Post 8

Each week of I have posted a new blog- this has meant connecting things I learned in class with outside companies or relevant topics of my choice. By doing so, I have gained several different outcomes all of which have increased my knowledge and experience of marketing. Below I have broken up what I have learned from these blog posts into five sections. Each section summarizes key lessons that relate to marketing...

1.      The customer and entity/business are the two key figures is marketing. One cannot survive without the other. The relationship between the two is vital and the business must constantly reevaluate itself to make sure it is providing consumers with what they need in an affective/efficient manner. Businesses must be able to recognize marketing opportunities and to deal with both inside and outside effects. A company could be affected by an incompetent manager or hit by an economic downturn. As a result, a company must be able to deal with and react to whatever situation is thrown its way. For example, in one of my blog posts I mentioned the struggle that Ford had encountered when trying to sell its 1950s car model. Ford had to deal with product failure to a great extent and be able to accept and move on from its models poor reception.

 

2.      Marketers are the ones trying to sell the goods or services of a business and they play a vital role within each company. They may use oral or written forms of communication to reach customers. For example, in my blog posts I often include pictures from advertisements of certain products. Some advertisements will just be a picture followed by a simple message. In my second blog I show a picture advertisement example of Ripcurl- it’s a surfer sitting on one of their surf boards and it reads “surfing is everything” with the logo below.

 

3.      Researching in marketing is very important. Without research, a company is sure to fail. A company must choose a target market and look at potential consumers. It is helpful to know review their age, sex, race and demographics. Also, knowing what millennia’s are targeted is important. This will inform the business what medium to use in order to reach the consumer and what message would be most effective. An example, in my first blog I discuss Tommy Hilfiger and its effective message of “Classic American cool” to reach its targeted consumer.

 

4.      The decisions that a business makes will of course depend on what type of business it is. There are non-profit companies, public companies and smaller businesses. Each has a unique perspective and goal. A non-for profit may not have a core focus on making money but operating efficiently and providing client satisfaction. In addition, public companies may have the goal of making a profit but the way they go about doing so obviously varies. Different companies have varying mission statements. Increasingly, companies are including environmental awareness to its mission/everyday activities.

 

5.      Although companies aim to make a profit, they do have to follow the law in doing so and managers/marketers should act ethically. In the past there has been debate over marketing and whether there we are affected by subliminal messages. Also, as mentioned in my last post, there is arising controversy over direct marketing and its invasion of privacy. How much should a company be able to research/track us online in order to target us? These issues are being brought into light and will likely be continued to.

      Marketing Communication: Direct marketing 

            How do companies communicate with consumers? Well a source (the company) conveys a message though a channel of communication and the receiver (the consumer) sees or hears it. A company can communicate in one of five ways: (1) Adverting (2) Personal selling (3) Public relations (4) Sales promotion (5) Direct marketing. A company may decide to use a few, just one or all of these methods. However, I will focus solely on number 5, direct marketing. Following, I will give an example of direct marketing, offer some of its positive/negative attributes and lastly, recognize some challenges it is experiencing.

         What is Direct marketing? It uses direct communication with a consumer. The different forms may vary and take on any one of the following forms: face-to- face selling, direct mail, catalogs, telephone solicitations and online marketing. Direct marketing is one of the fastest growing forms of promotion. Today, online marketing is very popular and many of us encounter it on a daily basis.

 

         Below is a video that shows examples of direct marketing and more specifically, the use of direct mail...

 

                   In this video there are a few different examples of direct marketing done by car companies. The most interesting example I found in this video was used by Porsche. Porsche used a very personal technique of direct marketing.  They took their newest Porsche model car and parked it in different driveways of some of the most exclusive homes in a Toronto neighborhood. Then employees of Porsche took pictures of the car placed in the driveways and printed out the pictures. Each picture was personalized and placed in the mailbox of each driveway/home used. The campaign slogan was “It’s Closer Than You Think.”  Obviously, this is an extreme example of personalization that was very time consuming and surely expensive. However, Porsche did record an impressive 32% response rate from its direct mail.

 

Here the Porsche car is being photographed in selected driveways

 



These show the final product of personal/direct mail to the potential customers of Porsche.

 

 

 

 

+Positives of direct marketing: The message can be prepared quickly and it facilitates a relationship with the customer. The ability to customize customer communication efforts is key.

 

-Negatives of direct marketing: Declining customer response and the database management is expensive. Also, there is some concern as to the privacy invasion of direct marketing as I will explain below.

 

                                          Challenges to direct marketing:

               Although it is fast-growing, direct marketing also faces a major challenge relation to consumer privacy. There is an increase of ethical issues as to how much information a business should be able to asses about a customer. For example, many businesses are matching customer records with Facebook profiles, twitter following behavior and Google search activity. When going on the internet, it is likely ads will pop up on the side that relate to you and your previous purchases or searches. In the United States, there is an increased concern over privacy and web “tracking.” The Direct Marketing Association has created an “Ad Choices” icon which allows consumers to opt out of having their online data collected. Currently, the United States senate is evaluating the “Do Not Track Online Act.” The outcome of this could have large effects on marketing, social media and the use of direct marketing.

 

 

                                                                      

  

 

                                                                  Citing:

 

Picture1:http://www.creativeguerrillamarketing.com/guerrilla-marketing/porsche-dealer-puts-your-house-in-direct-marketing-material/ (also Porsche statistic of 32%)

Picture2:http://www.mdgadvertising.com/blog/pfaff-porsches-customized-direct-mail-didnt-even-need-a-stamp-direct-mail-marketing/

 

Packaging and labeling

 

Have you ever payed close attention to the outside of the cereal box you purchased, to the plastic bottle containing your water or to the bag containing your chips? Often packaging is a very important part for businesses to consider when selling their products. In fact, the first exposure a consumer may have to a product is its package and label. For this reason, packaging is expensive and a vital part in marketing strategy.  A lot of time, thought and money goes into its design. A unique package and design can create a competitive advantage for any company.

 Creative.                          Unique.                                         Designs.

                               This is an example of a unique and clever spaghetti packaging design.



Types of packaging benefits:

Communication benefits: This is the information it conveys to the consumer such as directions, nutrition information and dietary. This is especially important for food products.

 

Functional benefits: Packaging can play a functional role in providing storage, convenience, protection and ensuring product quality.  

Perceptual benefits: This is the perception that is created in the consumers mind from the products presentation. Packaging, label shape, color and graphics distinguish one brand from another. Packaging increases brand recognition and can facilitate favorable and memorable brand associations. The packaging of a product can change every few weeks to reflect different themes. The changes in packaging can uphold a brand’s image in a consumers mind.


 An example of unique product packaging done by Nike…

Nike Air Max

 

 This is a shoe that has been on the market for a while however, it has always been shipped and sold in Nike’s classical cardboard boxes. Today, Nike has ditched this traditional packaging and changed to a clear cushion casing. This new casing was created by a Berlin based agency that has been known to come out with creative packaging ideas. Nike’s new product packaging is revolutionary compared to its past packaging and labeling. The clear casing highlights the shoes features very well, taking the “air” aspect of its name and literally placing the shoes in an air-tight plastic bag. The bag creates an illusion that the sneakers are actually floating in the bag and highlighting the air cushioning of the shoe. The new packaging also reduces its risk of damage during shipping. Due to less use of materials in the packaging process, the new presentation it contributes to more sustainability. 

 

Nike introduced its Air Cushioning Technology and shoe in 1979, so the air max shoe is clearly nothing new. The shoe of course has developed over the 36 years it has been out. It has gained more cushion, comfort and advanced technology has improved its performance. Although it is the same product, the new packaging does a great job at showcasing its new features. A new packaging design can change the placement of a product in a consumers mind. I would say Nike has created a favorable and creative brand association by its means of new packaging. I think that Nike’s newest labeling and packaging will have a positive effect on its sales for the air max shoe. People will probably precise and associate the new packaging with a newly designed shoe. It is futuristic and its Nike's change shoe design has finally caused a change in its product packaging. It makes me wonder if cardboard shoe boxes are now a thing of the past. The new plastic bubble could easily become a new norm, with Nike setting the precedence.

 

 

Cited...

(front shoe) https://www.google.com/search?q=nike+air+max+logo&noj=1&site=webhp&source=lnms&tbm=isch&sa=X&ved=0CAgQ_AUoAWoVChMIlPHHyf-SyQIVhtUeCh1q2w7h&biw=1778&bih=837&dpr=0.9#imgrc=qIMUkhxjBbCkwM%3A

 (back shoe) http://www.nicekicks.com/2013/06/19/nike-air-max-packaging-by-scholz-friends/

(unique packaging) https://www.google.com/search?noj=1&biw=1778&bih=837&tbm=isch&sa=1&q=creative+packaging+spaghetti+ny&oq=creative+packaging+spaghetti+ny&gs_l=img.3...2979.4049.0.4405.3.3.0.0.0.0.108.250.2j1.3.0....0...1c.1.64.img..3.0.0.aozc58guU0I#imgrc=F7CNA74ScB5VvM%3A

                            

                             110-years, of luxury and quality.
                          How do they price their watches?



The price must be “right”

Pricing plays a unique roll and is very important for a business. The price must be “right,” that is the consumer must be willing to pay the stated amount while the business simultaneously generates enough sales dollars to cover its expenses like development, marketing and production. The business aims to not only cover its expenses but generate a profit. The price of a product will influence a consumers’ view of both quality and value. Often times, a higher price is correlated to a higher quality. A consumer will judge the worth of the product relative to substitutes that satisfy the same need. If a product is perceived as having more value at the higher price compared to the others, then the consumer is willing to pay the price…So how does a company like Rolex price their products?

 

  Prestige Pricing

Rolex is a luxury brand that sells watches that are quality and aim to give the consumer a specific social status. For this reason, there pricing strategy is pretty unique. Prestige pricing is what Rolex uses, it means setting a high price so that quality will be perceived and attracted customers to buy it. Rolex watches are a luxury item and therefore sell at a very high price. They are exclusive and Rolex differentiates its watches from others on the market by its high price.  These watches attract status-conscious consumers looking to set themselves apart from others. It is seen as a reward for success. Owning a watch like this shows others that you have "made it."  The quality of a product can be associated to things like craftsmanship, parts, safety and time. A Rolex watch offers a unique look and craftsmanship that people want and are willing to pay for. These watches support the feeling of self-worth and status. The product's main attribute of exclusivity appeals to customers.

One side note, prestige pricing should not be confused  with ‘skimming.' With prestige pricing, the price is always set high throughout the life span of the product while skimming would entail a new product set at a high price that is eventually lowered. With a luxury item, lowering its price or offering discounting would actually have a negative impact. Overall, this would lower sales long-term and risk the reputation of the brand name. The credit and quality associated would disappear.

 

 

 

“Rolex is not in the watch business. We are in the luxury business."

-Heiniger (former CEO)

 

 

How do they reinforce their image of prestige and uniqueness?

Rolex has many promotional tactics that reinforce its image. For example, Rolex appeared in nine of the James Bond movies. These movies are a perfect promotion for Rolex, showing its exclusivity. James Bond is portrayed as someone who uses only the best and highest quality. In addition, Roger Federer also wears and endorses the brand. He often puts the watch on when receiving awards after a match. Roger is not only associated with his amazing tennis skills but also with his class, polished look and prestige. The watches of Rolex are easily recognizable and have been relatively unchanged throughout its years. By Rolex portraying its image through advertisement and its long history, it has been continuously successful with prestige pricing. Not all companies can exceed with a pricing strategy like this but Rolex has found its place in the market  this way. Rolex has developed a customer base that is willing to pay the price of these watches, as they believe they receive not only a quality watch but an increased self-image.

  

 

 

 

 

 

Cited:

 (007) https://www.pinterest.com/pin/469007748671106803/

 (Rolex gold) https://www.google.com/search?q=rolex+watch&biw=1778&bih=837&source=lnms&tbm=isch&sa=X&ved=0CAcQ_AUoAmoVChMIgcWBgsyNyQIVSaw-Ch0FGwRh&dpr=0.9#tbm=isch&q=rolex+watch+advertisement&imgrc=c2s5ZJFA-F8iEM%3A

 (roger) https://www.google.com/search?q=rolex+watch&biw=1778&bih=837&source=lnms&tbm=isch&sa=X&ved=0CAcQ_AUoAmoVChMIgcWBgsyNyQIVSaw-Ch0FGwRh&dpr=0.9#tbm=isch&q=rolex+watch+advertisement+roger+federer&imgrc=nPN2YLicmyLILM%3A




                                   

 

                                                      Product Failure

In this post, I would like to discuss and identify the difficulty of designing and marketing new product. A lot of planning goes into the production and marketing of a new product and all of this effort can be for nothing if the line fails. A company wants to develop a statement known as a protocol that before the product development begins defines three things; (1) Target market defined (2) Customer’s needs, wants and preferences (3) What the product is and what it will do to satisfy customers. Even in doing so the product may be met with failure. An example of such a failure is when Ford came out with its newest car model, Edsel, in 1957.
                                
                                                                   Ford Edsel



"Among worst cars"             "A legacy failure"

(1)



"The biggest bust" 

Ford comes out with the Edsel:

 In the 1950’s Ford was facing tough competition with General Motors and was being pressed to come up with something new to differentiate its self. As a result, Ford decided to come up with a new car that would be its best model yet, the Edsel. Ford built up an enormous amount of hype to sell this car. They did not release any information as to what the car would look like and decided to do a big unveiling of the car instead. They set to unveil the new model on September 4^th, 1957 and named the unveiling as “E-day.” The new model however was a complete failure. Although it was supposed to be such a revolutionary car most Americans thought it was just like any other. There was a huge disappointment among Ford’s customer base. People believed that Ford did not deliver on what they promised. The new Ford model was underwhelming and most certainly did not meet expectation.

 

 

(2)

                                                    What causes failure?

According to Marketing 12^th edition, these are some top reasons for failure….

1.      Insignificant difference: A distinctive point of difference is the most important factor for a new product.

2.      Incomplete market and product protocol before product development starts. This leads to a company developing a vague product for a phantom market.

3.      Not satisfying customer needs on critical factors. Even if general quality is high the product can still fail if a few factors are not met.

4.      Bad timing. A product can be released too soon or late.

5.      No economical access to the buyer.

6.      Poor product quality. This is a result from an untested product.

7.      Poor execution of the marketing mix: brand name, package, price, promotion or distribution.

8.      Too little market attractiveness. A target market can be too small or competitive.

Ford’s biggest failure causes:

Ford meets many of these points discussed above but perhaps their biggest problem was in there over-stressing of their new car that was in fact not much different. Ford failed at creating a significant difference in its Edsel model as it let on. Therefore, customers’ needs were not met. The customers wanted something that was different and significant. Ford promised "there has never been a car like the Edsel." Not to mention, the timing of its release was terrible. There was a recession that hit and Edsel was their most expensive model yet. This was a threat external to Ford and they had no way of controlling the economical downfall.

 

 

Customer reviews:

Some said it looked like a lemon. Other customers stated that the front-end grille was less like horse collar, and more like a toilet seat. Overall the look of the car meant didn't meet customer expectations. In addition, due to a poor quality many complained about parts missing from the car.

(3)

 Concluding:

Ford and its Edsel model is just one example of a product failure. There has been many failures among different companies and for different reasons. When a company produces and markets a new product it is taking on a big risk and the possibility of failure. That is why it is so important for a company to go through the proper steps of planning and marketing. If customers needs or wants are not met then like Ford Edsel it will lead to customer dissatisfaction and huge amounts of lost sales. .

 

 

Oxford dictionary shows just how bad this failure was for Ford....

"a Ford car model that was a famous failure. It was named after the son of Henry Ford. Fewer than 100 000 were sold from 1957 to 1960. It became a popular US joke, and other unsuccessful products are still sometimes referred to in a humorous way as Edsels."

 

 

 

                                                                Work Cited

(1)http://www.washingtonpost.com/wp-dyn/content/article/2007/09/03/AR2007090301419_2.html

(2)http://www.businessinsider.com/lessons-from-the-failure-of-the-ford-edsel-2015-9

(3)https://www.google.com/search?q=edsel+marketing+market+fail&biw=1684&bih=793&source=lnms&tbm=isch&sa=X&ved=0CAYQ_AUoAWoVChMI6ImJp9vOyAIVhTc-Ch15xwn5&dpr=0.95#tbm=isch&q=edsel+ford+failure&imgrc=zMeFyOjNzg1uzM%3A