Lesson 10- existing products

 Product- a good, service, idea, consisting of a bundle of tangible and intangible attributes that
satisfy consumers, and is received is exchange for money or some other unit of value
 Life of a company depends on how it conceives, produces, and markets new products
 Products:
o physical goods -shoes food
o services- doctors ziplines
o Ideas
o People
o Places- vacation
 Products- include tangible and intangible offerings to the consumer, and it can also include
experiences that are unique to the specific product or service.
 Product-see silde 8 pg 4 how managers, customers, and society sees products
 Core product- (not the tangible physical product) actual benefits received by consumer – a
customer buys holes not drills-basic function of the product-anyone can design to do core
functions – coffee->keeps me awake
 Actual Product- the quality level, features, design, packaging, and brand name of the product-
cadillac is a high quality automobile with the latest in options and styling (Marketing begins
here)
 Augmented Product- delivery, credit, warranty, and after-sale service associated with the
product – Hyundai has excellent warranties- Develops relationships with customers non-physical
aspects of a product- involve instructional support for assembly or use of product (Ikea)
 Desired Product- the product consumers really want- great tasting desserts that possess no
calories, fat, or sugar
 Summary-
o The core product is what the consumer needs from the product
o The actual product delivers the core product to the consumer
o The augmented product differentiates the product
o The desired product is what the consumer ideally wants
o Marketing research tells marketers how to develop actual and augmented features intp
products desired by customers
 Product layers slide 17 page 9
 Application Ipad example on page 9-10
 Consumer products- B2C- Business to consumer- product designed to satisfy individual needs –
typically one individual makes purchase decisions on a repetitive basis-expenditures are
relatively low for each individual transaction
o Convenience product- buy frequently, immediate purchase, little comparison or buying
effort by the consumer, lower priced
o Shopping product- less frequent purchases, consumers compare products and services
based on quality, price, style, suitability, higher price but not extremely high
o Specialty product- unique characteristics or branding, low comparison to other brands,
buyer is willing to make special purchase effort to obtain the product or service,
typically higher priced
 o Unsought product- consumer does not know about product or service or does not
consider buying until they know about the product or service, prices vary
 Industrial products- Business to business- products sold by one business to another to serve
organizational needs – elevator company buying steel from steel company- includes
installations, accessories, raw materials, tools, components, and supplies
 Product line- a group of products that are closely related- PG: Laundry detergents
o satisfy a class of needs
o are used together
o are sold to the same consumer group
o are distributed through the same type of outlets
o fall within a given price range
 Product Mix- the number of product lines offered by a company- P&G: household cleaners,
dental products, and laundry detergent
 The product mix reflects the breadth and depth of the company’s product lines (slide 25 pg 13)
 Depth of the product line- more depth means the firm carries a large assortment of items within
that line
 Breadth of product line- refers to the variety of different items a firm carries
 Four questions to building f=great products
o What is the product’s competitive advantage? Why would customers buy this product
versus another?
o Is this product’s CA something that the target segment is seeking?
o Is the CA sustainable?
o Will customers pay a price that matches the value of the product with the CA?
 Good, better, best approach: perceived competitive advantage
 Good products can weaken brand value, better products- if firms don’t position products in a
distinct way, consumers may get confused and get a wrong product to solve problems
 What should marketing consider? Product attributes- branding-packaging-labeling and logos-
product support services – The focus is to create core customer value
 Branding, packaging, labeling and logos, product support services available on slide 37 page 19

Lesson 11 Brands

 Products- tangible, easily copied, becomes irrelevant, a transaction

 Brands- intangible: lives in consumer’s mind, unique, timeless, a relationship
 Brand- everything a product or service means to a consumer. Brands are valuable assets to
companies. A brand can include name, symbol, distinctive benefits, experience, that
differentiate products and services from competitive offerings
 The whole purpose of branding is to differentiate your product within the market place.
 Important to consumer- help consumers identify the products that might benefit them, a sign
for quality and consistency ad facilitate purchases-- brands are risk reduction vehicles
 Important to companies- easier to establish customer relationships and loyalty, provide legal
protection for unique product features, and they are also reduce vulnerability to price
competitors, brands help the seller to segment the market
 Trademark- a brand that has been given legally protected status exclusive to the owner
 Revenue Premium- slide 15 page 8
 Brand equity- the added value to the firm, the channel, or the consumer with which a brand
endows a product
 Brand with high brand equity have a high degree of preference and insistence
 Brand equity can be measure at three levels: consumer mindset- product market- financial
market
 Brand loyalty- high brand equity allows marketers to drive buyers toward brand loyalty
 Brand recognition- the start of brand loyalty- some knowledge of the brand
 Brand preference- stage where consumer will prefer one brand over another, but will not
demand that brand everytime
 Brand insistence- stage where no alternatives will suffice- fe reach this stage- every marketers
dream
 Brand Development Strategies
o Line extensions- existing product category, existing brand name
o Brand extensions- new product category, same brand name
o Multi-brands- new brand name, existing product category
o New Brands- new product category, new brand name
 Product line extensions- PLEs-new products in the same product category – successful products
closely resemble existing products- doritos offers many flavors- enhance firm growth- more
optimal uses of company resources
 Cannibalization- the theft of sales from existing products by the new PLE
 Brand extensions – new products in different product categories that often carry the same
brand name
o Pros- the new product benefits instantly from existing brand, the brand name is
recognized by more customers, faster market penetration/adoption
o Cons- lack of fit with the primary category may doom the extension brand, if not done
well, the new product may hurt sales of the existing brand as well.
 Successful brand extensions- customers can easily link the brand extension to the core brand, fit
between product category of brand extension and core brand, consistent with brand image
 Unsuccessful brand extensions- the consumer can’t link the brand extensions to the core
brand(at least not easily), inconsistent with brand image ----- Possibly bridge extensions
 Co-branding – the practice of marketing two or more brands together, on the same package,
promotion, or store—Puma ferarri shoes
 Private label – store brand- a product manufacture or packaged for sale under the name of the
retailer rather than that of the manufacturer.
o Generic private labels- S: Cheapest-undifferentiated, O: provide customer with a low
price option
o Copycat brands: S: me-too at a cheaper price O: Increase negotiating power against
manufacturer and increase retailer share of category profits
o Premium store brands: S: value added, O: Provide added value products, differentiate
store, increase category sales, and enhance margins
o Value Innovators- S: Best performance-price ratios, O: Provide the best value, build
customer loyalty to store, and generate word of mouth
Lesson 12 – New Products

 New Product- Firm: anything different from previous products. Customer: a product’s newness
is defined by the degree of consumer learning required to use the product properly
 Continuous Innovation
o Requires no new learning by customers
o New flavors, packaging, and colors
o Marketers: Build customer awareness using the same distribution channels
o Least potential return on investment
o Most common—lowest risks, little change, easier to innovate, lowest cost
 Dramatically continuous innovation
o Disrupts customer’s routine but little new learning required
o Electric toothbrushes, dvds
o Marketers: Promote points of difference between old and new
 Discontinuous innovation
o Requires new learning and consumption patterns by customers
o Airplane, car, tv, gps, smart phones
o Marketers: educate customers using promotion, personal selling, and trial
o Greatest potential for return on investment
o Greatest risk
 New Products are important to firms because : more sales/revenues, higher prices for new
products, build competitive advantages, build employee morale
 Why new products fail:
o Lack of competitive advantage
o Don’t understand customer’s needs—mismatch between new products and customer
needs
o Too little market attractiveness
o Poor execution of marketing mix
o Competitors actions/ reactions
 New Product development stages
 Stage 1 – Idea Generation
o Internal sources; common sources are research and development
o External sources; common sources are distributors, suppliers, competition, customers,
etc
o Many good ideas come from consumers needs and pains
o Unfortunately the starting point for most research into solving consumer problems is
wrong
o Typical questions in Voice of customer research—the gold standard in marketing
research include : How would you improve this product , what features would you like
added or subtracted from your present solution, why is your present solution making
you unhappy??
o They all focus on existing products and are product centered rather than customer need
focused
 Stage 2 – Idea screening
o RWW screening framework; R: Is it real? W: can we win? W: is it worth anything?
o Screening—separate ideas that have merit from those that do not – most products do
not pass this step.
o Sophisticated firms use complex tools to screen projects, examining expected financials,
competitive reactions, ability to manage the new product over time,, Economic
Screening
o Screening is the first idea reducing stage
 Stage 2&3 Concept Development and testing
o Take the product idea and develop a detailed concept in concumer terms, then test the
concepts with consumers
o The measurement of consumer attitudes and perceptions relevant to the product. Focus
groups are given a description of the product and their attitudes and perceptions are
assessed
o More detailed version of the idea stated in meaningful consumer terms
o Slide 20 page 10 – As the time and money spent in predevelopment stages increase, the
probability of new product success increases.
 Stage 4 – Rough Marketing Strategy
o The initial marketing strategy on how to bring the new product to market based on the
product concept. Should include at a minimum target market, value perception,market
goals, and marketing mix
o The strategy describes
o Target market- who is most likely to buy the product/service
o Price, distribution, promotion and the marketing budget
o Planned sales and profit figures are announced and marketing mix strategy is illustrated
 Stage 5 Business analysis
o A review of the sales, cost, and profit perceptions for a new product to find out whether
these factors satisfy the company’s objectives
 Stage 6--- Product development
o Turning the product concept into an actual product
o A physical product now exists and results can be analyzed by the company
o In this stage, tests, revisions, and refinements occur before the product is actually test
marketed.
 Stage 7 -- test marketing
o The product is tested in realistic market settings
o The process of selecting a specific geographical area considered to be generalizable to
the product’s overall target market
o Marketers monitor this stage closely
o The idea of a test market is to have consumers evaluate and buy without knowing they
are participating in a test market. During the test market, sales are monitored so the
company can estimate the product’s performance in a full-scale introduction
o Companies who skip the test market stage run a huge risk of product failure
 o Draw backs—test marketing is expensive ,, test marketing is fallible since competitors
can often disrupt the test market by unusual actions like suddenly lowering prices and
increasing advertising,, test marketing is risky because it can give competitors
information about the new product or offer a better product.
 Step 8—Commercialization
o The product is introduced into the market
o Most expensive step in the process
o Steps 1-7 take care of the missing p – product. Many practical decisions must be made
including decisions about which distribution channels to use, promotion, pricing, hiring
new salespeople, or training old salespeople.
o This stage requires tremendous financial resources and extensive coordination of all
aspects of the marketing mix
 New Product portfolio management – a dynamic process whereby a business’ list of active new
product( and R&D) projects is constantly updated and revised. In this process, new projects are
evaluated, selected and prioritized; existing product may be accelerated, killed, or deprioritized;
and resources are allocated and reallocated to the active projects.
 Value Maximization—allocate resources in a way that maximizes the value of the portfolio in
terms of some company objective, example, financial terms
 Strategic alignment—Ensure that , regardless of all other considerations, the final portfolio of
projects is strategically aligned and truly reflects the business’ strategy – that the breakdown of
spending across projects, areas, markets, and so on is directly tied to business strategy
 Optimal balance—the principal concern is to achieve the desired balance of projects in terms of
a number of parameters
 The product life cycle describes the stages a new product goes through in the marketplace;
Introduction, growth, maturity , and decline,, slide 37 page 17
o Based on : the product have limited lives 2. Product sales pass through distinct stages
each with different marketing implications 3. Profits from a product vary at different
stages in the life cycle 4. Products require different life cycle stages

Lesson 13 – Advertising

 Promotion- is the process of communicating product and service information to target

customers and other stakeholders of the firm
 Promotion Mix- th combination of tools firms use to communicate with customers : advertising,
sales promotion, personal selling, direct marketing
 The hierarchy of effect model shows desired outcome
o Inform customers about a product- build awareness, increase knowledge
o Persuade them to buy- awareness without purchase is poor business
o Build repurchase rates- create loyal customers
 Advertising: any form of non personal presentation and promotion of ideas, goods, or services
by an identified sponsor
 Objectives of advertising Slide 15 page 8
 Types of advertising
o Product/service- objective is to increase purchases
 o Institutional- objective is to highlight the organization or to increase overall demand
 Advantages of Institutional advertising : building overall demand or product category level
 Disadvantages – doesn’t help specific
 Reminder Advertising
o Reinforce purchasing behavior
 Advocacy Advertising
o Communicates a marketer’s position on an issue “don’t drink and drive”
 Comparative advertising
o Creating a differential advantage by comparing a product with a competitor
o A type of advertising where a particular brand explicitly or implicitly mentions a
competitor’s brand name in order to show that the competitor is inferior to that brand
o Used for smaller brands to target market share leaders
 Advertising execution styles
o Slice of life- typical people using products or services in typical ways
o Lifestyle- How a product fits in with a particular lifestyle
o Fantasy- creates a fantasy around the product or its use
o Mood or image- Examples: beauty, love intrigue, serenity
o Musical- Music or singing about the product or music in advertising
o Personality symbol- a character associated with the product or service
o Technical Expertise- Shows a company’s expertise in making the product
o Scientific evidence- shows that the brand is better than another brand based on
scientific evidence
o Testimonial or endorsement- highly believable or likeable source endorses product

Lesson 14 – Advertising continued

 Good Ad Cpy : Ad copy are the words, phrases, pictures, messages, and themes contained in an
ad. What are the characteristics of good ad copy
 SCAB
o Stopping power—attract attention
o Clarity pf message
o Attitudes/beliefs modification
o Behavior change
 Good Ad Copy Includes;
o Unique selling proposition
o USO is a tagline for a product or service that highlights its differentiating benefits
relative to the competition : should be meaningful, believable, and distinctive
 Copywriter- person who writes advertising ; a salesperson that writes, the copywriter writes
with the intention to sell a product, idea, or service through advertising
 AIDA- copy formulas motivate the buyer and are used more for informative or persuasive
advertising, not typically for reminder/relationship building advertising
o A- Attention: get the reader’s attention
o I- Interests: create interest in the product or service
o D- Desire: create a strong desire for the product
 o A-Action: take an action to make the sale
 ACCA- also well known but under aida
o A-Awareness: make the customer aware that the product exists
o C- Comprehension: an understanding of what the product is or does for the consume r
o C- Conviction: consumer is convinced to buy the product
o A- Action: Consumer makes the purchase
 Selecting advertising media – determining the reach, frequency, impact, and engagement
o Reach: the measure of percentage of people in thetarget market who are exposed to an
ad campaign during a given period of time
o Frequency: a measure of how many times the average person in the target market is
exposed to a message
o Impact: the qualitative value of message exposure through a given medium
 Outdoor advertising—slide 31 page 16
 Internet advertising: paid search, display banner ads, classified ads, and video
o Could be interactive
o Rich media: drop down menus, built in games, search engines to engage viewers
o Reach younger consumers
o Cheaper: banner ads, diditized video clips, flash tech
o Targeted, measurable, interactive
o Where consumers socialize: social media
o Mobile marketing: promotional campaign, transactional campaign, onboarding
campaign, opt-in priming campaign, dynamic content campaign, Activity campaigns
 Preventing click fraud
o Click rates: the effectiveness of online advertising
o Click fraud: deceptive clicking of ads solely to increase the amount of advertisers must
pay
 Pros and cons table of media alternatives—dlide 42 page 21
 Media Scheduling
o Buyer turnover: how often new buyers enter the market to buy the product(high
turnover means high advertising frequency)
o Purchase frequency: higher purchase frequency means less repetition is requires, cars
more frequent, milk less frequent
o Forgetting rate- speed with which buyers forget the brand if advertising is not seen
 Types of media scheduling
o Continuous schedule: maintain a steady stream of advertising throughout the year
(breakfast cereal)
o Flighting (intermediate schedule): periods of advertising scheduled between periods of
no advertising ( seasonal demand)
o Pulse (burst) schedule: Flighting and continuous schedules combined to deal with
demand spikes; due to increases in demand, heavy periods of promotion, or
introduction of a new product
 Executing( the pretest)
 o Portfolio tests- the test ad is placed in a portfolio and tested against other ads and
stories
o Jury tests- consumers are asked to rate how they liked it, how much it drew their
attention, and how attractive they thought it was for single as of interest
o Theater test- consumers are invited to view new television shows or movies in which
test commercials are also shown
 Advertising effectiveness:
o The add must attract positive attention to the brand
o The ad must have a clear message
o The ad must lead to support for, or modification of, core beliefs and attitudes
o The add must support and incent positive behavior toward the brand
 Measuring advertising effectiveness
o Recall- ask people about the ad and prompt them about different parts of the ad and
where they saw the ad
o Attitude- measure whether people’s attitudes have changed after seeing the ad
o Sales- see how advertising affects the actual sales
 Major advertising decisions- slide 49 page 25

Lesson 15 – Sales Promotion

 Sales promotion: programs designed to build interest in or encourage purchases of a product

during a specified time period
o Tends to focus on short-term objectives such as an immediate boost in sales
 PRIMARY OBJECTIVES
o Build awareness for the promoted product
o Provide information about the product
o Present an economic incentive to buyer to purchase product
o Create an invitation to invitation
o One of the most important main objectives of sales promotion is to create an immediate
sale
 Consumer Promotion
o Sales promotion mix: the combination of tools firms use to complement the firms
advertising mix
o A contest calls for consumers to submit an entry to be judged by a panel that will select
the best entries
o A sweepstakes calls for consumers to submit their names for a drawing (advantages and
Disadvantages on slide 11 page six
o Money offs: an agreement between a business and customer in which the customer can
buy something for less than the usual price
o A rebate is an amount paid by way of reduction, return, or refund on what has already
been paid or contributed
o Sales promotions that usually offer a discounted price or rebate to the consumer to
encourage trail (advantages and disadvantages on slide 13 page 7)
 o Loyalty program: a rewards program offered by a company to customers who frequently
make purchases. A loyalty program may give a customer free merchandise, regards,
coupons, or even advanced released products
o A 5% improvement in customer loyalty results in a 25-85% improvement in profits
(advantages and disadvantages slide 17 page 9)
o Samples- the offering of a product free or at a greatly reduce price
o Point of purchase – located in high-traffic areas, near the cash register, or the end of an
aisle (ads and disads slide 20 page 10(
o Coupons- sales promotions that usually offer a discount price to the consumer to
encourage trial (ads and disads on slide 23 page 12 )
o Event marketing- creating a brand-marketing event or serving as a sole or participating
sponsor of events created by others (ads and disads on slide 26 page 13)
o Advertising focuses on informing about the product—sales promotion focuses on selling
the product
o Temporary price reductions: increase sales substantially; typically with a much greater
response than adveritising
o High-market share brands are less promotion-elastic than low-share brands : it is more
difficult for big brands to further increase market share than small brands. Market
saturation
o Heavily promoted products lower brand image and equity because the price becomes
the focus rather than the quality. Consumers begin to think of the brand in terms of
discounts and lower prices
o In store displays and feature advertising in retail are effective because they capture
consumer’s attention and think they are special. Help with immediate purchase
decisions
o Promotions cannibalize sales of competing brands and stimulate sales of
complementary brands

Lesson 16 – Personal selling

 Personal selling : personal representations by the firm’s sales force for the purpose of making
sales and building customer relationships: Today, sales is consultative and about mutually
beneficial solutions
 Transactional selling – focuses on pushing a one time sale, does more pushing than listening,
emphasizes adding new customers
 Relationship selling – (personal selling) focuses on learning about needs, does more listening
than selling, emphasizes building long term relationship through credibility, trust, and
responsiveness
 Creating value for customers
o Identify creative solutions to customer problems
o Ease the customer buying process
o Follow-up after the sale is made
 Order takers process routine orders or reorders for products already sold
 o Outside order takers visit customers, arrange displays, and replace inventory stocks of
resellers
o Inside order takers – take care of customers who call or visit their firm directly(check out
register)
o Order takers do very little listening
o They often represent products that are highly standardized
 Order Getters (Sales Representatives)
o Identify prospective customers
o Persuade customers to buy products
o Close sales
o follow up on customers after sales
o Typically work with complex b2b products with complex customers
o Order Getters are very expensive
o Make personal sales calls – much autonomy in the job
o Do little cold calling as they are often existing customers
o Are costly to the firm
o Enjoy high salaries and personal growth
o Know the customer better than any other person in the company
 Comparing order takers and order getters chart on slide 24 page 12
 Sales team- individuals from different functional areas working together to satisfy customer
needs
 Sales partnering- known as collaborative selling- an alliance is formed with the customer to
meet on going customer needs the sales rep is an integral part of buyer’s operation
 Traits of a successful salesperson: trustworthy, self starter, positive attitude, committed,
motivated, persistent, proactive, questioning, delegates tasks, optimistic
 Sales management- the sales force – order takers and order getters must be managed
o A group of managers, sales managers, work with the sales reps and order takers to help
them achieve company goals
o Sales plan formulation: designing an effective sales plan to generate sales and keep
existing customers
o Sales plan Implementation- A sales plan is put into practice based off of the sales plan
formulation
 Recruitment- managers must recruit differently based on the type of sales
person they are hiring
 Training- this is an ongoing event which covers both new and seasoned
salespeople
 Motivation and Compensation: to effectively motivate salespeople a manager
should do the following
 Write a clear job description
 Implement and follow effective sales management techniques
 Help develop personal sales goals for each person on their sales force
 Provide proper compensation, incentives, or rewards for meeting company and
personal sales goals
 o Sales Force Evaluation and Control- Involves evaluating the sales force objectives and
ensuring that sales policies are being followed
 Quantitative assessments – focus on past; quotas, sales calls completed, selling
expenses, and reports are ways to keep track of sales tea,
 Behavioral Evaluation- attitude, attention to customers, product knowledge,
communication skills, and professional demeanor must be monitored to ensure
a productive sales force (subjective)
o Account management policy grid page 17
 Direct Marketing : one of the fastest growing Integrated Marketing Communication tools today
(Immediate and interative) because
o Computerization has made it easier to create 1-1 interaction
o The rapid growth of information gathered by databases
o Direct marketing adds value for customers : providing direct orders, lead generation,
and traffic generation
 Product life cycle
o Informative advertising is important in the introduction and growth phases: trial and
excitement sales approach
o Persuasive advertising is important in the maturity and decline phases : sales on regular
basis sales approach