Week Nine

Although it's been two weeks, and spring break went by too fast, it's good to be back here on the blog! This past week in marketing, we talked a great deal about pricing, as well as structuring our survey for our smart project!

Tuesday was a great opportunity for each group to meet with our professor and talk about the survey we each had developed for our project. For my group in particular, this meeting really opened our eyes to designing our survey in an effective way. It helped us to come up with questions that would give us the information we really wanted, rather than just yes or no answers. Below are some of the changes we made:

1. Instead of jumping right into questions about organization, we are now starting by having our subjects describe what they do when they enter and leave their rooms.
2. Do you hang your keys up? → Do you have a special place for your keys?
3. How often do you lose your keys? → Do you lose your keys? How often?

These are just some of the changes that we made in order to improve our survey. As a group, we are now looking forward to asking people these questions, and many more, in order to gain insight about our market and where this product could potentially go!

Thursday's class was specifically structured around pricing. I enjoyed the way the class was set up because it made the time go by quickly and allowed us to apply the pricing techniques to the projects we are working on.

One topic that we talked about was pricing objectives. The three types of pricing objectives are shown below.

My group decided that we would focus on a sales oriented pricing objective especially when our product was new to the market because it would help us to focus on getting our product out to as many people as possible. 

Additionally, we talked about pricing strategies. These tend to go along with pricing objectives; however, they are different in the sense that a pricing strategy will help the organization reach their pricing objective. The pricing strategy that corresponds with a sales oriented objective is penetration pricing. This type of pricing sets the product price low at first in order to gain market share and may increase it over time. The other types of pricing strategies are shown to the left. Price skimming is a strategy that aligns with the profit objective because it allows for a company to set prices high in order to make money. Lastly, status quo pricing aligns easily with the status quo objective in order for an organization to meet their competition when it comes to prices and making money.

One other aspect of pricing my group thought about a great deal in relation to our product was discounts and price bundling. Price bundling occurs when the company packages two products together and offers a discounted rate. The example below shows this occurring with luggage. Clearly, the price to buy the two products together is lower than the price to buy them as separate entities. Unfortunately, my group decided there would not be a great way for us to use price bundling. We felt as though there was nothing we could sell our product with to make it more appealing and allow for a discounted rate.

However, we decided that there were two types of discounts that could work well with our product. The first would be a bulk discount if we are selling directly to universities. In this way, if a university were to buy a certain amount of our product they would get a discount. For example if they buy 500-1000 they might get 5% off, if they buy 1000-1500 they might get 7.5% off and so forth. We also thought we might be able to offer a seasonal discount if we were selling directly to consumers. Therefore, if the product was bought right around the time the school year starts it might cost $25 but if it was bought in March it might cost $20. 

Some other pricing tactics that I found interesting this week that we did not discuss included:

1. Single price tactic: pricing all goods and services at the same price (ex. dollar store)
2. Flexible pricing: different customers pay different prices for same product
3. Odd-Even pricing: when odd numbers are used to represent a bargain while even numbers represent quality (ex. $99.95 vs. $100)
4. Leader pricing: pricing the product near or below cost with hope that the buyer will make other in-store purchases

Keeping it short and sweet this week! Until next time!!

-Kristen

Week Eight

Crazy to believe we are already halfway through this semester! The past two months have flown by!! Over this past week, I've realized just how much I've learned about marketing so far. I'm excited to be able to put all of that together on one page in my mid-semester mind map. However, for the purposes of this post, I will focus just on what I learned over the last week.

On Tuesday our Smart Project groups had the opportunity to meet with our professor to discuss how our projects were going. I think the best part of this meeting was that our eyes were opened to some potential information sources we would not have thought of otherwise. For example, we were advised to talk to the head of facilities as well as public safety in order to learn about how many people actually get locked out of their rooms and if our product would be feasible for a university to purchase for students. We also were reminded to take a second look at our logo in order to make it eye catching and stand out to our consumers. Below is a picture of the current logo we are working on.

Additionally, during this class we were able to talk about our survey questions. Through this discussion we came up with many more potential questions to ask the people who will take our survey. This helped us to think about many different questions that might not be so obvious at first but could provide us with useful insight into how to make our product successful. Finally, we discussed our value proposition canvas. This relates the product to the consumer in order to eliminate the gap between the two. During our discussion with our professor, I realized just how important it would be to get the engineers involved in this process. Having them understand the way our customer will view the product will help them build the product to ensure it is well suited to their wants, needs, and fears. It also allowed us to think about certain features we may have forgotten as well as consider each aspect of the canvas from a different perspective. All in all, Tuesday's class helped our group progress in our project immensely.

On Thursday, we continued our discussion about products. However, this class focused on two major concepts, diffusion and innovation and product life cycles. To me, these are two of the most important concepts in marketing.

First, diffusion and innovation is all about how a product is introduced into the market. In other words, it is who buys the product over time until it is spread throughout the population of the market. The image to the left displays this theory. The innovators drive change, are adventurous, and are risk takers. They tend to buy a product because of the enjoyment they will get from it. Early adopters embrace change, are influencers, and are inspired by the newness of the product. They often buy a product because of the social acceptance it will give them. The early majority accept change, are practical, and go along with the world around them. They tend to buy a product because it will be useful to them. The late majority are skeptics, need proof of validity, and jump in. They often buy products out of necessity and only after others have it. Finally, laggards do not accept change, like tradition, and reluctantly join in. Often, they buy products because they have no other choice. The most important aspect of this theory is "the chasm". A product mucstget over the chasm, or get the early majority to start to purchase it, if it wants to succeed.

We were able to apply this theory to our Smart Projects by deciding what each group would be relative to our product. My group thought that high tech universities with a lot of money would be our innovators, our early adopters would be those who consider themselves influencial within the university world, and the early majority would be universities such as our own who see the practicality of the product. Our late majority would be more traditional universities with less money, while our laggards would be old school, classic universities who take pride in their rich history.

The other theory we talked about was the product life cycle. In general, all products follow the same life cycle. Right now, our products aren't even in the life cycle because they haven't been introduced or made yet, but they are in a "pre-introduction" stage. Introduction is when the product is first sold in the market. Often times, although sales are growing no profit is being made. The growth stage is when sales grow at an increasing rate, creating profits for the organization. The maturity stage is when sales still grow but at a decreasing rate. At this time, competitive or promotional pricing as well as intense advertising is often used in order for the organization to keep gaining money. The final stage is the decline stage. Sales begin to fall and competitors begin to take over.

What I found interesting in this discussion was that some products never quite reach the decline stage. One example discussed in class was the iPhone. The iPhone as a product may never decline, at least not in the time we can think about right now. Although certain versions of the iPhone have clearly reached, and surpassed, the decline stage (can anyone say iPhone 3G?!?!), the entire iPhone product most likely won't ever reach that stage. This brings up the distinction between a product and a product line which we talked about last week. Either way, it is important to recognize that not all products have the same exact life cycle, but that this idea can be used as a general outline for thinking about products within a market.

As I continue to learn more about marketing, I am looking forward to seeing the progress that has been made on our Smart Projects as a class. Additionally, I'm excited for the opportunity to connect what I've been learning to make a marketing plan for a product that has been on Shark Tank. Although I don't know what product I will be using yet, I can't wait to continue to apply what I've been learning in and out of class to such a unique assignment.

Here's to spring break!! I'll be back with more in two weeks!!

-Kristen

Week Seven

As we get farther along into the semester, I am really starting to enjoy the way this class is making me learn. Instead of feeling like I am forced to memorize certain things for an exam, I am remembering the concepts that are most important, and that will help in the future. I enjoy the fact that I can take these concepts and put them in my "book shelf" in order to use them when I need to.

This past week our classes focused around products. Specifically, we focused on Gato Cafe, a cafe that would serve beverages as well as prepackaged foods to customers while also allowing them to play with cats in the seating area These cats could also be adopted by patrons of the facility. Gato Cafe was not yet a full-fledged business but was seeking the Sharks' investment in order to open their store.

Gato Cafe is a really great example to learn about products from. First, Gato Cafe can be considered a specialty product because the people who would go there and enjoy would most likely do a good amount of research about the establishment. Additionally, once they found they liked Gato Cafe they would most likely be reluctant to finding substitutes. Gato Cafe is a new product in the US, and specifically in Florida; however, similar types of cafes have been opening up around the world.

Something that we discussed in depth was product lines, mixes, and extenstions. Gato Cafe doesn't really have a product line, or similarly related items, but they do have a pretty large product mix if you consider all of the cats and food/beverages they will sell. A great product line extension for Gato Cafe would be to include dogs or create another cafe for dogs. This would diversify not only their product, but their customer base as well.

We also talked about product positioning. There are many ways to position a product including those listed to the right. A great way for Gato Cafe to position themselves would be based on attribute. Their concept is something new to the market so they have something that nobody else currently offers. This is an attribute of their company in the sense that it distinguishes them from other cafes as well as other animal shelters or pet stores. By doing this, Gato Cafe will give themselves an advantage in the market. An example of product class positioning is Pepsi and Coke.

Additionally in class this week, we talked about co-branding. This is a concept that I find extremely valuable to a business, especially one that is just starting out. Co-branding is putting two or more brand names on a product. By doing this, a potentially lesser known brand could partner up with a well known brand in order to get their name out their. A really great example of this that we talked about in class was Gato Cafe partnering with Panera. I thought this would be a good way for Gato Cafe to bring in customers while it would help Panera because they might be able to reach an even more diverse group of people. This strategy would be mutually beneficial for both brands, thus making it a great thing for well established brands to do with a relatively new brand.

Understanding all of these aspects of a product, and many more, will ultimately help us improve our Smart Project. This is because, we will be able to put ourselves in the best position to succeed. For example, if we can determine what the best positioning base would be for our product, we can focus on that specific factor to distinguish our product from others rather than just claiming that ours is better. Additionally, by understanding our product as a concept, and potential line or mix of items, we can see the bigger picture of what effect it might have. Although the focus will still always be on our particular product, knowing it's potential in the future will help us make it the best it can be today in order to appeal to a wide range of people.


I think another major aspect of this project will be brand. Although we clearly will not become an established brand in the next two months, we can use the idea of a brand to help us produce the best product possible. What I mean by this is that what makes a good brand will also make a good product. We want our product to be identifiable. We want people to see our logo and know exactly what the product is and does. We want it to be something that people will remember because of the impact or impression that it made.

Along with meeting with our marketing consultant. This week gave my group a great deal of information we can use in order to develop our product effectively. Additionally, it has provided us with the insight we need in order to create and market a product that consumers will be interested in and would want to buy. From thinking about the type of product we are selling to how we should position the product to what questions a consumer might ask, we are ready to take the next step in the development of our product.

Here's to even more improvements next week!

-Kristen