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86 Cards in this Set
- Front
- Back
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what percent of the economy has shifted to services and why? |
55% in 1970, now 80% of jobs, 75% of GDP, changing demographics (boomers) |
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how can service differentiate you? |
hard for competitors to replicate, gives sustainable competitive advantage |
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what is a "service-centered" view of a company? |
tangible goods are appliances that offer services, things should be aligned to best serve customers, firms can now assist in value creation |
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intangibility, inseparability, variability, perishability |
intangibility - can't actually take in product with senses, i.e. car insurance, brand strength inseparability - services are performed and consumed at the same time, inseparable from providers variability - a service can only be as good as its provider perishability - services cannot be stored for later use |
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first four activities in service profit chain |
-internal service quality, employee satisfaction, employee retention, employee productivity -your employees must be happy if you want to deliver high-quality services |
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staples complimentary services |
staples realized many of their business customers needed copy made, didn't take much floor space for copy centers |
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customer delights |
example: if a customer gets a cookie when he stays at a hotel, he remembers, and even though customers come to expect it, builds brand |
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why should companies do a gap analysis? give examples of gaps. |
divides consumer and marketer perceptions -what do marketers think customers expectations for service are vs. actual customer expecations -actual service quality specs vs. deliver -actual service delivery vs. firm claims |
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service blueprint |
for services, maps out the space between the first customer interaction with the business (ie placing an order) with the actual delivery of the services |
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netflix's service orientation example |
perfectly illustrates intangibility (free trial), inseparability (free trial), variability (eliminated mistakes), and perishability (ensure that online infrastructure could accommodate high viewing periods) |
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service recovery |
ritz-carlton, go above-and-beyond to make sure that if you mess up, you fix it |
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why is cost leadership important? |
companies can compete better if they streamline a particular area, have more flexible pricing strategies |
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how do pricing decisions affect perception of value? |
lower prices may mean customers view product as cheaper or discount, higher may be premium or ripoff |
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penetration pricing strategies |
capture as much of the market share as possible, works if customers are sensitive to price |
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pros and cons of price skimming |
pros: prestige, works will with niche position in markets cons: must almost always be thrown out over time |
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financial teams usually prefer profit maximization and focus on return on investment. why is this bad sometimes? |
the product is strategically vulnerable to competitors if the bottom line is decided first and pricing decisions are strict |
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what is competitor-based pricing? |
looking at competitors marketing practices, should be done alongside other methods |
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prices of "Sprecher Gourmet Soda" |
companies can offer it at higher prices the further you get from its hometown because people perceive it as gourmet, tourists will pay higher prices |
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how are strategies of value pricing implemented? more valid, accurate, fair? |
alongside other strategies, attempt to perceive customer value of product |
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what is product line pricing? |
hotel rooms example, more luxury at a higher price, has to involve measuring perceived additional value vs. additional cost |
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Ritchie Brothers auction style |
try to induce bidding wars between customers, get the customers to inflate the value of the product by competing with other customers rather than increasing the price |
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price bundling and unbundling |
bundling: cable providers, becomes unclear what each product is really worth unbundling: airlines, can reduce revenues |
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captive and two part pricing |
captive: customers buy initial product but need peripherals to use it two part: monthly fee for product + charging for actual service provided |
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prestige pricing |
plays on psychology of perceiving expensive products as good |
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EDLP vs. high/low pricing |
EDLP: reduce promotion, rely on generating buzz about everyday low price high/low pricing: periodic heavy promotional pricing to offset high price periods |
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how are discounts passed on to customers? |
allow customers to get discount for paying earlier, buying more, during certain seasons, etc. |
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why are price changes hard to execute? |
easy for customers to notice, change it just enough where it will not affect demand, price wars destroy margins and bottom lines |
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legal considerations in pricing |
price-fixing, price discrimination (different prices to different customers to reduce competition), deceptive pricing, predatory pricing |
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how do quick-service restaurants use pricing as a weapon? |
can easily shift prices, food is cheap |
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home depot's supply chain and its advantage. |
build omni-line system to assure everything is at the right place at the right time |
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network/virtual organization: what is it and how can it backfire? |
eliminates in-house business functions except ones that add to value, can backfire because business has little control |
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how can channel partners help with distribution? |
co-branding helps both businesses, business can specialize in whatever they're best at in channel |
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how can middlemen help finance, market research, and risk-taking? |
financial: can get financing when company can't market research: closer to end consumers risk-taking: absorb some risk in market |
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how are channels used in the wine industry? |
allow smaller companies to focus on creating product rather than distribution, shelving, etc. |
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disintermediation occurs when adding new e-channels. when do they help? |
allows manufacturers to go over middlemen straight to consumers, helps when websites are efficient and delivery is reliable |
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how do power relationships in channels work? |
- Coercive power: an explicit or implicit threatby the channel captain will invoke negative consequences on a channel member ifit does not comply- Reward power: the motivation of working withlarge, yet sometime coercive, forms- Expert power: Channel members adopt an approachof utilizing their unique competencies to influence others in the channel- Referent power: power that arises from a channelmember being respected or revered- Legitimate power: results from contracts such asfranchise agreements�b |
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what are the logistics rewards of using channels? |
channels allow for logistics cost-sharing, usps and zappos return label example, order processing, warehousing, inventory management, transportation |
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legal issues that could occur with channel partners |
exclusive dealing (Chanel), exclusive territories (limiting retail outlets), tying contracts (tie together things like printers and ink) |
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what value do retailers have in channels? |
offer variety, break up huge quantities of goods, maintain inventory, make additional services available (dressing rooms) |
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advantages and disadvantages of electronic retailing? |
advantages: less profit directed to retailers disadvantages: customers often want to try on items |
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examples of non-store retailing |
catalog retailing goes straight to homes, direct selling goes straight to customer homes, television retailing allows for demonstrating the product |
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why has b2b e-commerce grown faster than b2c? what is a market maker? |
there are dedicated b2b sites (market makers) where buyers and sellers can get together more quickly |
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6 elements of the promotional mix |
advertising: less personal sales promotion: coupons, can boost sales but sometimes affects brand public relations: publicity isn't paid and hard to control personal selling: very personal, expensive direct marketing: mail, e-mails, can annoy customers interactive marketing: grants customer control, website |
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why is having an integrated marketing communication important in promotional decision making process? |
strategic approach to communicating brand to customers, businesses are less depending on mass marketing and can tailor messages to consumers |
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push vs. pull promotional strategies |
push: get the offering into the channel, push it onto users pull: stimulate demand and then push into channel |
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four steps in the AIDA Model |
1. attention, reveal product exists 2. interest, generate media attention 3. desire, make customers want it 4. action, make customers pull the trigger |
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how does the market manager affect promotional strategy? |
identify targets, establish goals, select mix, develop message, select media for use, prepare budget, measure results |
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how does the product life cycle affect promotion decisions? |
introduction: PR and advertising growth: brand comparison, sales promotion, personal, direct/interactive marketing maturity: decrease advertising, sales promo keeps up volume decline: heavy use of direct/interactive to make sure loyal customers stay involved |
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three types of appeals and example of each |
rational: Maytag repairman never has anything to do emotional: Squeeze orange juice brings family together moral: Salvation Army |
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essential elements of Website Presentation |
context, commerce, connections, content, community, customization, communication |
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viral marketing |
encourages people to pass on a marketing message, social media essential |
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guerilla marketing |
water is life example |
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ethical issues behind paid blogging and green-washing |
reducer consumer trust, disinformation intended to fool customers |
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Jungle Jim's and Bass Pro Shop |
huge stores, make shopping fun and interactive |
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future of the shopping mall under new media |
may cease to exist |
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buzz marketing |
generate excitement around product that gets people talking, ie taco bell home run thing |
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what is advertising wear-out? |
customers can become bored with any advertising campaign |
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why is sports marketing so effective in advertising and promotion? |
tons of people watch sports and it instantly generates buzz |
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institutional advertising |
promote an industry, for example cotton |
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approaches to advertising execution |
slice of life, humor, mood, research-based, demonstration, musical, endorsement, lifestyle, fantasy creation, animation or animal |
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4-5 types of advertising media and their pros/cons |
television: multiple senses, but fleeting radio: low cost, lots of competing ads newspapers: highly credible, but nobody reads them online: interactive, but concerns about privacy |
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three types of product advertising |
pioneering, competitive, comparative |
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3-4 types of sales promotion |
product sampling, coupons, loyalty programs, contests, sweepstakes |
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4-5 roles of a public relations department |
generating buzz, managing crises, educating consumers, lobbying government, investor relations |
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what is "brand-jacking?" how did greenpeace use it? |
attacked shell oil via lego, ethical concerns about unrelated brands. |
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how did target use lily pulitzer? |
generated tons of hype, stores were packed, sold a higher-end image of target |
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holiday inn ad agency example |
people doing dumb stuff because they thought they were smart by saving big at Holiday Inn |
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Georgia Aquarium example |
let people swim with whales, generated tons of buzz, was booked full for months |
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what is needs-based selling and when is it effective? |
analyze needs before trying to sell, customize from consumer to consumer, works well in B2B |
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advantages and disadvantages of personal selling |
advantages: personal relationships built disadvantages: expensive |
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key elements of relationship sales according to andre thornton |
long-term, executive contacts, integrity, wide range of contacts, solutions over products |
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best way for relationship sellers to handle objections |
negotiate a win-win solution, build confidence in brand, more time (raise price or benefits) |
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role of a telemarketing center |
inbound: get a good list of prospects outbound: convince to act immediately, keep up ethical standards |
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why is it important to do a transaction cost analysis? |
it's important to know what's better to outsource and keep in-house |
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how do you compensate sales team members? |
salary incentives, commissions, nonfinancial incentives |
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what is a direct marketing campaign and what channels does it use? |
going straight to customers rather than marketing it to large groups, direct mail, telemarketing |
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how does zappos use personal selling in its online business? |
can instantly talk to a rep, will suggest better options if zappo's isn't the best offer |
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nordstrom's personal selling |
make guests feel special and honored with dressing rooms/shoes and handwritten letters |
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kraft nabisco and oreos brand management worldwide |
partner with trusted brands in countries they're moving into |
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what challenges does mcdonald's face in china? |
new legal challenges, less amiable government |
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how must marketing communications adapt in a global expansion plan? |
they now have to look at trends within every country and have a variety of new legal and political barriers |
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issues around one-world price |
exchange rates are a huge problem, sometimes better to base around costs of getting products in stores or demand in certain areas |
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grey market, dumping, currency, tariffs |
grey market - legal, but makes it hard for business to set prices dumping - dumping low cost goods in home market currency and tariffs - make it harder to set prices |
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uber and airbnb example |
have rapidly spread via social media and technology, harder for manufacturing |
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starbucks consistency example |
all stores around the world are near-identical, wherever you go you can feel comfortable in a starbucks |
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how must the team be different in a global company? |
must know customs of different markets, exchange rates, new prices to offer, etc. |
