing and internet marketing; used to be the most widely used method, but now it is the internet. |
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Definition
| least expensive marketing channels. More effective in business to customer channels than it is in business to business. Drawback is a low response rate, and it is easily discarded. The response rate is only 2.77%. This makes it inefficient. |
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| Components of direct mail- |
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Definition
| Outside envelope: offer must grab attention, have colorful illustrations, a personal address, unique feature (size, color, shape) |
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Definition
| offer is conveyed in the sales material inside the envelope. This usually includes a letter detailing an offer with a brochure that presents a graphic presentation. |
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Definition
| offer gives contact info in several places. Toll free number, response card, website. Mentions discounts such as coupons in direct mail then posting them on the website increases response rate. |
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Definition
Most criticized. Has a “do not call registry”. Costs $1-$3 per contact. Has one of the highest response rates at 8.55%. The focus is to create a personal connection with customer.
Successful telemarketing campaigns have four essential elements:
Access to an accurate list of qualified prospects
Offer must persuade the prospect to act immediately
Offer must convey a sense of exclusivity
Engage the prospect with high ethical standards |
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Definition
marketers use a variety of catalogs including full line catalogs, specialty catalogs and business to business catalogs. The average consumer catalog purchase is $150. More than 70% of Americans use catalogs.
Catalog success includes: precise inventory control, lists or customers and targets, brand management to hold up the company’s reputation. The company website must integrate with the catalog. |
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Definition
an internet driven relationship between companies, their brands, and customers. It enables customers to control information flow and encourages customer-company interaction as well as a higher level of customer service.
Represents less than 20% of US commerce, and less than 10% of global business
Serves both business to customer markets and business to business
Customers drive interactive marketing. They control when, where and how they interact |
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Term
| Challenges of Interactive Marketing |
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Definition
Customers become more connected to a company through customer service and relationships.
Combining traditional marketing with interactive media
Has a slower response time in communicating with customers |
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Definition
| small box containing graphics and text that have a hyperlink embedded in them. Clicking on it will take you to the company website. |
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Definition
| shown the greatest growth in last few years. Companies pay to be included on the results page on the search engine. |
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Definition
| more graphic, visually entertaining ads that move across a web page. |
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Definition
| enables companies to subsidize a section of the web page on the site. |
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Definition
entertaining and informative messaging created by a firm intended to be passed among individuals and delivered through online and other media channels.
Used through word of mouth, or internet social networks. It encourages people to pass along a marketing message.
Nicknamed viral because it gets passed on from one person to another |
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Term
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Definition
| Integrating the product into pop culture |
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Term
| Connect people to the experience: |
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Definition
| enabling people to participate. One example was when the batman movie the dark night was coming out, they encouraged individuals to take pics of themselves as the joker and submit them to the company social media site. It gives the people a reason to come back and engage themselves. |
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Term
| Target a younger demographic: |
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Definition
| The ability to target a younger demographic without offending existing target markets that are not likely to be a part of the same social networks gives companies the freedom to experiment. |
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