Marketing with mon
Something that we, as this generations students, look at a lot is how powerful social media is. We were roughly between the ages of 10 and 12 when social media really began to take off and occupy space in almost everybody's life. It began as a way for people to connect with people all around the world, a way to express ourselves, and share photos. Since then, businesses have taken this opportunity to market their company through ads and promotions that we see basically anytime we open up a browser. Some platforms of social media are Facebook, Twitter, LinkedIn, blogs, Instagram, and Pinterest, just to name a few.
The video above backs up the notion that it's so incredibly easy to reach largest audience possible with a click of a button. I mean, for the past semester, we've been writing these posts to inform anybody that wants to read these about the basics of marketing. Along with morphing into the basis of human relationships, social media has become a place for people to learn new things, sell new products, and increase brand awareness.
Commercials show up before we watch a new video on YouTube, commercials are added to YouTube by virtually, every company trying to sell something. Promotions are made known to the public domain through tweets and emails. Clothing companies use Instagram to display new lines and models wearing them. Marketers have began to set aside money specifically dedicated to social media marketing because it's starting to prove to reach new markets many didn't even know where out there and be the most successful. Thanks to social media, employers have also began seeking employees that can increase their online presence by simply broadening email lists and gaining more followers/subscribers. The picture below says "for Facebook Marketing" but I believe those tips are applicable to just about any platform of social media. 17 Survival Tips for Facebook Marketing. 2013. Business 2 Community. Web. 17 Apr. 2015.
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Every year, Apple comes out with new phones but usually keep them at the same price as the previous models phone. For example, when a 5S first came out, it started at $199. When the 6 came out, it also started $199 however the 5S price was lowered. They start the new models at higher prices in a strategy known as penetration pricing. Companies initially set their new models/products at high prices to cover for marketing and start up costs. The new watch is another example of penetration pricing. The picture on the left is an 18-karat, $17,000 watch from Apple. Things you can also do with $17,000: buy a car, pay off loans, pay a full year of rent, buy a boat, place a deposit on a house, or travel comfortably for at least 2 years. That's actually besides the point. The point is that yes, the fact that the watch is 18-karats plays a role in that $17,000 but Apple set a huge price tag on it to compensate for the watches they might not sell, marketing costs, and production costs. Nobody really seems to know how the watches, all and any of them, might sell so by setting a high price, if Apple notices a small response, they have room to lower the price without hurting their pockets too much. Other examples of products and services that use penetration pricing are: real estate, tablets, fashion, and televisions. At some point all of these will most likely go down in price. People usually set their houses at the highest price that an appraiser thinks it could be sold at but they quite often will accept the best offer. TV's and tablets somehow always go out of style when the next model comes out, so companies ask retailers and wholesalers to lower the price. Clothes will always lower in price. If they don't sell at the main stores, they're shipped to an outlet and offered at a discounted price. To wrap this up, if you're really thinking of splurging and buying an 18-karat digital watch from Apple, maybe wait a little. Chances are the price will drop. Since the watch is a first generation of the product, you should always assume there are going to be glitches. So wait a little, buy the 2nd generation and maybe save some $$$$'s. In honor of the iWatch coming out in just about two weeks, let's talk about how iPhone users were less than delighted to see a new app automatically downloaded onto their phones called "Apple Watch". With the introduction of the new emojis, Apple included this app in their latest software update. The app that allows you to pair your new iWatch with your phone opens up to the first page that says "If you have an Apple Watch, you can pair it with your iPhone here." Even if I wanted one of their watches, they aren't available until April 24th. Like the iBooks, Podcasts, Tips and the Health apps, this new app can't be deleted. If this isn't forced exposure, I don't know what is. Apple has always spent majority of their time and money on advertising. They have always been successful in being the first company many consumers think of when they want a new smartphone, computer, tablet, etc.. However, as consumers, is there a point when marketing strategies cross the line, for example downloading an app and taking up memory space? We see roughly 5,000 ads and logos per day, whether it's voluntary or involuntary, most of the time we don't even recognize that we're seeing them. Apple's first apps that were released an impossible to delete were Mail, Reminders and iBooks, apps that promote a productive lifestyle. However, now they've taken that main idea and ran with it to promote their other products. It'll be interesting to see how Apple responds to this as users are starting to become annoyed that their phones that are already limited on space are being forced to make room for apps that serve no purpose to them. Is this a great marketing strategy for the new watch or are they going to see consumer's converting to Android, where they can pick and choose what apps they download? Works Cited: Neubecker, Robert. 2014. Slate. Web. 12 Apr. 2015. Apple Watch Icon. 2015. TechnoBuffalo. Web. 12 Apr. 2015. As we already know, PRICE is a huge part of a product. It's one of the first things consumers look at when considering a product as they want to make sure that they're going to be spending their hard earned dollars well. Companies spend a significant amount of time trying to price their product correctly keeping in mind that they also need to make a profit. There are 6 major steps in determining a price.
1. Identifying Pricing Objectives and Constraints:
2. Estimate Demand and Revenue: Based on research, companies will need to estimate who will buy their product and what they think revenue could be if they set it at specific prices. They quite often use demand curves to help in their estimations and these are graphs relating price per units and quantities sold. They base these numbers off of three important factors:
3. Determine Cost, Volume, and Profit Relationships: When pricing a product, it's important for companies to determine how much they are paying in fixed costs, variable costs, unit variable costs and marginal costs (totaling up to total costs). This will set at least a Break even point, which is a certain amount of money they should make to cover the expenses they used to produce the product, so they can keep themselves from going bankrupt. 4. Select an Approximate Price Level: At this point, companies can begin to approximate what their price should be. They've done enough research to (probably) accurately determine what consumers would pay for the product, keeping them happy as well as keeping the company in good financial standings. This price might be debated a little to ensure that the company is making the largest profit possible. 5. Set list or Quoted Price: Now it's time to actually set the price and make it aware to the customer. They'll either react well to the price and they'll know this because there will be a high demand and high sales or sales will be lower than predicted and they'll have to change the price accordingly. 6. Make special adjustments to list or quoted price: Most times if a consumer is reacting well to a price, companies won't change the price. Some products are expected to have some fluctuation, especially natural resources like oil. However, rarely will we see a price go up if it's doing well but if a product isn't selling, a company will lower the price, offer discounts or sales, to get their product out into the public. Companies usually offer the product at the highest price to yield the highest profit in order to leave room for error. All products go through the product life cycle which describes the 4 stages all new products go through in the market: introduction, growth, maturity, and decline. (I apologize in advance for the lack of photos, there's some sort of glitch with the website I use and it's not working.)
Introduction: The product is introduced to it's target market, sales are typically slow and profit is minimal. The point of this stage is to begin marketing the product and spreading the word and create an awareness strong enough to entice the consumer to buy the product. Companies take the risk and will spend most of their money on advertisement and promotional tools. An example of a product currently in the introduction stage is Apple's iWatch. At this point, consumers know the product, a watch that connects with our phones and has apps similar to those found on other apple products. All money right now is being directed towards advertising the watch and building a customer base, most likely consumers loyal to Apple. The product won't be sold until April 24th, so as you can imagine, sales are at zero. Growth: This is when a product shows a rapid increase in sales and competitors begin to show. We find out who are the Big dogs in the market and who might be able to offer a similar product at a lower price. Often for companies to differentiate themselves with their competitors they'll offer a new and improved version. They might also broaden and/or change their distribution channels. The introduction stage can be seen as a "trial" stage and companies make changes based on their results and profits from the intro stage. An example of a product that's growing is alternative energy. More and more people are becoming aware of how much energy they use and seeking ways to reduce it to minimize their carbon footprint. Solar panels are going up everywhere, windmills are being constructed across the nation, more and more electric car charging stations are available. Maturity: When a product is in the maturity stage, industry sales slow and smaller competitors leave the market, which makes the competition between the bigger competitors more fierce. Profits decline but the cost of trying to gain new buyers is rising. An example of a product that's mature are smartphones. For the most part, people that are going to want to buy them already have them. Apple, Samsung, LG and Blackberry are the four competitors and easily dominate the industry. These companies also rely on the sales of other products, like computers and tablets. Decline: In this stage, products are pretty much beginning to be forgotten. Sales drop drastically and there is no longer a need for them. Usually products decline due to environmental and technological changes. Sometimes the products are completely deleted from the market. As examples, we've been looking at technological examples so to continue, an example of a product that's declined: CD portable music players. This product is nearly impossible to find on the internet unless somebody is selling their old one. Companies have stopped production in light of iPods and other other MP3 players that have proven to be more practical. There are several types of products which differ in purchasing behaviors, price and function. Two of the most common types of products are consumer products & business products. In itself, there are four types of consumer products. 1. Convenience Products: bought frequently, conveniently and with minimal effort. Often located at or near the check out. 2. Shopping products: A consumer might compare alternatives based on price, quality and/or style. EX: Organic vs. Nonorganic foods 3. Specialty Products: A consumer makes a special effort to seek information on these types of products. EX: Cars, Houses, basically any large purchase 4. Unsought Products: These are products that we know are there but don't have any need for them and/or we can't afford them. EX: There is a small consumer market for personal helicopters. How somebody classifies a certain product may be different to the person behind them in line. Some people might find a camera to be a quick, effortless buy, depending on their intended usage and income. Another person might spend time doing research, finding the best price in the area and might be loyal to only one brand. Business Products are usually products that are the result of derived demand, meaning that they usually sell from a manufacturer based on what the consumer is buying from the middleman. An example of that is oil. Drillers and companies in the Middle East sell gas based on consumption world wide. The higher the demand They can be categorized into Components which are items that become part of the final product (ex: lumber, metal, grain, car parts). They can also be Support Products, which are used to assist in producing other goods & services like:
Services include anything from cleaning, maintenance, repair, customer service, restaurant business, salons & spa's. Anything that aids the consumer in past purchases or making a purchase, is considered a service. Works Cited:
N.d. Irving Weber Associates, Inc. Business Products. Web. Lumber: A Business Product. N.d. Business Products. Web. 1 Mar. 2015. N.d. The Hershey Company. Hershey's Variety Helps Drive Sales across Your Entire Candy Set! Web. 1 Mar. 2015. N.d. Types of Consumer Offerings. Web. 1 Mar. 2015. We've already talked about target markets, something that is extremely necessary to make a product successful. However, there's more to target markets than we think. There are sub-groups to the groups and we can narrow a market down pretty accurately. This is called market segmentation. We separate these larger groups into groups that 1, have common needs and 2, will respond similarly to a marketing action. EX: Young Adults -->College Students --> College Students in the Northeast --> College Students in Burlington, VT (where it's cold and snowy and isn't Spring supposed to be only weeks away?) Anyway, we're all in the market for a winter coat that's fashionable and probably needs to double as a ski jacket, so it should probably be pretty warm. There are 5 steps to creating a successful segmented target group. Step 1: Group Potential Buyers into Segments. Sometimes it's not always best to segment markets so marketing managers have to look at two questions: 1) Would it be worth it? and 2) Is it possible? If the answer is yes to both, they must find variables within a group and segment based on those variables. Step 2: Group Products to Be Sold into Categories An efficient way to appeal to more customers is to group products together. Based on segmented groups made in step 1, a marketing team might find it productive to bundle products that are similar and could be used together. EX: Buy a new Burton winter jacket and get a free matching hat. Step 3: Develop a Market-Product Grid and Estimate the Size of Matters This type of grid is a framework to relate the segments to products offered or potential marketing actions of a company. If the grid is done completely and correctly, it can show a rough market size for each product and marketing strategy. Step 4: Select Target Markets As a result of the grid, managers should decide which segments they're actually going to pursue. At some point Burton's marketing team went through the process and narrowed their market from young adults to young adults who ski and snowboard in locations with lots of snow and frigid temperatures. They had to cut out all the young adults in the "fly-over states" and the south. It just wouldn't make a lot of sense to spend money and energy trying to sell them a warm, winter jacket when they have no mountains, very little snow, and mild temperatures. Step 5: Take Marketing Actions to Reach Target Markets This is where managers make a decision of where, how and when they're going to market their product. In the case of winter jackets, seasons matter, location matters and even the mean in which their target market is most likely to see an ad. It's unlikely for a young adult to be paying attention to commercials on news channels, weather channels, and the History channel, just to name a few. It is likely that they'll see it on almost every mean of social media, which creates an easy way to go through with a purchase (3 cheers for online shopping). It's important to do research and figure out what would be the most productive way to reach an audience. All of these steps are extremely important in marketing as it would be a waste of time and money if a company did little research on potential consumers for their product. It would be out of pure luck if a marketing strategy was put together randomly and was successful. Works Cited: Randy from A Christmas Story Movie. N.d. Can Staying Warm Keep Your Kids Healthy? Web. 26 Feb. 2015. "Market Segmentation, Targeting & Positioning." Marketing. 11th ed. New York: McGraw-Hill/Irwin, 2013. 224-33. Print.
My heart started to beat fast before the game even started, thanks to Chevy and their blackout commercial (see above). This shattered my heart for about 4 seconds until I realized that they were just joshin' us. After the initial shock and me quickly placing the blame on Saint Mike's cable, I thought it was genius of them. It caught our attention real quick, it promoted the new feature the truck (product) has, it listed the price, and had it driving through the city, a place different than their usual backroad backdrop. Also, the 4G Wifi feature is a great example of product development. Nissan, that was good. Pull at my heart strings a little more. Relatively same product, same market as before, Nissan just upped the ante and captured the hearts of moms, dads, sons, daughters, literally anything with a heart beat. (TARGET MARKET) Definitely a more underrated and under appreciated commercial. Good work, Nissan, do you offer student discounts?
HEY HI WELCOME! I'm sorry these first two posts are a little blah blah with terms but on Sunday (Goooo Pats!) I'll be taking notes on my favorite commercials and then we can look at them, laugh and ugh, analyze.. But I promise some will probably include cute puppies & food. SWOT: One way a company is analyzed based on their perceived STRENGTHS, WEAKNESSES, OPPORTUNITIES, & THREATS. This analysis is the first part of the planning phase, later followed by setting market goals for specific products. Let's break it down and WOAH SURPRISE! Let's use Apple as an example: STRENGTHS: This is an internal factor within the company, meaning something that comes straight from them and that they can control. Apple is a well diversified company, meaning they have a ton of products and are constantly developing their software, they have strong distribution channels in the US (and making their way around the world), and EVERYBODY and their grandmother knows who Apple is (not talkin' granny smith here). WEAKNESSES: Again, internal factor here. Who would have guessed that these are things the company needs to work on?! Well if that's what you guessed, up high. Even a company as big and successful as Apple has some weaknesses. First of all, they lack serious innovation. Yeah we mentioned they have a variety of products but they are all the same, maybe just different sizes and maybe the phone has a camera that is maybe .000001 megapixels better than the previous version. Their products are also relatively expensive which is why really only materialistic countries have them EVERYWHERE (lookin' at you, US of A). They also really place a lot of their sales into iPhones & iPads which could mean that when the next best thing (Samsung???) takes over, hasta la vista Apple. OPPORTUNITIES: Now, this is an external factor that companies need to take advantage of. There are so many innovators out there that are selling their ideas. Apple has a couple opportunities that they're starting to turn into a reality. EX: iWatch & Apple Pay. They are also capable of teaming up and buying companies like the headphones everybody swears by, a little thing called Beats. THREATS: HEY WATCH OUT! These are obviously the things companies have to look out for. Biggest one: Competition! Competition! Competition! Apple needs to keep their eyes out because Samsung is creepin' around the corner and sticking their products right under our noses. DIVERSIFICATION: This is another type of analysis that helps a company search for growth opportunities from current & new markets// products. It includes 1 new introduction strategy & 2 new developmental strategies and then one other thing real original. Ready? It's called diversification. THEY ARE: market penetration: a marketing strategy to increase sales of current products in current markets. Example: selling more of 1 special product to a market. Think special editions. A couple years ago, Apple introduced the (Product) Red iPods and every time one was bought, a portion of the sales would go towards the fight against AIDS. I still have my special edition RED nano and my 12 year old self at the time just thought it was a cool color but my 20 year old self now realizes, hey that idea was kinda cool. Golf clap for Apple. market development: a marketing strategy to see current products to new markets. Think reaching new countries. If we can remember to when we were super young and Apple only sold to a small market of people that loved to create videos, listen to music, be *hipster*. Now, you walk down some deserted street in the middle of absolutely no where and the people there STILL HAVE iPHONES. That's because Apple has made their product more appealing to businesses, easier to use, and believe it or not, more affordable (LOL that $1200 for a computer is considered cheap..?) product development: a marketing strategy of selling new products to current markets. Apple Pay! iWatch! NEW THINGS! HOW FUN! Apple realized people are catching up to them and they need to create their own products to keep them at numero uno. That's where Apple pay and iWatch come in. These are both responses to other products by mainly, Google & Nike. diversification: a marketing strategy that involves developing new products & selling them in new markets. Okay, #tbt to when Steve Jobs & Steve Wozniak created the first Macintosh computer in 1984 (mom? dad? remember this?). There was such a small market for computers. It wasn't until this time that businesses started to really implement them in daily tasks. Cue J & W, workin' hard hardly workin' in (supposedly) Jobs basement. Their market? Homes & small businesses, creating THE turning point in the way life is. OKAY OKAY SO SORRY THIS WAS LONG BUT I PROMISE CUTE PUPPIES (and probably horses) NEXT WEEK! I hope this was clear enough and my apple + beets pun wasn't too lame. Hi! Let me introduce myself. My name is Monica Andreani and I am currently a junior at Saint Michael's College in Colchester, Vermont. I'm pursuing a Media Studies, Digital Arts and Journalism degree and a minor in Business. For the next semester, I'll be keeping you updated on new topics we talk about in my marketing class and just how you can apply it to your life! I'll try to keep it interesting with photos and fun concepts so please bear with me! The 4P's: If you learn anything from this, please learn this. These four simple words are the most important words any advertiser or marketer must know. They are the basics of marketing, for any situation. If you can answer all of these questions about the 4P's, you're on the right track.
Together, these four elements are part of the marketing mix. These elements are considered "controllable factors" and managers use them to solve their marketing problems. Target Market: Wondering who is going to buy your product? As a marketer, it's important to dial in on certain ages, gender, education levels, hobbies, location, etc... The results? Your target market! This should determine how you reach them and promote your product. For example, if you're trying to sell to college students, you might want to try advertising on college campuses and through social media. If you're trying to sell to an older generation, your best bet might be infomercials and home and senior health magazines. HEY THANKS FOR CHECKING THIS OUT! Swing by next week for things like SWOT & Diversification Analysis. "Creating Customer Relationships & Value Through Marketing." Marketing. 11th ed. New York, NY: McGraw-Hill Irwin, 2013. 3-23. Print. |
Monica AndreaniJunior at Saint Michael's College, MJD major, Business minor. Here to teach you the basics of Marketing. Archives
April 2015
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