Marketing Roleplay/MC Concepts Flashcards
6 steps to dealing with customer complaints
- Listen carefully to what the customer has to say and let them finish
- Ask questions in a caring and concerned manner
- Put yourself in their shoes
- Apologize without blaming
- Ask the customer: “What would be an acceptable solution to you?”
- Solve the problem, or find someone who can solve it - quickly
- do not argue or get defensive
- repeat back what you heard to show you’re listening
- ask rather than jump to conclusions
- be sincere
- propose one or more solutions to alleviate the complaint
Business life cycle
Recession (trough):
- period of reduced economic activity (buying, selling, production, and employment diminish)
- a severe recession is known as a depression
Recovery (upturn):
- economy starts working its way up to better financial footing
Growth:
- a period of sustained expansion
- increased consumer confidence = higher levels of business activity
- generally acconpanied by inflationary pressures
Decline (contraction or downturn):
- marks the end of the period of growth
- decreased levels of consumer purchases
- reduced production by businesses
Factors that shape business life cycles
- volatility of investment spending
- momentum
- technological innovtions
- variations in inventories
- fluctuations in government spending
- politically generated business cycles
- monetary policies
- fluctuations in exports and imports
Product life cycle stages
- Introduction
- Growth
- Maturity
- Decline
Introduction stage
product life cycle
Product:
- branding and quality level established
- intellectual property protection (ie. patents, trademarks, etc.) are obtained
Pricing:
- may be low penetration pricing to rapidly build market share
- may be high skim pricing to recover development costs
Distribution:
- selective until consumers show acceptance of the product
Promotion:
- aimed at innovators and early adopters
- marketing communications seeks to build product awareness and educate potential consumers about the product
- seeks to build product awareness
- seeks to develop a market for the product
Growth stage
product life cycle
Product:
- quality is maintained and additional features and support services may be added
Pricing:
- maintained as the firm enjoys increasing demand with little competition
Distribution:
- distribution channels are added as demand increases and customers accept the product
Promotion:
- aimed at a broader audience
- seeks to build brand preference
- aim to increase market share
Maturity stage
product life cycle
Product:
- features may be enhanced to differentiate the product from that of competitors
Pricing:
- may be lower because of new competition
Distribution:
- becomes more intensive and incentives may be offered to encourage preference over competing products
Promotion:
- emphasizes product differentiation
- strong growth in sales diminishes
- competition appears with similar products
- primary objective is to defend market share while maximizing profit
Decline stage
product life cycle
Sales decline, the firm has several options:
1. Maintain the product - possibly rejuvenating it by adding new features and finding new uses
2. Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment
3. Discontinue the product - liquidating remaining inventory or selling it to another firm that is willing to continue the product
Strategic business risk
- result directly from operating within a specific industry at a specific time
- counteract measures need to be put in place to constantly solicit feedback so changes will be detected early
- shifts in consumer preferences or emerging technologies
- drastic market forces that could put your company in danger
Legal compliance risk
- risks associated with compliance are those subject to legislative or bureaucratic rules and regulations
Types of financial risks
- financial risks take into account interest rates and if you do international business, foreign exchange rates
- which customers do you extend credit to and for how long?
- what is your debt load?
- does most of your income come from one or two clients who might not be able to pay?
Internal operational risks
- result from internal failures
- unlike a strategic risk or a financial risk, there is no return on operational risks
Examples:
- people or systems fail unexpectedly
- transportation systems breaking down
- supplier failing to deliver goods
Reputational and publicity risks
- may result from product failures, lawsuits or negative publicity
- e.g. social networking (blog posts, bad product reviews…)
Other business risks
- difficult to categorize
- include risks from the environment (e.g. natural disasters)
- difficulties in maintaining a trained staff that has up-to-date skills to operate your business (employee risk management)
- health and safety risks not covered by OSHA or state agencies
- political and economic instability in countries you import from or export to
Tort
- a wrongful act or violation of a right
- can involve many types of injury or harm to the victim of the tort
- governed by civil, not criminal law
Intentional torts:
* when a party knowingly and purposefully causes harm, suffering, or loss to another party
Negligent torts:
* committed unknowingly and without intent to harm
* the defendant neglected a duty of due care, resulting in harm to the plaintiff
Strict liability torts:
* do not require proof of negligence or ill intent
* all that must be proven is that harm or loss was brought upon the victim and the defendant is at fault
Economic utilities
- the total amount of satisfaction that someone experiences when they consume a particular product or service
- helps measure how much fulfillment someone requires in order to satisfy a particular need or want
- the concept of economic utility falls under behavioral economics
- utility doesn’t necessarily have to be measured in numbers—just in perceived value
Form
economic utility
- how much value a consumer receives from a product or service in a way that they actually need
- the incorporation of customer needs and wants into the features and benefits of the products being offered by the company
- the goal is to increase and maximize the perceived value of the products
- e.g. offering lower prices, more convenience, or a wider selection of products
Time
economic utility
- a company provides goods and services when consumers demand or need them
- they adjust their production process, logistical planning of manufacturing and delivery
- when demand increases, the company should respond by producing and delivering more of the product to the market
- e.g. considering the hours and days of the week a company might choose to make its services available
- e.g. 24-hour availability for a product or the company’s customer service department through a phone number or website chat function
Place
economic utility
- making goods or services available in locations that allow consumers to easily access products and services
- making a product available in a wide variety of stores and locations is considered an added value since it is more convenient
- increasing convenience can be a key element in attracting business
Possession
economic utility
- the amount of usefulness or perceived value a consumer derives from owning a specific product and being able to use it as soon as possible
- this is why it’s important for companies to increase the ease of ownership, which boosts the product’s possession utility or perceived value
- consumers should be able to use a specific good or service as soon as they’re able to purchase or obtain it
Channels of Distribution
- a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer
- can include wholesalers, retailers, distributors, and even the internet
- distribution channels are part of the downstream process: “how do we get our product to the consumer?”
- the upstream process (aka supply chain — “who are our suppliers?”)
Direct distribution channel
- allows consumer to make purchases from the manufacturer
- may mean lower costs for consumers because they are buying directly from the manufacturer
Indirect distribution channel
- allows consumer to buy the goods from a wholesaler or retailer
- typical for goods sold in traditional brick-and-mortar stores
Types of distribution channels
- there are three main types of channels, all of which include the combination of a producer, wholesaler, retailer, and end consumer
1. producer > wholesaler > retailer > consumer
2. producer > retailer > consumer
3. producer > consumer
Supply and demand
- as the price increases, supply rises while demand declines
- as the price drops, supply constricts while demand grows
Product’s price elasticity:
- the degree to which changes in price translate into changes in demand and supply
- surplus — when there is enough supply but not enough demand
- shortage — when there is not enough supply but too much demand
Product branding
- the use of a name, term, symbol or design to give a product a unique identity in the marketplace
3 Major strategic options:
1. manufacturer branding vs private labels
2. individual branding vs family brands
3. co-branding
Manufacturer vs private brands
- when a brand identity is clearly linked with the manufacturer of the product (aka national brand)
- marketers usually choose this option when the firm has a strong, positive image
- some products benefit more by being associated with the store where they are sold
- e.g. NoFrills and No Name, Costco and Kirkland
Individual vs family brands
- used by firms with sufficient resources to create a separate identity for each product they offer
- makes the most sense when a company sells items in very different categories
- the use of a unified platform is called family branding
- a single company may launch several family brands to lend a uniform identity to its different product lines
Co-branding strategy
- links two existing brand names to create an identity for a new product
3 Variations of this approach:
1. ingredient branding - one product is integral to another
2. cooperative branding - two or more brands sharing a promotion
3. complementary branding - brands marketed together to suggest the benefits of using both
Premium pricing
- pricing a product at a higher level (even if the product doesn’t cost that much)
- e.g. Gucci, Starbucks
Economy pricing
- pricing things aas low as possible
- gives off a feeling of value and getting money’s worth
- e.g. Dollarama, Walmart
Price skimming
- a new product enters a market, companies can set the price to be higher at first because it is new
- eventually as new competitors enter, they start to compete by lowering prices
Penetration pricing
- new product starts with a lower price, wanting to gain more customers
- clientele becomes more valuable in the future
- prices raise later on
Bundle pricing
- used to sell multiple products together for a lower price than if they were purchased separately
- an effective strategy to move unsold items that are simply taking up space
- creates the perception in the mind of the consumer that he’s getting a very attractive value for his money
Price setting
illegal
- multiple companies come together to set prices
- have control over the whole market of certain products
- a couple of supermarkets agreed on raising the prices of bread and all the customers that shopped at these stores had to pay more (they were eventually sued — Loblaws bread incident)
Discriminatory pricing
illegal
- setting different prices for customers based on demographics
- e.g. Farmer’s market, seller tells you “here’s a $2 apple, oh wait you’re a woman, pay $6 please”
Selling process
Product knowledge:
- how will the customer benefit from product features?
Prospecting:
* searching for new customers (create a profile of existing customers so you can tailor approach tactics)
The approach:
- first impressions
- will either identify you as a bothersome salesperson and cause a prospect’s guard to go up, or it will identify you as an obliging salesperson which something of value to offer
The needs assessment:
- arguably the most important, allows you to determine how you can truly be of service
- to be an effective salesperson, you first have to understand what the prospect’s needs are
- ask lots of questions
The presentation:
- focus on benefits rather than features
- tailor your presentation to your audience and keep it interactive
The close:
- closing is about advancing the sales process to ultimately get an ordr
- closing is also about discovering obstacles
- when mentioning price, don’t be afraid that they are too high, say it with pride
Follow-up:
- making sure you stay in a prospect’s mind, yet still making sure it isn’t considered bothersome, is very important
- follow up should never end
- follow up convos are best handled by the salesperson who started the relationship
Specialization of labor and productivity
- occurs when workers are assigned specific tasks within a production process
- workers will require less training to be an efficient worker
- can lead to an increase in labour productivity and firms will be able to benefit from economies of scale and increased efficiency
Specialization within economies
- the theory of comparative advantage - countries should specialize in producing certain goods they are best at producing where they have a lower opportunity cost
- specialization requires trade
- if there is increased trade, there will also be increased competition
- domestic monopolies will now face competition from abroad
Product positioning
- conveying to your target market the qualities and attributes of your brand that make it superior to competitor offerings
- effective positioning involves communicating a value proposition that the benefits of your product relative to the price are unrivalled
- a key responsibility of a company’s marketing department
Drucket’s 5 functions
role of management
- Set objectives and establish the goals that employees need to reach.
- Organize tasks, coordinate his/her allocation, and arrange the right roles for the right people.
- Motivate and communicate in order to mold staffers into cooperative teams and to convey information continually up, down, and around the organization.
- Establish targets and yardsticks that measure results and clarify outcomes to ensure that the firm is moving in the right direction.
- Develop people through finding, training and nurturing employees, a firm’s primary resource.
10 Essential roles of a manager
- Hire great people
- Performance management
- Team development
- Setting overall direction
- Being an important and supportive team member
- Doing unique work that no one else could or should do
- Manage resources
- Improve processes and quality
- Self-development
- Communicate information
Marketing information
- centers around different companies trying to get information about their products from their target market
- businesses know that if they understand what their customers want…
- it opens the door to expand ideas
- it helps them make more thoughtful ideas
- it helps them understand what their competitors are doing well and not well
- customers don’t go buying products anywhere and anytime unless they are super rich
Internal marketing information
- events that occur within the company
- productions and operations reports make the company more cost and time efficient
- tests based on performance are judged based off of customer satisfaction or sales
External marketing information
- providesfactors outside of the organization
- government reports make different reports using a collection ofdata over time
- commercial data and information services that help make the best decision for how to market a product
Effective marketing information system
- Input
- Storage
- Analysis
- Output
- Decision Making
- a marketing information system is an organized method of collecting, storing, analyzing, andretrieving information to improve the effectiveness and efficiency of marketing decisions
- the information has to be complete, accurate, easy to use, timely, affordable, and cost-effective
Pure risk
- two possibilities: something bad happening or nothing happening
- unlikely any benefit will arise from a pure risk
- predicting the outcomes of a pure risk is sometimes accomplished using the law of large numbers, a priori data, or empirical data
- also known as absolute risk
- is insurable
Speculative risk
- three possible outcomes: something good (gain), something bad (loss), or nothing (staying even)
- not insurable in the traditional insurance market
- there are other means to hedge speculative risk (ie. diversification and derivatives)
- e.g. gambling and investing
Affinity marketing
- two parties involved (the affinity group and the business providing the group with a new product or service)
- establishes client referral policies and procedurea
- negotiate mutually beneficial marketing relationships
- group marketing effort to individual niches
- cross-selling products to existing members
- membership organizations or associations
- nonprofits and charities
- companies that cater to specific demographics
- e.g. airlines, hotels, banks, supermarkets, clothing outlets, gas stations, real estate companies, etc.
Affiliate marketing
- the process by which an affiliate earns a commission for marketing another person’s or company’s products
- the affiliate searches for a product they enjoy and promotes that product and earns a piece of the product from each sale they make
- affiliate shares ad/link on their website or socials
- customer clicks and converts
- conversion is tracked
- affiliate is paid a comission
