Study Guide Marketing 351 Midterm II April 10 2014 KNOW Stages of development for new products o 1 Idea generation Basic idea is created and described Come from employees customers competitors and suppliers Least expensive step o 2 Idea Screening Costs profits and potential sales of the offering are calculated at different price levels Company also considers how well the offering fits in with its competitive strategy Concept testing presenting an idea for offering to consumers for reaction early in offering development process 2 risks opportunity risk chance that there is a better idea that gets ignored because firm is invested in idea at hand Investment risk possibility company will fail to earn appropriate return on money and effort put into new product Detailed speculations for the product are developed Its features and pricing o 3 Feature specification are established o 4 Development o 5 TESTS Alpha and beta QFD Quality function deployment process where company begins with customers desired benefits then designs offering to fit those benefits Actual offering is designed considers the manufacturing process Offering is tested first in lab then with real customers 1st step Alpha testing testing of product in lab setting 2nd step Beta testing testing of product by real consumer in consumers location Testing the marketing at same time o 6 Launch Commercialization Offering is made available to customers Rolling launch made available to some customers first Market test test launch of a products complete marketing plan to ensure that it reaches buyers gets positive reactions and generates sales of the product Offering is evaluated as to whether it is delivering the appropriate value to consumers as well as meeting the firm s business goals o 7 Evaluation Constant process o Introduction Advertising costs high profits low By law only allowed to put new on products for 6 months Must have enough distribution outlets to get products to consumers quantities must meet demand Phases of PLC Sloan s inflections points windows how marketers should use them o Growth o Maturity Penetration pricing strategy low initial price so captures as much market share as possible often combined with special incentives Skimming price strategy high initial price set in order to get back money invested Sales increase and more competitors enter the market Must keep up with demand emphasizes advantages of their product Begin to make profit Sales begin to level off and competitors have saturated the market Lasts the longest Extend maturity stage by Modifying target markets o Attract different customers enter new markets ex Internet international Modifying product o Changing packaging size shape etc o Downsize decreasing size of the package or amount of product in package o Standardized keeping product same in all markets o Adaptation changes that an organization must make for a product to fit the local culture Modifying marketing strategies o Adding new segments such as coffee bars or lunch service Appealing to a new group by remodeling or advertising of pricing o Decline Sales drop and company must decide whether to keep modify or drop a product Possible prices cuts Harvesting companies reduce costs spent on product hoping that profits from products will increase until inventory runs out Divesting companies get rid of product The meaning and purpose s of IMC Integrated marketing communications o Approach designed to deliver one consistent message to buyers across an organizations promotions o Delivering consistent information helps establish the brand in the minds of consumers and potential customers Promotion mix and communication mix content and functioning o Promotion communication mix tools that may include advertising sales promotions public relations and publicity personal selling and direct marketing o Vehicle specific means within a medium to reach a selected target market o PR process of creating a image for company via publicity o Push and pull strategies what creates such forces and desired outcome of using them o Push strategy businesses are target of promotion so products get pushed through their marketing channels and sold to consumers Convincing them to sell their products Doesn t focus on needs of actual users of products Focus is to sell to intermediaries o Pull strategy focuses on creating demand for a product among consumers so that businesses agree to sell the product Ex Pharmaceutical drugs Causes wholesalers and retailers to buy the product to try to meet their Aspects of the Mission Statement demand o Emphasize values customers and motivation of employees o What value we offer to whom using what know how technology and why us o Answers Why does this company exist What a USP is and does o Unique selling proposition USP specific product benefits a consumer will remember o Ex Pizza in 30 minutes or its free just do it The AIDA Model and what it implies for marketers in all of its forms places and uses o AIDA Model attention interest desire and action model that includes several different promotion objectives Ultimate objective is to get customers to take action or purchase product Types of demand e g selective brand Tropicana o Primary demand demand for product category orange juice instead of a product o Selective demand demand for specific brand Tropicana The history and effectiveness of e mail as an e communication in customer dealings o Costs have dropped over years and effectiveness has increased o Was first used as a way for users of same computer to leave messages for each other The steps in e mail marketing campaigns 9 KEY FACTOR growing a database while keeping it targeted o Strategic planning o Definition of list required Have KPIs key performance indicators0 help organization define and measure progress towards goals Have data base of prospects emails ask for enough info but not more than o Creative execution o Integration of campaign with other channels o Personalization of the message o Deployment o Interaction handling o Generation of reports Email statistics produce easy reports o Analysis of results Tests open rates across different subject lines and delivery times optimal number of links in an email for click through rates and conversions different copy styles and lengths effect of video on delivery rates open rates and conversions 6 Parts of an e mail o Header has to from and reply to fields in an email o Subject line aids the reader in identifying the email and also