unit 7: the marketing mix Flashcards
types of products depend on:
effort and frequency put into purchase
convenience products
Widely available and inexpensive, purchased frequently with minimal effort (groceries, toiletries, cleaning products, candy, fast food)
convenience products: for marketers
Easy accessibility, widespread distribution, competitive pricing, and memorable advertising to build brand recognition
shopping products
Less widely available (i.e. selective distribution) and moderately priced, purchased less frequently with moderate effort (comparison, research) (clothing, furniture, appliances)
shopping products: for marketers
effective messaging, product differentiation, positioning
speciality products
Limited availability (i.e. low breadth of distribution) and high price
Purchased rarely, deliberately sought (low comparison)
(luxury items, services of medical/legal specialists, gourmet foods)
speciality products: for marketers
targeted promotion, build brand status
unsought products
Unknown to customers or undesirable to customers
Delay of benefits are common feature
(insurance, fire extinguishers, preplanned funeral services, blood donations)
unsought products: for marketers
extensive promotion (awareness, value, counter negative views)
total product concept
process of developing a product that helps to identify its major benefits
core product
Basic definition of a product, fundamental benefits derived from using the product
actual product
Product that is sold to customers
Point of product differentiation
Includes: brand name, design, features, quality, packaging, labelling
augmented product
Non-tangible, service-related features
Create better customer experience
Example: warranty, delivery and credit, assembly, after-sale service, product support
cost-based pricing
setting prices based on the cost of manufacturing, distributing, and promoting a product
value-based pricing
setting prices based on the customers’ perception of the product’s value
competition-based pricing
setting prices based on the activities of competing organizations
penetration pricing
Set a low initial price on a product, then increase the price overtime
Generates interest in new product
Attracts customers from competitors
Gradual price increase recommended
May not retain customers
skimming
Set the highest initial price that consumers desiring the product are willing to pay, lower the price once demand of these consumers are satisfied
Generates revenue early
Creates perception of high quality
Can encourage entry of competitors
prestige pricing
Product price is set high and remains high
Effective for products intended to be status symbols
Creates perception of high quality
High profits
Potential for limited customer base
odd-even pricing
Set prices a few dollars or cents under a target price
Creates the illusion of a bargain
Promotes impulse and higher-volume purchases
Product may be perceived as being of lower quality
loss leader pricing
Subset of products are priced below cost to stimulate the sales of other profitable goods
Can be short-term (e.g. black friday) or long-term (e.g. kid’s meals)
Attracts customers and increases sales
Can attract “cherry picking” buyers
retailer classification
categorizing retailers on the basis of ownership
independent retailer
Owned by individual, family, partnership
Owners responsible for decision-making (i.e. autonomous decision making)
Few retail locations (typically up to 3)
Higher prices due to lower stock
contractual system (franchise)
Agreement between an individual and a business to operate a retail location
Individual gains access to resources
Business profits from the retail location
Greater independence
corporate chain
Numerous outlets under common ownership
Largely centralized control
Lower prices
Larger inventory
retailing utility
usefulness or value provided by a retailer
place utility
Making products easily accessible to potential customers
Includes: wide product availability, online and in-person purchasing
Convenient locations
possession utility
Increasing ease of owning a product
Includes: numerous payment options, payment plans
form utility
Degree to which product design meets customer needs
Includes: customized products, product alterations, wider selection
time utility
Making products available when customers need them
Includes: extended hours, fast delivery, seasonal items year-round
sales promotion
Provides short-term incentives to generate interest in a product
Example: coupons, contests, rebates, demonstrations, displays, events
Encourages immediate purchase
May result in lower revenue
public relations
Activities meant to build and maintain a positive image for a product, brand, or organization
Includes: press release, press conference, content on website/social media platforms
Reflects a form of earned media
earned media
unpaid content generated about a product, brand, or organization (e.g. news stories, social media reviews, brand mentions)
experimental marketing (aka engagement marketing)
Create an interactive experience between customers and a product/brand
Consumers not viewed as passive message recipients
Can create emotional connection to product/brand (breeds customer loyalty
Taxing on time and resources
advertising
Paid form of media used to communicate to consumers about a product/brand
Includes: billboards, print advertisements, television commercials, radio commercials, online advertisements
Controlled messaging
shock appeals in advertising
Words, images, and/or actions intended to deliberately startle and offend
May contain controversial, disturbing, provocative
Intended to capture attention
sexual appeals in advertising
Words, images, and/or actions intended to deliber a message designed to evoke sexual thoughts, feelings, and/or arousal in a target audience
May be explicit or subtile
May be related or unrelated to a product
Appear to attract consumer attention
Sexual appeals resulted in more negative attitudes toward a brand
pure tangible good
company selling a good with no services accompanying the product (toothpaste, soap, salt)
pure service
market offer consists primarily of a service (doctor’s exam, financial services)
total quality management
an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes
style
describes the appearance of a product
design
goes to the very heart of a product, contributes to a product’s usefulness as well as its looks
brand
name, term, sign, symbol, or design or a combination of these that identities the maker or seller of a product or service
labels
Identify the product or brand
Might also describe several things about the product: who made it, where & when it was made, its contents, how to be used, how to use safely
Might help promote the brand and engage customers
brand equity
the differential effect that knowing the brand name has on customer response to the product and its marketing. Measure of the brand’s ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic or unbranded version of the same product. Negative if consumers react unfavourably.
brand value
the total financial value of a brand
customer equity
the value of customer relationships that the brand creates
Total promotion mix/marketing communications mix
specific blend of advertising, public relations, personal selling, sales promotion, and direct and digital marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships
lovemarks
products or services that “inspire loyalty beyond reason”
personal selling
Personal customer interactions by the firm’s sales force to engage customers, make sales, and build customer relationships
push strategy
involves “pushing” the product through marketing channels to final consumers
lobbying
building and maintaining relationships with legislators and government officials to influence legislation and regulation
product
Good or service, characterized by tangible and intangible attributes, that might satisfy a need or want
tangible attributes
physical characteristics that are discernible by the senses (colour, taste, smell)
intangible attributes
symbolic or subjective characteristics (stylish, reliable, comfortable)
plassman 2008 experiment: wine glasses
When consuming glass 2 (more expensive wine):
Higher ratings of enjoyment
Greater activity in regions of brain association with please
Price capable of changing people’s experiences with a product
dahl 2003 - shock appeal advertising experiment
Role of shock appeals in the promotion of health behaviour
Write down descriptions of posters you remembered seeing
Identify which poster captured your attention the most
Indicate which posters you saw from a list of options
shock advertisements are more likely to capture attention and be remembered compared to non-shocking ads
wirtz (2017) - sexual appeal in advertising
Over 17 000 participants from 78 studies
Sexual appeals had no significant effect on:
Brand recognition
Brand recall
Intention to purchase
service
an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in ownership of anything (banking, airline travel, retail, wireless communication, home-repair services, hotel)
consumer products
products and services bought by final consumers for personal consumption (include convenience, shopping, specialty, and unsought products)
brandasset
levels of product and services
- core customer value - what is the buyer really buying?
- actual product
- augmented product
brand positioning
position based off product attributes on the most basic level, benefits, and the most strongest brands go beyond both and position on strong beliefs and values
store brand (private brand)
a brand created and owned by a reseller of a product or service (loblaws - presidents choice, amazon - amazonbasics)
co-branding
using the established brand names of two different companies on the same product
Brandasset valuator measures brand stretch along four consumer perception dimensions:
Differentiation (what makes the brand stand out)
Relevance (how consumers feel it meets their needs)
Knowledge (how much consumers know about brand)
Esteem (how highly consumers regard and respect the brand)
4 sponsorship options for manufacturers
- launch product as a national brand (brands sell output under their own names, kellogs frosted flakes, samsung galaxy tablet)
- sell to resellers who give the product a private brand/store brand
- market licenses brands
- co-brand
direct and digital marketing
Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships - email, catalogues, social media
press relations or press agency
creating and placing newsworthy information in the news media
product and brand publicity
publicizing specific products and brands
public affairs
building and maintaining national or local community relationships
