Chapter 10: Marketing Services

When it comes to advertising, products can be easy to advertise because they are a physical item that one can see and touch and grasp their mind around, but for services advertising can be much harder. Services can range far and wide, including everything from insurance, to airlines and hotels, to something as simple as getting your lawn mowed. In the following paragraphs I will show three examples of service advertisements and analyze just how they did it.

                In this first video, Verizon Wireless is advertising their cell service. They are focusing on the important point and concept “rule the air”. Throughout the commercial they are building up through different scenes showing the viewer how important it can be to have a service provider that gives you service everywhere and how helpful and assuring that can be- especially in the most important situations.

                In the ABC news commercial, ABC is trying to demonstrate their traditions and how they attempt to deliver the news. They talk about the “honor” and “accomplishment” of their former anchor and how that will be carried on in a new chapter of news reporting. They are demonstrating their ability to portray the news in the best way and hoping to hook viewers with these points.

                The final commercial and the one that I think demonstrates a service in the most creative way is the Progressive commercial. They are taking intangible things such as “24/7 live support insurance coverage” and “pet injury coverage” and turning them into physical items and presents. Obviously when you buy these coverages, they are not a physical item, but this commercial is making it easier for the viewer to observe them in this fashion and making it easier for the viewer to get a grasp around what service they are marketing.

                Whether you have a product or a service, the marketing aspect is incredibly important and something that simply can’t be passed up no matter how hard it may be to market a specific thing. Creativity is key and the more eye catching an ad is, the more powerful it will be.

Chapter 12: Pillsbury's IMC Process

An essential part of marketing a product is in Integrated Marketing Communication. This creates a voice of the product and gives it a universal image. For example, when you walk into a supermarket and see this product, if the IMC worked properly, you will hear the marketing jingle from the ad in your mind. A certain product that has had this specific effect on me is Pillsbury so I will run through the steps Pillsbury took to get to this point.

                The first thing Pillsbury had to do was identifying the target audiences and base their campaign around these people. There is no point wasting recourses on customers who aren’t interested in your product in the first place. The next thing Pillsbury did was establish communication objectives. With this they would want to make their customer aware of the product such as with the ad I have added to this blog. These objectives have been very effective due to their importantness down the road. Step three of Pillsbury’s process is setting up the budget and this will ultimately come down to how much they want and need to spend as well as how much exposure they want their product to receive. This can either be expensive or at times rather cheap or even free- such as the Facebook page of the Pillsbury Dough Boy. After the budget is finalized, the company needs to decide what to spend this money on and how much per project. This is step four which is developing the promotion mix. It is imperative that these promotions are effective and draws in customers. The final step, as in any process, is evaluating the promotion mix’s effectiveness and understanding whether or not it is getting the job done. If it is, then you either want to continue the current campaign or possibly add or subtract from it to make it fit what the evaluation said. This is also very important because you don’t want to waste money, but you also don’t want to waste market potential that is out there waiting to be tapped.

                The promotion portion of marketing is very important and something that can’t be overlooked or underestimated. This is one of the four factors that will determine the success of your product and without it, you may lose something that could easily have been gained with better promotion.

Distribution: The Supply Chain Process for Potato Chips

In order to do anything with your product, you have to first have and utilize a supply chain. These chains can and will vary from product to product and depending on what product you are looking at, it can vary in huge, drastic ways. Today, I will look at a specific product and go through and explain the supply chain for this product. The product I will look at will be potato chips.

The first step in the supply chain is raw materials and the gathering of these materials. Therefore, for potato chips, this is the gathering of the main ingredients and especially the potatoes which would come from local farms. The next step is the supplier and the supplier is the firm that would gather the potatoes in the first place (for example the farm). From there the supplier would ship the potatoes off to the manufacturer. This is where the conversion will take place from potatoes and other main ingredients (salt, flavoring, oil) into potato chips. This is the Frito Lay or Tostitos factory that is responsible for the “creation” of these chips, as well as the packaging.

From there, the potato chips enter the logistics phase where they are shipped via truck, train, or boat to the retailer. In this case, the retailer will be a grocery store, gas station, or possibly sports arena just to name a few. From here, the finished product is sold to the consumer.

Although the supply chain is long, in some cases this process must take place in a matter of days- especially for products that have an expiration date. With a streamlined process and intelligent logistics, it is amazing what firms can do when taking a raw material and transforming it into something completely different and much more valuable.

Chapter 11: Steps in Price Planning for an iPad

When new products are put out on the market, one of the major things that needs to be determined in the product’s price. This can be done many ways and throughout the following paragraphs I will analyze the likely steps that Apple went through to price their recently released iPad.

                The first thing Apple had to consider is its pricing objectives which it had to develop. When doing this, Apple had to decide between making the product aim for a sales or market share, hit certain profit objectives, have competitive effect objectives, aim for customer satisfaction, or set pricing to reflect its image. In my opinion Apple went with a profit objectives approach because they already have such a great reputation that price is rather inelastic in most respects and they also may have utilized an image enhancement approach to avoid customers thinking the iPad is a cheap product if it was priced cheaply.

                Apple then had to estimate demand and they could do this based on surveys or based on current sales of their other similar products such as the iPhone and iPod. Following this they had to determine costs and to do this they had to first determine their variable costs and their fixed costs. With these costs in mind they would need to decide on pricing and to decide on pricing they also would want to take into considering competitors prices, consumer’s spending habits, and countless other factors that are essential when determining the price. This is called evaluating the pricing environment.

                Apple’s next step would be to choose a pricing strategy. They could utilize a cost-plus pricing strategy where they would just take the total costs and add a profit on top or they could use demand based pricing. There are two types of this: target costing and yield management pricing. Apple more than likely used target costing because price points are very visible and somewhat standard in this industry and this can be important. Apple’s final step is to develop pricing tactics which deal with how to charge, what to bundle, if discounts will be offered, etc.

                Regardless of what Apple did throughout these steps, clearly they did the right thing seeing as iPads have flown off the shelf since release and promise to be a big holiday shopping item as well. Pricing is important no matter what product you plan on selling and can be critical to the product’s success.

Chapter 9: Evaluating Brand Names

Brand names are incredibly important and at times can allow a product to be sold at three or four times its regular price. This then explains why brand names need to pass a certain checklist of criteria in order to maximize effectiveness. This check list is as follows: easy to say, easy to spell, easy to read, and easy to remember. The brand should also fit the product by: fitting the target market, fitting the product’s benefits, fitting the customer culture, and fitting legal requirements. In this blog, I will analyze three brand names and determine if they complete the checklist.

The first brand I will analyze is Pizza Hut (http://www.pizzahut.com/). This name is very easy to say and spell and its comprised of two simple words so it’s easy to read. It’s also very easy to remember because of how well this brand fits the product. The name fits the target market perfectly (seeing as this market is pizza wanting citizens) and it fits the benefits of the product as well as the culture of the customers. Finally it is very original and complies with legal requirements.

My second brand is Play Station (http://www.playstation.com/), a second very successful brand. Similar to Pizza Hit, it’s comprised of very simple basic words so not only is it easy to say and spell, but also easy to read and remember. It also fits the target market, which is someone seeking to relax and play video games, and it fits the product benefits perfectly. The culture is also nailed down and it fulfills all legal requirements.

My final brand is Google (http://www.google.com/). This is slightly different from the above because its ability to obey the criteria isn’t as clear. Google is easy to say, but not nearly as easy to spell if you haven’t heard of the brand before. However, since Google is so ubiquitous with today’s culture, it is easy to spell as well as easy to read and remember. Although the target market really depends on which Google product you are focusing on, no matter what it really doesn’t fit the target market. I mean, what really is Google anyway? It’s similar to Apple in this sense because Apple (although hugely popular and successful) doesn’t really fit with the target market or, like Google, doesn’t really fit the product’s benefits or the customer culture. Both Apple and Google don’t really fulfill these rules, but at the same time they have really established the fact that these criteria do in fact apply to their brand. Finally, Google does fit legal requirements because there isn’t really any other word like it.

Chapter 8: The Product Layers of a North Face Jacket

Products of all kinds are designed to be not just that simple product, but much more than that. For example, a pair of sunglasses isn’t just a pair of sunglasses anymore and a pair of jeans is no longer just a pair of jeans. They are status symbols, ways of belonging, and a set of ideas which the brand plays a big part of. A product that I will focus on in particular is a North Face jacket and throughout the following paragraph I will dissect its product layers and show just how much more this jacket is than just a jacket.

The first product layer is the core product and its benefits. The North Face jacket is essentially a winter coat and it is meant to keep you warm and looking good in the process. However when looking at the emo-benefits, much more goes into this simple coat. The jacket gives you the push to never stop exploring (North Face’s motto) and this jacket can be seen as the reason to go hiking or skiing or snowboarding. Also when wearing this jacket, you feel like you are a part of something and join the group of other North Face product wearers. Also if you look good in the jacket, then naturally you will feel better and the coat delivers this. When analyzing the actual product, it is of course a winter jacket. When analyzing the augmented product, you’re looking at the website and the online community this jacket basically comes with. Also there is a North Face twitter, facebook, and youtube channel that go along with the brand and product and also a complete return policy, lifetime warranty, and full support.

Overall this North Face jacket is much more than just a jacket. With this new age of marketing and product offerings, similar things as describe above apply to countless products in their own ways. Whether they are cars or ball caps, products have become much more than just the material product.

Chapter 7: Ads and Target Markets

In chapter seven, the biggest concept was that of target marketing and finding the right market for your product and then focusing your advertising on this group of people. For this blog post, I found two commercials and I will analyze them by speculating who they were meant for and who their target market is.

                The first commercial (http://www.youtube.com/watch?v=1C8y5z_7YtA) is a Buffalo Wild Wings commercial from a few years ago. The commercial shows a restaurant full of people talking to a referee who is suppose to be viewing game footage, but instead is asking the restaurant attendees what they would like to happen. It’s a very hilarious and creative commercial and the target market that they are attempting to appeal to is the sports watching segment of America. This can vary in age from a college student (or even younger) to the upper middle age section of the population. This commercial is usually aired during sports games as well which is perfect because that is when their target audience is watching television. They did an excellent job appealing to this market because anyone watching can really relate to the commercial.

                The second television ad (http://www.youtube.com/watch?v=vdafSHne5wM) is for Pepsi. Throughout this ad, comparisons are shown between the older generation and the younger generation and sums up by mentioning how every generation refreshes the world. Although the product (Pepsi) isn’t shown until the end, it’s shown in a comparison where someone from a previous generation is drinking a Pepsi just as someone from the current generation is as well. In my opinion the target market for this ad is mainly the current generation, but also I think it extends really to everyone because everyone can relate to this commercial. As I said, the commercial shows different time periods throughout American culture that most people can probably remember or say “Hey I remember that” or “Wow I can really connect with that” and then they see that this is a Pepsi ad and then they feel they can really relate to the Pepsi brand as well. I think it’s an excellent commercial that really does its job and hits its target market well.

Chapter 6: Buying Classes and Milk

For my chapter six blog post, I want to focus on the slide in the power point that talked about the “buy classes” and different types of purchases.  For the purpose of this post, I will focus on one product and then choose the different variations of this product based off of the different types of purchases. This product that I will center my examples around is one of my favorite beverages, milk.

For me personally, when I buy milk and I want to make my purchase easy and do a straight rebuy (which of course requires the lowest effort) I choose 2% milk. This is a purchase I have made countless times and it is a very easy decision to make when I want to just stay within my comfort zone.

However, when I’m feeling adventurous and want to try something different and new (when it comes to milk), I would go with a modified rebuy. This will take some effort, more than what a straight buy would require and I will have to take a little more time deciding what to purchase. For my milk example, a modified rebuy might be 1% milk or chocolate milk. Neither are quite the same product as my straight purchase (2% milk), but the taste very similar and obviously have the same core product. This purchase won’t be a difficult one, but it won’t be an easy one either.

Finally, if I really want to try something completely different, something completely new when it comes to a milk type purchase, I would do what is called a new-task buy. This requires the most effort out of all of the decisions and will take a lot of working deciding which product to go with. Staying within the realm of my product milk, if I am to do a new-task buy, I might purchase a type of milk that is lactose free, maybe Silk (soy milk) or muscle milk. I might also choose a type of milk that isn’t from a cow at all, perhaps goat milk. This product would be much more risky than my original purchase of normal 2% milk and would be a much more complicated and tough decision. This purchase would also be far more risky as well considering there is a good chance I might not like my new product choice at all.

In conclusion, when buying products, whether it is groceries, electronics, or sporting equipment, you can always find a certain class that your purchase will fit in. This might be a purchase that you’ve made hundreds of times and therefore it would be a straight rebuy, but if you stray from this comfortable purchase and choose something that’s different in only a slight way or a much larger way, your purchase would be qualified as a modified rebuy or a new-task buy. This is yet another marketing concept that we may not notice, but it is always happening and always present.

Chapter 5: My CDM Process Experience

Whether consumers realize it or not, there is a process that they go through when realizing they need something. This process is described in Chapter 5 and in this blog post, I will provide an experience of mine experience where I realized I was going through this process subconsciously.

                The first step of the Consumer Decision Making Process is problem recognition and the problem in my case is that I am hungry. I need food and I want to satisfy this need with some fast food. Next I naturally do some information searching; I try to remember which restaurants are close and within a reasonable driving distance. In this case, there is a Subway, McDonalds, Arbys, Quiznos, Dairy Queen, and Jack in the Box. I now move on to evaluating my choices or alternatives and utilize certain key criteria. One of these criteria is that I want a sandwich and not a burger so that can help me narrow my choices down to just two: Subway and Quiznos. A second key criterion is that I want this lunch to be affordable, but both of these options fit that criteria so I can’t narrow it down any further based on that.

                Finally, I can move onto the next step and that is my decision. Based on brand loyalty I have decided to go with Quiznos, which is my usual favorite. As far as the last step goes, post purchase behavior, I am very satisfied with my decision and I don’t neurotically question myself at all.

                Throughout the above passage, I went through one example of the Consumer Decision Making Process and how it guided me throughout my decision of what to have for lunch. Consumer’s do this all the time for many different products and services whether they realize it or not and if you understand the system, it can actually benefit you as an individual in many different ways.

Chapter 4: Marketing Research

      No matter what company you are or what products or services you deal, you’re going to want to do marketing research. This can be done in numerous ways and in this post I will talk about one way that I think is a growing trend. This form of research is the survey that you sometimes receive on your receipt or at the very least a URL that is on your receipt that leads to a survey. I’m not so sure how effective this is; most people that I know (I included) simply throw the receipt away and never give it a second thought. Sometimes the company will offer possible rewards and prizes for doing the survey- Panda Express offers a free entre with your next purchase for example. Other companies such as chain stores will offer big money shopping sprees, but we all know how hopeless this is so we all don’t even attempt it. Overall, I think this method is largely ineffective; yes, it is cheap, but I would guess the survey is largely ignored. There are many other better ways to gather information and I think that if you do choose to do the survey on the receipt, you should probably have some other marketing research methods as well.

Chapter 2: Marketing Strategies

    One of the concepts that I found interesting in Chapter 2 was the four marketing strategies that companies can utilize to expand. Throughout this post, I will choose a company, Starbucks, and explain how they used these four strategies to grow and include my insights.

    The first strategy is Market Penetration or Expanding Existing Markets. From what I have learned, this is usually done through sales or something similar and creative to draw in more customers from the target market. For Starbucks in particular, I found an example of a coupon they gave out. As you can see, it shows its meant for an existing customer, but it says to bring a friend in. This friend is the expansion that they are trying to get from this coupon and this sacrifice of a cup of coffee. They are assuming this friend that is brought in is a member of their target market and they are hoping this friend will return in the future.

    The second strategy is Market Development or trying to find a new geographic market or market segment. There are numerous ways companies can do this and I noticed that Starbucks used a billboard. This is a perfect way to reach loads of people and it also fits into their product as well because coffee and driving go well together.

    The third strategy is Product Development and this can be anything from Apple creating a new product such as the iPad or Chevy introducing a new vehicle such as the Volt. Starbucks utilized this strategy by introducing a new section to their menu: breakfast. Once again, this is a very smart and logical move for Starbucks. Since they serve coffee and many people go there in the mornings for their coffee, it makes sense to sell breakfast as well.

    The final strategy is Diversification. This is where a company can develop new products for new markets. This was a little bit difficult for Starbucks, but one thing I did find was Starbucks entering the music sales industry. Now they aren’t doing this in a huge way, however they do have their own playlists and they also sell many of these songs as Starbucks-type songs with their trademark. This isn’t exactly finding a completely new market, but it is a new product and if it manages to attract a whole new set of customers, it could fit this strategy quite nicely.

    Overall, it is clear why companies choose to utilize these strategies to grow and expand and its interesting how each company chooses to do it slightly differently than the last (or vastly different in some cases). This is what I find interesting and intriguing: the different methods, products, and ideas that companies employ to grow and the sheer amount of creativity involved.

Chapter 1: Not Just a Product

    One of the major concepts that I picked out from Chapter 1 was the idea centered around "you're not just buying a product, but also...". An example from class was "you're not just buying a pair of sneakers, but you're also buying individuality" or "you're not just buying water, but smart water". I thought this was interesting because I have felt that effect on me before when I'm buying various products- anything from a car to an iPod to an item at a grocery store.
    To demonstrate this point in my own apartment, I checked my pantry and found two items that I thought utilized this marketing strategy. The first image is a box of brownie mix, courtesy of Betty Crocker. As the picture shows, it's "Americas Favorite Brownie!" so you're not just buying brownie mix when you pick up Betty Crocker's brownie mix. You're also buying "Americas Favorite Brownie". This can give someone the feeling of belonging to something- being a part of the group who finds this brownie their favorite. The same thing is shown on the lower image of JIF peanut butter. As you can see, it says #1 Choice of Choosy Moms. If you are a "choosy mom" then you're going to want to buy this product to once again feel a part of something. This is smart on the company's part because it would be my guess that their target market is in fact moms or parents in general.