Reading Notes

Question 1

New Product Development: Managers Reject Ideas Customers Want

Answer 1

The customers wanted the most creative ideas, the team found, but not the ideas that people in the firm thought would be most profitable or feasible

Question 2

New Product Development: I Think of My Failures as a Gift

Answer 2

We learn more from failure than we do from success

5 fundamental root causes for failure:
- The absence of a winning strategy for the combination
- Not integrating quickly or well
- Expecting synergies that don’t materialize
- Cultures that aren’t compatible
- Leadership that wouldn’t play together in the same sandbox

Question 3

Service Marketing: A Practical Guide to Combining Products and Services

Answer 3

Two underlying characteristics determine how customers will value and use an offering:

Complementarity
Degree to which value to the customer increases when product and service are used together
Ex: iPod and iTunes

Independence
Products and services that are highly independent are usually sold separately

Question 4

Service Marketing: A Practical Guide to Combining Products and Services PART 2?

Answer 4

Hybrid offerings

Question 5

Hybrid offerings: flexible bundle

Answer 5

Best suited to complex products and services that address thorny customer problems

Question 6

Hybrid offerings: Peace-of-Mind Bundle

Answer 6

Appeals to customers looking for the assurance that they are getting a complete, best-of-breed offering
Low complementarity, high independence between product and service is combatted by strong product brand

Question 7

Hybrid offerings: Multibenefit bundle

Answer 7

Product and service are inseparable
High complementarity and dependence
Benefit to the customer comes from offerings added to the basic one

Question 8

Hybrid offerings: One-stop bundle

Answer 8

Customers are attracted by reliability of service and shopping convenience

Question 9

In evaluating options of hybrid offerings, companies should keep in mind 4 rules

Answer 9

Rule 1: Look for points of differentiation in product and service markets
Rule 2: Scope the service and scale the product
Rule 3: Assess the revenue and profit potentials of various hybrids
Rule 4: Invest in the brand

Question 10

Promotion: Creativity in Advertising: When it Works and When it Doesn’t

Answer 10

Creative messages get more attention and bring positive attitudes to the product, but only some influence purchase behavior

Question 11

Promotion: Creativity in Advertising: When it Works and When it Doesn’t
TORRENCE TEST OF CREATIVE THINKING

Answer 11

Fluency: number of relevant ideas proposed in response to a given question
Originality: how uncommon or unique the responses are
Elaboration: amount of detail in a given response
Abstractness: degree to which a slogan or a word moves beyond being a label for something concrete
Resistance to premature closure: measures the ability to consider a variety of factors when processing information

Question 12

Promotion: Creativity in Advertising: When it Works and When it Doesn’t
BUSINESS DEFINITION OF CREATIVITY

Answer 12

Originality: rare or surprising, moves away from the obvious
Flexibility: smoothly links the product to a range of different uses or ideas
Elaboration: extend simple ideas with unexpected and intricate details
Synthesis: blending or connecting normally unrelated objects or ideas
Artistic value: aesthetically appealing verbal, visual, or sound elements

Elaboration most impactful, synthesis least
Companies don’t know this and use originality and artistic value most

Question 13

Ad Placement & Effectiveness: Madison Avenue goes to the movies to keep Oscar viewers from skipping ads

Answer 13

Companies who had ads in the Oscar’s broadcast related them to movies because people watching the Oscars obviously have an interest in movies and want more of the same
Goal is to keep viewer’s attention

Question 14

Ad Placement & Effectiveness: Ads that don’t overstep

Answer 14

Marketers’ access to consumer digital data revolutionized their marketing abilities
But, too much personal data use causes consumer backlash
People are usually okay with sharing info to someone themselves, but third-party sharing makes them uncomfortable
Consumers must feel a sense of trust, control, and justification for why their info is being shared

Question 15

Price: How to stop customers from fixating on price

Answer 15

In mature markets, heavy competition has a commoditizing effect
Commoditization = diminishing differences among offerings
Customers only focus on price when faced with many options
Close link between pricing and customer attention
4 pricing strategies

Question 16

Pricing strategy #1

Answer 16

Use price structure to clarify your advantage
Goodyear prices their tires based on how many miles they’ll last
Norwich Union competes price-wise on the personal relevance to customers for the value it provides

Question 17

Pricing strategy #2

Answer 17

Willfully overprice to stimulate curiosity
Customers feel more passionate about products they spend extra money on because of the luxury benefits
Price range above WTP that makes customers ask “Do I need this benefit?”
KONE, an elevator company, introduced MonoSpace, an expensive elevator, in addition to their competitively priced elevators

Question 18

Pricing strategy #3

Answer 18

Partition prices to highlight overlooked benefits
Breaking a price into its component charges
People chose a more expensive flight when they saw the price partitioned (“itemized”)
Customers see a real benefit they would have otherwise overlooked

Question 19

Pricing strategy #4

Answer 19

Equalize price points to crystallize personal relevance
Uniform pricing for every song on iTunes caused people to buy more music and think about the benefit of iTunes’s huge selection

Question 20

Price: How online shopping makes suckers of us all

Answer 20

Online prices are always toggling
Left-digit bias works well in grocery stores and for smaller purchases
Ex: Overstock sold a cheap patio furniture set to a man for $499
Prices aren’t set anymore– they change frequently
The Boomerang app is meant to manage consumers’ perceptions of an acceptable price

Question 21

Place: Selling on TikTok and Taobao: The growing power of online video platforms

Answer 21

Livestream commerce always has an audience and builds community

Companies using this have 5 main objectives:
Generate immediate sales
Reach new consumer segments
Introduce new products
Educate consumers
Create buzz

Question 22

Ethical Concerns: Marketing in the age of resistance

Answer 22

Consumers want to see authenticity and action from brands in regard to political and social issues

Brands must:
Get outsider perspective to maintain thoughtfulness and sincerity
Listen, process, and validate consumer concerns and feedback
Apologize without excuses
Show action and effort to change after apology

Question 23

Managerial & Consumer Biases: Nudge your customers toward better choices

Answer 23

Defaults simplify decision-making, enhance customer satisfaction, and drive profitable purchases

Question 24

Managerial & Consumer Biases: Nudge your customers toward better choices MASS DEFAULTS

Answer 24

Begign default: company’s best guess

Random default: customers are randomly assigned to one of several default configurations

Hidden options: presented as customer’s only choice because alternative options are hard to find

Question 25

Managerial & Consumer Biases: Nudge your customers toward better choices PERSONALIZED DEFAULTS

Answer 25

Smart defaults: apply to individual customers in a way that is likely to be ideal to them– they use data, so customers can opt-out

Persistent defaults: a customer’s past choices are the best predictors of their future choices– customer preferences can change, so companies should make opting out easy and transparent

Adaptive defaults: they update themselves based on real-time decisions that customers are making

Question 26

Spreading & Sharing Information: Want your ads to go viral? Activate these emotions

Answer 26

The more an experience provokes activating emotions, the more likely people are to share it (BUT people don’t like to share sadness)
In terms of marketing, people feeling good about your brand isn’t enough– you need to fire them up