Blog 10: T'was the Night Before Finals: Wrapping up the Semester as I Wrap up Presents!

Here I sit, on the eve of finals week, 10 days away from Christmas Eve, amazed at how fast this semester FLEW by! I can remember the first day of classes (marketing was my first) like it was yesterday!

 Annual First Day of School Picture (9/1/2014 8:15 a.m.)

On Labor Day of all days, at 8:30 a.m.-ready or not, I entered my first marketing class eager to gain knowledge in a field I am interested in entering once I graduate. As in every college class, the first day is often the class where the professor reads you the long syllabus of what you will be doing throughout the semester. I distinctly remember sitting in this class thinking to myself "this is a lot of work!" We did so many different types of assignments throughout this course to strengthen what we were learning about, which definitely kept things interesting!

One assignment that at first I really didn't understand the point of, was when we each presented a TED Talk to the class. I was scared about standing in front of a class alone, with no PowerPoint, and no notes talking about something related to marketing for THREE WHOLE MINUTES! However, after conquering this fear, I realized how much of an accomplishment this was being able to succeed in public speaking. From there, my presentation skills throughout this class only improved, and I was able to grasp the importance of presenting not only in marketing, but throughout business. I will carry this new-found confidence in my presentation skills throughout the rest of my academic career and into my professional career. 

Each class 2 students would present a brief advertisement in the form of a commercial and discuss it in terms of the marketing mix (Price, Place, Product, and Promotion). This assignment was not only a fun, hands-on way to apply what we've learned in class to the "real world" but it was also a great study tool in applying class vocabulary to the marketing strategy of a specific company. 

Another component to this course was found in an online Practice Marketing Simulation by McGraw-Hill. Working in groups, we participated in the marketing simulation by designing a backpack and formulating a marketing strategy utilizing different promotional channels and distribution channels all while applying concepts learned in class such as pricing strategies, and financial formulas such as break-even points and market share percentages. While this online simulation had a few technical difficulties, and was limited in terms of consumer feedback (I would've loved to have been able to lead a focus group within the simulation to gain consumer insight!), the written assignments that corresponded with the simulation helped to combine all that the course covered in an interesting way!

My group's backpack design within the Practice Marketing Simulation

This course served as a great foundation into the world of marketing. I feel as though I was able to connect concepts covered in this course not only to the real world, but to concepts covered in other classes throughout my college career. I look forward to going more in-depth into specific areas of marketing- perhaps logos, and applying all that I've learned and experienced as an Media Studies, Journalism, and Digital Arts major to an internship in Marketing in the near future, and hopefully a career in Marketing upon graduating from Saint Michael's in 2016! 

But for now, its time to study, celebrate the end of a great semester, and finish wrapping presents that will soon be under the Christmas Tree! 

Thank you for following along during my first blogging experience this semester! I wish you all the Happiest of Holidays!

Blog Nine: 'Tis the Season... But is it Worth it?

Thanksgiving is now behind us, which can only mean one thing... It's beginning to look a lot like Christmas... EVERYWHERE!

Yes, that's right, 'Tis the season for advertisement OVERLOAD! From newspaper inserts, to internet ads and of course the endless television commercials, our halls will be decked with advertisements of this years hottest gifts and gadgets until next year!

It seems as though this time of year has become all about consumption, rather than what it's intended for- giving. I mean just look at the entire concept of Black Friday.

Black Friday, the day after Thanksgiving here in the U.S. is the largest shopping day for Americans. Once we are done giving thanks for everything we are lucky to have in our lives and filling up on turkey and stuffing, we brave the cold weather, the late night and early morning hours, and most of all the CROWDS in order to score what's sure to be the season's hottest gifts at widely discounted prices.

And while Black Friday sales offer shoppers great discounts, they come with a slight danger. In 2008 a Walmart employee in a New York store was trampled to DEATH by shoppers rushing into the store.

A fight breaks out in a Target parking lot

It seems as though Black Friday brings out the worst in consumers as fights break out among shoppers over merchandise, leading to injuries ranging from minor cuts and scrapes, to severe injuries requiring hospitalization, and even death.

While consumers are in competition in order to get their hands on the limited number of products available at such steep discounts, the retailers are also in a price war with their competitors over which store offers the lowest price, which store posts their sales flyers first, and more recently- which store opens the earliest.

The trend of Black Friday has lead to the rising trend of stores opening on Thanksgiving day in what is referred to as Gray Thursday. Big-Box stores such as Target, Walmart, and Best-Buy in certain states now open on Thanksgiving night, as early as 6 p.m. 

One of Target's many Black Friday Ads this season

With consumers lobbying for the first spots in lines, this seems to leave no room for Thanksgiving dinner as some dedicated consumers may line up as early as 9 p.m. Wednesday night, the day BEFORE Thanksgiving.

So is it really worth standing in line for days, missing Thanksgiving with your family, risking your life just to get a good deal on a TV? Think twice about what this season is really all about.

Blog Eight: If the Price is Right!

COME ON DOWN! There are four main components in the marketing mix, Product, Place, Promotion and Price! Price refers to the monetary amount which is exchanged for the ownership or use of a good, a service, or an idea. 

Consumers spend a large amount of time considering the price of a good, service, or idea in determining its value when it comes its perceived benefits such as its quality, durability, status, etc.
                 In other terms, Value= the Perceived Benefits
                                                             the Price
The greater the benefits, the greater the value, and the more a customer is willing to pay.

This gives companies a lot to think about when selecting the right price for their product, service, or idea. Obviously the ultimate goal is to turn a profit, meaning that the company's production costs associated with the product, service or idea are covered from their sales, and there is still money left over.

                 In other terms, Profit= Total Revenue x Total Costs
                                         where total revenue is the unit price x quantity sold,
                                         and total costs are fixed costs + variable costs

So how do company's determine what price will give their product, service or idea the most consumer value, while also producing the greatest potential profit for the company?

Using several different pricing approaches the price for a product, service, or idea can be established. These approaches are broken down into 4 distinct categories of pricing strategies, demand-oriented pricing, cost-oriented pricing, profit-oriented pricing, and competition-oriented pricing.

Demand- Oriented Pricing takes into account the styles, preferences, tastes, and needs of the consumer. Demand can be generated using several different pricing strategies.

• using penetration pricing, a low price is initially set in order to generate demand. 

  

  By offering consumers their first month of service for free, Netflix has established a penetration pricing strategy to attract subscribers. 

• in a price skimming strategy, a high price is initially set in order to satisfy the needs of consumers while associating the high price with a high value, and covering the initial production and marketing costs. 

  

  The new Google Glasses are priced at $1500, a clear price skimming strategy implemented by Google to position Google classes as a high quality product in the "eyes" of consumers.

• company's may adopt a price lining strategy when selling a complete line of products with different features, distinguishing such features such as quality by establishing an even incremental increase in price as the quality of the product increases within the product line. 

  

  each jacket may be set at different prices within even increments based on its features compared with that of other jackets in the line.

• using odd-even pricing products or services are priced at dollars to cents under an even number, presuming that consumers will see this as a good deal. 

  

  Arizona Iced Tea is priced at 99 cents, which is interpreted by the consumer as "less than one dollar."

• in setting a target price company's work backwards with manufacturers to determine the price a consumer would be willing to pay for a particular product, and tailor the product to suit that specific price. 

  

  Cannon uses target pricing with their cameras.

• company's use bundle pricing to sell two or more products at one single package price. The idea behind this is to lower marketing costs while selling a variety of products. 

  

  Kentucky Fried Chicken's Value menu offers combinations of entrees sides and drinks at one package price. 

• in yield management pricing the price of the good, service, or idea is always changing based on the time of day, week, month, or season. 

  

  Airlines use yield management pricing strategies to maximize profits by charging more during holiday seasons when there is an increased demand.

• using prestige pricing a high price is set to attract consumers concerned about status and quality of products. 

  

  The cost of one Cartier 'love bracelet' in yellow, pink, or white gold is $6,600- clearly a high quality product intended for consumers of high status. 

Cost-Oriented Pricing focuses on the costs of producing a product, service or idea rather than the demand that it creates. 

• in standard markup pricing a fixed percentage is added to the cost of all products to arrive at the final price. 
• in cost-plus pricing a specific amount is added to the cost of a product to arrive at a final price.

Profit-Oriented Pricing targets a specific profit that is desired.

• Target profit pricing sets a specific dollar volume desired as a profit. 
• Target return-on-sales pricing sets a specific percentage desired for profit.
• Target return-on-investment sets a specific percentage desired for a return on an investment.

Competition-Oriented Pricing focuses on prices of similar products and competitors within the market. 

• Customary pricing follows the standard, or traditional price of a product within the marketplace. 
• Above-, at-, or below-market pricing uses the prices of similar products in the marketplace as a benchmark in establishing the price.
• in a loss-leader pricing strategy, a product is intentionally sold below market value and its customary price in order to attract sales.

It is important to consider the demand, the costs involved in production, the desired profit, and the prices of competitors in establishing the right price for a product. Once an appropriate pricing strategy is selected, hopefully the right price will be produced so consumers see value in the product, and company's can produce a profit! 

Pricing, like life, is one big balancing act- but if you work hard at establishing the right pricing strategy for your product, the price will be right!

Blog Seven: The Circle of (a Product's) Life- The Product Life Cycle

Sarah Jessica Parker once said, "trends come and go, but friendships never go out of style." In marketing, however, products can and do go out of style.

The stages a new product goes through in the marketplace is referred to as the product life cycle which includes a products Introduction, Growth, Maturity, and Decline.

a visual of the stages of the product life cycle 

In the introduction stage a product is first acquainted with its target market. Because the product is new, profits are low and marketing expenses are generally high. Companies establish their pricing strategies within this stage. In penetration pricing an initially low price is set in order to stimulate sales. In price skimming an initially high price is set in order to offset high production costs.

The growth stage is when companies see rapid sales and profitability. Marketing strategies are changed so as to promote or continue repeat business from satisfied customers. Changes are made to products to help differentiate the product from that of the competition.

These changes made in the growth stage that help differentiate a product from the competition come in handy during the maturity stage where there is a large amount of competition in the market causing a slowing of sales and profits. Marketing in this stage is centered upon holding market shares.

Lastly, the decline stage goes along with its name, and is characterized by a decline in sales. Marketing is no longer relevant to the future worth of the product and therefore companies have two options for a product in the decline stage- Deletion which involves dropping the product from a company's product line, or harvesting which involves keeping the product in the product line, but diminishing marketing costs.

As we know in business you can never predict the market, therefore it is nearly impossible to predict the length of time a new product will spend in each stage of the product life cycle. Not all products spend the same amount of time in each stage of the product life cycle. There are high-learning products, low-learning products, fashion products, and fad products.

high-learning products require a large amount of consumer education and therefore spend a large amount time in the introductory phase. In the ever-advancing world of technology perhaps the newest trend to come is that of the Google Glass. As a Media Studies, Journalism, and Digital Arts major, I have spent a decent amount of time in several of my classes talking about this new technological advancement and I was shocked when a student asked what they were in our marketing class last week. This just goes to show that high-learning products such as Google Glass need to spend a large amount of time in the introduction stage to generate awareness.

Google Glass

low-learning products require little to no consumer education, allowing sales to begin immediately. The benefits of such a purchase are easily understood thus creating a market full of competition. Marketing strategies within this phase aim to broaden product distribution so as to produce a large market share. Examples of low-learning products are razor's, toothpaste, and several other everyday items. 

fashion products are styles of the times. These products go in and out of style on a regular basis going through each stage of the product life cycle. In the decline phase, fashion products are harvested as they will most likely become in style again. 

Leopard is a fashion product

fad products experience rapid sales upon introduction into the market, quickly followed up by a fast decline in sales. I can remember being in middle school when Crocs were popular, and then the following month they weren't cool at all. Another example of a fad I witnessed were the rubber bracelets that were shaped like different animals, places, or things called Silly Bandz, which were everywhere for the two months they were actually popular. 

Silly Bandz shaped like characters from Yo Gabba Babba, a popular children's television show

And thats the circle of (a products) life!

Blog Six: Is That New?

Companies oftentimes place the primary focus of their marketing strategy on products, services, and ideas that are "new." But what exactly makes something "new?"

The problem here is in the term "new" itself. If you've just come out from living under a rock for the past 10 years you may think a basic cell phone is a new technology, however, smartphones are wildly popular in today's society.

We can then realize that there are several different viewpoints of the word "new" as it pertains to marketing- new as it relates to existing products, new in legal terms, new from a company's perspective, and new in the eyes of the consumer.

Products that contain different features, whether new or improved, as existing products are considered new. As Apple is now on its 6th version of the iPhone, the iPhone 6 and iPhone 6+ are considered to be new products as they contain different features (better camera's, different shapes and sizes, larger screens) than their predecessors.

As far as in the eyes of the law, the Federal Trade Commission (FTC) classifies products with the term new for its first six months of regular distribution. On September 19, 2014 Apple released its iPhone 6. As long as Apple does not release a new model of the iPhone within six months, this product will be classified as new until March 19, 2015.

New products from an organizational standpoint are assessed based on risk into 3 main categories; product line extensions, jumps in innovation or technology and brand extensions, and  true innovation. Product line extensions require the least amount of risk for a company and include improving a line of a product that the company already sells, such as Coke producing Coke Life, a healthier and more natural soda, in addition to its Diet Coke and Coke Zero products.

jumps in innovation or technology occur on a pretty regular basis in today's technologically driven society. An example of this is each time a cell phone company comes out with a new smartphone. Meanwhile at this same risk level, Brand extensions occur when an established brand enters a new product market. In "sticking" with Coke (Bad pun) an example of this is producing merchandise with the Coke Logo on it such as tee shirts and baseball caps.

Coke Merchandise 

True innovation involves a radical invention and a completely new product idea. This occurred when Apple introduced their iPad, combining features of their computers with features of their iPhones, a game-changing invention. 

Products can also be defined as new based on their methods of consumption. In this way, consumers classify new products based on the degree of learning that is involved. 

In continuous innovation consumers do not need to acquire any new methods of use in order to utilize the product. We see this in everyday products such as toothpaste where companies can add qualities such as whitening benefits or breath enhancers to the product without changing its terms of use.

Colgate toothpaste is still used in the same way, it just has added benefits to help increase its demand.

In dynamically continuous innovation consumers change minor habits of product use, while the product itself does not change. Products that have gone through dynamically continuous innovation oftentimes have undergone slight changes in their logo or in their packaging. The marketing strategy here is to exploit the benefits of the product through its use.

In sticking with the toothpaste example from continuous innovation; for years I had been using this specific flavor of Crest toothpaste which came a stand up bottle which I found convenient to place on the counter. One day I went to the store to buy more and I noticed it now came in a tube. At first I did not see the need to change its packaging- and was a little worried at how I'd store my toothpaste in its new container, but after using it I realized that the tube is a way more effective medium for toothpaste as consumers can "squeeze" more out of the product, while companies have a box that they can place additional marketing features on, a dynamically continuous innovation. 

In discontinuous innovation consumers must learn completely new methods of using the product. If you've bought a computer that uses the Microsoft system anytime since October 26, 2012 you'll notice that the new Windows operating system, Windows 8, is now installed in that device. This system looks, and works entirely different than that of its predecessor, Windows 7. With this, consumers have to adapt to learning how to navigate through this new system. 

The new look of the Windows operating system, Windows 8

So the next time a friend, family member, coworker, or stranger asks you if your shoes, cell phone, or cookies that you're eating are new, think twice about your answer!

Blog Five: One Size Does Not Fit All- Market Segmentation

I have always been on the small size and I have seen the misconception that comes with the statement "one size fits all," because lets face it- those socks are way too big for my tiny feet, my head is too small for that hat, and those gloves are way too big for my small hands- ONE SIZE DOES NOT FIT ALL!

As I have observed through my experiences in shopping for winter accessories, one product will not satisfy all consumers needs and/or wants. Something that a child would want is certainly not something that a middle-aged man is going to need . In marketing it is important to have a target market- one specific set of potential consumers toward which a company directs its marketing activities. The target market of a product cannot possibly be people of all ages, it would be way to expensive. and thus ineffective, to market such a product to each demographic. One way of increasing the effectiveness of marketing is through market segmentation- placing prospective buyers into different groups in which members will have the same needs and interests and respond similarly to a product, thus resulting in various market segments of consumers with similar behaviors.

There are three different types of segmentation strategies that companies follow- one product and multiple market segments, multiple products and multiple market segments, and segments of one/ mass customization.

One Product and Multiple Market Segments occur when a company or an organization produces one specific product with the idea to sell it to 2 or more market segments. Much like with the Harry Potter book series by J.K. Rowling, Disney released the movie Frozen in 2013 originally targeted towards children and parents. However, buzz quickly spread and these products have become extremely successful for all ages. 

 

♫Let it go, Let it go♫

Multiple Products and Multiple Market Segments are found in companies which produce different products within their product lines targeted towards different types of customers. While Apple came out with the iPhone, which replaced the iPod for many, the iPod is still popular among young children who do not have a need for a device with a phone in it. 

While one product seemed to have replaced another, a new market is found for the product which seemed to be obsolete. 

Segments of One: or Mass Customization has occurred as a result of consumers wanting to be as unique as possible. Companies had to find a way to address consumers growing desire for a unique product tailored toward individual consumers, while being able to produce this product with fast and effective manufacturing. A heightened flexibility in manufacturing along with the internet has helped to make this possible, allowing for online ordering to produce products in a process of mass customization. M&M's, a Mars company, has adopted a product available for mass customization. 

Using an online ordering system consumers can customize their M&M's.

In selecting a specific market segment as a target market, a company can increase the effectiveness of their marketing strategy. 

Blog Four: You Can't Always Get What You Want, But...You Get What You Need

One of the things I like the most about going to Saint Michael's is the Liberal Studies Curriculum that we follow. With this, we are required to not only take courses in our major, but also to take foundation courses in each major subject area here at the college, for instance English, History, Science, Math, and Art, but also Religion, Language, and Philosophy.

As a First-Year student (what freshmen are referred to at Saint Mike's) I took a foundation course in Philosophy cleverly titled Introduction to Philosophy, and while I don't remember much from this class (It's been almost 3 years!) I do remember learning about a concept called The Hierarchy of Needs Theory by Abraham Maslow.

In taking classes within this Liberal Studies Curriculum, I have found that a lot of times my classes overlap and I learn about something I have already learned in another class, much like what happened last week. Not only did our Marketing textbook-and exam that followed, cover this theory relating it to marketing, but my Management textbook covered it also relating it to motivation. It was definitely a deja-vu moment that allowed me to connect the dots and understand this theory more deeply.

This theory, published by psychologist Abraham Maslow in 1943, states that there are five different types of human needs. These needs are arranged in a hierarchy, so that once one need is satisfied, another one can be met, much like going up a staircase- you can't reach the second step without going up the first to begin with.

So what are these needs and how do they relate to marketing?

As we have already learned, Marketing seeks to Identify the needs of consumers, and to fulfill those needs. Maslow organizes these 5 basic human needs into categories- physiological, safety, love, esteem, and self-actualization.

Physiological Needs- the most basic needs to be met by consumers which include food, water, air, clothing and shelter.

If you are driving down the street and are hungry, you may see this sign and recognize you need to fulfill your hunger and stop at McDonald's for some food.

Safety Needs-make up protection, security, and freedom from harms way. 

Companies that provide homes with security alarms fulfill these homeowner's safety needs.

Social Needs- include feelings such as affection, love, belonging, and friendship.

Online Dating companies that help others find love are attempting to fulfill ones social needs.

Personal/Esteem Needs- bring need for achievement, prestige, status, and respect. 

Luxury cars bring the feeling of prestige.

Self-Actualization Needs- the highest level of needs and also the hardest needs to fulfill, this category achieves the feeling of self-fulfillment once one has met every other need.

Ads such as this U.S. Army recruitment poster that invite one to "be all you can be" suggest to satisfy ones self-fulfillment needs. 

As a college student on a budget I can completely relate to Maslow's hierarchy of needs while I am shopping. I focus my buying on items like food and gas which are necessities to fulfill my physiological needs while items which satisfy esteem or self-actualization needs are put on hold. However my parents, who already own a home, have found love, and own nice cars, may be looking to fulfill their self-actualization needs at this stage in their lives. As we know in Marketing, it is all about targeting the right person at the right time!