MARKETING 3401 EXAM 1 NOTES
MARKETING 3401 EXAM 1 NOTES Companies want you to bring in business! What is required to be successful? 1. Market yourself creating a unique, appealing brand 2. Sell yourself 3. Know people (networking) 4. Maintain contact build relationships, follow up: Christmas cards, giftgiving, so people know who you are. 5 Traits that help you market yourself : What companies look for Professional advancement 1. Creative think about ways to solve problems 2. Aggressive thinking of another way when you’re turned down 3. Enthusiastic don’t wear down the culture 4. Smart problem solve, get things done, be reliable, intelligent 5. Honesty trustworthy. Most crippling. Will get you on your résumé. Will take care of most of ethics. SELLING YOURSELF is related to LIKEABILITY—the emotional impact you have on somebody. Get people to pay attention and like you! Al Morabian said: 38% of emotional impact is judged on vocal delivery 55% of emotional impact is judged on visual delivery 7% of emotional impact is judged on verbal arrangement 38% of emotional impact is judged on vocal delivery Bully Tone of voice and words youuse. You are expected to be articulate, clean, and clear—THE POWER OF VOCALDELIVERY You are expected to be poised and professional when asked a difficult questions. Tone of voice will define you more than you think! When you mismanage (snap) that’s what they will remember. You can sound smart and knowledgeable, but arrogance will limit your growth. You have to be careful not to come across as arrogant. People will judge you harshly. Speaking too fast is more persuasive than speaking too slowly. The heart and soul of business is being a good presenter! 1/24 of a second brands are created: Grunts, “whatever,” “psht,” Will define you! EX: Richard Sherman; Justin and Janet Jackson 55% of emotional impact is judged on visual delivery acial expression is the number one visual element! People look at you before you leave the room and after. If you can’t manage this, you can’t get the personal brand you desire.
Media training: Peyton Manning looking and smiling as he walks. Drew Brees has a good brand. He cares about his team. HE GETS IT. People see you and formulate opinions about you. LIKEABILITY leads to PERSUASION In 10 seconds you can predict with 70% accuracy who someone is as though you listened for 1 hour. Figure out your default look—everyday look you have. If you can frame and package it better, you can persuade people. You have to give people the look of likeability. Eye contact is overrated. Ignore the default look of people sitting across from you (interview) Instead, assume they are listening. 7% of emotional impact is judged on verbal arrangement. Prepare content, but don’t be so set on memorization Good brand, great presenter 3 Types of Presenters 1. Showrunner can step up and they are just good. Poised. Wonderful. Maybe 10 in the class 2. Neophyte Good. Average. Not perfect, but above average. 3. Artists Do weird things on purpose. See past their brand. All of them are good, but they are different. Personal branding= Performance + Personality + Visibility + Trust Whitney Houston made debut at Super Bowl when she sang the National Anthem in 1991. She sang it so beautifully that people cried. The papers didn’t show the game— they showed the tears. She tweaked something mundane and branded it. Visibility= viral—people talk about and use your product. Trust can destroy a personal brand. Corporate branding Microsoft show a side never seen before. Critical! Every advertisement had a personality they wanted to link themselves to. Why do you believe some people, but not others? Harvard vs. someone else: Credibility is believability and trust (of person across from you) Credibility = Knowledge + Confidence + Connection 1. Knowledge turns into expertise. Material knowledge of your audience. Curse of knowledge is when you know so much, but you can’t break it down. No clear way. “Simplicity is complex” – present in a clean way. 2. Confidence Not arrogant or timid. Be natural. You can’t be too nervous. Camouflage it. It does not exempt you from being good. Control, manage, and camouflage nervousmess: Maintain a default look that looks comfortable. Manage your inflections.
3. Connection – Identify and relate to the audience. Know their interests. Denis Rodman—He had a connection due to his love of basketball. North Korea. Two types of credibility 1. Résumé credibility written or spoken résumé 2. Authenticity Who are you? Are you genuine? Are you likeable? Are you rigid? Delivery. Charisma. What your personality is all about. Trustworthy and sincere. When you lose trust, your chances of being believable are diminished! Honesty affects other people. Credibility is destroyed. For how long? Can you recover? Ex: BP asked LSU to help repair their brand. Help people forgive them. You have to know what people think of you—strong, weak, damaged credibility? 4 Marketing/Management philosophies: 1. Production Orientation they don’t care about the customer, the consumer, or people. They only care about making a product the best they can. 2. Sales Orientation they take what they produce and put it into the hands of skilled sales force and tell them to sell it. Tell and sell. 3. Marketing Orientation satisfying he customers needs and wants by providing them with a product or service that they will use. Satisfaction driven. 4. Societal Orientation We have grown up with products that feast on this. Marketing Orientation while keeping the environment safe and friendly. • You aren’t a good steward if you don’t recycle. • WalMart introduced curly light bulbs • Patagonia Sustainability recycle. Do things to make society better. • Nike and LSU. Nike got in trouble for sweatshop childlabor factories. They created a blueprint for oversees manufacturing. Came up with machinery to eliminate waste. Better stewards! • CVS choosing to not sell cigarettes.
3 Marketing Concepts 1. Customer Value Be able to show how you can add value to the company. Be creative. Customer value= Benefits – Cost If the benefits outweigh the costs, it’s value! Sell the benefits!! Ex: First class flights. Getting on early, off early, refreshments. Create benefits that are bigger than costs. 2. Customer Satisfaction You have to be happy with what you just bought. You want them to come back and talk good about you and give you a high rating. Service, quality, and delivery are the components of satisfaction. Critical element:
Customer service—every doctor has “bedside manner.” Studies prove that if they feel car is authentic they are less likely to sue if something messes us. Fear word of mouth! Ex: Delta trained employees in customer service $1 billion Ex: Jet Blue Valentine’s Day fiasco. 7,100 flights cancelled. • 63% of people will change a purchase decision based upon the indifference of one person • 77% of people who have a bad experience will tell at least one person and embellish the story to make it more sensational. • 7% of people who have a bad experience will tell the service provider. Let them yell! Put out the fire. You have an opportunity to create lasting relationships. Repair the relationship. Customers switch because of customer service more than anything else—not price, location, etc. 2 types of disgruntle customers: Angry yells, shouts, screams. They don’t want free stuff. They want you to listen. Remorseful How was your experience? Good. (but it’s not) They unload on another mechanism. Mystery shoppers pose as a shopper and go into store and evaluate and report everything you do. 2 types of service failure: Ante Everyday good service that you expect. Everyday good behavior. Moment of truth Terrible moment happens, your chance to make it right. Ex: Case Study: United Breaks Guitars. A person’s guitar is broken and he tells the airline (United) employee. They said nothing good in a back and forth exchange. The Power of One. He writes a song and puts it on YouTube. Customer service is violated and the brand is damaged. What should you do with service failure? Be prepared. Show that you care. Have a plan. How much recovery is enough? Results of good customer service: • Referrals people will talk good about you. More business. (The floors in his house) • Reduced effort to sell You don’t have to advertise much. • Premium pricing If you pay 20% more you get the best. 3. Develop longterm relationships Show appreciation. Do nice things for people who give you business. Ex: Companies give Christmas presents. It is what makes an industry wonderful. 4 Reasons why a customer switches (takes their business elsewhere) 1. Coreservice failure Failure in the service function. Ex: dropped calls 2. Service encounter failure Be knowledgeable and polite Ex: Kenneth Fienburg was the attorney who had to tell the 911 families that they would not be getting more money. Facial expression shows compassion. All but 2% (of 2000) understood when he used this.
3. Price Unfair, underhanded, illegal, gauging, etc. Ex: Hurricane generators, shipping and handling 4. Inconvenience (NOT LOCATION) How can CC’s coffee put you out of business? Customers park and stay all day, using up your parking spaces.
MARKETING STRATEGY FRAMEWORK LEVEL ONE MARKETING ANALYSIS: Examine 4 things before marketing. Preparation. 1. Company Strengths and weaknesses 2. Competition Have to know them. Figure them out and keep up with them. There is not one company that does not have competition. It used to be Google. Who will it be in the future? Ex: FedEx, UPS, USPS keeping up with each other. 3. Customer Who are they? What are their buying habits? How do they change? React to them. Demographics: Tailor to you. Who you are trying to appeal to, who not to offend. The more you know, the better you can tailor. • Age (0100) Products, services, etc. for older people • Gender • Race Ex: Coke and Pepsi. Pepsi goes after African American population. Started selling more products. Hispanics and the Home Depot. • Income (You can tell from their dress and occupation) Ads in the Wall Street Journal are tailored to highincome. • Education • Religion 1. Identify 2. Do not offend. Offend vs. appeal: Lent special. Edwin Edwards and his commercial. • Geographical North, south, east, west. Politics and the machine of marketing. 4. Conditions External environment. Understand it and you can go forward. The external environment is everchanging. • Social factors (values of the day) Samsonite’s luggage after 911. Security systems after mass murders. Value life styles. Levi Straus Poor wore Wrangler, even poorer more Lee, richer wore Levi. Levi lost market shares when lowcut jeans came into style. They said they wouldn’t do it. Other companies gave customers that they wanted. Activities, interests, and opinions help make up your lifestyle decisions. Life styles change all the time. Companies who can adapt get a huge population. • Technology – tracking packages, online banking, Amazson’s newest venture—Drones that will drop packages at your door, but it’s a long way away. They have hurdles to cross. Robotics in medicine.
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Legal or political Laws change that make things different. No more TV ads for phones and will have a skull on the package to warn people of their potential risk. Car seats for babies were invented. Companies that made toys shifted to car seats. Someone at LSU’s grandpa had a factor that had nylon and it was going out of business—so they made seatbelts and became very successful! Economic factors When times are good, you spend money. During recessions, prices change and the way you run your company should change.
LEVEL TWO—STRATEGY DEVELOPMENT: Stage 1 Segmentation: How will you divide the population? Focus. Criteria for effective segmentation: • Identification Identify the best target • Accessible Reach them through promotions and distribution. Frito Lay chips. • Responsive Can audience respond to you? • Substantial Big enough population to drive profits Stage 2 Targeting: 3 Effective ways to look at it • Mass marketing Appeal to a large population • Multsegmented Find multiple segments in large population a. Lowincome individuals looks for needs b. People who like a brand name. Fruit of the loom. c. Rich people who want household goods, laundry, cleaning, etc. • Niche one specialty and do it well, but a little more expensive. William Sonoma. • Positioning Mountain Dew introduces caffeine a. Attributes b. Benefits c. Communication of value Ex: Motel 6 is the cheapest national chain. Tom Bodett is the voice behind it. Reposition something then sell it. Have a focus group of 79 people. Survey them and find the pros and cons using. Reseach. They found the brand wasn’t good. They had a frugal population and a population of travelers. Wrote a book called The Millionaire Next Door. So they changed the brand of Motel 6. *What was their branding strategy? 1. Position Motel 6 as an economical, clean, enjoyable, and fun place. No amenities. 2. Affiliation Who’s at the same place as you. Same as bars. 3. Personality Insurance companies. Tom Bodett’s voice. It’s the longest run commercial. LEVEL THREE—IMPLEMENTATION: Marketing Mix has 4 Components
1. 2. 3. 4.
Product Price elite vs. inexpensive Place Where will your company be? Promotion Advertising, public relations, sales promotions
PRODUCT
Product categories • Convenience Low in level of involvement; bubble gum; candy; don’t spend time search; quick and easy. KitKat is icon candy. • Shopping You don’t just run in and buy it. You look into it, shop around, more involvement, greater price. • Specialty Niche store, more luxurious, higher prices, simple, obvious • Unsought Life insurance, 401K, health insurance, if they go looking and understand they hook you. Hearing aid. Product components • Warranty Everything has a warranty. Some are implied. Written warranty laptop, car, etc. Ex: Chrysler was the #3 car company in the world. CEO Lei Coco wanted to transform Chrysler. He saw a trend in women minivan. There were a lot of people who just needed to get from point A to point B without breaking dow k car, boring, but affordable, and slapped on a TEN YEAR, 100,000, bumperto bumper warranty. • Service after sale have to keep things running • Brand the package, the visual, is critical. The brand of a product what do you think of ? images? LSU football brand is scary. Les Miles has a good brand. Objectives of Branding • Identification Get your product seen from a cluster of others. The stronger, the more you’re drawn. Nike very cultivated. Naked swoosh. • Repeat Sales Nike. They are good, so you buy them again. • Introduction of new products When you like and trust a brand, this is easier to do. That’s why Nike can do every single item of clothes, and introduced the fuel band vs. the FitBit that got recalled. • Packaging Critically important as part of brand. Altoid took mints off rolls and put them in a tin can. Made their brand stand out. Red Bull Barbie can. Vodka bottles are gorgeous. Functions of Packaging: • Contain and protect the product (Milk, eggs, computers, whatever) • Protection against theft. Walmart reported 1.1 Billion dollar in theft. Products would be cheaper without all the packaging. Ex: The battery. People will steal, so the packaging has to protect. Greek yogurt is taking up shelf space and moving out butter— butter has become square.
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Labeling Tells you what’s in the product, ingredients; older people care about sodium and fiber. Campbell’s is losing to Progresso; Progresso took out sodium. Cereal focuses on less sugar. Provides information. Color Color serves as a source identifier. Purple and Gold LSU. Powerade blue versus Gatorade orange.
3 branding decisions 1. Target better than Walmart (12% difference is sales price) Recesssion WalMart 2. McDonald’s, fat kid introduced healthy choices and improved sales by 8% 3. Tiffany’s sold a $45 bracelet with target market of girls 1418. Sold enormously well with $35 million, but it wasn’t good for the brand. It diluted it. You weren’t supposed to get this blue box until you were older. Product Life Cycle 2. Growth 3. Maturity 4. Decline 5. Extension
1. Introduction
Price and promotion are always in place. Ex: Flatscreen TV. Decisions affect products. How do promotion and price change as you move through the cycle?
PRICE
The price of a product. Misprice and it hurts your brand. What’s wrong with pricing too low? Karam could have gone to Switzerland, but he only charged $200 an hour, and he didn’t seem credible. He sold himself too short. 3 pricing strategies 1. Penetration pricing Set the price as low as you can to get market share, name recognition, and get people to try the product. 2. Price skimming Set the price as high as you can for as long as you can until competition catches up. 3. Status Quo price match competition. Match product and hope it doesn’t negatively affect product.
Pricing Tactics 1. Rebates coined in 1975 2. Single pricing dollar store, dollar menu, one price in area of the store 3. Professional lawyers, dentists, car 4. Loss leader regular company, runs ad pricing name brand product lower than you’ve seen it. Then, they surround you with other products you wan—coke, whiskey, popcorn, etc. 5. Psychological pricing (Odd/Even) – Odd number notes bargain. Zales advertisements are $100, $2,000 $900. Porshe is the same. Kay’s will say 499.99. Expensive restaurants use $8, $9, $10 6. Precise/Rounding In negotiation use precise numbers. They indicate more thought. 62,700 vs. 65,000 Unethical Pricing Tactics 1. Bait and switch Price low and say, “sold the last one, but we have this.” 2. Predatory pricing Price low and knock out competition 3. Dynamic pricing Internet. Constantly changing price.
PLACE/Distribution
The convenience store that was on the wrong corner of Nicholson.
PROMOTIONS 4 parts of the Promotional Mix 1. Advertising Pay money for TV, radio, etc. Choose properly. How can you reach most effectively? 2. Public relations Positive light on company brand. Big crisis: GM cars can kill you, recalls, lawsuits 3. Sales promotions get you into the store 4. Personal selling 5 steps of the Consumer DecisionMaking Process Persuasion is a conscience attempt to modify the thoughts and behavior of you, the consumer, AND move you toward a predetermined goal. (action) Waldo Grayton said, “If you don’t want to be converted, don’t go to the revival.” You will never see Karam at a new car dealership. Taste this, try this, smell this, etc. 1. Need Recognition Find an unfulfilled need and grab their attention 2. Information search Get as much information as you can to make the right decision. The more convenient the product, the less risk. Types of information (Ways we get information) 1. Internal recall, past experiences 2. External • Personal o Family/friends. Ask them for advice because we trust them and they have experienced the product firsthand.
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92% of consumers get information from family/friends, they are the most trusted. (7% from online reviews) Ex: Building a house o Opinion leaders people who shape what we do, trend setters; look up to them; influenced indirectly o Wordofmouth Rate my professor. Chimes. Movies. “Sneezing” People talk. Frozen becomes a blockbuster. You hope it’s positive. o Celebrity Endorsement Mel Gibson and the Passion of the Christ. Best selling movie despite it’s predictability. He marketed it via talk shows and traveled to opinion leaders—preachers—and told the story. Preachers told their congregation. Celebrity sells? It depends if it’s the right celebrity for the right endorsement. Why do we use celebrities? 1. Sell 2. Change perception of product Nike is elite, class, etc. o “Buzz Marketing” –chooses to put a product in the hands of an opinion leader for the purposes of them using the product for free and hoping they spread good word of mouth. MoPad Vespa gave the bikes to football players at Ohio State University, hoping that they will say something good about the product. The ethical concern is that you can’t tell them to say something good. Commercial Biased o TV commercials o Radio each station advertises for its group o Newspaper o Magazine only if there is a big population of readers. Sports Illustrated. o Internet popup advertisements are in their infancy o Direct mail more money is spent on this than any other form. Large population o Billboards 1. Placement and number of cars that pass 2. Advancements in technology. GOLD Find the piece of land where the pipe in the ground is buried. Public The unbiased sources we use for information. Neutral. Government. JP Power and Associates. Consumer report. o Clutter so much to choose from. There are a lot of options and decisions. o Unique Selling Proposition Separate yourself from the clutter. Believable advertising appeal. Pull your product out amongst the population. Ex: Volvo and it’s safety. Toothpaste industry Rembrant came up with whitening. It resonated throughout the industry.
o Involvement Time and energy spent in searching and evaluating a product 3 types of Involvement decisions 1. Routine limited involvement 2. Moderate a little bit more time 3. Extensive big decision. Everything is this for Karam. His shoes o Evoked set The final group of choices. Your odds are better if you make it down to this group. Choosing a college, you embarked on an information search, ending in an evoked set of LSU, Georgia, and Texas. Fronett. 3. Evaluate the Alternatives Look at the benefits, can you afford it, is it the product you want. Choose LSU. 4. Purchase Actual action step. (Enroll at LSU) 5. Postpurchase behavior What happens after the purchase. If you keep the product, you may experience cognitive dissonance, doubt. Why did I buy this? You ask a friend and they make you feel better by confirming your choice. Ex: Jewelry shop that has someone pop in and say that they have that piece and they just adore it. Karam bought a new couch and attempted to return it; he likes it now that his friend complimented it. He has not gone back to the store though because they did nothing to soften his selfdoubt. His house is handicap accessible, except for 2 back doors that his wife made him change. Robert comes over, charges him an arm and a leg, but comes back to see how he is doing in a week. He refers people to him all the time. Loves Robert. More loyal customers!
Media training: Peyton Manning looking and smiling as he walks. Drew Brees has a good brand. He cares about his team. HE GETS IT. People see you and formulate opinions about you. LIKEABILITY leads to PERSUASION In 10 seconds you can predict with 70% accuracy who someone is as though you listened for 1 hour. Figure out your default look—everyday look you have. If you can frame and package it better, you can persuade people. You have to give people the look of likeability. Eye contact is overrated. Ignore the default look of people sitting across from you (interview) Instead, assume they are listening. 7% of emotional impact is judged on verbal arrangement. Prepare content, but don’t be so set on memorization Good brand, great presenter 3 Types of Presenters 1. Showrunner can step up and they are just good. Poised. Wonderful. Maybe 10 in the class 2. Neophyte Good. Average. Not perfect, but above average. 3. Artists Do weird things on purpose. See past their brand. All of them are good, but they are different. Personal branding= Performance + Personality + Visibility + Trust Whitney Houston made debut at Super Bowl when she sang the National Anthem in 1991. She sang it so beautifully that people cried. The papers didn’t show the game— they showed the tears. She tweaked something mundane and branded it. Visibility= viral—people talk about and use your product. Trust can destroy a personal brand. Corporate branding Microsoft show a side never seen before. Critical! Every advertisement had a personality they wanted to link themselves to. Why do you believe some people, but not others? Harvard vs. someone else: Credibility is believability and trust (of person across from you) Credibility = Knowledge + Confidence + Connection 1. Knowledge turns into expertise. Material knowledge of your audience. Curse of knowledge is when you know so much, but you can’t break it down. No clear way. “Simplicity is complex” – present in a clean way. 2. Confidence Not arrogant or timid. Be natural. You can’t be too nervous. Camouflage it. It does not exempt you from being good. Control, manage, and camouflage nervousmess: Maintain a default look that looks comfortable. Manage your inflections.
3. Connection – Identify and relate to the audience. Know their interests. Denis Rodman—He had a connection due to his love of basketball. North Korea. Two types of credibility 1. Résumé credibility written or spoken résumé 2. Authenticity Who are you? Are you genuine? Are you likeable? Are you rigid? Delivery. Charisma. What your personality is all about. Trustworthy and sincere. When you lose trust, your chances of being believable are diminished! Honesty affects other people. Credibility is destroyed. For how long? Can you recover? Ex: BP asked LSU to help repair their brand. Help people forgive them. You have to know what people think of you—strong, weak, damaged credibility? 4 Marketing/Management philosophies: 1. Production Orientation they don’t care about the customer, the consumer, or people. They only care about making a product the best they can. 2. Sales Orientation they take what they produce and put it into the hands of skilled sales force and tell them to sell it. Tell and sell. 3. Marketing Orientation satisfying he customers needs and wants by providing them with a product or service that they will use. Satisfaction driven. 4. Societal Orientation We have grown up with products that feast on this. Marketing Orientation while keeping the environment safe and friendly. • You aren’t a good steward if you don’t recycle. • WalMart introduced curly light bulbs • Patagonia Sustainability recycle. Do things to make society better. • Nike and LSU. Nike got in trouble for sweatshop childlabor factories. They created a blueprint for oversees manufacturing. Came up with machinery to eliminate waste. Better stewards! • CVS choosing to not sell cigarettes.
3 Marketing Concepts 1. Customer Value Be able to show how you can add value to the company. Be creative. Customer value= Benefits – Cost If the benefits outweigh the costs, it’s value! Sell the benefits!! Ex: First class flights. Getting on early, off early, refreshments. Create benefits that are bigger than costs. 2. Customer Satisfaction You have to be happy with what you just bought. You want them to come back and talk good about you and give you a high rating. Service, quality, and delivery are the components of satisfaction. Critical element:
Customer service—every doctor has “bedside manner.” Studies prove that if they feel car is authentic they are less likely to sue if something messes us. Fear word of mouth! Ex: Delta trained employees in customer service $1 billion Ex: Jet Blue Valentine’s Day fiasco. 7,100 flights cancelled. • 63% of people will change a purchase decision based upon the indifference of one person • 77% of people who have a bad experience will tell at least one person and embellish the story to make it more sensational. • 7% of people who have a bad experience will tell the service provider. Let them yell! Put out the fire. You have an opportunity to create lasting relationships. Repair the relationship. Customers switch because of customer service more than anything else—not price, location, etc. 2 types of disgruntle customers: Angry yells, shouts, screams. They don’t want free stuff. They want you to listen. Remorseful How was your experience? Good. (but it’s not) They unload on another mechanism. Mystery shoppers pose as a shopper and go into store and evaluate and report everything you do. 2 types of service failure: Ante Everyday good service that you expect. Everyday good behavior. Moment of truth Terrible moment happens, your chance to make it right. Ex: Case Study: United Breaks Guitars. A person’s guitar is broken and he tells the airline (United) employee. They said nothing good in a back and forth exchange. The Power of One. He writes a song and puts it on YouTube. Customer service is violated and the brand is damaged. What should you do with service failure? Be prepared. Show that you care. Have a plan. How much recovery is enough? Results of good customer service: • Referrals people will talk good about you. More business. (The floors in his house) • Reduced effort to sell You don’t have to advertise much. • Premium pricing If you pay 20% more you get the best. 3. Develop longterm relationships Show appreciation. Do nice things for people who give you business. Ex: Companies give Christmas presents. It is what makes an industry wonderful. 4 Reasons why a customer switches (takes their business elsewhere) 1. Coreservice failure Failure in the service function. Ex: dropped calls 2. Service encounter failure Be knowledgeable and polite Ex: Kenneth Fienburg was the attorney who had to tell the 911 families that they would not be getting more money. Facial expression shows compassion. All but 2% (of 2000) understood when he used this.
3. Price Unfair, underhanded, illegal, gauging, etc. Ex: Hurricane generators, shipping and handling 4. Inconvenience (NOT LOCATION) How can CC’s coffee put you out of business? Customers park and stay all day, using up your parking spaces.
MARKETING STRATEGY FRAMEWORK LEVEL ONE MARKETING ANALYSIS: Examine 4 things before marketing. Preparation. 1. Company Strengths and weaknesses 2. Competition Have to know them. Figure them out and keep up with them. There is not one company that does not have competition. It used to be Google. Who will it be in the future? Ex: FedEx, UPS, USPS keeping up with each other. 3. Customer Who are they? What are their buying habits? How do they change? React to them. Demographics: Tailor to you. Who you are trying to appeal to, who not to offend. The more you know, the better you can tailor. • Age (0100) Products, services, etc. for older people • Gender • Race Ex: Coke and Pepsi. Pepsi goes after African American population. Started selling more products. Hispanics and the Home Depot. • Income (You can tell from their dress and occupation) Ads in the Wall Street Journal are tailored to highincome. • Education • Religion 1. Identify 2. Do not offend. Offend vs. appeal: Lent special. Edwin Edwards and his commercial. • Geographical North, south, east, west. Politics and the machine of marketing. 4. Conditions External environment. Understand it and you can go forward. The external environment is everchanging. • Social factors (values of the day) Samsonite’s luggage after 911. Security systems after mass murders. Value life styles. Levi Straus Poor wore Wrangler, even poorer more Lee, richer wore Levi. Levi lost market shares when lowcut jeans came into style. They said they wouldn’t do it. Other companies gave customers that they wanted. Activities, interests, and opinions help make up your lifestyle decisions. Life styles change all the time. Companies who can adapt get a huge population. • Technology – tracking packages, online banking, Amazson’s newest venture—Drones that will drop packages at your door, but it’s a long way away. They have hurdles to cross. Robotics in medicine.
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Legal or political Laws change that make things different. No more TV ads for phones and will have a skull on the package to warn people of their potential risk. Car seats for babies were invented. Companies that made toys shifted to car seats. Someone at LSU’s grandpa had a factor that had nylon and it was going out of business—so they made seatbelts and became very successful! Economic factors When times are good, you spend money. During recessions, prices change and the way you run your company should change.
LEVEL TWO—STRATEGY DEVELOPMENT: Stage 1 Segmentation: How will you divide the population? Focus. Criteria for effective segmentation: • Identification Identify the best target • Accessible Reach them through promotions and distribution. Frito Lay chips. • Responsive Can audience respond to you? • Substantial Big enough population to drive profits Stage 2 Targeting: 3 Effective ways to look at it • Mass marketing Appeal to a large population • Multsegmented Find multiple segments in large population a. Lowincome individuals looks for needs b. People who like a brand name. Fruit of the loom. c. Rich people who want household goods, laundry, cleaning, etc. • Niche one specialty and do it well, but a little more expensive. William Sonoma. • Positioning Mountain Dew introduces caffeine a. Attributes b. Benefits c. Communication of value Ex: Motel 6 is the cheapest national chain. Tom Bodett is the voice behind it. Reposition something then sell it. Have a focus group of 79 people. Survey them and find the pros and cons using. Reseach. They found the brand wasn’t good. They had a frugal population and a population of travelers. Wrote a book called The Millionaire Next Door. So they changed the brand of Motel 6. *What was their branding strategy? 1. Position Motel 6 as an economical, clean, enjoyable, and fun place. No amenities. 2. Affiliation Who’s at the same place as you. Same as bars. 3. Personality Insurance companies. Tom Bodett’s voice. It’s the longest run commercial. LEVEL THREE—IMPLEMENTATION: Marketing Mix has 4 Components
1. 2. 3. 4.
Product Price elite vs. inexpensive Place Where will your company be? Promotion Advertising, public relations, sales promotions
PRODUCT
Product categories • Convenience Low in level of involvement; bubble gum; candy; don’t spend time search; quick and easy. KitKat is icon candy. • Shopping You don’t just run in and buy it. You look into it, shop around, more involvement, greater price. • Specialty Niche store, more luxurious, higher prices, simple, obvious • Unsought Life insurance, 401K, health insurance, if they go looking and understand they hook you. Hearing aid. Product components • Warranty Everything has a warranty. Some are implied. Written warranty laptop, car, etc. Ex: Chrysler was the #3 car company in the world. CEO Lei Coco wanted to transform Chrysler. He saw a trend in women minivan. There were a lot of people who just needed to get from point A to point B without breaking dow k car, boring, but affordable, and slapped on a TEN YEAR, 100,000, bumperto bumper warranty. • Service after sale have to keep things running • Brand the package, the visual, is critical. The brand of a product what do you think of ? images? LSU football brand is scary. Les Miles has a good brand. Objectives of Branding • Identification Get your product seen from a cluster of others. The stronger, the more you’re drawn. Nike very cultivated. Naked swoosh. • Repeat Sales Nike. They are good, so you buy them again. • Introduction of new products When you like and trust a brand, this is easier to do. That’s why Nike can do every single item of clothes, and introduced the fuel band vs. the FitBit that got recalled. • Packaging Critically important as part of brand. Altoid took mints off rolls and put them in a tin can. Made their brand stand out. Red Bull Barbie can. Vodka bottles are gorgeous. Functions of Packaging: • Contain and protect the product (Milk, eggs, computers, whatever) • Protection against theft. Walmart reported 1.1 Billion dollar in theft. Products would be cheaper without all the packaging. Ex: The battery. People will steal, so the packaging has to protect. Greek yogurt is taking up shelf space and moving out butter— butter has become square.
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Labeling Tells you what’s in the product, ingredients; older people care about sodium and fiber. Campbell’s is losing to Progresso; Progresso took out sodium. Cereal focuses on less sugar. Provides information. Color Color serves as a source identifier. Purple and Gold LSU. Powerade blue versus Gatorade orange.
3 branding decisions 1. Target better than Walmart (12% difference is sales price) Recesssion WalMart 2. McDonald’s, fat kid introduced healthy choices and improved sales by 8% 3. Tiffany’s sold a $45 bracelet with target market of girls 1418. Sold enormously well with $35 million, but it wasn’t good for the brand. It diluted it. You weren’t supposed to get this blue box until you were older. Product Life Cycle 2. Growth 3. Maturity 4. Decline 5. Extension
1. Introduction
Price and promotion are always in place. Ex: Flatscreen TV. Decisions affect products. How do promotion and price change as you move through the cycle?
PRICE
The price of a product. Misprice and it hurts your brand. What’s wrong with pricing too low? Karam could have gone to Switzerland, but he only charged $200 an hour, and he didn’t seem credible. He sold himself too short. 3 pricing strategies 1. Penetration pricing Set the price as low as you can to get market share, name recognition, and get people to try the product. 2. Price skimming Set the price as high as you can for as long as you can until competition catches up. 3. Status Quo price match competition. Match product and hope it doesn’t negatively affect product.
Pricing Tactics 1. Rebates coined in 1975 2. Single pricing dollar store, dollar menu, one price in area of the store 3. Professional lawyers, dentists, car 4. Loss leader regular company, runs ad pricing name brand product lower than you’ve seen it. Then, they surround you with other products you wan—coke, whiskey, popcorn, etc. 5. Psychological pricing (Odd/Even) – Odd number notes bargain. Zales advertisements are $100, $2,000 $900. Porshe is the same. Kay’s will say 499.99. Expensive restaurants use $8, $9, $10 6. Precise/Rounding In negotiation use precise numbers. They indicate more thought. 62,700 vs. 65,000 Unethical Pricing Tactics 1. Bait and switch Price low and say, “sold the last one, but we have this.” 2. Predatory pricing Price low and knock out competition 3. Dynamic pricing Internet. Constantly changing price.
PLACE/Distribution
The convenience store that was on the wrong corner of Nicholson.
PROMOTIONS 4 parts of the Promotional Mix 1. Advertising Pay money for TV, radio, etc. Choose properly. How can you reach most effectively? 2. Public relations Positive light on company brand. Big crisis: GM cars can kill you, recalls, lawsuits 3. Sales promotions get you into the store 4. Personal selling 5 steps of the Consumer DecisionMaking Process Persuasion is a conscience attempt to modify the thoughts and behavior of you, the consumer, AND move you toward a predetermined goal. (action) Waldo Grayton said, “If you don’t want to be converted, don’t go to the revival.” You will never see Karam at a new car dealership. Taste this, try this, smell this, etc. 1. Need Recognition Find an unfulfilled need and grab their attention 2. Information search Get as much information as you can to make the right decision. The more convenient the product, the less risk. Types of information (Ways we get information) 1. Internal recall, past experiences 2. External • Personal o Family/friends. Ask them for advice because we trust them and they have experienced the product firsthand.
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92% of consumers get information from family/friends, they are the most trusted. (7% from online reviews) Ex: Building a house o Opinion leaders people who shape what we do, trend setters; look up to them; influenced indirectly o Wordofmouth Rate my professor. Chimes. Movies. “Sneezing” People talk. Frozen becomes a blockbuster. You hope it’s positive. o Celebrity Endorsement Mel Gibson and the Passion of the Christ. Best selling movie despite it’s predictability. He marketed it via talk shows and traveled to opinion leaders—preachers—and told the story. Preachers told their congregation. Celebrity sells? It depends if it’s the right celebrity for the right endorsement. Why do we use celebrities? 1. Sell 2. Change perception of product Nike is elite, class, etc. o “Buzz Marketing” –chooses to put a product in the hands of an opinion leader for the purposes of them using the product for free and hoping they spread good word of mouth. MoPad Vespa gave the bikes to football players at Ohio State University, hoping that they will say something good about the product. The ethical concern is that you can’t tell them to say something good. Commercial Biased o TV commercials o Radio each station advertises for its group o Newspaper o Magazine only if there is a big population of readers. Sports Illustrated. o Internet popup advertisements are in their infancy o Direct mail more money is spent on this than any other form. Large population o Billboards 1. Placement and number of cars that pass 2. Advancements in technology. GOLD Find the piece of land where the pipe in the ground is buried. Public The unbiased sources we use for information. Neutral. Government. JP Power and Associates. Consumer report. o Clutter so much to choose from. There are a lot of options and decisions. o Unique Selling Proposition Separate yourself from the clutter. Believable advertising appeal. Pull your product out amongst the population. Ex: Volvo and it’s safety. Toothpaste industry Rembrant came up with whitening. It resonated throughout the industry.
o Involvement Time and energy spent in searching and evaluating a product 3 types of Involvement decisions 1. Routine limited involvement 2. Moderate a little bit more time 3. Extensive big decision. Everything is this for Karam. His shoes o Evoked set The final group of choices. Your odds are better if you make it down to this group. Choosing a college, you embarked on an information search, ending in an evoked set of LSU, Georgia, and Texas. Fronett. 3. Evaluate the Alternatives Look at the benefits, can you afford it, is it the product you want. Choose LSU. 4. Purchase Actual action step. (Enroll at LSU) 5. Postpurchase behavior What happens after the purchase. If you keep the product, you may experience cognitive dissonance, doubt. Why did I buy this? You ask a friend and they make you feel better by confirming your choice. Ex: Jewelry shop that has someone pop in and say that they have that piece and they just adore it. Karam bought a new couch and attempted to return it; he likes it now that his friend complimented it. He has not gone back to the store though because they did nothing to soften his selfdoubt. His house is handicap accessible, except for 2 back doors that his wife made him change. Robert comes over, charges him an arm and a leg, but comes back to see how he is doing in a week. He refers people to him all the time. Loves Robert. More loyal customers!
