Week 10

Tuesday

On Tuesday, each Smart project team was given a 15 minute time period where they were scheduled to come in and discuss the progression of our surveys and project. When the OK to Drive team met, we changed up quite a bit of our survey. Professor Spotts helped us arrange our questions in a way that did not make our survey sound accusatory to bar owners. Additionally, we realized that we asked questions that we wanted to know before they knew about the product, and questions that we wanted to ask them after reading a little bit about the product. The same goes for a survey for the patrons of the bar. So, to start off we asked the bar owners about their setup with arranging precautionary measures of overdrinking at their location. We then ask them about any legal issues they may or may not have encountered in their years of operating business. As for the patron survey, we start out by asking them about the legality of their drinking by assuring that they are 21 years or older. Then we ask them about their typical week. This includes disclosing information about how often they drink and how much they drink, their usual arrangement for getting home, if they believe that drinking and driving is an issue, if they have been directly or indirectly impacted in any possible way by this action, and how important it is that they get home in a safe manner. Once the bar has answered their set of questions before introducing the product, and the patrons have answered their set of questions, it is then time to introduce the product to them. In order to assure that the product is presented in the exact same why by each member of the smart project team, we decided to disclose the product portion of our value proposition canvas to formally introduce the product to the businesses and patrons. This shows that the information disclosed is consistent and one member is not describing the product in any way different to our consumers.

This is the information we disclosed to our consumers in each survey:

OK TO DRIVE: Breathalyzer Activated Lockers

Product: What is it? How will it help me?

Experience

Breathalyzer activated lockers will be set up in restaurants, bars, and event venues. Upon arrival, patrons are required to hand in their car keys in the same way they show their proof of identification. The patron will walk over to the quad stand, scan their fingerprint, and will automatically be assigned to an available locker. Patrons will be required to put their car keys into the locker. Other items will be allowed in the locked, but at the risk of patron not passing the breathalyzer test. When leaving the bar, the patron will check in via fingerprint scanner and once again, take the breathalyzer test. The fingerprint scanner prevents any issues of theft, and avoids people taking the test for others. The digital display will show the locker number if the operator passes the breathalyzer test. If the operator were to fail the breathalyzer test, then information regarding how they would obtain their car keys at a time when they are legally sober will appear. Information on how to return home that night will also be displayed instead of their designated locker number. We hope for the bars to be given a quick and easy way to enforce safety and security to decrease legal ties with accidents and tragedies in the future. We hope for patrons at the bar to feel safe. We want them to not feel tempted into drinking and driving, and we want them to see this as a positive experience rather than a negative. We hope that this will be an efficient way to solve this pain-point of drinking and driving. Additionally, we hope that consumers will promote this method of security and safety so they understand that the bar or venue has society’s best interest in mind.

Features

The quad stand an apparatus in where a cube is placed on a stand. All vertical sides of the cube are the same; for they have a digital display, fingerprint scanner, and breathalyzer.

●     Breathalyzer activated lockers

●     Fingerprint scanner to detect identity of patrons

●     Disposable tubes to regulate sanitation

Benefits

●     Limits the ability for drivers to operate a motor vehicle while under the influence of alcohol

●     Prevents liabilities being traced back to bars and restaurants by enforcing this as a company policy

●     Provides a method of reducing the number of fatalities linked to drinking and driving

●     Keeps the road safer by limiting operators of vehicles to be consuming alcohol in that surrounding town and neighborhood of venue or bar

●     Gives bars and restaurants a good reputation

o      Shows that they care about the overall well-being of their customers, and not just their money, by investing in this product

After disclosing information about the product, it is important to find out what they think. We asked bars the following questions:

1) How do you think that this product would affect the action of drinking and driving in your area?

2) What problems do you envision being associated with this product?

3) In what ways do you think that this product will affect your image? Positive or negative? Please explain.

4) How would you enforce security provided by this product? (Ex: Bouncers, police, etc.)

5) Would you be willing to hire employees to oversee this product?

6) Some customers may be dissatisfied with having to give up their keys… In what ways could you make consumers more accepting of this product? (Ex: Discount, free entry, free drink, etc.)

7) How much would you be willing to pay for a product like this?

8) Would you be willing to reserve a space in your bar for this innovation?

We asked patrons the following questions:

1) Would you buy and/or use this product if it was an optional service at restaurants, bars, and event venues?

2) How do you think that this product would affect the action of drinking and driving in your area?

3) What problems do you envision being associated with this product?

4) In what ways do you think that this product will affect you or your friends and family? Positive or negative? Please explain.

5) If this was a required process by the venue of your social gathering, would your feelings toward the product change in any way? Please explain.

6) Please try to imagine a situation where you walk into the bar and are required to hand in your car keys. Explain your reaction to this new experience.

7) If it was a mandatory process among admittance to the bar, how would that make you feel? Would you be angry or upset? Would you be happy or excited?

8) If bars implemented this product into their venue, would you change the location of your future social gatherings?

9) We understand that some customers may be dissatisfied with having to give up their keys… In what ways do you think the bars and venues could you make consumers more accepting of this product? (Ex: Discount, free entry, free drink, etc.)

10) Please explain your feelings if you were liable of the people operating machinery while consuming alcohol, instead of someone else, like the bars for instance.

11) If the product was available as a rental, for house parties and small gatherings, would you take the time to rent a product like this when you are the host of the party, and not a guest?

12) Would this process make you feel agitated? Or, would it make you feel safe?

13) How much time would you be willing to spend on a line for this service? How long in duration do you expect it to take?

14) How much would you be willing to pay for a product like this?

We truly believe that these questions will help us determine our market and the level of need or want of the product.

Thursday

Although I was not in class on Thursday, we had to read Chapter 19 for the class. This chapter talked about pricing and helped when I tried to apply those processes to the OK TO DRIVE smart project.

Price is what is given up in an exchange to acquire a good or service. Price is an important aspect of a product. According to our textbook, price plays two roles in the evaluation of product alternatives: as a measure of sacrifice, and as an information cue. Personally, I immediately connect value to price. Before taking this class, I would think that something was valuable based on whether or not is was expensive. As a consumer, I felt that I could only make my purchases that were expensive to fit in with the crowd. For example, I would buy UGG boots, or Hunter Rain boots, which were priced high, because I thought the high price was associated with the quality. I still do this to this day. I am content with paying a high price for something, because I automatically assume that it will give me a high quality service or product.

Setting the right price on a product is a four step process:

1) Establish Pricing Goals: Pricing objectives fall under three categories, (1) Profit Oriented, (2) Sales Oriented, (3)Status Quo. It is important to consider trade offs before deciding how to price your products. It is also important to make sure that it is a realistic goal.

2) Estimate Demand, Costs, and Profits: After setting a pricing goal, it is important to estimate how many people will buy your product, how much it will cost you to make the product, and how much profit you will make by estimating how much you'll make in revenue and subtracting the costs it took you to make your product.

3) Choose a price strategy to help determine a base price:

     A price strategy is a basic, long term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle. A company's freedom in setting the price for their product depends on the market conditions and the other elements of the marketing mix. If a company releases a product that is quite similar to others in the market, its price will be dependent on their competitors prices. Therefore, they are restricted. In order to succeed, they would want to be in the range of their competitors prices so they are not too overpriced, but not too underpriced either. On the other hand, if a business is coming up with a totally new product that has never been on the market before, they will have less competitors, and then have more freedom with pricing since they are setting the baseline for that type of product. There are three basic approaches of price strategy. They are (1) Price skimming, (2) Penetration Pricing, and (3) Status Quo Pricing. Price skimming is used for new products when the product is perceived by the target market as having unique advantages. Others will use skimming and lower prices over time. Price skimming is a policy where a company charges a high introductory price, often coupled with heavy promotion. Penetration pricing is very different from price skimming. Penetration pricing charges a relatively low price for a product when it is rolled out as a way to reach the mass market. It means lower profit per unit, so to beak even, it requires a high volume of sales. This tends to be the most effective in a price sensitive market. Status quo pricing means charging a price identical or very close to the competitor's price. The disadvantage of this pricing technique is the strategy may ignore price and demand. This is mainly used in small companies.

4) Fine-tune the base price with pricing tactics: After companies understand both the legal and the marketing consequences of price strategies, they should set a base price. Fine-tuning techniques do not change the level of the general price, but they do result with changes within that general price level. Fine-tuning pricing tactics include:

•      Discounts
•      Geographic Pricing
•      Strategies

Fine-tuning strategies help companies adjust for competitions in certain markets..

SMART PROJECT: OK TO DRIVE

For pricing, we are a brand new product. There is no other product like ours, so we have flexibility with the amount we want to price our product. We do not have anyone to look at to compare/contrast prices with. Since we do not have direct competition, we could charge as much as we want and get away with it. But, we still want the price to be attractive to customers.

For our breathalyzer activated lockers, it is important to determine how price sensitive our customer will be.

Elastic

• Price Sensitive
• Bars will be hesitant to invest if it is super expensive
• New product and they don't know what this will do for their business yet

Inelastic

• Value outweighs price
• Value is important
• Safety
• Prevention of fatalities
• Price could go up if it was made regulated
• Mandatory product, mandatory high price

These pricing strategies that we learned in Chapter 19 are very important. Price is often seen as the value of the product. You want it high enough to make your product seen as valuable, but not too high where no one can afford to buy it. Price can often make or break a company, so it is something we definitely need to focus on when we work on our SMART projects.

Week 8 and Week 9

This past week I was unable to attend class, so I figured I would combine my blog posts of week 8 and week 9 together.

Although I was not present this week, there are still important key terms in marketing that I have encountered in my studies outside of class.

First off, I would like to start off by talking about the adoption curve. When introducing a product to the market, it will be difficult to gain recognition right away. Some will be immediately receptive, and some will have a little more difficulty joining the bandwagon. The adoption curve has identified some fascinating personality traits that help us classify how people will accept a new innovation.

Innovators (2.5%) – Innovators are the first people to try this new product. They are not afraid to take the risk of trying something new. They are young and ambitious. They have the highest social class, and have great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Even though they may not be satisfied with every product they come across, they continue to lead this innovative lifestyle.

Early Adopters (13.5%) – This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. More discrete in adoption choices than innovators. Realize judicious choice of adoption will help them maintain central communication position (Rogers 1962 5th ed, p. 283).

Early Majority (34%) – Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system (Rogers 1962 5th ed, p. 283)

Late Majority (34%) – Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.

Laggards (16%) – Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to change-agents and tend to be advanced in age. Laggards typically tend to be focused on “traditions”, likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership.

I think this is really important. In order to analyze your product and see what your type of people your market will consist of, you need to keep this adoption curve in mind. Technology has impacted our society in a tremendous amount of ways, but it took quite a bit of time for the entire world to adjust. Using this adoption curve, you can map out how long it will take for people to adopt your product and plan accordingly as far as supplies, updates, and releases. You do not want to make an abundance of your product when you do not know the rate at which the market will adopt your product. That is why this adoption curve is so vital within your business and marketing plans.

Additionally, last week we my team met with our marketing consultant. Although I was unable to make it, I know that a lot was discussed and I was informed about what I missed. Before meeting with Sam DiGiovanni, we met in Sleith and brainstormed on what questions we would like to use, or what we found to be important, in our surveys.

After meeting with Sam, we have narrowed our questions down to ten that we feel will help us best understand our target market:

1. Have you ever encountered legal issues involving drinking and driving at your bar?
2. Do you think that this product would eliminate/diminish the hazards of drinking and driving in your area?

3. In what ways do you think that this product will affect your image?

4. How much would you be willing to pay for a product like this?

5. Would you be willing to reserve a space in your bar for this innovation?

6. Some customers may be dissatisfied with having to give up their keys…

    Would you be willing to sacrifice customers for safety?

7. How would you enforce security provided by this product?

8. Would you be willing to hire employees to oversee this product?

9. In what ways could you make consumers more accepting of this product?

10. What problems do you envision being associated with this product?
    

We really wanted to know what they thought of our idea. We know it could be a controversial product, so we found it important to get venues' opinions on how likely they would be to use it, and what issues they could encounter. One thing that Sam will be extremely helpful with is surveying surrounding bars due to the fact that our OK TO DRIVE team is not of legal age to be in a bar. Additionally, I have realized that our consumers and our customers are two different things. Our customer would be the bar, but the patrons at their bar would be the consumer. So, we need to keep that in consideration and evaluate their thoughts as well. This will require us to come up with a second survey directed toward consumers.

Week 9: It is finally spring break! Where has the time gone?

This week we have a lot of work to do. First off, we need to compose a mega-mind map which will basically incorporate all of the marketing concepts we have learned in this midterm, and put them on paper. We have made mind maps for each individual week, but it is important that we are continuously connecting the prior weeks to our present ones. I just completed my mind map and tried to include all of the things we have learned so far, connecting recent terms to beginning terms, while all linking back to the promotion and marketing of our smart projects.

Midterm Mind Map

Additionally, we were given a Shark Plan Assignment. We each had to select a shark tank video to work on. My product is Kodiak Cakes. I am looking forward to completing this project by the end of the semester.

Week 7

Overview of the Week
     On Tuesday we watched a video clip from Shark Tank regarding a new business called Gato Cafe. They had a concept theory of having a location where prepackaged baked goods and drinks would be served in a cafe, but this one would have cats. The business founder hoped to provide customers with a pleasant and relaxing experience of visiting with cats to DE-stress while grabbing a cup of coffee, or getting some work done. They would charge an entrance fee to the customers and then the people could come in and relax as long as they pleased. 

     At first I thought this is absolutely crazy. As a person who does NOT like cats, I figured that this would be one of those stupid ideas in which I questioned why they came onto the show in the first place. During class, we got into groups and broke it down. We really focused on evaluating this service through the Value Proposition Canvas, the elements of the value pyramid, Positioning bases, segmentation bases, and concluding questions that Professor Spotts gave us to make us think. This helped us link the readings in our textbook and the videos he posted on Kodiak to a specific company. 

On Thursday, we met back up into our groups and wrote our responses to the questions on individual white boards. We then compared our responses with the rest of the class. I thought this was extremely helpful because it allowed us to clear up some of the confusion behind definitions in our textbook. After class, I felt like I left a lot more confident than how I walked in. I had finally grasped an understanding of what the definitions actually meant, how to apply them to companies, and was able to separate meaning of a definition versus my own interpretation of vocabulary. 

Various Positioning Bases
     In the beginning of class, we first went over various positioning bases. The goal of these bases is for a business owner to position their company or product to be equivalent, if not greater, than a national brand in that product class. Positioning bases is a psychological concept that helps a customer determine how they view your product in comparison to your competitors. 

•  Attribute Product:  An attribute product focuses on the characteristics of a product which make it distinct from other products. Attributes include size, color, functionality, components and features that affect the product's appeal or acceptance in the market. For example, Seventh Generation is a paper product company that can be classified as an attribute product. They diversify themselves by advertising their product "better for the environment," and claim that this will be positively impacting seven future generations. 
• Price/Quality:  In order to formulate a high value in the business world, we agreed that a low price with "average" quality will succeed. Another way to be recognized as a highly valued product is to have a high price associated with a high quality product. For example, Target and Walmart have clothes that are suited for their price, therefore they make business in their apparel departments. However, Macy's has a higher quality of clothing in comparison to Target or Walmart, offered at a higher price, yet it still has a substantial value in the market. 
• Use/Application: Some products can be seen for a variety of purposes. This makes their product versatile. For example, Baking soda has been proven to be used in many different matters. It has been used for baking, it has been used for cleaning purposes, and it has even been used as an ingredient in toothpaste. 
• Product User: Some companies are positioned toward a specific consumer. For example, Banana Republic, GAP and Old Navy all have different groups of customers. Banana republic is a high end business that tends to gear its products more toward younger adults that are in the professional world. GAP directs its clothing to teens and tweens. Old Navy is seen as a good store for parents going clothes shopping for their kids. The product user in all three of these business is different, and each company has decided to base their position in the business world solely on that diversification. 
• Product Class: Positioning by product class is a marketing strategy that consists of promoting two products that lie in the same product class. By promoting two related products simultaneously, the positioning of both is improved in the market. The main driver of positioning by product class is usually sales promotions and sales tactics. An example of this would be Coke versus Pepsi. 
• Competitor: This is all about defining how you’ll differentiate your product and create value for your market versus someone else. "It’s about carving out a spot in the competitive landscape, putting your stake in the ground, and winning mind share in the marketplace – being known for a certain something." (http://www.marketingmo.com/strategic-planning/competitive-positioning/) An example of competition positioning bases is Apple versus Samsung. 
• Emotion: This is seen as a company using motivation to buy the product. For example Nike's slogan "Just do it" appeals to the emotions of customers and intrigues them. It gives them incentive to buy from that company. 

Segmentation Bases

Although we have covered this topic already, it was brought up once again in class on Tuesday. It is important to keep these segmentation bases in mind even as we move on and learn new marketing concepts: 

• Geographic 
• Demographic
• Gender
• Income
• Ethnic
• Family Life Cycle
• Psycho-graphic
• Benefit
• Usage

Value Proposition Canvas 

• Can be used for new and existing products
• Acknowledges that the customer has a set of needs

This is an extremely helpful tool to evaluate the value of your product, the value of your competitors, and the consumer decision making process all in one. The goal of the value proposition canvas is to narrow the gap between your product and customer, while also broadening the gap between the customer and your competitors. 

Product: What is it? 

• Benefits your product has
• Features of the product
• Experience you want to give your customers. 

Customer: Why do I want it? 

• Wants: emotional drivers
• Needs: rational drivers
• Fears: hesitations & concerns the consumer may have about investing in your product or company
•  Do not want to be dissatisfied or frustrated
• Socially
• Financially 
• Psychologically
• From a health standpoint 

Substitutes: 

• Who are your competitors? 
• Alternatives? 

Let's apply the Value Proposition Canvas to Gato Cafe: 

Product

Benefits 

• DE-stressing activity
• Relaxing Setting
• Social Gathering
• Provides remedy to hunger
• Enjoyment
• Something to do
• Support for rescue animal services

Features

• Cats
• Food

Experience

• Visiting with cats
• Relaxing
• Doing work
• Have food and drinks 
• Gato Cafe wants this to be a fun hangout spot

Customer

Wants

• Enjoyment
• Calming experience
• Getaway
• Test drive for owning a cat 

Needs

• Emotional help
• Animal therapy

Fears 

• Allergies
• Combination of food and animals
• Sanitation
• Aggressive cats 

Substitutes 

• Zoo
• Pet shops
• Animal shelters
• Normal, ordinary cafes (ex. Starbucks) 
• Competing industries: other getaways or relaxation techniques
• Nail Salon
• Massage
• Spas
• Resorts

The Elements of Value Pyramid

How could you evaluate Gato Cafe according to the elements of value pyramid? 

Emotional:

• Can reduce anxiety
• Therapeutic value
• Fun/entertainment 

Functional: 

• Sensory Appeal
• Variety
• Avoids hassles (of having your own cat) 
• Reduces effort (of having your own cat) 
• Reduces Risk (of having your own cat)

Simmons

• Secondary data source- good for Smart project
• Crosstabular data tables
• Popular for managers to use
• Simple and understandable 

Applying Simmons to Gato Cafe...

• Break it down by region and cat/dog interest
• Index: Measure of how things change- way for comparison
• Above 100= above average
• 100=average
• Below 100=below average 

Florida and Miami.. where Gato Cafe is planning to be located

• Not many people own cats there
• Are there cat lovers in Florida who have an obstacle hindering their ability to own a cat? 
• Or, do they just not like cats?
• Might be a tough place for Gato Cafe to go into business

Crowdfunding: the practice of funding a project or venture by raising monetary contributions from a large number of people

Crowd-sourcing: a specific sourcing model in which individuals or organizations use contributions from Internet users to obtain needed services or ideas

• Gato Cafe utilizes Crowd-sourcing and crowdfunding 

Bring it all together now...  WATCH THIS

• How are you going to position Gato Cafe?
• What type of product is this?
• Is it a new product?
• Does it have a product line? 
• Product Mix? 
• Product Line Extension? 
• Is it a brand? 
• Brand loyalty? 
• Co-branding opportunities? 

It is important to think of these questions before you go into business. We need to do this with our smart projects as well!

Product Cubed Concept 

• Augmented: Anything you do to make your product greater- guaranteeing quality so that the value goes beyond just satisfying a need
• Tangible: physical components of the product 
• Water Bottle Example
• Water bottle, water, cap, size, labeling
• Core: intangible, related to the value of the product, & satisfaction of needs

Smart Project Update

• Smart Project Market Analysis and Customer Discovery 
• Value Proposition Canvas
• Possible Reasons our product might fail 
• Develop a market research plan

It is important to include the engineers in the process of our marketing analysis. We will focus on easing this into our meeting. Engineers tend to focus on the product as a whole, instead of the value of the product to consumers. We need to keep in mind that we are selling a service for a need that it satisfies, not just the physical component of the product. This smart project market analysis and customer discovery will help us determine modifications needed and/or what we need to elaborate on when pitching our product to consumers. This is in the hopes of achieving a complete understanding from our market.