Chapter 11 - Penetration

In chapter 11, Professor Featherman discusses product pricing and the various pricing strategies. One must consider several factors when setting the price including competition, fixed costs, variable costs, and demand. One strategic approach to setting the price of a new product is called price penetration. Professor Featherman defines price penetration as a "pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it". The combination of a new product and the fact that it is offered at a cheap price provides consumers with more of an incentive habitually purchase the product with little or no cognitive reasoning. One recent example of a price penetration is Taco Bell's new value menu. Amongst the midst of other fast food dollar menus (offering their products for $1.00), Taco Bell recently introduced several new items on their value menu offered at 79, 89, 99 cents. Again, the combination of new items on their value menu and the cheap price they sell for makes Taco Bell's value menu a perfect example of price penetration.

Chapter 10 - Service Scape

In chapter 10, Featherman describes the concept of services, in comparison to products, and explains how services are often a combination of many services in unison. For example, he states that services are consist of core and augmented services. Core services refer to the initial service sought out by a consumer and augmented services refer to the additional provided services that enhance the value of the core service. In addition, Featherman states that a company's service scape is also crucial in maintaining a desired rate of consumption and keep consumers returning to receive the services you provide. A service scape can be defined as "the actual physical facility where the service is performed, delivered, and consumed" and is often foolishly overlooked by service providers. It is important to consider that while receiving or waiting for a service, consumers want to remain calm and comfortable. Ensuring this assumption will no doubt result in the return of previous consumers. A hospital lobby is an excellent example of what it means to have an effective service scape, and can be seen above. The unfortunate truth is that behind locked hospital doors there is a lot of blood, panic, and hysteria. In order to hinder this realization, hospital lobby's are often very elegant, play soothing music, and have dim lighting in order to help comfort already anxious patients. The combination of the core service at hospitals (treatment) and the augmented services provided by the service scape make it easy to see why so many people turn to hospitals each day.

Chapter 8 - Prototyping

In Chapter 8, Professor Featherman discusses the process of introducing new products into the marketplace. After brainstorming and researching a potential product, most innovative companies choose to develope a prototype prior to the product's release. Professor Featherman states that prototypes are simply "test versions of a proposed product" evaluated by potential investors and consumers. Prototyping has proved time and time again to be an accurate forecast as to how consumers will react to the product. Often used in focus groups, prototypes give potential consumers the opportunity to phsyically hold or experience a product and, in turn, praise or critique it. The picture above depicts a protoype of Aptera's Electric Hybrid Car which was no doubt tested and evaluated by investors and consumers alike. By allowing potential consumers to handle a new, innovative product, market researchers can gain more insight as to how to product will do in the future. In fact, the insight gained from Aptera's Electric Hybrid Car prototype must have been significant, considering the fact that these environmentally friendly vehicles have entered production!

Chapter 9 - Packaging

The concept of product line management is outlined in Chapter 9. Product line management is a general term used to describe the life of a product, licensing and co-branding, and the potential consequences of maintaining a product line. Perhaps of the most important aspect of product line management is developing a product's package. In some cases, while out shopping consumers purchase products that simply catch their eye and spark their interest. However, poor packaging can negate this possibility if the consumer does not know who created the product they are looking at, what its primary function is, and detailed instructions on how to use it. I posted a picture of Kraft Macaroni and Cheese which clearly displays how to properly package a product. The brand of Macaroni (Kraft) placed at the top of the box, an image of what the intended meal will look like is located in the center, and detailed instructions on how to prepare the macaroni is given on the side. Without properly communicating to your intended customer base, poor packaging will lead to forgone revenue allocated elsewhere due to frustrated and confused consumers.

Chapter 8 - Product Complexity

The introduction of new products and innovation is the primary topic of Chapter 8. Whenever a new product reaches the market it must undergo several tests of profitability, one of which is complexity. Featherman describes complexity as "the degree to which consumers find a new innovation or its use difficult to understand, learn and use". A product's complexity is a huge factor to consider when preparing to enter your product into the market. If a product is too complex, it may leave many consumers frustrated and unsatisfied with their purchase, something all organizations obviously try to avoid. However, over time, the complexity of a product may decrease as individuals become more exposed to similar products and more familiar with the complexity level assoicated with recieving the desired benefit/need from a product or service. Consider, for instance, the complexity of the world's first computers, as seen above. Early computers had to be housed in entire rooms and run by several people, clearly indicating the complexity of such a product. Therefore, it is not hard to see why computer popularity did not begin to increase until after the promotion and release of the personal desktop computer, a modernized computer that was much easier to operate than eariler models.

Chapter 7 - Demographics

Perhaps one of the most important aspects of marketing is covered in Chapter 7. Of the course of this chapter, Professor Featherman discusses the concept of target marketing, which he defines as "the market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts". By specifically "targeting" a certain type of individual, companies can create products/services that appeal to their target market and can generally assume the same purchasing habits amongst the entire target market. In order to gain enough information about a desired target market, market researchers often turn to demographics in order to propell themselves into deeper, more extensive, target market research. Featherman defines demographics as "statistics that measure observably aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure". When a market researcher acquires the demographics of a certain area, they can predict how their product/service will do considering the amount of individuals in the area that can be classified as a target market. Demographics can reveal a small target market in a previous assumed profitable area and discover a large target market in a region they least expected. An extremely general example of demographics can be seen in the picture above, classifying Facebook use per country during January 2008. If, for example, a company wanted to promote a product in February via an online networking website, this graph indicates that the target market would most likely be located in the U.S., U.K., and Canada, the top three countries with the most Facebook use in January 2008.

Chapter 6 - Inelastic Demand

Business to Business relations is the primary focus of Chapter 6. Throughout the chapter, Professor Featherman discusses the various forms of business to business relations such as B2B e-commerce, B2B markets, and purchase/selling techniques frequently used between partnering organiztions. In Business to Business markets, companies supply one another with essential parts, ingredients, and materials needed to run their organization. Often times, these Business to Business relations reflect the concept of inelastic demand. Featherman states that inelastic demand occurs when there is a "demand in which changes in price have little or no effect on the amount demanded". Many organizations simply cannot bounce around from one supplier to the next, thus creating inelastic demand for many business to business relations in which organizations are willing to pay for the product being supplied despite flucuations in price. The graph above depicts an inelastic demand. With quantity demanded on the X axis and price on the Y axis, it is easy to see that reasonable variations in price have little effect on the actual quantity demanded.

Chapter 4 - Ethnographic Study

In chapter 5, Professor Featherman describes the various strategies used in market research in order to gain a more accurate assumption of why their product appeals to its target market and if not, what is inhibbiting the acceptance of their product amonst the target market. One research method discussed by Featherman is the process of ethnographic studies, where market researchers observe of people in their own homes or communities, and how they use the product or product category in question. Since ethnographic study tactics emphasize strict observation, consumers do not feel the pressure of telling a market researcher simply what they want to hear and not their true feelings. One example of an ethnographic study could be the observation of a new brand of beer in a local bar. Market researchers can determine how popular the beer is becoming amongst the community and possibly overhear crucial reactions to the product itself, its packaging, etc. However, in this example it should be noted that market researchers should not give into the temptation of consuming alcohol while researching in order to gain useful information and not end up being an empty-handed hungover employee the next day.

Chapter 5 - Subliminal Advertising

Consumer behavior is the main topic discussed in chapter 5. When analyzing consumer behavior, market researchers aim toward revealing the process involved when individuals or groups select, purchase, use, and dispose of goods & services to satisfy their needs. In turn, marketers often propose different strategies to help accelerate the consumer behavior process, either directly or indirectly. One form of indirectly activing consumer behavior is through subliminal advertising. Professor Featherman describes subliminal advertising as "hidden messages in vendor messages. these are messages that are not consciously received, but they still affect consumer decisions - such as hidden shapes in pictures, or perhaps the use of music or noises in TV ads." Take this into consideration, a videoclip of the show Iron Chef (linked provided at bottom of blog), shows gormet chefs competing to make the most ecsquisite meal. Sadly, most Iron Chef viewers are not expert chefs and even though they may be interested in preparing an extravagent meal, most of the time viewers will settle with any food in order to spark the hunger they feel from watching the show. Carefully watch the video and see if you notice any subliminal advertising. If you paid attention, around 44 seconds into the video the McDonald's logo flashes onto the screen. Descrete and simple, the logo alone may have been responsible for increased sales shortly after being aired on television. Broadcasting error? I think not.

http://www.youtube.com/watch?v=LMzbwa6PvEE

Chapter 4 - Focus Group

Market research is the primary topic of chapter 4. Market research refers to the general process of collecting, analyzing, and interpreting information about customers, competitors, and the business environment in order to improve marketing effectiveness. One market research tactic involves the use of focus groups. After a marketing team has narrowed down the public to the target market for their product/service, some researchers choose to take their actions a step further using focus groups. A Focus group is a group of similar consumers in the same target market that is paid to meet and discuss a vendor's product or service. The discussion is centered around the 4P's and consumer perceptions, evaluations and opinions of a product or service. Focus groups are an important part of market research in a sense that they provide first-hand reactions and opinions toward a product or service and, afterward, marketing teams can edit/reevaluate their product or service so that it is specifically tailored to their target market and their assumed reactions.

Chapter 2 - Mission Statement

In chapter 2, Featherman addresses what factors make up a marketing plan and explains how different marketing plans can be used in reaching specific marketing goals depending on the desired outcome. However, all marketing plans boil down to a company's mission statement, a clearly defined, straightforward plan of what the company hopes to achieve in its future endeavors. Professor Featherman defines a mission statement as "a formal paragraph in an organization's strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources." Above is an example of what a mission statement should look like, both structurally and visibly. Mission statements not only provide a general guideline for the company to follow, they also serve as brief descripions of an organization and their intentions, a notion that could be researched by both competitors and investors alike.

Chapter 1 - Brands

In chapter 1, Professor Featherman briefs the reader on a few marketing basics before dividing into the rest of course. One of these basic topics included branding an the benefits of having a clear, recognizable brand. Featherman defines a brand as "a name, term, symbol that identifies one company's product(s) and sets it apart from their competition. The thing that turns a commodity into a specialty, and allows you to charge triple what the product is worth and 10x what it costs to make." In this picture, there are several popular brands that, no doubt, could be easily dechipered and linked to the companies they represent. Nike, McDonalds, Mercedes and Microsoft Windows have proved to have easily recognizable brands and its hard not to associate them with their corresponding companies, who (given their past success) can simply post their brand name and successfully market themselves without much effort.