Post #10: Reflection of the Semester

Looking at the semester in reflection, I can confidently say that I will walk away from BU-215 Marketing with a plethora of useful knowledge about this highly significant subdivision of the business world. I found several of the marketing concepts and the terminology discussed in class very useful when dealing with activities such as Practice Marketing, and even applicable to my life outside of class, i.e. my job and internship.

McGraw-Hill’s Practice Marketing market simulation game definitely helped its user incorporate the knowledge and key concepts acquired from class to make business decisions and evaluate the outcomes of those decisions. This relatively elaborate marketing simulation walked the players through the four aspects of the Marketing Mix: designing a product for a particular target market segment, setting a price appropriate for their consumers, establishing distribution channels, and creating an advertising campaign to promote the product. While we did not have any direct method of retrieving consumer behavior reports, each target market profile had a basic ‘Consumer Feedback’ section that reflected each segments opinion of your bag, e.g. how they felt about the price, the features, etc. This game gave us the opportunity to put marketing into action as a group, similar to a real marketing team. We had to analyze the market via the given data of the game and decide, as a team, on what could lead our company to success. Therefore, a loose marketing strategy needed to be established early on. While it was subject to change, certain elements remained constant throughout the course of the semester. The roles and responsibilities of the marketer are to abide by this strategy and strive to expand the company’s brand. For instance, our goals during the semester were to generate high revenue so as to maintain a high profitability by producing low-cost backpacks that could be sold to our consumers at a reasonable price. We stuck with this philosophy, but changed our target market segment from University Students to Urban Commuters as the latter proved more apt to purchasing our product. One gains a true appreciation for the integrated role of marketing in business decisions once they have immersed themselves in the discipline. Marketing—in particular, through the Marketing Mix—is essentially the foundation of business.

Another aspect largely discussed and emphasized in today’s rapidly evolving marketing world is the ever-important use of social media by marketers. Social media offers marketers many benefits such as vast decreases in marketing costs, increased brand recognition, improved brand loyalty, higher conversion rates due to inbound traffic (people visiting your page due to quality content), and most importantly, social media listening (obtaining consumers opinions of your products/brand). For my internship, earlier this semester, I helped lead the social media campaign for a woman running for state senate. My tasks included updating the Facebook page daily with promotional statuses about her policies and beliefs, in addition to daily promo videos of personal testimonies by supporters from the local area. These practices increased her brand reputation amongst voters significantly. This experience provided me not only with an opportunity to attain some real-world marketing involvement, but also it provided me with an outlet to demonstrate and put to practice many marketing concepts I had learned in class.

I thoroughly enjoyed class discussions, attempting to make connections and bring to class any previously acquired marketing knowledge that I deemed relevant. Working for Coca-Cola, even as a vendor, I have learned first-hand the importance of my position. Vendors are the final stage of the distribution channel for food and drink brands. Their job entails product placement and promotion, stocking shelves, fronting coolers, and building displays (watch the video below to see how it's done!), all of which enhances the brand via brand recognition and aesthetics.

Therefore, I often interjected in class with my own experiences working for one of the world's largest name brands, related course material to Coca-Cola’s marketing strategy, or shared some insight on the new, innovative tactics Coke’s marketing team had in development. I strove for professionalism in class, participating in discussions, bringing enthusiasm and seriousness to group assignments, and most importantly, always dressing for success.

Consumers undoubtedly have the most influence on marketing. Studying consumer behavior, the lengthy process that a person takes in purchasing and using a product or service, can prove highly beneficial for marketers. The consumer purchase decision process provides a basic, and accurate, outline of the five stages a buyer passes through when making choices about what to buy. Firms and organizations that spend time and money studying the consumer recognize the importance of meeting their needs, wants, and expectations, widely known as consumer orientation.

This course has taught me a considerable amount about marketing, both conceptually and experientially. I will take what I learned with me for future use, either in a professional setting or in a personal one (one can market themselves to create their own ‘personal brand’). I am thankful for the opportunity, and the knowledge I have gained which will prove useful in my later career. I advise all students to take a marketing course once in their lifetime as it is not strictly pertinent to business personnel, but all people in general.

Readers, thank you for joining me this semester.

Peace, Love, Drink Coke.

Adam Geffken

Post #9: How to Communicate as a Marketer

As a marketer, you probably chose this path because you thought it would provide you with an outlet for your creativity; perhaps you find yourself more of an introvert, and you would rather avoid socialization and work in an office, in front of a computer, designing digital ads and television commercials. Now, if your hopes revolved around the idea that you would have to communicate minimally with other people, you were sadly mistaken. Communication plays a significant role in marketing. However, this form of communication is different from the literal definition. In Marketing, communication is the process of conveying a message to others and it requires six elements: a SOURCE, a MESSAGE, a CHANNEL OF COMMUNICATION, a RECEIVER, and the processes of ENCODING and DECODING.

The Six Elements of Communication:

1.       Source: a company/person who has info to convey.

2.       Message: information sent by a source forms a message.

3.       Channel of communication: the means that the message is conveyed by (salesperson, advertising media, public relations tool, etc.)

4.       Receiver: consumers who read/hear/see the message.

5.       Encoding: having the sender transform an idea into a set of symbols.

6.       Decoding: process of having the receiver take a set of symbols, the message, and transform the symbols back to an idea.

From my own personal experience, I will illustrate the “Six Elements of Communication” via Coca-Cola. Obviously, the source is Coca-Cola, the international soft drink giant. The company’s message has changed over the years, but it has consistently been associated with words and phrases like: ‘Fun’, ‘Good Times’, ‘Refreshing and Delicious’, ‘Enjoy Life’, and most recently, ‘Happiness’ and ‘Share a Coke’. Take a look at a few of the marketing techniques utilized by Coca-Cola during their ‘Open Happiness’ marketing campaign below:

Above we have three examples of channels of communication via advertisements that can be publicized through magazines or social media, and public relations stunts, such as these two innovative vending machine ideas. Since its beginning, Coca-Cola has remained infamous for its ingenious marketing strategies. Sales promotions, short term inducement of value offered to arouse interest in buying a product/service, are a channel of communication as well. Coke uses discount coupons (seen below) that its vendors place on the products on the shelves during the restocking process. They also promote their products with contests, such as the recent NCAA College Football Sweepstakes that offered the consumer the possibility of winning four tickets to an NCAA playoffs game by simply entering a code underneath the cap online.

 

The receivers are obviously customers who buy Coke products. In terms of encoding, Coca-Cola has transformed the idea of ‘happiness’ into the very symbol of its brand. With its unique shape, the Coke bottle symbolizes the aforementioned ideas of ‘happiness’, ‘fun’, and ‘refreshing’. By using innovative advertisements and other marketing stunts, the company has subliminally impacted consumers to associate these keywords with their brand. Hence the reason many people find themselves thirsty for ‘an ice cold Coke’ on hot a summer day, or salivating at the thought of a Coke with a burger and fries.

As for decoding, the same is true. The symbols that Coca-Cola projects (its Coke bottle, its logo, its slogans, and advertisements presenting 'Coke messages') influence the consumer, allowing them to transform these messages and symbols with ideas related to the product.

It is important to remember the significance of communication when marketing a product. Innovative marketing techniques and strategies can rapidly enhance a company’s brand reputation and the position of a product in the consumers mind. Ineffective communication will not lead to the success of a company as it will not further the company’s brand. Utilize these six communication elements so as to bring sure success to your company!

Until next time!

-Adam

Post #8: Supply Chains and Marketing Channels

Have you ever purchased a product, started using it, and suddenly began philosophizing about where it came from? How was it made? Who, or what, helped manufacture it? The answer to these questions lies in what marketers call the supply chain, the various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users. The various firms that aid in the production process include suppliers and producers. The suppliers provide raw material inputs to the producers who manufacture the goods using these resources, selling the products to intermediaries (wholesalers, retailers, dealers, etc.) who then deliver the finished products to consumers. Essentially, the supply chain is one big series of linked suppliers and customers purchasing from each other until a finished product reaches the ultimate consumer.

Supply chain management is the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumers. Companies use sophisticated information technology to share and operate systems for ORDER PROCESSING, TRANSPORTATION SCHEDULING, and INVENTORY and FACILITY MANAGEMENT.

The following diagram exemplifies the supply chain of the global enterprise SolarWorld Private Limited (AG), one of the world’s leading solar power system corporations.

  

SolarWorld employs 2600 people at 11 branches in 8 countries on 4 different continents of the world with distribution facilities in every key market in the world. As displayed in the above diagram, the company itself, in addition to a joint venture facility in Qatar, harvest the raw materials (silicon) from three locations: two in Germany and one in Qatar. The company sends raw materials to two manufacturing hubs (Hillsboro, Oregon, U.S.A. and Freiberg, Germany) to convert the SILICON into SOLAR WAFERS to then form SOLAR CELLS which make up SOLAR MODULES. Next, an inspection procedure occurs before the shipping process. Finally, the Hillsboro plant delivers the finished solar panels to distribution facilities throughout North, Central, and South America, while the Freiberg plant distributes them to such facilities in Europe, Africa, Asia, and Australia. These distribution facilities are also known as marketing channels (of distribution), which consist of individuals and firms involved in the process of making a products or services available for use or consumption by consumers or industrial users. These individuals or firms, known as intermediaries, make possible the flow of the finished products to the consumer. Watch this video about the manufacturing portion of SolarWorld to get a better idea of the production process:

Coca-Cola uses intermediaries associated with the company known as distributors. These are branches of the company with warehouses where their products are stored. The distributors are also wholesalers who maintain inventories and sell to retailers, like supermarkets and grocery stores (known as “Off-Trade Channels”). These stores prove the final stage of the supply chain as they provide the consumer with the finished good. Check out this beautiful looking aisle at THIS grocery store! Do you see the fancy display method of 2 Liter Bottles of Coca-Cola?

The final term to discuss this post is the idea of logistics, the activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. Companies strive for the high performance of these activities, known as logistics management, the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.

Three elements can be used to summarize this definition:

1.       Flow: of the product; from raw material to consumption.

2.       Cost-effective:  relating to the above decisions.

3.       Customer service: satisfying customer requirements.

Logistics and Logistics Management are nicely represented in the concept of supply chain and supply chain management in that companies often recognize the need for smooth running logistics, thus collaborating, coordinating, and sharing information among manufacturers, suppliers, and distributors to create a seamless flow of products and services to the consumer. UPS stands strongly by this idea, and heavily advertised this part of their mission for their customers via ads like these:

Hopefully, after this introduction to the Supply Chain and Marketing Channels, you now realize the significance of these two in the business world. Logistics, a related category to these two concepts, assists companies in operating effectively and efficiently and proves a crucial aspect of any marketing strategy. Remember, the supply chain is essentially the framework of any business. Without it, companies would literally not exist. The more organized and well-managed, the more efficient and successful a business will operate, resulting in increased sales and brand reputation. Remember this in your professional career. Please enjoy this SNL UPS parody to conclude.

                                     https://screen.yahoo.com/ups-1-000000789.html 

See you soon!

Adam

Post #7: The Price Is Right

In the early stages of building a business, one of the most crucial and controllable factors of the marketing mix is price, the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. The “right” price means that customers are willing to pay it. It determines all other business decisions, and thus must be set prior to deciding on further actions. The “right” price should generate enough sales dollars to maintain an efficient business operation (e.g. development, production, and marketing of the product), not to mention, earn a profit for the company. Depending on the firm’s pricing objectives—specifying the role of price in an organization’s marketing and strategic plans—they may hope to penetrate the market rapidly or slowly. Once established in the market, a company may decide to raise the price of their product if they have effectively created a demand for it. Kerin, Hartley, and Rudelius claim on page 318 of their textbook, Marketing, that “Research on 1,000 large U.S. companies show that a 1 percent price increase translates to a 12 percent increase in profitability, other factors remaining the same”. Again, a price increase must occur after a brand has successfully defined itself in the market.

Proper utilization of the Global Marketplace can reduce the production costs of a firm. Firstly, once a business has grown to the extent that it feels it can expand outside of its home of origin, it may hope to become a multinational corporation (MNC) and engage in international trade. In doing this, often times a company cannot afford to simply ship their product from the country of origin to new markets in other countries. Instead, they tend to have to set up new production facilities in these new markets so as to expedite the distribution process in terms of time, in addition to dramatically cutting costs. Selecting a new country to market towards often involves searching for suppliers whose efficiencies and lower hourly wages can reduce the costs of production. With a lower production cost, a company can maintain or raise their prices and make an even greater profit. With several growing economies eager to expand their job markets MNCs have lush opportunities to invest in cheaper labor via mass production facilities.



The world’s leading technology companies—including big names such as Apple, Microsoft, Samsung, and Intel—have taken advantage of these cheap labor markets in order to increase sales revenue and decrease production costs, resulting in vast amounts of profit. However, a company should not be too ambitious when setting a price, especially if they have lowered their production costs, as too high an increase of unit price outside the customer’s price range can deter them from purchasing the product. This segues us nicely into our next topic which revolves around the concept of value and the way in which it correlates with price.

Value is the ratio of perceived benefits to price, exemplified through the following equation:

For the consumer, price indicates the value of a product. This equation is one method in which the consumer can quantify the value of a product through a simple ratio of “perceived benefits” over “price”. As perceived benefits increase, value increases as well. Hence, the success of “BUY 1, GET 1 FREE” sales. Jos. A Bank is an example of a company that often advertises such sales, such as “BUY 1 SUIT, GET 3 FREE”, which incentivizes the purchase of a suit so as to obtain further suits. The sale attracts buyers as they see it as more valuable. Rather than spend $500 on one suit alone at a competitor like Men’s Wearhouse (which actually recently acquired Jos. A Bank in the summer of 2014), why not pay the same amount for multiple substitute products? Any customer would jump on a deal like that, and so, many companies promote their products through such value-adding sales.

Demand factors, the factors that determine consumers’ willingness and ability to pay for products and services, include three key causes: (1) Consumer tastes; (2) Price and availability of similar products; and (3) Consumer income. These three aspects influence the consumers want to buy, and their ability to buy. Vitamin Water is a current example of an everyday product in the global marketplace which has suffered in popularity in recent years. As a fad product, it is very much in the ‘decline stage’ of the product life cycle with shrinking consumer interest and loyalty to the energy drink. The consumer has not become unable to pay for the product, but due to changing consumer tastes and the availability of similar drinks, the number of brand loyal Vitamin Water customers has dwindled. The consumer has become less willing to purchase the product when many other competitors exist in the sports drink market.

Price is a highly important aspect of marketing product. The right price can either set your business up for success, or for failure. Too high, and your product will never effectively penetrate the market and establish your brand. Too low, and you may never turn a sustainable profit. Understanding the importance of value and recognizing, from the consumer’s perspective, how valuable your product is, will help you and your business effectively create and market your product. In addition, demand factors aid in establishing the consumer’s willingness and ability to buy a product. After reading this blog, I hope you feel confident and comfortable enough go out into the real world and apply these teaching to your life and professional career!

Until next time,

Adam

Post #6: Raisin(g) Bran(ds)

Brands define businesses. Branding is a marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these used to distinguish a seller’s goods or services. The concept “brand/branding” has many characteristics that will be covered in today’s blog.

Kellogg’s is a classic and world-renowned example of a company which has strengthened the brand of their product, Raisin Bran, through effective product development. This results in what is known as brand equity, the added value a brand name gives to a product beyond the functional benefits provided. The common misconception is that Kellogg’s Raisin Bran is a trademarked brand. However, according to a 1944 case by the District Court of Nebraska, “A name which is merely descriptive of the ingredients, qualities or characteristics of an article of trade cannot be appropriated as a trademark” (Skinner v. Kellogg). Hence the use of the name “Raisin Bran” by other cereal companies.

Thus, the fact that Kellogg’s has so successfully marketed this cereal to occupy itself in the consumer’s mind as “the” Raisin Bran proves the effectiveness of Kellogg’s early marketing strategy. The four steps used by marketers to achieve such brand equity included the following:

    1. Developing positive brand awareness in the consumer’s mind.
    2. Establishing the brand’s meaning in the minds of the consumers, both functional and abstract dimensions.
    3. Elicit the proper consumer responses to a brand’s identity and meaning (to think and feel
       positively about the brand).

    4. Create a consumer-brand connection evident in an intense active loyalty brand relationship.

One company’s brand equity can lead to lucrative brand licensing opportunities for other companies. Brand licensing is a contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee. A well-known example exists in the way that many packaged foods, like cereals and Kraft™ Mac N’ Cheese, sometimes feature popular television characters to promote the sales of their product. Brand names are any word, device (design, sound, shape, or color) or combination of these used to distinguish a seller’s goods/services. They represent a company’s mission statement, helping the consumer identify with the company and its message.

Some companies will follow a marketing tactic known as multiproduct branding, which is when a company uses one name for all its products in a product class. This tactic gives the company an edge when marketing their product as consumers that have had positive experiences with the product in the past will feel the same when considering the company’s other products. Thus, product line extensions—using a current brand name to enter a new market segment in its product class—become possible for companies such as Campbell’s Soup Company. Campbell’s has expanded their target market through the extension of their soup varieties, including Campbell’s Condensed, Select Harvest, and Chunky soups, with over 100 soups flavors. In this way, multiproduct branding also proves valuable for a company as it reduces advertising costs and raises awareness levels while remaining highly effective. However, product line extension can harm a company if it begins cannibalizing the company’s products, and does not take sales away from competing companies.

Another method of avoiding cannibalization is through multibranding, a branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment. Frito-Lay created Santitas, what is known in the business world as a fighting brand, which confronts competitor brands, to contend head-to-head against regional tortilla chip brands that were taking away from Frito-Lays brands Doritos and Tostitos. Many consumers do not realize that Santitas are a branch brand under Frito-Lay, instead assuming that Santitas is an independent company. This works out to Frito-Lay’s advantage as brand loyalty (to Frito-Lay or their competitors) does not influence the consumer’s decision to buy the product. Part of Santitas success—aside from being a superior substitute good due to their delicious quality—revolves around their packaging, seen below, which looks like the labelling of an independent foreign tortilla chip company. Labels are an integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients. Santitas’ label not only characterizes a classic Central American theme, but it’s simple yet attractive design with a bright “$2 Only” selling point effectively captures consumers’ attention, in addition to immensely undercutting popular brands like Tostitos.

Packaging—a component of a product that refers to any container in which it is offered for sale and on which label information is conveyed—proves highly important in influencing the consumer to purchase a company’s product. Many companies, in their early years, invest a great deal of time and money in package and product development. Coca-Cola experimented with bottle design early on, hoping to create a package which would prove both voluminous and distinguishable. Early prototypes achieved these goals, but sadly, proved problematic in that they were unstable on conveyer belts. By shrinking the diameter, but keeping the contour shape of the bottle, Coca-Cola achieved a stable bottle that remained recognizable to the consumer, so much so that today it is one of the most identifiable packages worldwide. This highly effective form of packaging has greatly impacted the success of Coca-Cola and their brand equity.

Brands prove a highly important concept in the business world. They represent a company’s mission statement, their success, ways in which one company can implement another company’s brand for increased market standing, a means of cutting marketing costs while expanding their product line, and methods of increasing sales through ‘stealthy fighting brands’. With this new-found understanding of this important aspect of marketing, one should be able to apply it to both their life and professional career.

Works Cited:

Skinner MFG. Co. v. Kellogg Sales Co. Same v. General Foods Sales Co., Inc. 143 F. 2d 895. U.S. (1944).

Post #5: How to Develop a Successful Product/Service

Today’s post focuses on developing a popular, and hopefully lucrative, product or service through what is known to marketers as the new-product process, the seven stages an organization goes through to identify business opportunities and convert them into salable goods or services. This post proceeds to break down, define, and give examples for each of these stages in the process.

Stage 1 of the process, new-product strategy development, defines the role for a new product in terms of the firm’s overall objectives. The firm determines these objectives through environmental scanning and SWOT analysis which allow it to assess its strengths and weaknesses relative to the trends it identifies as opportunities or threats. This information enables the company to establish a procedure for each new-product idea in addition to the strategic role it may play within the company.

Stage 2 covers idea generation, which involves developing a pool of concepts to serve as candidates for new products, building upon the previous stage’s results. Many companies partake in open innovation, when an organization finds and executes creative new-product ideas by developing strategic relationships with outside individuals and organizations. A modern example of this is the Vermont company, Renewable NRG, which created a joint venture, called Lidar Wind Technology, with the French company Leosphere. Leosphere had developed a new product idea for measuring the wind, but did not have the funds or resources to produce it. NRG sought them out and agreed to manufacture their product for a 50% profit share, allowing them to remain one of the leaders of their industry. Lidar exemplifies the use of Smaller Firms, Universities, and Inventors by larger businesses to create new products. Companies in search of new ideas also seek out their Employees and Co-Workers suggestions, Customer and Supplier suggestions, utilize Research and Development Labs, and analyze the Competitive products of the market.

Stage 3: Screening and Evaluation internally and externally evaluates new-product ideas to eliminate those that warrant no further effort. For instance, the internal approach includes an evaluation of the technical feasibility of the proposed new-product idea to decide whether it satisfies the objectives of the new-product strategy development process. The external approach uses concept tests, external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product. Therefore, these are typically modified existing products that the consumer is unfamiliar with. An example is 3M’s Post-It™ Flag Highlighter, shown below:

Stage 4: Business analysis specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections. In other words, before the creation of a prototype, the company must agree upon the practicality and capacity for success of the proposed new-product, and its consistency with the company’s mission and objectives—will the company be able to economically develop and manufacture the product? And what sort of marketing strategy is required to have it succeed in the market place?

Stage 5: Development is the transformation of the idea into a prototype. This is not merely manufacturing the product, but also conducting consumer and lab tests that ensure the quality and accuracy established in the new-product strategy development process. This includes both internal and external development, either reflecting and developing the product internally, or searching externally for ideas on how to produce the product. A crucial part of development by companies includes safety tests. Car companies are generally known for such tests, simulating accidents by repeatedly crashing their cars to constantly improve and assure the safety of their product.

Stage 6: Market Testing involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy. Test marketing involves offering a product for sale on a limited basis in a defined area for a specific time period. The three main kinds of test markets are described below:

1. Standard Test Markets: when a company develops a product and then attempts to sell it through normal distribution channels in a number of test-market cities which demographically represent the selected target market for the new product.
2. Controlled Test Markets: involve contracting the entire test program to an outside service.
3. Simulated (Lab) Test Markets: replicates a full-scale test market to a limited degree, but saves the firm time and money. For example, these simulations tend to take place in malls, where consumers are shown the product, marketing tactics and ads including their competitors, questioned about who would use the product, and finally given money to decide to buy or not buy the product.

Stage 7: Commercialization is the positioning and launching of the new product in full-scale production and sales. Here are a few related terms to remember when commercializing your product:

Regional rollouts: in order to minimize the risk of new-product failure, companies may introduce a product sequentially into geographically areas of United States, allowing for production levels and marketing activities to gradually grow.

Parallel development: when a firm has cross-functional team members who conduct the simultaneous development of both the product and the production process remain with the product from conception to production.

Fast prototyping: the “do it, try it, fix it” approach—encouraging continuing improvement even after the initial design. Apple has proven its approval for such a technique with its constant updates for its operating systems and programs such as iTunes, in addition to the way it ‘fast prototypes’ such popular products as the iPod, iPad, and iPhone.

To wrap up this post, I want to emphasize the importance of the new-product process when beginning a business. It is a reliable, effective, and in-depth method when brainstorming and crafting a product, evaluating the product’s success by determining consumer interest and possible risks. I encourage any of you considering the development of a product to utilize this process, carefully considering all influential aspects associated with your business, such as your target market and the demand for your idea, before simply commencing production. Thank you for reading today’s post. I hope you have found value in its content and the desire to apply what you have learned to your future business endeavors!

-Adam

Post #4: Market Segmentation and Product Positioning

Welcome back!

Once you’re company has established its business plan, it has a product, and understands consumer behavior, it is time to develop a marketing strategy. This first requires the company to define its market segment through market segmentation, which involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Today, we will focus on this important aspect of marketing, in addition to a few complementary marketing terms.

Let us begin with an example. Ford Motor Company has developed a fun and contemporary style of television advertisement incorporating flashy colors, appropriate music, and exciting text that captions the narrator’s voice as he relays Ford’s message to consumers. The consumers which they seek to attract to their product are primarily hardworking men, in need of a TOUGH, HEAVY-DUTY, HIGH-HORSEPOWER truck that will perform better than any other truck on the road, regardless of the conditions in which the driver chooses to use the vehicle; not to mention, the added benefit of its EcoBoost engine which allows for superior fuel efficiency and reduced greenhouse emissions. Despite the effectiveness of this recent ad, the Ford F-150 has existed in consumers’ minds as the leading pick-up truck on the market due to Ford’s solid reputation which it has acquired over 66 years of F-150 production. Therefore, the Ford Motor Company has successfully used product positioning, the place a product occupies in consumers’ minds as important attributes relative to competitive products, to define their brand as superior to their market segment. See the aforementioned ad below at the following link:

                             http://www.ispot.tv/ad/75Yw/ford-f-150-research-project

Companies can also engage in a practice known as product re-positioning, changing the place a product occupies in a consumer’s mind relative to competitive products. A company may do this to readapt to their market segment if their sales are suffering, or if they hope to infringe on their competitors sales. Burger King is a recent example of a company which has attempted to re-position their food service with the introduction of the Big King, a two-tier burger sandwich. They used this tactic to re-establish their burger in the consumers mind to increase sales; in this case, so much so that their product looked identical to their competitor’s.

Here’s how they describe it on their website:

“Our BIG KING™ Sandwich features two savory fire-grilled beef patties, topped with, melted American cheese, fresh cut iceberg lettuce, crisp onions, crunchy pickles, and featuring a sweet thousand iland style dressing, all on a warm, toasted, sesame seed bun.”

If you’re familiar with McDonald’s Big Mac jingle, you probably realized the two sandwiches are nearly identical. Take a look for yourself at the resemblance:

And here is the Big King ad that I remember watching, jaw-dropped and in awe of BK’s brazen move:

Sadly for Burger King, their attempt to penetrate the market with a new product that they hoped would impede on McDonald’s Big Mac sales did not prove as successful as they hoped. While their initial 2 for $5 dollar deal brought in many customers, but for the most part, the brand loyal Mickey D’ers remained under the Golden Arches alongside their delicious Big Mac.

One final concept to end this blog posting with is product differentiation, a marketing strategy that involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products. Due to our materialistic society and the vast array of products saturating the market, companies competing for the consumers of similar segments must market their products as outstanding, innovative, and unique in order to capture and convince them of the value and worth of their product. The electronics industry proves a highly competitive market, especially today’s cellphone market. The below ad exemplifies both the competitiveness of this market, as well as Samsung’s effort to differentiate their product from Apple’s:

Samsung has spent the past several years not only positioning themselves in the cellphone/tablet/phablet industry as offering a respectable, reliable, and innovative product, but also assured the consumer that their products are both different and superior. Once a company chooses the segment it wishes to target, markets its product successfully so as to position it in the consumers mind, and makes sure to differentiate their product with a uniqueness that captures their audience, the company has laid themselves a solid foundation for a successful future. Thank you for reading this post. I hope to have enlightened you about the ways of marketing today, so as to encourage you to use these techniques when marketing your own personal or business brand.

Until next time!

-Adam

Post #3: Understanding Consumer Behavior

Hello again!

Two blog postings back to back; it must your lucky day! That or I just have so much new knowledge to share that I cannot manage to contain it all in one post. I would like to focus this post on “Understanding Consumer Behavior”, a highly significant aspect of marketing that allows marketers to discover why consumers choose one product or brand over another, how consumers make these choices, and how exactly companies can use this information when creating value for consumers.

To begin, we must define consumer behavior. It is the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions. Consumer behavior is more straightforwardly defined with yet another business term known as the consumer purchase decision process (PDP), the stages a buyer passes through in making choices about which products and services to buy. This process contains FIVE STAGES which I will elaborate on.

Stage 1: Problem Recognition: Perceiving a Need

This is the first step in the PDP, when a person realizes they must purchase something due to their current situation, i.e. realizing something as simple as a need for eggs, or something as important as needing a new washing machine.

Stage 2: Information Search: Seeking Value

The second step involves the consumer searching for information. Initially, one will scan their memory for a product to fulfill their need, known as internal search. They will then proceed to execute an external search by accessing any of these three sources:

      1.       Personal sources (relatives and friends)

      2.       Public sources (product rating organizations such as Consumer Reports, government agencies, TV “consumer programs”)

      3.       Marketer-dominated sources (information from sellers including ads, company websites, salespeople, and point-of-purchase displays in stores)

Stage 3: Alternative Evaluation: Assessing Value

Now that you, the consumer, have researched the market for a product that will suit your needs, you have clarified what it is that you are looking for in a product by compiling a list of criteria for your purchase, in addition to seeking out brands within the product class that meet this criteria (consideration set), all the while leading you to develop value perceptions about certain products. This criterion is known as evaluative criteria, which represents both the objective attributes of a brand (such as display) and the subjective ones (such as prestige) you use to compare different products and brands. It is through advertisements that companies subliminally shape our perception of “what we need”. Take restaurant chains, for example. Often times, they advertise their menu items as necessary for the consumer, sometimes claiming that they will "make you stronger". This Subway commercial certainly convinced me...

Stage 4: Purchase Decision: Buying Value

Depending on the price of the product/service, by this stage you have narrowed down your search to a few alternatives within the consideration set. It now comes down to two decisions: (1) where to buy from, and (2) when to buy. For a washing machine or a car, you have likely considered TV ads, visited retail stores/automotive dealers, and viewed many sellers’ websites. It will all come down to such factors as terms of sale, previous experiences from the seller by either yourself or others, and warranties and return policies.

Stage 5: Post-Purchase Behavior: Value in Consumption or Use

Finally: the moment of truth. You have purchased your product or service. You are either satisfied or dissatisfied with what you have paid for. Perhaps that washing machine you bought was supposed to easily steam out the worst of grass-stains with ease; instead, it merely faded them into those white pants of yours, ruining them permanently. If the consumer is dissatisfied, marketers must identify why; typically, this is due to a deficiency of the product or the marketers overselling of a product’s features and benefits, leading to high consumer expectations, and thus, disappointed customers. If the consumer is satisfied, however, the company may have acquired a repeat-purchaser, and perhaps a brand loyal customer (brand loyalty: a favorable attitude toward and consistent purchase of a single brand over time).

Large firms such as Coca-Cola, Verizon, and General Electric use post-purchase consumer behavior to maximize customer satisfaction in the future. If these companies fail to satisfy the consumer with one product, they strive to make up for their failures with their “next big thing”. Coca-Cola did just that after their flop in the mid-1980s with the release of “New Coke” which received major negative attention by the American public, recovering with the reintroduction of “Coca-Cola Classic”.

At this time, you should have a general understanding of consumer behavior, and recognize its significance in relation to marketing. Perceiving why consumers choose one product or brand over competitive brands, how consumers make these choices, and what companies can do in terms of creating value for the consumer when they obtain such information are all characteristics of consumer behavior that prove highly important.

I hope that this discussion has enlightened you with yet another essential marketing concept for you to take away and implement in your own lives and careers.

Thank you, and see you next week!

Adam Geffken

Post #2: The Importance of Environmental Scanning

So we return!

This week I’d like to discuss the significance of environmental scanning, the process marketers use to continually acquire information on events that occur outside of the organization so as to identify and interpret potential trends. Marketers follow five environmental forces that heavily influence these trends: Competitive, Regulatory, Economic, Social, and Technological, or CREST, as I like to remember them. Acronyms are an effective method used by professionals to evoke important phrases through memorable lingo. I became familiar with a few well-known acronyms this past summer within the marketing world through my internship in the Sales & Advertising department at Vermont’s own news station, WCAX. Here are just a few of the acronyms we used regularly:

·         POS = Point of Sale

·         ROI = Return on Investment

·         CTR = Click-Thru Rate

·         SEO = Search Engine Optimization

·         SEM = Search Engine Market

Now, to effectively market to the consumer, marketing specialists must carefully study these forces in order to explain past trends and predict future ones. Recently, Coca-Cola’s marketing analysts asked, “Why has the percentage of Coca-Cola drinkers slowly declined in the past five years?” One explanation for the decline existed in the fact that their competition, the alternative firms that can provide a product to satisfy a specific market’s needs, had risen to an all-time high. With more soft drinks in the market than ever before, the consumer had the highest breadth of beverages to choose from, thus reducing the amount of Coca-Cola consumers. In order to solve this problem, Coca-Cola’s marketing team has been hitting the global market hard with impressively new and innovative campaigns that have proven to be just as good as the “delicious crisp taste” of Diet Coke.

This past Super Bowl XLVIII, Coca-Cola played the ‘multicultural card’ to reach every demographic (describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation) of the market with its “America Is Beautiful” commercial. The company compiled various lines of the patriotic song sung in several different languages put to relatable images of Americans doing what they love, be that camping, dancing, surfing, or eating with family and friends. By appealing to the many ethnicities that make up our populace, Coca-Cola hoped to effectively entice everyone to buy into their product, connecting Americanism to their brand. The company almost guild-trips the consumer into buying their product, essentially stating that it is un-American to NOT buy Coca-Cola. This form of advertisement is known to marketers as multicultural marketing, or the combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races. View this remarkable ad below:

If we put ourselves in the shoes of Coca-Cola’s marketing team upon realizing the decline in Coca-Cola sales, and we utilized the environmental scanning approach, we would recognize some benefits and detriments due to the environmental forces. First, the detriments: Competitive forces have infringed on Coke’s sales due to a record-high number of competitive soft drink companies. Regulatory forces, that being American’s increasingly health-conscious mindset have led consumers to purchase less soda. The benefits: the rising amount of global media consumption and use of social media as a dominant form of communication for consumers has proven highly valuable for marketers who can likewise communicate their company’s message to consumers. Lastly, and similarly, the Technological forces (smartphones, tablets, etc.) have allowed for increasingly effective means of advertising. In terms of generational cohorts, today’s widespread use of such technology by people from the baby boomer generations (born between 1946 to 1964) to today’s millennials (1994 to the present) has made marketers jobs much easier.

Consequently, after scanning the environment, the Coca-Cola marketing team developed a marketing breakthrough, a revolutionary idea to connect with the consumer, on a personal basis. This beautiful brainchild was none other than the ‘Share a Coke’ campaign this past summer. With over a 1000 names on their 20 ounce bottles of Classic Coca-Cola, Diet Coke, and Coke Zero, the company personally appealed to a majority of the American and United Kingdom populations, attracting soda drinkers and non-soda drinkers’ alike, readjusting Coke sales to a steady incline once again. 

Personally, as a Coca-Cola merchandiser, hence my insight on this campaign and Coca-Cola’s history, I witnessed people’s fascination and joy in stores across Vermont as they searched for their name, many times being asked, “Have you seen the name ___ today?” On certain occasions, I had just put that name in the cooler, and--much like a commercial--I would gladly pull out a cold bottle of Coke for the customer, the personal relationship between supplier and consumer that Coke hopes to portray to its target market.

To conclude this post, I want to stress the importance of Environmental Scanning within the business world. Coca-Cola exists as merely one example of a company which has effectively utilized it in order to strengthen their company’s consumer basis through the analysis of the environmental forces and following their corresponding trends. In order to reinforce their brand, they focused not on market segmentation, but instead, through the establishment of marketing strategies with goals of attracting every potential consumer, or demographic, within the market, regardless of age, ethnicity, gender, or social status. These all-encompassing campaigns are crucial for any marketer that hopes to achieve great success for his or her business. Therefore, as a marketer, one should focus on enthralling as many consumers as possible, whether that includes youth or the elderly (i.e. Facebook). Remember: so long as the customer is able and willing, a product or service for everyone is one that will succeed.

Thanks for taking the time to read my blog, I hope you enjoyed it. Now get out there and use what you’ve learned to promote your product, service, or idea!

Enjoy your week!

Adam Geffken

Post #1: The Essence of Marketing

Hello!

My name is Adam Geffken, a senior at Saint Michael’s College, and an International Relations major with a concentration in Marketing.  As the semester continues, I will post on a weekly basis for my business class, BU-215-B, Marketing, as I log my progress through this course. These segments will provide my readers with accounts that both enlighten and entertain, regarding the material which has been touched upon in class. My primary aim in writing this blog is to educate the reader on the significance of marketing, how one can add value to their product, whether in the business world or through one’s own social experience. Every week, I hope you find yourselves walking away with a greater understanding of this business field, and perhaps even a few morsels of practical information to apply to your lives and your careers.

Now, allow me to disclose some of the terminology that I personally find most applicable to everyday life and the professional world. Let us begin with the marketing mix, also known as the Four Ps, each “P” representing one of the four controllable marketing factors—Product, Price, Promotion, and Place—which the company, represented by the marketing manager, will use to solve their marketing problems. To define each of the Ps, Product is a good, service, or idea to satisfy consumer needs, Price is the value of that product, Promotion represents how the seller entices the consumer to buy his product, and Place exists as the distribution method that delivers the product to the consumer. If properly executed by a marketing team, a company could achieve massive growth rates.

First, the company has to assign a marketing team. It then begins development of a marketing strategy, thus establishing the Four Ps. In order to effectively market toward the consumer, a company must identify its target market—one or more specific groups of potential consumers. If an existing company hopes to produce business growth, it will use a technique to generate such growth in current and new markets via the development of current and new products, known as diversification analysis. Such companies as Ben & Jerry’s have utilized this strategy; the international ice cream organization has recently branched out into the apparel market, branding clothing with their insignia and selling it to potential customers worldwide as they intend expand their target market.

The final term that I would like to discuss is the most relevant term within this course: marketing, the activity for creating, communicating, delivering, and exchanging offerings that benefit its customers. It is not simply advertising a product to the consumer; rather, marketers aim to develop a strong relationship with customers through the delivering of goods with genuine benefits, thus allowing all parties (the organization marketing the product, the stakeholders, and society) to benefit. The essence of successful marketing is to gain loyal customers by providing them with unique value. Loyal customers build the foundations of successful businesses, establishing for such firms a basis future growth. Eventually, such loyalty will actually prove as another outlet of marketing in that this customer loyalty will influence potential customers to become actual customers as they invest in the firm. Companies that have developed such strong, loyalty-based relationships with their customers include Walmart, Costco, or Southwest Airlines, due to providing their customers with the best price.

I hope that within this first blog post you have learned a little something about marketing, and enjoyed yourself in the process. This field of business proves highly significant within the business world, but also provides teachings that can be applied to our personal lives. In other words, one does not simply need to learn to add value to their company’s product, but instead, one can learn to build strong personal relationships and add value to themselves in addition to their cohorts. Such is the essence of networking, a term which may be touched on again later in this course. For now, thank you for taking the time to enjoy this blog, and begin to educate yourself on the discipline of marketing. See you next week!

-Adam