Design Marketing strategy Assignment

>> Okay management, Technology, ethics, capital, globalization, free market, strategy, branding, promotion, innovation. I'm Miguel Garcia and this is Fundamentals of Management and Marketing for Non-Business Majors.

Let's talk about the first P, products.

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When we talk about products, we are not referring only to physical products. Product is everything one receives in an exchange including all tangible and intangible attributes and expected benefits. That means that a product can be a good.

>> This is iPhone 6S. Not much has changed.

>> It can be a service.

>> With Uber it's all possible.

>> Or even can be an idea. And we're talking about physical products, it's not just the product itself, but it can be the brand, it can be the packaging, it can be the labeling.

>> Tropicana dropped its well known carton that we've seen for years. The one showing an orange with a straw in it. And instead opted for a more understated look. It was just a simple glass of OJ. But apparently many consumers hated it and Tropicana's feeling the squeeze. Will Ogonki [phonetic] has more this morning.

>> It bombed royally with customers. They voiced their opinion on the Internet. One fan wrote, "I would never buy the new packaging". Tropicana released a statement yesterday. They said we heard our consumers and we listened. We appreciate their love and passion for Tropicana. And when they told us they miss the look of their Tropicana, we responded and we're bringing back the original.

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>> When we buy a product, it's not just the physical part that we value. In the case that we just heard about Tropicana, the juice is absolutely or was absolutely the same independently of the packaging. But it make a huge difference in the consumers because they are not buying just the juice. They are buying everything that comes with it. The packaging, the labels, the logos, and everything is considered when deciding to buy or not the product.

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The truth is that not all products are born the same way. This product

offerings can be distinguished among different criterias. But the one we're going to use is the following. For example, we have convenience offerings which are products and services that consumers generally don't want to put too much effort in something. Because there are very few, very little differences among them. Bread, cereal, fuel, milk.

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>> Wait a minute. Where am I?

>> Got milk?

>> We can take this to a higher level whether we talk about shopping offerings in which consumers develop quite a strong preference for one brand over the other. To the point that sometimes if you go to a supermarket and you don't find the toothpaste brand that you want, some people will go even somewhere else to try to find it.

>> I don't care what everybody's using, you're using a fluoride paste to fight cavities.

>> But, mom, I need this gel for fresh breath.

>> Pardon me. My family used double protection Aqua Fresh.

>> Aqua Fresh gives you all the cavity-fighting fluoride.

>> Another higher level of that is what we call specialty offerings. When are brands that are more exclusive and people will go a long way to get those. Let's say you want to find an Rolex watch. So those are not available everywhere. And some people will go a long way to try to get it if that's what they want.

>> The first Rolex with two time zones and an annual calendar that discreetly marks the passage of the months. At the heart of the movement.

>> And above the characteristics of a product or a service, we have the brand. And when we find the brand as a name, term, symbol, design, or any combination that identifies a seller's product or service as distant from those of other sellers.

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>> Branding is the foundation to every successful business endeavor. Branding is you with intent and clarity at every customer contact point. It is the purpose that drives your business.

>> If consumers have a favorable experience with a product, it builds brand equity. It means that the brand has value. If consumers are

loyal to it over time, it enjoys brand loyalty. And as you all know, there are certain people who only buy, for example, Honda cars.

>> This is what a Honda feels like.

>> That experience has been very positive, and they don't see the need to change brands.

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>> Apple has long been maligned for its pricing. There is what's been called an Apple tax. So let me introduce you to a little simple concept called supply and demand. Apple can charge a premium for the products, people will pay them. If people didn't want to pay that premium product, then the price would go down or the demand would go down and Apple's profits would, in turn, also go down with it. But people are buying these things in droves. The iPad is selling millions. It's like 11 per hour. IPhones, Mac Books, Mac Book Pros, iMacs. These things are flying off the shelves. Apple is not a charity.

>> That was John Rettinger from Revision3. He was talking about Apple pricing. And that's what we call demand-based pricing. The price is set up by the company thinking of how much consumers are willing to pay. But that's not the only way of pricing the product as we're going to see in the next few examples.

>> An interesting question to ask is how do people actually set prices in real life? And you ask your, let's say, restaurant uncle, he obviously, I take the cost, and I add something on top so there is some money. And this is what we call mark up pricing. Is he earning profits? Of course. The maximum, well, you may not be very sure.

>> Cost-based or market pricing models works very well in restaurants as we can hear about. But also it works very well in custom products or custom services that are built upon request. Rather than having them on stock. It's not probably the most profitable system, but it works very well. It's very different from what we just hear before about the Apple products where the price is not set up by how much it costs to produce but rather how much people are willing to pay. Having said that, there are other ways of fixing prices. For example, the odd/even pricing model which plays a lot more with our psychology and how we react to certain prices verses to another.

>> Always go in with an odd price to the customer. Now here's why. You go in with an even price and let's just use this example, $1,000. But if you go in with a price of $997.47, what does that make. Well, first of all, it's not 1,000. Okay, we know that trick. But here's what it is. Anytime I go in with an odd number, it makes it feel as if I've done more thinking, more processing. That this truly is a price that

is what it is. And it's not just some smoke and mirrors.

>> There are a lot of ways that you can use to set up the price for your product or service. Some work better in certain industries than others. But in any case, all of them have pros and cons. The important thing to remember is that price is the only part of the marketing mix that brings revenue.

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>> A 14 acre warehouse is swarming with robotic carts and forklifts.

>> Every day the stores send our orders in, we select that product, ship it out to the stores, and in the produce world, we basically empty the building every day.

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>> Just take their top-selling item, bananas, 90,000 pounds of them arrive at their warehouse every day from Central America. A full two weeks before they'll reach store shelves.

>> We're trying to orchestrate it so that we work right on what the customer wants. Because bringing in product they don't need or aren't going to buy, that doesn't help anybody.

>> And what doesn't sell, doesn't go to waste. The supply chain process is so streamlined today that only a tiny percentage ends up in food banks or the trash.

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>> Just listen an example of another one of the Ps in the marketing mix. This one is the P for placing the product or distribution. As you can imagine, producers cannot afford most of the time to deliver the product themselves to every single supermarket, for example. That's why we have distribution companies, retailers that get the products from multiple producers and put them in one spot where I go and buy them. Let's think about the example of a supermarket. I can go there, find multiple products that have been produced by multiple companies. To get that done, we need distribution companies. And that requires physical distributions, you have to move the items from one place to the other. But that means to have in storage warehouses, trucks to deliver, material handling. So it becomes a major operation. That's why there are companies dedicated to supply chains which is, that's what it means. Getting things, move around at the right time, at the right place, at the right cost. Most of us buy our products through retailers. Companies who make available to us in one single place products from different manufacturing companies or different producers.

>> Amazon Prime Now. Free two hour delivery on thousands of items. Shop for daily essentials like home.

>> It's so convenient, it has become the most common way of buying things. But it is not the only one. You can find situations where producers sell directly to consumers. And here in Madison, we have a very good example of that. The farmer's market at the square.

>> Well, the farmer's market here started in 1972. There were certainly other farmer's markets in the area before that time, but we started in '72 and been going continuously since then.

>> Dane County Farmer's Market manager Larry Johnson says the organization's humble beginnings hale to what's now become the largest producer only farmer's market in the country.

>> Hot and spicy cheese, bread!

>> Meaning everything you see on the table.

>> If you're going to try them. Why not? Go all out.

>> Must be produced by the person behind the table.

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>> Promotion is the last P of the marketing mix. Using billboards to let potential customers about a particular product or service is a promotional tool. Studying the patterns of traffic of both people and cars was really helpful when deciding where to locate billboards. And consequently getting the best return of their investment.

>> Commonly referred to as traffic. Traffic is the necessary and fundamental function of a population that composes a market. Without such traffic movement, there could be no market. Composite traffic flows or streams of various classes of traffic make definite and stable patterns in any community. These patterns are a necessary element in the scientific planning of outdoor advertising locations. Outdoor advertising companies have the definitely responsibility of guaranteeing potential consumer circulation of specific market locations. The general outdoor.

>> That was in the 1940s. And, yes, the world has changed a lot since then. But some of the basic principals remain the same. To promote a product, marketers use the promotion mix. Which is the way that they use to communicate with customers. And that can include many tools but all of them try to persuade potential customers to buy products.

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Advertising on TV, advertising on radio, posting ads in magazines or in newspapers, using sales promotions or personal sales. They are all tools that we use to promote products or services.

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Today, thanks to new technologies, we can promote our products or services in new ways. New ways that permit a lot more customization or personalization of our message. But also ways that allow us to track in a much more accurate way the impact of our investment.

>> If you really want to use social media right, you need to understand the particular culture of the particular platforms. And if companies need to choose which platform fits best for their particular objective which can be anything from awareness to consideration preference, action, or loyalty, they need to figure out which platform fits best. Facebook has a very different culture from Twitter. Twitter has a very different culture from Pinterest. So if you do not understand these differences between these platforms, it will be difficult for you to use the social media. Companies need to make clear decisions about what are my particular objectives? And how does my company culture maybe also fit well with a particular culture of these different platforms?

>> New technologies are providing us with new challenge in which to promote our products or services. Despite those, the purpose of promotion remains the same. We want people to know about our products or services with the idea that eventually they will become customers. With promotion, we have completely the last element of the marketing mix. Let's recapitulate.

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The marketing mix is a series of tools that we use to develop and implement a marketing program. A marketing mix is composed of four elements. Product, price, placements or distribution, and promotion. An important thing to remember is that you need to do a good job in all four elements of the marketing mix. You have the right product, but it doesn't have the right price, or it's not located at the right place at the right time, or doesn't have a good promotion, it will not succeed. You need to make sure that you work on all the four elements of the marketing mix.

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>> This course was made possible by the Wisconsin School of Business Innovation Fund.