Esame di Marketing 30015 (corso BIEM) - Università Bocconi, Appunti di Marketing

Scarica Esame di Marketing 30015 (corso BIEM) - Università Bocconi e più Appunti in PDF di Marketing solo su Docsity! Chapter 1: Marketing: a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing process: • Understand the marketplace and customer needs and wants • Design a customer value-driven marketing strategy • Construct an integrated marketing program that delivers superior value • Build profitable relationships and create customer delight • Capture value from customers to create profits and customer equity Needs: state of deprivation Wants: form that needs take Demands: wants backed by buying power Market offerings: the combination of products, services, information or experiences offered to a market to satisfy a need or want. Marketing myopia: focusing only on existing wants and losing sight of underlying consumer needs. Exchange: act of obtaining some desired object from someone by offering something in return. Marketing actions: try to create, maintain and grow desirable exchange relationships. Marketing management: art and science of choosing target markets and building profitable relationships with them. Evolution of orientations: PRODUCTION ERA – SALES ERA – MARKETING CONCEPT ERA – MARKETING ORIENTATION ERA Production concept: focusing on efficiency of production Product concept: focusing on the improvement of the quality, performance and features of the product Selling concept: profits from sales volume Marketing concept: profits through customer satisfaction Societal marketing: societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being. (present and future) Customer relationship management: is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. The relationship building blocks are formed by: • Customer perceived value – difference between total customer perceived benefits and customer cost • Customer satisfaction – the extent to which perceived performances matches a buyer’s expectations. Customer-Engagement Marketing: fostering direct and continuous customer involvement in shaping brand conversations, experiences and community. Consumer-Generated Marketing: brand exchanges created by consumers themselves – consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. Partnership relationship management: working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Customer lifetime value: the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Share of customer: the portion of the customer’s purchasing that a company gets in its product categories. Customer equity: the total combined customer lifetime values of all the company’s customers. Digital and social media marketing: using digital marketing tools such as websites, social media, mobile ads and apps, online videos that engage consumers anywhere at any time via their digital devices. Chapter 2 Strategic planning: involves developing an overall company strategy for long-run survival and growth. Composed of 4 steps: Define Mission, Set Company’s Objectives, Design Business Portfolio, Plan Functional Strategies. Mission statement: organization’s purpose; what it wants to accomplish in the larger environment. (good/ bad). Good mission statements: market oriented, fit market environment, emphasize company’s strength, meaningful, specific, motivating. Bad mission statements: not market oriented: ex. To be the best company in our industry, to make the world’s best (product). Setting the company’s objectives and goals: business objective vs. marketing objectives. Business objective: build profitable customer relationships, invest in research, improve pofits. Marketing objective: increase market share, create local partnerships, increase promotion. Business portfolio: collection of business and products that make up the company. Portfolio analysis: major activity in strategic planning whereby management evaluates the products and businesses that make up the company. GROWTH-SHARE MATRIX: portfolio-planning method which evaluates a company’s SBUs in terms of market growth rate and relative market share. Dogs: low relative market share and low market growth rate. May consider to discontinue. Cash cows: high market share/low growth rate (maturity). You’re well established. However, the market isn’t growing and your opportunities are limited. Produce cash. Question marks: buyers still don’t know the product (Introduction). Build into stars or phase out- Need investment to build market share. Economic environment: consists of factors that affect consumer purchasing power and spending patterns. Ex. Developing economies: outstanding market opportunities income distribution Natural environment: physical environment and natural resources that are needed as inputs by marketers or that are affected by marketing activities ex. Fuel costs for airplane transportation (growing shortage of raw materials, increased pollution) • Environmental sustainability: developing strategies and practices that create a world economy that the planet can support indefinitely. Technological environment: forces that create new technologies, new products or new products. Political environment: laws, government agency, pressure groups that limit organization and individuals Social & Cultural environment: forces that affect society’s basic values, perceptions and preferences. INDEXES: potential market, primary demand, secondary demand, gaps, market share Potential market: maximum demand level for a product in a certain area and period of time. Every subject, which is able to use the product, uses it. Every user adopt the product at every usage occasion. Potential Market = N. Potential Users X Quantity (maximum amount) Total Market Demand (or primary demand): the total volume of a product or service what would be bought by a defined consumer group (in a defined geographic area, in a defined time period in a defined marketing environment) under a defined level and mix of industry marketing effort. Primary Demand = N. number of buyers in the market X Q.quantity purchased by an average buyer per year X P.price of an average unit Secondary Demand (selective demand): the quote of the demand held by a company (or by its brand). Potential GAP: gap between the primary demand and the potential market. Competitive GAP: gap between primary and secondary demand. MARKET SHARE: Index used to understand the company’s competitive position and performance. (Market share = Secondary Demand/Primary Demand) look at the slides. Chapter 4 Big data: huge and complex data sets generated by today’s sophisticated information generation, collection, storage and analysis technologies. Customer insights: fresh marketing information-based understandings customers and the marketplace that become the basis for creating customer value, engagement and relationships. Marketing information system (MIS): the people and procedures dedicated to assessing information needs, developing the needed information and helping decision makers to use the information and validate actionable customer and market insights. It provides information to the company’s marketing and other managers and external partners such as suppliers, resellers and marketing service agencies. Internal data: Internal databases are collections of consumers and market information obtained from data sources within the company network. Marketing intelligence: systematic collection and analysis of publicly available information consumers, competitors and developments in the marketing environment. Marketing research: systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. 4 steps of marketing research: • Defining the problem and research objectives: 3 types of obj: Exploratory research, Descriptive Research or Causal research. • Developing the Research Plan • Implementing the Research Plan – Collecting and Analysing the data • Interpreting the results 1st step: 3 types of objectives: Exploratory Research: marketing research to gather preliminary information that will help define problems and suggest hypotheses. Descriptive Research: Marketing research to better describe marketing problems, situations or markets, such as the market potential for a product or the demographics and attitudes of consumers. Causal research: Marketing research to test hypotheses about cause-and-effect relationships. Secondary data: information that already exists somewhere, having been collected for another purpose. The advantages of secondary data are the lower costs involved, the fact that they can be quickly obtained and the fact they cannot be collected otherwise. But they may not be relevant, accurate, current and impartial. Primary data: information collected for the specific purpose at hand RESEARCH APPROACHES Observational research: Gathering primary data by observing relevant people, actions and situations. Ethnographic research: A form of observational research that involves sending trained observers to watch and interact with consumers in their “natural environments” Survey Research: Gathering primary data by asking people questions about their knowledge, attitudes, preferences and buying behaviour. Experimental research: Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors and checking for differences in group responses. Focus group interviewing: Personal interviewing that involves inviting small groups of people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer “focuses” the group discussion on important issues. Online marketing research: Collecting primary data through internet and mobile surveys online focus groups, consumer tracking, experiments and online panels and brand communities. Online focus groups: the same as I said before but online (chatting) Behavioural targeting: Using online consumer tracking data to target advertisements and marketing offers to specific consumers. Sample: a segment of the population selected for marketing research to represent the population as a whole. ANALYZING AND USING MARKETING INFORMATION Customer relationship management: managing detailed information about individual customers and carefully managing touch points to maximize customer loyalty. Marketing analytics: the analysis tools, technologies and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance. Chapter 5 – Consumer Markets and Buyer Behaviour Consumer buyer behaviour: is the buying behaviour of final consumers-individuals and households that buy goods and services for personal consumption. Consumer markets: are made up of all the individuals and household that buy or acquire goods and services for personal consumption. THE CONSUMER BEHAVIOUR MODEL: The environment – Buyer’s Black Box – Purchase Decision Factor Influencing consumer behaviour: Cultural – Social – Personal – Psychological CULTURAL FACTORS Culture: the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions. Subculture: A group of people with shared value systems based on common life experiences and situations. New task: a buying situation in which the buyer purchases a product or service for the first time. Systems selling (solution selling): a complete solution to a problem from a single seller. PARTICIPANTS IN THE BUSINESS BUYING PROCESS Buying center: consists of all the individuals and units that play a role in the business purchase decision- making process. (varied group – complexity) Users: members of the buying organization who will actually use the purchased product or service. Influencers: People in an organization’s buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives. Buyers: People in an organization’s buying center who make an actual purchase. Deciders: People in an organization’s buying center who have formal or informal power to select or approve the final suppliers. Gatekeepers: People in an organization’s buying center who control the flow of information to others. Business products: • Are used to manufacture other products • Facilitate an organization’s operations • Are resold to other customers (Retailers and Wholesalers) Types of business products: • Major equipment: ex. Extruding machine – expensive, large machines, buildings, customization • Accessory equipment: ex. Tool cart - short-life terms, standardized, more and dispersed customers • Raw materials: ex. Aluminium – minerals, wheat, fish, become part of finished products, extensive users who buy huge quantities • Processed materials: ex. Extruded metal – used directly in manufacturing other products, already processed, do not retain their identity in final products • Component Parts: ex. Propeller blade (elica) – Diesel engines, finished items, ready to be used • Business services: consultant services • Supplies: ex. Paper – not part of the final product, short life and not expensive, maintenance Categories of business customers: • Producers: profit-oriented organizations that use purchase products to produce other products • Resellers: businesses that buy finished products to resell them to final customers for a profit. Retailers and Wholesalers • Governments: Federal, State, Local • Institutions: Schools, Hospitals, Colleges, Churches, Unions, Foundations etc. Major influences on Business buying behaviour Remember that on Customer buying behaviour major influences were: Cultural, Social, Personal and Psychological. In this case they are: Environmental, Organizational, Interpersonal, Individual. Environmental Organizational Interpersonal Individual • The economy • Supply conditions • Technology • Politics/regulations • Competition • Culture and Customs • Objectives • Strategies • Structure • Systems • Procedures • Influence • Expertise • Authority • Dynamics • Age/Education • Job position • Motives • Personality • Preferences • Buying style THE BUSINESS BUYER DECISION PROCESS: Problem recognition: the first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good service. General need description: The stage in the business buying process in which a buyer describes the general characteristics and quantity of a needed item. Product specification: The stage in which the buying organization decides on and specifies the best technical product characteristics for a needed item. Supplier search: The stage in which the buyers tries to find the best vendors. Proposal solicitation: The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals. Supplier selection: The stage in which the buyer reviews proposals and selects a supplier or suppliers. Order-routine specification: The stage in which the buyer writes the final order with the chosen supplier(s), quantity needed, expected time of delivery, return policies and warranties. Performance review: the stage in which the buyer assesses the performance of the supplier and decides to continue, modify or drop the arrangement. E-procurement: Purchasing through electronic connections between buyers and sellers – usually online. B-to-B digital and social media marketing: Using digital and social media marketing approaches to engage business customers and manage customer relationships anywhere, anytime. Institutional market: Schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. Government market: Governmental units – federal, state and local – that purchase or rent goods and services for carrying out the main function of government. TYPES OF BUYERS Satisficers: Business customers who place an order with the first similar supplier to satisfy product and delivery requirements. Optimizers: Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all the proposals carefully before selecting one. A good competitive advantage should be: • Important • Distinctive • Superior • Communicable • Preemptive • Affordable • Profitable Value proposition: overall positioning strategy – the full positioning of a brand, the full mix of benefits on which it is positioned. BENEFITS vs. PRICE ex. More for More (both benefits and price) BMW Positioning statement: a statement that summarizes company or brand positioning using this form: To ___ (target segment), our ____ (brand) is _____ (concept) that ____ (point of difference). Example: Evernote (an cross-platform app designed for note taking, organizing, archiving) “To busy multitaskers who need help remembering things, Evernote is a digital content management application that makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet, and the Web.” Chapter 8 – Products, Services and Brands Product: Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Service: An activity, benefit or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything. LEVELS OF PRODUCT AND SERVICES: • Actual product: Brand name, features, design, quality level, packaging, design • Augmented product: Warranty, Delivery and Credit, After-sale service, Product Support. At the most basic level, the company asks “ What is the customer really buying?” For example, people who buy an Apple iPad are buying more than just a tablet computer. They are buying entertainment, self- expression, productivity and connectivity. Product and Service Classifications: Consumer Product/ Industrial product Consumer product: A product bought by final consumers for personal consumption. • Convenience product: are consumer products and services that the customer usually buys frequently, immediately and with a minimum comparison and buying effort. (ex. Newspapers, candy, fast food) • Shopping product: are less frequently purchased consumer products and services that the customer compares carefully on suitability, quality, price and style. (ex. Furniture, Cars, Appliances) • Specialty product: are 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. Medical services, designer clothes) • Unsought product: are consumer products that the consumer does not know about or knows about but does not normally think of buying (ex. Life insurance, funeral services, blood donations) Industrial product: those products purchased for further processing or for use in conducting a business. • Materials and parts: include raw materials and manufactured materials and parts • Capital items: industrial products that aid in the buyer’s production or operations • Supplies and services: include operating supplies, repair and maintenance items and business services. Social marketing: the use of traditional business marketing concepts and tools to encourage behaviours that will create individual and societal well-being. PRODUCT AND SERVICE DECISIONS Product Attributes: quality – features – style and design Product Quality: the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Brand: A name, term, sign, symbol or design (or a combination of these) that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors. Packaging: involves designing and producing the container or wrapper for a product. Product Line: group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. Ex. Nike offers several lines of shoes. • Line filing: adding more items within the present range of the product line (reaching for extra profits, keeping out competitors) • Line stretching: lengthening the product line beyond the current range (downward, to cater to lower-end segments, upward, to add prestige to existing products) Factors affecting the company’s product line decisions: consumer segments, production technology, cost structure. CHOICE OVERLOAD PROBLEM – JAM Product mix (or product portfolio): the set of all product lines and items that a particular sellers offers for sale (ex. All the lines that Nike offers) • Length: Total n. of items carried within all the product lines • Width: n. of different product lines • Depth: n. of versions for each product • Consistency: how closely related are the product lines Decoy effect: remember the experiment of the economist – Ugly Jerry and Ugly Tom Services Marketing – Nature and Characteristics of a Service Service intangibility: Services cannot be seen, tasted, felt, heard or smelled before purchase. Service Variability: Quality of services depends on who provides them and when, where and how. Service inseparability: Services are produced and consumed at the same time and they cannot be separated from their providers. Service perishability: Services cannot be stored for later sale or use. Service profit chain: The chain that links service firm profits with employee and customer satisfaction. Internal marketing: orienting and motivating customer-contact employees and supporting service employees to work with customers to satisfy their needs. Interactive marketing: training service employees in the fine art of interacting with customers to satisfy their needs. BRANDING STRATEGY: BUILDING STRONG BRANDS Brand equity: the differential effect that knowing the brand has on customer response to the product or its marketing. Brand value: The total financial value of a brand. Manufacturer’s brand: Samsung Licensed Brand: Wizzies Store brand (private brand): a brand created and owned by a reseller of a product or service. Ex. Esselunga Co-branding: The practice of using the established brand names of two different companies on the same product. Line extension: Extending an existing brand name to new forms, colours, sizes of an existing product category. Brand extension: Extending an existing brand name to new product categories. Multibrands: Companies often market many different brands in a given product category. For example, in the US PepsiCo markets at least 8 brands of soft drinks. New brands: A company might believe that the power of its existing brand is waning, so a new brand name is needed. Or it may create a new brand name when it enters in a new product category for which none of its current brand names is appropriate. (table) Chapter 9 – New Product Development Firm can obtain new products in 2 ways: Acquisition, New product development. Fad: a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. Introduction stage: The PLC stage in which a new product is first distributed and made available for purchase. • Slow sales growth • Little or no profit • High distribution and promotion expenses Growth stage: the PLC stage in which a product’s sales start climbing quickly. Ex. TESLA • Sales increase • Profits increase • New competitors enter the market • Economies of scale • Consumer education • Lowering prices to attract more buyers Maturity stage: The PLC stage in which a product’s sales growth slows or levels off. Ex. iPhone • Slowdown in sales • Many suppliers • Substitute products • Overcapacity leads to competition • Increased promotion and R&D to support sales and profits • MODIFICATION STRATEGIES: modify the market, modify the product, modify the marketing mix Decline stage: the PLC stage in which a product’s sales fade away. • Sales decline for many reasons, including: technical advances, shifts in consumer tastes (ex. Hose telephone) How to retire a brand? Reduce costs (cut price)/ Assess whether it can perform as a cash cow Two tables really important (see the slides) Chapter 10/11 – Pricing and Pricing Strategy Price: amount of money charged for a product or service, or the sum of all the values that customers exchange for the benefits of having or using the product or service. Customer-value-based pricing: setting price based on buyers’ perceptions of value rather than on the seller’s costs. • Good-Value pricing: offering just the right combination of quality and good service at a fair price. • Everyday Low Pricing: charging a constant everyday low price with few or no temporary price discounts. • Value-Added Pricing: attaching value-added features and services to differentiate a company’s offers and charging higher prices. Cost-Based Pricing Strategies: Setting prices based on the costs of producing, distributing, and selling product plus a fair rate of return for effort and risk. Customer-value perceptions set the price ceiling but costs set price floor. • Fixed Costs: Costs that do not vary directly with the level of production (ex. Rent) • Variable Costs: Costs that vary directly with the level of production. (ex. One more smartphone produced more variable costs) • Total costs: The sum of the fixed and variable costs for any given level of production. • Experience curve (learning curve): the drop in the average per-unit production cost that comes with accumulated production experience. • Cost-plus pricing (mark-up pricing): Adding a standard mark-up to the cost of the product. Benefits: sellers are certain about costs, price competition is minimized, buyers feel it is fair. Disadvantages: ignores demand, ignores competition prices. • Break-even pricing (target return pricing): is setting price to break even on costs or to make a target return. Competition-based pricing: is setting prices based on competitors’ strategies, costs, prices and market offerings. Pure competition: many buyers and sellers trading in a uniform commodity. (ex. Wheat) No single buyer or seller has much effect on the going market price. Thus, sellers in these markets do not spend much time on marketing strategy. Monopolistic competition: many buyers and sellers who trade over a range of prices because sellers can differentiate their offers to buyers. Each firm has a low degree of market power and they are all price makers. (ex. Restaurants/Super markets) Consumer perceive that there are non-price differences among the competitors’ products. Oligopolistic competitions: only a few large sellers. Each seller is alert and responsive to competitors’ pricing strategies and marketing moves. Example: cellphone service provider market. Pure monopoly: The market is dominated by one seller. Example: Postal service, De Beers and diamonds Target costing: Pricing that starts with an ideal selling price, then target costs that will ensure that the price is met. Demand curve: a curve that shows the number of units the market will buy in a given time period, at different prices that might be changed. Price elasticity: A measure of the sensitivity of demand to changes in price. • Inelastic demand: when demand hardly changes with a small change in price. • Elastic demand: when demand hardly changes with a small change in price. • Public Policy and Pricing Price fixing legislation: requires sellers to set prices without talking to competitors. Predatory pricing legislation: prohibits selling below cost with the intention of punishing a competitor or putting him out of the market Deceptive pricing: occurs when a seller states prices or price savings that mislead consumer or are not actually available to consumers. Chapter 12 – DISTRIBUTION CHANNELS Value delivery Network: a network composed of the company suppliers, distributors and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value. Marketing channel (distribution channel): a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Channel level: a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Direct marketing channel: A marketing channel that has no intermediary levels. Indirect marketing channel: A marketing channel containing one or more intermediary levels. Ex. In the case of consumer marketing channels, a direct one is Producer Consumer, an indirect one is Producer Wholesaler Retailer Consumer. In the case of Business marketing channels, a direct one is Producer Business customer, indirect: Producer Manufacturer’s representatives of sales branch Business distributor Business customer. ROLE OF INTERMEDIARIES Wholesaler/distributor • Distribution tasks for manufacturer: market coverage (enable to reach large geographical areas), sales contact (maintain sales force to each retailer/consumer, hold inventory, handle order processing, provide market information to manufacturer, handle customer support. • Distribution tasks for customers: product availability (enable product to reach large geographical areas), provide customer & service, provide credit & financial assistance, assortment convenience (have products from multiple manufacturers), provide advice and technical support Agent/broker: • Act as an extension of manufacturer • Represent manufacturer to wholesaler/retailer/consumers • Fee/commission-based, does not take on ownership of goods. Retailer: • Display the merchandise • Promotes it at stores • Provides after-sales support where needed CHANNEL MEMBERS ARE CONNECTED BY SEVERAL TYPES OF FLOWS: physical flow of products, flow of ownership, payment flow, information flow, promotion flow. WHY DO MANUFACTURERS USE INTERMEDIARIES? Contractual efficiency: intermediaries reduce negotiation effort between manufacturer and buyers. Lack of expertise to perform all the tasks needed to distribute the product. Distribution efficiency. • Franchising Contractual VMS reduces the double marginalization problem by giving manufacrurer a second tool (fixed franchise fee) to extract profit from retailer CHANNEL DESIGN DECISIONS Marketing channel design: design effective marketing channels by analysing customer needs, setting channel objectives, identifying major channel alternatives and evaluating those alternatives. Analyzing consumer needs – Setting Channel Objectives – Identifying channel alternatives – Evaluating channel alternatives Analyzing Consumer Needs: find out what target consumers want from the channel, identify market segments. Setting Channel Objectives: Determine targeted levels of customer service, balance consumer needs against costs and customer price preferences DISTRIBUTION INTENSITY: Exclusive, Selective, Intensive Exclusive: a single intermediary in a geographic region (ex. Italy only in Milan). Resellers do not compete. Typically for Specialty Products (ex. Luxury designer clothes, industrial equipment) Selective: A selected number of intermediaries. Enables producer to gain adequate market coverage with more control and less cost than intensive distribution. Typically for Shopping Product (ex. Electronics) Intensive: stocking the product in as many outlets as possible. – typically for convenience products (toothpaste, toilet paper, soap, snacks etc.) (trade-off between retailer support and market coverage) Chapter 13 – Retailing and Wholesaling Retailing: All the activities involved in selling goods or services directly to final consumers for their personal, non-business use. Shopper marketing: Focusing the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online or mobile shopping. Omni-channel retailing: Create a seamless cross-channel buying experience that integrates in-store, online and mobile shopping. (ex. Rebecca Minkoff video) TYPES OF RETAILERS: Specialty store: e.g. IKEA, Media World A retail store that carries a narrow product line with a deep assortment within that line. Department store: e.g. Macy’s typically 5+ departments A retail store that carries a wide variety of product lines, each operates as a separate department managed by specialist buyers or merchandisers. Supermarket: e.g. PAM A relatively large, low-cost, low-margin, high-volume, self-service operation designed to serve the consumer’s total needs or grocery and household products. Convenience Store: e.g. Carrefour Express a relatively small store located near residential areas, open 24/7, and carrying a limited line of high-turnover convenience products at slightly higher prices. Superstore: e.g. Esselunga a store much larger than a regular supermarket that offers a large assortment of routinely purchased food product, non-food items and services. Category killer: a giant specialty store that carries a very deep assortment of a particular line (ex. PetCo) Service retailer: A retailer whose product line is actually a service; example include hotels, airlines, banks and many others. Discount store: e.g. Walmart a store that carries standard merchandise sold at lower prices with lower margins and higher volumes. Retailing Trends and Developments: rise of megaretailers, growth of non-store retailing (online, mobile, showrooming, webrooming) Creation of Multichannel synergies, Services enhanced by technology Green Retailing: Environmentally Sustainable Practices store design, construction, operations; product assortment; Recycling made easier; Package and distribution Wholesaling: All the activities involved in selling goods and services to those buying for resale or business use. Broker: A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation. Agent: A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods. Chapter 14 – Engaging Customers and Communicating Customer Value Promotion mix: the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. Advertising: any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or a service. Personal selling: Personal presentation by the firm’s sales force for the purpose of engaging customers, making sales and building customer relationships. Public relations: Building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image, and handling or heading off unfavourable rumors, stories and events. Direct and digital marketing: Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build customer relationships. IMC – Integrated marketing communications: involves carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent and compelling message about the organization and its products. Steps in developing effective marketing communication: • Identify the target audience: How – What – When – Where – Who • Determine the communication objectives: buyer-readiness stages: the stages consumers normally pass through on their way to a purchase: awareness, knowledge, liking, preference, conviction, purchase. • Design the message: AIDA Model get Attention, hold Interest, arouse Desire, obtain Action. Message content (what to say) rational appeal, emotional appeal, moral appeal. Message structure (how to say it) ex. Whether to draw a conclusion or leave it to the customer • Choose Communication Channels and Media: • Personal communication channels: ■ Opinion leaders: are people whose opinions are sought by others. ■ Buzz Marketing: involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. • Non-personal communication channels: no personal contact or feedback • Selecting the Message Source (ex. Celebrity, athlete etc.) • Collecting Feedback • Setting the Total promotion Budget and MIX 4 different ways: • Affordable Method: setting the promotion budget at the level management thinks that the company can afford. • Percentage-of-Sales Method: setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. • Competitive-Parity Method: sets the promotion budget to match the competitors’outlays. • Objective-and-task Method: develops the promotion budget by specific promotion objectives and the costs of tasks needed to achieve these objectives. PUSH STRATEGY: a promotion strategy that calls for using the sales force and trade promotion to push the product through the product channels. The producers promotes the product to channel members who in turn promote it to final consumers. PULL STRATEGY: a promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that “pulls” the product through the channel. The Nature of Each Promotional Tool • Advertising: can reach masses of geographically dispersed buyers at a low cost per exposure and it enables the seller to repeat a message many times. Advantages of PR: Lower cost than adv., stronger impact on public awareness, has power to engage consumers and make them part of the brand story. Chapter 17 – Direct, Online, Social Media and Mobile Marketing Direct and Digital Marketing: involve engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting consumer relationships. Benefits: For buyers: Convenience, ready to access to many products, access to comparative information about companies, products and competitors. Interactive and immediate. For sellers: tool to build customer relationships, low-cost, efficient, fast alternative to reach markets, flexible, access to buyers not reachable through other channels. DIGITAL AND SOCIAL MEDIA MARKETING: Using digital marketing tools such as websites, social media, mobile apps and ads, online video, email and blogs that engage consumer anywhere, anytime via their digital devices. Omni-channel retailing: creates a seamless cross-channel buying experience that integrates multiple purchase or service channel (e.g. in store, online and mobile shopping) to create a single shopping experience. (see slide 9 of Lecture 20) Online marketing: Marketing via the internet using company websites, online ads and promotions, emails, online videos and blogs. Marketing website: A website that engages consumers to move them closer to a direct purchase or other marketing outcome. (ex. Hyunday’s site from inquiry to sale) Brand community website: a website that presents brand content that engages consumers and creates customer community around a brand. Online advertising: Advertising that appears while consumers are browsing online, including display ads, search-related ads, online classifieds and other forms. Email marketing: Sending highly targeted, highly personalized, relationship-building marketing messages via email. Viral marketing: digital version of word-of-mouth marketing: videos, ads, and other marketing contents that is so infectious that customers will seek it out or pass it along to friends. Blogs: Online forums where people and companies post their thoughts and other content, usually related to narrowly defined topics. Social media: Independent and commercial online social networks where people congregate to socialize and share messages, opinions, pictures, videos and other content. Mobile marketing: marketing messages, promotions and other content delivered to on-the-go consumers through their mobile devices. TRADITIONAL DIRECT MARKETING: Direct mail marketing: Marketing that occurs by sending an offer, announcement, reminder or other item directly to a person at a particular address. Catalog marketing: through print, video or digital catalogs Telemarketing: through telephone DRTV – Direct-response television marketing: Direct marketing via television, including direct-response television advertising and interactive television advertising. Chapter 19-20 – Global Marketing and Sustainable Marketing Global firm: a firm that, by operating in more than one country, gains R&D, production, marketing and financial advantages in its costs and reputation that are not available purely to domestic competitors. Main steps of Global Marketing decisions: Looking at the global marketing environment, deciding whether to go global, deciding which markets to enter, deciding how to enter the market, deciding on the global marketing program, deciding on the global marketing organization. Looking at the global marketing environment: International Trade System we have to take into consideration tariffs, quotas, exchange controls and nontariff trade barriers. Deciding Which Markets to Enter: Foreign sales volume, how many countries to enter, types of countries to enter based on: geography, income and population, political climate. Deciding how to Enter the Market: • Exporting (Indirect/Direct): when the company produces its goods in the home country and sells them in a foreign market. It is the simplest means involving the least change in the company’s product lines, organizations, investments, or mission. • Joint venturing (Licensing, Contract Manufacturing, Management contracting, joint ownership): when a firm joins with foreign companies to produce or market products or services. • Licensing: when a firm enters into an agreement with a licensee in a foreign market. For a fee or royalty, the licensee buys the right to use the company’s process, trademark, patent, trade secret or other item of value. • Contract Manufacturing: when a firm contracts with manufacturers in the foreign market to produce its product or provide its service. Benefits include faster startup, less risk, the opportunity to form a partnership or to buy out the local manufacturer. • Management Contracting: when the domestic firm supplies management skill to a foreign company that supplies capital. The domestic firm is exporting management services rather than products. • Joint ownership: when one company joins forces with foreign investors to create a local business in which they share joint ownership and control. Joint ownership is sometimes required for economic or political reasons. • Direct investment: the development of foreign-based assembly or manufacturing facilities. Offers a number of advantages including: labor, logistics, control, government incentives, lower costs, raw materials. Standardized marketing mix: involves selling the same products and using the same marketing approaches worldwide. Adapted marketing mix: involves adjusting the marketing mix elements in each target market, bearing some costs but hoping for a larger market share and ROI. 5 global product and communication strategies: (table)