Introduction to Marketing (extension)

Dissonance-reducing buying behavior

Habitual buying behavior

• Short-run reactions:
  - (Re)Positioning of existing products
  - Adaption of communications (highly trendy features, e.g. green products)
  - Adapting easy-to-change product features (add service features)
• Long-run reactions:
  - Change or adapt company strategy (e.g. Audi: cars for old people –> sport cars)
  - New products (e.g. products for LOHAS (lifestyle of health and sustainability) costumers, products for aging society)
  - New business fields
  - Change business model (e.g. form product to service – XEROX, IBM)

1. prepare product ranking
2. compute average score of each attribute level
3. compute part worth utility of each attribute level
4. compute raw importance of each attribute
5. compute relative importance of each attribute

• Evaluate impact of a product redesign
• Test new product concepts
• Estimate demand curve and set pricing
• Estimate brand equity
• Identify market segments

• Measurability: degree to which size, purchasing power and profiles of a market segment can be measured
• Accessibility: degree to which a market segment can be reached
• Substantiality: degree to which a market segment is sufficient large and profitable
• Differentiability: degree to which a market segment is conceptually distinguishable
• Actionability: degree to which attracting programs can be designed for attracting and serving a market segment

• Core product: product that is most directly related to core competencies of the company, benefit that makes product valuable (e.g. relaxation is core product of holidays)
• Actual product: physical or tangible product that a customer buys to receive core benefit (core product + branding, packing, design etc.)
• Augmented product: both primary physical and non-physical attributes that are added to increase the product's value (actual product + after sale service, warranty etc.)

• Intangibility: not touchable
• Heterogenity: no two services are the same --> evaluation in advance is not possible
• Inseperability: not storable --> production and consumption occur together
• Perishablity: services perish, e.g. if plane takes off, seat (service) cannot be sold anymore
• Lack of ownership
• Customer co-production

Ability of a brand to acquire and bind customers more effectively than without branding

• Manufacturer's brand: manufacturer markets a brand under its own name (e.g. BMW)
• Private brand: brand owned by wholesaler or retailer (e.g. M-Classic) --> "battle of brands" (vs. manufacturer's brand)
• Licensed brand: contract of brand owner and company that wants to use the brand for its products (e.g. Mickey Mouse used by Ravensburger)
• Co-branding/brand partnership: two companies form an alliance creating a marketing synergy (e.g. Philips & Nivea)

• Narrow definition of price: amount of money charged for a product
• Broad definition of price: sum of values a consumers exchange for the benefit of a product, including non-paying values (e.g. word-of-mouth, co-production (self-checkout), data, network value etc.)

• Advertising
• Sales promotion (e.g. 20% discount)
• Personal selling (mostly B2B)
• Public relaitons: building good relationships with company's various publics
• Direct marketing: direct connections to carefully targeted individual customers

• Circulation: number of printed copies of an issue
• Issues sold: total number sold - number of complementary issues and returns
• Gross reach: number of contacts that can be reached with the medium
• Gross rating point GRP: \(CR=reach*frequency\)
  reach: % of target group exposed to the medium
  frequency: # of times a person of the target group is exposed to the medium
• Cost per mille: \(CPM=\frac{c}{C}*1000\)
  c: cost for using the medium
  C: # of contacts with each use of the medium

+ posiblity to measure consumer response (view, click, sale, lead) (not just assuming)
+ metrics are based on interactivity --> better proxies for advertisement success
+ online customer journey analysis enables path conversion analysis

- most companies have troubles in tracing the sources of consumer's actions
- data exists, but firms are not able to use/analyze them
- cockie-based tracking has disadvanteges (expire after 30 days, cleaining tools)

Sale of product accounts only for a small portion of the revenue, most of the revenue comes from providing services to the product

1. Requirements definition
2. Customizationa & integration
3. Deployment
4. Post-deployment support

+ lower functionality risk
+ lower transaction costs
+ no skills for integration required

- high risk of technological and/or contractual lock-in
- more expensive