Contemporary Marketing Study Set 5

Business

Quiz 11 :

Pricing Strategies: Additional Considerations

Quiz 11 :

Pricing Strategies: Additional Considerations

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Suppose you were asked to be a marketing consultant for a restaurant specializing in a regional cuisine such as Tex-Mex, Cuban, or New England fare. The owner is concerned about employee satisfaction. When you visit the restaurant, what clues would you look for to determine employee satisfaction? What questions might you ask employees?
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Employee satisfaction in restaurants:
Employee satisfaction or the job satisfaction is the measure that depicts the how satisfied or content the employees are with their jobs.
The quality of the service offered at the restaurant will be a measure to evaluate the satisfaction of the employees in the restaurants. A satisfied employee will only be able to provide a pleasing service for the customers.
In order to get a clear picture on the level of satisfaction for the employees, a detailed survey can be taken. The survey must include the question regarding the level of satisfaction on their job role, working environment, dignity of the team members, effectiveness of the leader, effectiveness of the management and more.
This would help the restaurant to determine the number of employees willing to work with the organization thereby facilitating them to invest only on the potential employees. Frequent hiring and training of employees will incur unnecessary cost to the company. Satisfaction among employees is necessary in order to retain them with the organization.

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Cobranding. Use a search engine like Google or Bing to find three examples of cobranding similar to the Delta Skymiles credit card from American Express. www.deltaskymilescard.com/?openeep=30212 ccsgeep= 28009 psboth=OPEN_Google_B_Gold_Delta_Business
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Cobranding:
A corporate agreement in which two or more businesses unite to link their names closely for offering a single product is termed as cobranding.
Some of the examples of cobranding are:
• I in S computers
• V in bank debit cards
• P drink in all D restaurants
• G insurance for all vehicles
• M for all performance oriented B cars

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Explain why a large firm like General Mills might use national account selling to strengthen its relationship with a major supermarket chain.
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National accounts:
A classification that shows the macroeconomic measure of purchase and production categories in a nation is termed as national account.
Usage of national account selling:
Large firms like GM use national account selling strategy to reinforce its relationship with the major supermarket chain. This is done so as to increase the viability of its business for a longer term. Since the firm does not reach the end users directly with its products, a strong association with a major supermarket chain or any other large scale retailer is necessary for it to serve its target customers.
Operating a retail outlet would incur additional cost to the company as compared with outsourcing the retailing to other providers. Therefore, such a strong relation with the retailer is necessary to increase the potential of the business over a long run.

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What types of social interaction might be appropriate- and effective-for a local hair salon to engage in with its customers?
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What is an affinity marketing program?
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Suppose you work for a firm that sells home appliances, such as refrigerators, microwaves, and washers and dryers. Your company has been slowly losing customers, but no one seems to know why. Employee morale is sliding as well. You believe the company is run by honest, dedicated owners who want to please their customers. One day, you overhear an employee quietly advising a potential customer to shop at another store. You realize your firm's biggest problem may be a lack of employee satisfaction-which is leading to external customer loss. Would you ask the employee why he or she is turning customers away?
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With a teammate, choose one of the following companies. Create a plan to attract customers at the first level of the relationship marketing continuum-price-and move them to the next levels with social interactions. Present your plan to the class. a. dog-grooming service b. fitness club c. surfboard or snowmobile manufacturer d. sandwich shop
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Distinguish between grassroots marketing, viral marketing, and buzz marketing.
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Suppose you work for a firm that sells home appliances, such as refrigerators, microwaves, and washers and dryers. Your company has been slowly losing customers, but no one seems to know why. Employee morale is sliding as well. You believe the company is run by honest, dedicated owners who want to please their customers. One day, you overhear an employee quietly advising a potential customer to shop at another store. You realize your firm's biggest problem may be a lack of employee satisfaction-which is leading to external customer loss. . Would you approach the employee to discuss the problem?
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What types of factors might the firm monitor in its relationships?
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A hotel chain's database has information on guests that includes demographics, number of visits, and room preferences. Describe how the chain can use this information to develop several relationship marketing programs. How can it use a more general database to identify potential customers and personalize its communications with them?
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Visitors to Disney's fabled theme parks are delighted by immaculate facilities, unfailingly cheerful and friendly service, personalized attention, and knowledgeable and helpful staff The company's top-notch customer service is widely admired, and some years ago other firms asked Disney to share its customer- service secrets. So Disney created its own consulting company, called the Disney Institute. The Disney Institute keeps a low profile (not everyone can make the imaginative leap from mouse ears to skilled advice on best business practices), but nevertheless it has helped clients ranging from a single hair salon in Michigan and a youth counseling center in Boston to hospital chains, car dealerships, Häagen-Dazs International, United Airlines, and the NBA. Caught between a sluggish economy and multiple social media sites where consumers can express dissatisfaction, many companies are urgently seeking ways to please their customers. Sometimes the stakes for the Disney Institute's clients are especially high. Hospitals, for instance, must earn high scores on patient satisfaction surveys to qualify for Medicare reimbursements. One Florida hospital went from the bottom 10 percent in the country on patient satisfaction to the top 10 percent after consulting with the institute's experts. The core of the institute's customized program focuses on five principles: leadership, training, customer experience, brand loyalty, and creativity. Some of the customer service lessons Disney's clients can hope to learn are the importance of surprising customers in small ways, creating and delivering on a brand promise (Disney's is "Entertainment with heart"), and learning to say yes to customers whenever possible. Perhaps the lesson Disney itself best exemplifies is the need for employees to become the face of the brand, interacting with customers as much as possible, offering help instead of waiting to be asked, and becoming thoroughly knowledgeable about the product. The corollary lesson? Companies should keep employees happy to ensure they can focus on the positive in their customer interactions, instead of falling back on rote behavior and just taking the customer's money. Questions For Critical Thinking 1. The Disney Institute says clients can't "take Disney and just plug it in." In what ways can companies best adapt Disney's advice to their own customer service situations? 2. Do you agree that keeping employees happy is important for sustaining a customer satisfaction orientation? Why or why not?
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CRM software. Sage ACT! is a type of customer relationship management software. Visit the website shown here and prepare a brief report about Sage ACT! software and how it can improve marketing relationships. http://na.sage.com/sage-act
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What steps might a clothing store take to win back its lost customers?
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Suppose you work for a firm that sells home appliances, such as refrigerators, microwaves, and washers and dryers. Your company has been slowly losing customers, but no one seems to know why. Employee morale is sliding as well. You believe the company is run by honest, dedicated owners who want to please their customers. One day, you overhear an employee quietly advising a potential customer to shop at another store. You realize your firm's biggest problem may be a lack of employee satisfaction-which is leading to external customer loss. What steps do you think your employer could take to turn the situation around?
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Rewards programs. Virtually all hotels and airlines have customer loyalty rewards programs. Go to the websites listed here to learn more about the rewards programs offered by Southwest Airlines and Starwood hotels. Prepare a brief report comparing the two programs. www.southwest.com/rapidrewards/overview?int=GNAVRP DRWDS disc= ss=0 www.starwoodhotels.com/preferredguest/index.html
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Describe the benefits of relationship marketing. How does database technology help firms build relationships with customers?
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People love Pepe's pizza so much they'll line up around the block waiting for a chance to sink their teeth into fresh dough, homemade sauce, and toppings-all roasted in a coal oven while they sip a root beer or iced tea Regular customers may even choose a table at Pepe's Pizzeria near the open kitchen, where they can watch their crust being spun and tossed, then slipped into the oven. The open kitchen isn't just a nod to the latest trend in restaurant design; it's an acknowledgement of the importance of Pepe's nearly 90-year relationship with its customers. "I treat the customers as if they are part of my family," says Jennifer Kelly, granddaughter of founder Frank Pepe. From 1925, when Pepe began selling pizzas off a pushcart, until today, when hundreds of hungry diners pass through the doors of Pepe's New England restaurants every day, customers have been considered family and friends. Pepe's Pizzeria has built its brand equity not only on the high quality of its food but on its social interaction with customers. "They relate to their customers," says Pepe's CEO Ken Berry. Kelly is a co-owner of Pepe's, along with several siblings and cousins. She is also a server at the New Haven, Connecticut, flagship restaurant. This means that Kelly sees her customers every single day and gets to know them well. She understands how they feel. "When I go out to dinner, I like to be treated with respect," Kelly explains. "I treat them the same way." She listens to them and cares about getting their orders exactly right. If a group of diners has waited in line for a long time, she's empathetic about that too. "They're hungry," Kelly says. "I try to get them their drinks and salads right away." Kelly also notes that hiring the right staff is critical to the restaurant's success. The wait staff does make transactions; but the relationships they create in just an hour or two ensure that diners will return. "We hire people who know what to do," Kelly says. "We aren't going to hire someone who doesn't have our values." Even as the price of everything rises, Pepe's pizza prices stay relatively the same. But it's not a focus on price for the purpose of cutting costs or skimping on ingredients-it's one of Pepe's original values, treating his customers as if they were friends and family. "Frank's business survived the Great Depression because he didn't increase prices. He gave to people," Kelly explains. "He was a contributor to the war-time veterans... my grandfather never charged them. This is the type of man my grandfather was. This is the type of heritage that we follow." As for prices in today's economy, Kelly asks, "Why would we increase prices right now? People are struggling." She comments that a family of four can eat at the restaurant for around $20 and be satisfied-which means they are very likely to return. Pepe's doesn't need to do a lot more in the way of marketing to enhance its relationships, but there are thousands of pizza joints littered across the nation, translating to competition. Valuing its roots-but not wanting to be stuck in the last century-the company does engage in social marketing for broader relationship building. On Pepe's Facebook page, which has more than 14,000 "likes," customers post comments such as, "I have driven 50 miles- each way-for one of these pizzas." The company advertises new menu items there, including beverages. Fans can also enter the current "Where in the World Is Pepe's?" contest for a chance to win a $300 Pepe's gift card and an iPad. Or they can log on to their Twitter accounts to enter #MyPepes contest by tweeting a picture of their pizza from the restaurant. Still, Pepe's will always maintain its old-world family feel. Berry describes how Pepe sometimes spent 24 hours at a time in his pizzeria, fashioning new recipes, making dough, cleaning the kitchen. People tossed pebbles at the windows late at night or early in the morning to catch his attention and ask him to make them a pizza-which he did. In this regard, the transition of Pepe's from 1925 to today's world is seamless. "It goes back to the people from our community and our neighborhood," says Kelly. "Those are the people who made us famous. Those are the people who made us who we are today." Questions for Critical Thinking 1. How does Pepe's Pizzeria use price and social interactions to build relationships with its customers? 2. How does Pepe's Pizzeria ensure customer satisfaction?
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Scooping Up Consumer Insight "Food is such a huge topic in people's lives," comments Susie Fogelson, senior vice president, marketing, creative services, and public relations for Food Network and the Cooking Channel. "Social media gives us an opportunity to be relevant in people's lives almost every minute of every day, as long as we can make the content valuable, compelling, unique, and authentic." That's a large order to fill, but marketers for Scripps Networks Interactive and its branded networks, including Food Network, recognize that social media is not only a way to reach consumers but also for consumers to reach them. The social media conversation begins naturally and becomes marketing research as marketers tease out data that help them identify consumer trends, preferences, lifestyle choices and habits, and the like. "We're always looking for better ways to get more interesting information," says Gabe Gordon, vice president of research for the food category at Scripps. While the networks themselves may look specifically for food trends, Gordon's team researches a broader scope-what he calls "emotional" trends. If the defined problem is loss of market share for a certain type of cooking show, then researchers will attempt to find out why. If Scripps wants to develop a new show to compete head-on with a show from a rival network such as Bravo or TLC, researchers may initiate a social media conversation to learn what viewers especially like about the other network's show. Once they gather enough information on viewers' preferences, they can do targeted messaging that encourages viewers to visit Food Network to watch shows, such as "Food Network Star" or "Chopped." Social media allows marketers to collect a lot of primary data through conversations directly with consumers. "We want our social media conversations to be as non-invasive as possible," says Gordon. Computer technology allows these exchanges to take place as naturally as possible-Scripps might give participants a smartphone or tablet to carry, so they can chat or comment at any given moment during the day. Scripps still conducts traditional surveys (usually online) and focus groups, because they do contain value. "But there are always drawbacks to any sort of research process," acknowledges Gordon. "One of the biggest is having people in an artificial environment." Social media gives marketers a peek into nearly every aspect of consumers' lives that they're willing to share, including the most mundane details. "Consumers are out there in the social spaces telling us what they're eating for breakfast, what they're doing over the weekend," says Jonah Spegman, director of digital media and database marketing for Scripps. "They're leaving all sorts of data elements out there for us on the marketing side." But just knowing that one consumer ate cereal for breakfast while another went running instead isn't enough. Marketers must be able to identify groups of people and interpret the gathered data so it becomes valuable information. "We pick up on those data elements and start building out segments about people who are interested and have certain passions around what our brands can offer," explains Spegman. For example, after airing the Food Network documentary "Hunger Hits Home," marketers used targeted Facebook ads to pinpoint people who were interested in charity work. "Social media allowed us to use mechanisms to identify who those people are and then reach out to them with a message that spoke to what the documentary had to offer," recalls Spegman. Food Network marketers already know that the overwhelming majority of their audience is women; but more and more men are tuning in, says Kate Gold, director of social media. In social media interactions, she notes a similar trend-but younger consumers tend to communicate via Twitter while Facebook is more across the board in terms of age groups. Food Network targets female viewers with decision-making and buying power-preferably with the ability and desire to spend money on restaurants, fine food and beverages, and higher-end cooking supplies. Although Engel's law states that the greater a person's household income is, the lower the percentage spent on food items will be, in this case, food expenditures blend with luxury and entertainment. Social media reaches directly to Food Network's segmented audience- consumers who care about food, cooking, and dining. Fogelson thinks about the ways that Food Network can interact with consumers long after they've turned off the TV. Shoppers could access Food Network from their smartphones while in the grocery store and learn which ingredients to buy for a quick dinner. While standing at the fish or produce counter, they could find out which fish or vegetables are in season. "The possibilities are infinite if we can talk to consumers all day, what we can do for them," says Fogelson. "Consumer insights are the most important thing when you think about how to program social media." This kind of activity underscores the idea of conversation- building relationships with viewers and consumers in general. For example, Food Network celebrity chefs such as Bobby Flay and Giada De Laurentiis tweet and answer questions from consumers on Facebook several times a day. "It's a great opportunity for the network to cultivate those relationships," remarks Gold. "It's broken down that barrier-seeing someone on TV and then being able to interact with them in social media. These are real people, and viewers get real insights into the talents' everyday life." Questions for Critical Thinking 1. Using the VALS framework, how would you segment the average viewer of Food Network programming? 2. Using social media, what steps might Food Network take to expand its viewership to include more teens? What about viewers from different ethnic groups? 3. What types of secondary data could be helpful to Food Network marketing researchers? How could they put this data to use? 4. Through social media, how do Food Network viewers become advocates for the network?
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With a teammate, select a business you are familiar with and design a frequency marketing program for that firm. Now design a grassroots, viral marketing, or buzz marketing campaign for the company you selected. Present your campaign to the class.
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