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.