You are on page 1of 11

FAR EASTERN UNIVERSITY

Institute of Accounts, Business and Finance

Chapter 5 Consumer Insight

Consumer Insight - is perceived meanings of data collected from the study of consumer
behavior.

Marketing Research - is the acquisition and analysis of information used to identify and define
marketing opportunities that connect consumers to marketers.

The Market Research Process:

Types of Research Data:

Primary data Information that is collected to address a current research question.


Secondary data Information that has previously been collected for another purpose.

Research Design Categories:

Exploratory research is used to identify new areas for study and is useful in narrowing broad
research questions into smaller areas for future research.
Descriptive research is used to describe marketing variables such as who, what, when, etc.
Explanatory research seeks to understand the relationship between independent and
dependent variables. Experiments are often used in this type of research design.

Research Types:

Qualitative researches are those techniques which gain information by observing people and
can be used in concert with quantitative research. Qualitative research includes focus groups,
interviews, and ethnographic studies.
Quantitative researches include surveys etc.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Measurement is the process of quantifying how much one variables set of features are possessed in
another variable.

The sampling procedure involves selecting a subset of the population where all members either have an
equal chance of being selected (probability sampling) or they do not have an equal chance of being
selected (non-probability sampling).

A Marketing Information System is a series of steps that include collection, analysis, and presentation of
information for use in making marketing decisions.

This information gives a picture of the effectiveness of marketing decisions such as pricing, promotion,
etc.:

Market intelligence systems is the means to gather, process, and analyze market information in
a way that gives managers the ability to quickly make sense of the data efficiently and
effectively. They key here is to identify the major areas that need to be monitored, which may
include customer order trends and competitor actions.
A marketing decision-support system is the software used to connect marketing activities to
the companys databases. This system provides the critical data that allows a manager to
analyze and model different scenarios or what if statements.
The marketing research system is the collection of all the information conducted through
marketing research; the information is more specific than the market intelligence system.

Chapter 9 The brand

A Brand is a promise to deliver specific benefits associated with products or services to consumers.

Brands provide benefits to both the manufacturer and the consumer.


FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

These are the differences between a product and a brand.

The benefits that companies gain from branding are numerous:

Brand Equity is the power of a brand, through creation of a distinct image, to influence customer
behavior.

Channel switching Strong brand equity that allows a company to move into new channels.
Brand stretching Allows for new products to be introduced under an existing brand name.
Because of strong brand equity (based on consumer trust), Johnson & Johnson has been able to
continually introduce new baby products into the market under the Johnsons Baby brand
name.
Brand alliances Partnering with other companies through co-branding (KFC and Taco Bell
sharing site locations), licensing, or cross marketing (companies that agree to promote each
others products).
Relationship building Allows for a faster and closer connection to the customer and to
distribution partners.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Supplier advantages Strong products attract the attention of suppliers because they know
that these products will sell in the marketplace. As such, suppliers are often willing to extend
more favorable pricing and other considerations to secure a relationship.

Strong Brand occupies a distinct position in consumers minds based on relevant benefits and creates
an emotional connection between businesses and consumers.

Brand positioning the location that a brand occupies in the marketplace relative to competitors

Hierarchy of three levels

Attributes are the basic elements of the product smells, tastes, textures, ingredients, etc.
Benefits focus on what the attributes provide the consumer through the purchase and use of
the product. These include elements such as security, quality, performance, convenience, and
value.
Values are what create emotional connections with consumers; values develop brand loyalty,
commitment, and strong consumer equity.

If youre going to CREATE brand name, you MUST consider these FACTORS:

Brand Management is the overall coordination of a brands equities to create long-term brand
growth through overseeing marketing mix strategies.

In Managing Brands you MUST FOCUS on:


FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Brand Protection:

Genericized Term used to describe what happens when a brand name becomes so well recognized
that the names become the product category name.

*** YOUR QUIZ is UNTIL HERE***

For your advance reading heres the last chapters and Might be in your FINAL examination

Chapter 12 Product and Service Strategies

Products are items consumed for personal or business use.

Services are activities that deliver benefits to consumers or businesses.

Distinctions of a Service:

Intangible A service that cannot be perceived through the five senses.


Inseparable The service and the service provider are one and the same.
Perishable A service that cannot be stored for later use. An example can be an airline once a
plane departs, an empty seat cannot be saved and sold for a later flight.
Variability Differences exist in the quality of the service being provided. This is true not only
for differences between service providers, but also among the same service providers. Each time
a service is performed, it is different from the previous performance (and will be for all future
performances).

Levels of Product:

Core benefits are the fundamental benefits that the customer is buying. For the purchase of an
automobile, the core benefit is transportation.
Actual product is a combination of the tangible and intangible attributes that deliver the core
benefit.
Augmented products are the additional services or benefits that enhance product ownership.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

New Product Development:

Idea generation Dream up the idea for a new product or service.


Idea screening Review the ideas and discard the bad ideas in an attempt to find the best ones
to advance to the next stage.
Concept development In this stage, the concept is becoming more focused as the features and
benefits of the product idea are being outlined.
Business analysis Outline of the sales and profit objectives to see if the new product will meet
set goals.
Concept testing Develop prototypes of the product and test them with market research.
Commercialization Launch the new product into the market.

Types of New Products:

Cosmetic, or incremental changes, are minor enhancements or upgrades to an existing product.


Context, or new direction changes, are taking existing products or concepts and repackaging
them in a new way.
Concept, or breakthrough changes, are new to the world products that alter everything.

Product Portfolio is the collection of all products and services offered by a company.

Product Life Cycle is a model describing the evolution of a products sales and profit throughout its
lifetime.

Introduction stage, sales volume for the entire category is low. Models introduced during this
stage have limited features and often perform worse than existing (substitute) products. Think
of electric or hybrid cars. Electric cars have limited range as compared to cars that are powered
by gasoline. Few retailers or distributors carry the product. The goal for the marketer is to
generate awareness of the product category first, and then build awareness of their particular
brand. In many cases, multiple companies competing in the category will work together to build
awareness.
Growth stage, managers are seeking to retain existing buyers, as additional competitors are
entering the market. Changes are made to specific products and seek to enhance brand image.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

While profits are beginning to become tangible, competitive pricing is also becoming a factor,
due to competitive pressures. These pressures are coming from the existing brands, which have
not yet gained a sufficient spot in the market (and will soon be exiting the market).
Maturity stage, managers are trying to maximize sales by trying to find new buyers. This is done
by making improvements to the product and finding ways to increase product usage.
Decline stage, sales volume is decreasing, profits have disappeared, and companies are reducing
expenses for the product. Products can be stripped down to the basic elements by eliminating
the bells and whistles. Managers have several options during the decline stage they can either
harvest profits by cutting all marketing expenses, modify the product in hopes of restarting
growth (think Arm & Hammer Baking Soda), or eliminate the product completely.

Chapter 13 - Pricing Strategies

Price is the exchange value of a product or service in the marketplace.

Value = Benefits Costs

Market Structure:

Monopoly A single firm has the power to set and control price in a market. Drug
manufacturers, due to patent protections, are examples.
Oligopoly Several firms share the price power by being able to control supply.
Monopolistic A limited number of firms compete and prices are dictated through customer
demand for specific brands. Car manufacturers are examples.
Pure Competition When numerous producers sell undifferentiated products.

Pricing Practices are considerations (such as legal requirements or bidding practices) that must be taken
into account when establishing a price for a product or service.

Pricing Practices:

Legal requirements entail the role that governmental regulations play in setting prices
Competitive bidding relates to the acquisition of goods/services in the B2B environment.
Managers must understand the implications of various factors when pricing for global markets.
Factors to be considered include quotas (limits on the amount of specific foreign products that
are allowed into a country), tariffs (duties or fees imposed by countries to ensure price parity
with local producers), and currency exchange rates (which can fluctuate overnight, turning small
profit into a loss).

Pricing Strategy identifies what a business will charge for its products or services.

Pricing Objectives:

Profitability Setting the price to meet a specific profit target.


FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Volume If a company can reduce its cost through achieving economies of scale and/or the
experience curve, they may opt to price its products low in order to generate significant volume
Meeting competition Allows a company to position its product close to a competitor, if price is
a key differentiator.
Prestige Many brands enjoy perceptions of high quality or luxury. Since price is often used by
buyers as a proxy for quality, high prices can help maintain the desired image.

Pricing Strategy:

New Product Pricing:

Price skimming is where a products price is set high upon its introduction and lowered over
time.
Penetration pricing is pricing a product low to gain market share quickly.

Storefront pricing is when prices are set based on brick-and-mortar sales.

Online pricing refers to the setting of prices based on the cost structure of an Internet retailer

Tiered pricing is the practice of offering different products at different price points to appeal to a wider
market audience.

Dynamic pricing is where prices are charged based on various elements including market conditions,
cost to serve differences, or is based on the value of the customer.

Forward auction is where a buyer announces a desire to purchase a certain product and a merchant
responds with the price he or she is willing to sell the product for.

Reverse auctions are similar to forward auctions except that the buyer also states the price they are
willing to pay.

Price Adjustment Strategies:

Cash discount Receiving a discount for paying with cash (due to the expense associated with
credit card payments).
Quantity discount Buying more and paying less.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Trade-in Receiving a cash value for trading in an old item for a new purchase. Applies to more
than just automobiles.
Rebate Cash payment made to a buyer for purchasing a product.

Chapter 16 - Advertising and Sales Promotion Strategies

Marketing communications are the messages sent from organizations to members of a target market in
order to influence how they think, feel, and act toward a brand or market offering.

Marketing Communication Tools:

Marketing Communication Process:

Communication Objectives:

Communication objectives are the goals that a company or brand seeks to achieve through its
promotional activities.

Need recognition Helps a consumer recognize a particular need that they may have; it also
helps a consumer recognize that a featured product can satisfy them.
Build awareness Buyers must first become aware of a product before they can consider
buying the product.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Reinforce decision Many ads are geared toward making buyers, who have already purchased a
product, feel positive about the brand.
Value persuasion Influences consumer attitude toward the brands competitive superiority in
satisfying needs.
Stimulate action Drives the consumer to take the next step in the buying process, such as
forming intentions or placing an order.
Brand reminder Used to strengthen a consumers thoughts on the brands value and
encourage repeat purchasing.

Advertising is the paid, nonpersonal communication of a marketing message by an identified sponsor


through mass media.

Pros and Cons of Advertising:

Developing an Advertising Plan:

Advertising Objectives:

Informative advertising is used to provide consumers with information on the product or


service, as well as build awareness and initial demand of a new product.
Persuasive advertising is used to develop brand preference, and is also effective at increasing
customer loyalty.
Reminder advertising to maintain brand awareness and remind consumers to buy.
FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Creative strategy is how the message will be encoded to deliver information to the target market about
the benefits of the brand.

Sales Promotion is marketer-controlled communication to stimulate immediate audience response by


enhancing the value of an offering for a limited time.

Trade Sales Promotions:

Trade shows showcase products to large groups of buyers in a central location.


Trade allowances reward retailers and wholesalers with discounts of payments for promoting a
product to consumers.
Co-operative advertising allowances pay part or all of the cost for wholesalers and retailers to
conduct local advertising (Kelloggs advertising its cereals in a local grocery store ad is an
example).
Sales contests reward salespeople for meeting or exceeding sales goals. Some manufacturers
pay what is known as a spiff, to the salesperson of a retailer, for selling one of its products.
Training can also be used as a promotion tool by improving the knowledge and sales skills of
members of a trade (including training a retailers sales team).

Public Relations is two-way communication designed to improve mutual understanding and positively
influence relationships between the marketer and its internal and external publics.

Public relations is used to target audiences that are both inside and outside the company (stakeholders),
including customers, the government, industry, community, etc. The objectives for PR are as follows:

Gauge public opinion about how the public feel about a brand or company.
Establish a dialogue with the various stakeholders.
Enhance company image.
Build or rebuild trust
Help the companys ongoing marketing efforts.

Corporate PR is used to shape public opinion of the company as a whole, rather than a specific brand.

Thank you so much for a wonderful sem. This section will always be in my heart FOREVER

Good Luck and PUT GOD first in every decision you will make. God Bless always!

-Paul Hernandez