How is product defined?

Can be defined as both tangible goods and intangible services generally created for the purpose of transaction.

How do Interactivity and Individual (the 2Is) impact product?

The 2Is allow a company to learn more about its customer, personalize a product to meet customer preferences, and offer CRM tools to provide more value for customers and cut costs for product sellers.

Websites which require customers to register to use the site have access to numerous tools to interact with the user as an individual.

•Once the user has registered, the site can recognize an individual customer both on the first and return visits.

•Using log files, a site can track a specific individual’s clickstream, i.e.where they go on a site, length of time spent, actual sequence of page views etc.•Based on such data, sellers greatly increase their ability to develop products based on their customers’ interests and preferences, especially in developing augmented products.•The Internet has also changed market research – today, syndicated reports can be found, assessed, and downloaded in a matter of minutes..  These reports are highly customizable and inexpensive relative to traditional research.

What are key marketing levers for product?

Customer Service Programs, Postsales Support

(Two primary benefits: can be used as a lever to provide a relevant basis for establishing an ongoing dialogue with the customer and enable an annuity stream which can be considerable )

Customer Care (Internet has enabled a radical shift from the traditional complaint management to customer care. / The Internet facilitates customer interaction, greatly reduces time to resolution and reduces costs)

Customer Relationship Management (The entire concept of CRM is to recognize individual customers, understand their value, apply sales and marketing resources that are in line with their value, and then let the customer train the enterprise in terms of  how they would like to interact and receive their products and services.

Loyalty Programs and Privileges (Purpose is to recognize and reward a company’s best customers by providing additional services in appreciation of their loyalty.  This in turn can increase a customer’s perceived value. )

Availability of Complementary Products (This assures the buyer of the basic product that has additional functionality, tools or other enhancements are available or will be available in the future thereby improving the potential value of the basic product. )

Upgrades (Upgrades have been effectively used to develop long-term customer relationships and offer the customer a better value proposition. / Important guidelines to note are that upgrades should be meaningful and relevant to the customer base, interface of upgrade should be similar to old product with no high learning curve to overcome and be upward compatible.)

Enabling Community (An active community around a product deepens the relationship between the product and the individuals in that community and can offer long-term, loyal and high-margin customers to a company. )

Additional Functionality (There are a number of enhanced functionalities that a website can use to augment a basic product and drive additional benefits to its visitors. Two general types: low-tech and broadband-enabled.

•Low-tech includes facilitated comparison shopping, product selection guides, live personal assistance or product demonstrations.

•The nascent stage of the Internet, slow connections and processing speeds are currently hindering the advancement of broadband applications such as simulcasting, web-conferencing, and streaming video capabilities.

Fulfillment Capabilities  (The Internet allows for greatly increased fulfillment capabilities as a result of the 2Is. E.g. a customer can be given the choice of multiple shipping addresses for one shopping session. )         

What does the overall product development process look like?

Customer needs, Production needs and capabilities, Research and Development, Competitors and Marketplace Forces

How can companies manage their product portfolio?

New product development, Enhancements and line extensions of current products and services, Development of existing products, Support of current products and services

How does marketing research fit within the product development process?

Test Marketing – Small-scale experiment in which a new product is introduced and supported by a clearly defined marketing mix. 

How can products enable a customer relationship?

Deploying the product development levers that are appropriate for the existing relationship and

Emphasizing the elements of the value proposition that are most relevant at a given stage of the relationship.

What is the relationship between price and demand?  Why is it important for a firm to price at the point at which marginal revenue is equal to marginal cost?

Price

•Inverse relationship between price and quantity.

•As a product price decreases/ decreases, demand will increase/ decrease.

Substitute Offerings/ Prices

•Both the types of substitute goods and their prices affect the product demand curve.

•If there are close substitutes, the product has limited maneuverability in terms of pricing.

Complementary Offerings/ Prices

•The prices of complementary goods affect a product’s demand curve.

•If the price of the complementary good decreases/ increases, then demand for the product will increase/ decrease.

Income

•Income is positively correlated with demand.  As income rise, so does product demand.

Market Size

•As market size increases, so does product demand.

Taste

•Regardless of market size, price, income, substitute and complementary products, consumers must have the desire to purchase the product.

•The latitude that a firm has to price its product is dependent on the slope of its demand curve.  The steeper the curve, the more power firms have in pricing.

Marginal Revenue

•Is the additional (or negative) revenue reaped from lowering or increasing the product price by increments.

Marginal Cost

•Is the cost associated with producing an additional good. 

•Marginal cost curve is often U-shaped – as more goods are produced, firms often experience increasing returns to scale.

Why should a firm consider fairness when pricing its goods?

As a general rule, firms should avoid competitive price cutting that could lead to a price war.

Fairness in Pricing

•Consumer often think about pricing in terms of how fair the price is. 

•Three factors are taken into consideration:

1.Past prices

2.Close-substitute prices

3.Context (purchase environment)

How has the Internet enhanced opportunities for dynamic pricing strategies?

Interactivity – The Internet makes it easy and much less costly for buyers and sellers around the world to interact and negotiate.

Menu costs are the costs associated with changing the price of a good.

In a store or a mail order catalog, there are costs associated with changing costs, but on the Internet, this is easy and virtually costless.

Why would a firm want to implement a price-discrimination strategy?

First-degree Price Discrimination

•Involves getting consumers to pay exactly what they are willing to pay for an item.

•Implies that in order to charge each consumer exactly what they are willing to pay, firms must know what each consumer’s demand curve is – which is unrealistic.

•What is more realistic is for the merchant to ascertain more information from consumers to gauge what they are willing to pay.

Second-degree Price Discrimination

•Firm is trying to ascertain how much consumers are willing to pay not only for the first unit of a good, but for each additional good.

Third-degree Price Discrimination

•Most common type of price discrimination.

•Involves classifying consumers by category according to their willingness to pay.

•E.g. price discrimination by age at theatres and airline pricing.

Server log files are created by the server that houses the Website.  Each time a browser requests a file in order to build a Web page, it generates entry in the server request log.  A hit is counted for each file/graphic on the page. Server logs are huge excel sheets with the following information: The IP address of the requesting computer, date and time of request, code indicating whether request was successful or not, number of bytes of date transferred, referring site, type and version of Web browser making request, operating system of computer making request. 

Coded pages are a new method of collecting data on the user’s side of the information transaction.  Indeed of the server side like server logs.  Files send data back to the server.  Working with cookies, the tag can send back detailed information about the visitor’s activity on the page.  Data from coded pages is more accurate than server logs.  It also has smaller storage requirements because it only stores relevant data. It permits real-time processing and viewing of site metrics. On the other hand, server log data must be transferred to a separate analytics system for batch processing which means it cannot be made available in real time.

Panel Data recruits a statistically representative panel of Internet users who agree to participate in data collection.  There are three main benefits of this type of data as opposed to server logs.  1) The source of the data is unambiguous, which it often is not with server logs.  For example, international IP addresses can be difficult to identify precisely in terms of their source.  2) a person who used the internet from both home and work is two separate people according to server logs, but carefully planned and maintained panel data can overcome this issue. 3) The measurement firm can collect demographic and behavioral data from panel households that can be very useful in reporting and analytics.  Because server logs identify most users by dynamic IP addresses, it is not possible to use much third-party data to enhance it. 

I think coded pages and panel data are both very useful.  The coded pages record actual activity.  Panel data records actual activity as well as demographic and behavioral data, but participants know their actions are being recorded, so they might act differently.

What are some of the specific metrics that measure Internet traffic, audiences and campaigns?  Which ones do you think are most important?

Metrics used are:

Report Dashboard – customizable display of summary data on a computer screen.  Because the summary data are always present on the specified screen, it prevents the user from having to activate a function or program or visit another Website to obtain data.

Marketing Campaign Reports – Marketers are able to select reports to view. They have the option of viewing any day, week, or month.  They can also compare two reports to each other. 

Browser-Based Reports – Users subscribe to the service, enter the page in the site and data will be displayed.  The data that are overlayed on the page represent the percentage of visitors who see the page, how much time they spend, where they came from, and where they go when they exit the page.

Path-Analysis – Shows the paths that consumers go on.  Shows when the consumer returns back to the home page, or backtracks, means that they are experiencing navigational problems.  Or when they are exiting the site, they may still be looking for the product they want.

Segmentation by Behavior and Channel – Being able to segment visitors by their behavior pattern or by information provided by the visitor. 

What kinds of variables are needed to measure the effectiveness of branding efforts on the Internet? Where are these measures obtained?

Variables needed are:

traffic measures that document site activity. (Hits the number of files requested; impressions – the number of times an ad banner is requested by a browser; page views or deliveries – the number of times a web page is requested; sessions – the amount of activity on a site during a specified period; click throughs – the number of times visitors come to the site by clicking on an ad)

Audience measures provide data about the people who visit the site:

(Total includes multiple visits or unique, different people, during specified time frame;  unidentified, anonymous, or identified, registered or customer)

Unduplicated audience, the visitors that are unique to a website

Behavior on the site (number of page views, session time, path through the site, shopping cart abandonment, entry page – how many visitors do not enter through the home page)

Sales can be a measure of effectiveness if it is a transactional site.  Three basic ways of collecting measure from the sire itself are hit counters, server log files, and coded web pages. 

The consumer adoption process is a generally accepted conceptualization of the stages a consumer does through when confronted with a new product of service. The consumer must first become aware of the product, then develop interest in it, perform some prepurchase evaluation, and then try the product, either as a consequence of a purchase or of a marketer-sponsored promotion or incentive.  After the trial, the consumer must first decide to purchase/continue purchasing the product (adoption) or the product would become an integral part of the consumer’s lifestyle (internalization). 

The diffusion of innovations is a communications model that consists of four elements: the innovation, communication channels, time and the social system within which the innovation is spreading.  It determines the ease/how the speed at which an innovation is being adopted and diffused amongst consumers.

Define “pervasive computing” in your own words.  What changes is it likely to bring about in the way marketers approach the internet?

Pervasive computing aims to enable people to accomplish an increasing number of personal and professional transactions using a new class of intelligent and portable devices.  It gives people convenient access to relevant information stored on powerful networks, allowing them to easily take action anywhere, anytime.  These new intelligent appliances or “smart devices” are embedded with microprocessors that allow users to plug into intelligent networks and gain direct, simple, and secure access to both relevant information and services.  These devices are as simple to use as calculators, telephones, or kitchen toasters. 

Marketers will likely develop new products and services that successfully take advantage of this new technology.  Some applications successfully in place already are RFID payment systems & wireless parking meters so you can use your cell phone.

Be prepared to describe the strategic drivers of wireless adoption and to give an example of each.

Context – Providing necessary information when and where the customer needs or wants it.  The content trigger is in the hands of the customer, not of the marketer.  Context in the wireless environment has two dimensions:  Localization – Through carious geographic systems the location of the user can be identified and information specific to that location can be provided.  A consumer driving down the highway can be beamed information about attractions in the area.  Personalization – The customer can select not only the type of information desired but also the frequency of information provision. For example, the consumer may select specific stocks and specific price levels at which he or she wished to be notified.

Time Sensitive- Screens are small and storage is limited, so information must be provided at the time appropriate to the customer, not convenient for the marketer.  As a customer passes a store in a shopping mall, he or she may be willing to receive a coupon for a purchase in that store, which can be saved or retained on the screen until the customer shows it when checking out the purchase. 

High Value – The coupon will have to have a reasonable value in order to make it welcome in the wireless context.

Voice activation – There are many situations, driving in particular, in which it I not safe and in many locales, not legal to use the keyboard of a mobile device.  Voice activation is the solution in these situations.

One-click payment mechanisms – Consumers are not going to be willing to enter credit card information on mobile keyboards and may be uncomfortable with the idea of their credit card data being transmitted wirelessly.  They are not likely to be willing, either, to have numerous vendor-specific accounts, especially for micropayments.  A system in which payment is easily and securely authorized and billed to a single account will be necessary to enable frequent use of m-commerce services.

Security – Users must be assured that data transmissions are secure, and authentication services must be provided in a way that is suitable for the devices.  Embedded devices that identify the owner are one possibility.  Smart cards that can be inserted and removed to protect encoded information are another.

Privacy – In addition to protecting personal data, providers of content and services will have to be sensitive to download times, lack of storage, and the fact that users are paying for airtime.  They must not abuse technological capabilities like geographical locational services.

Expanded permission marketing – Marketers will have to extend the concept of Permission Marketing beyond simple opt-in scenarios.  They must find out what kind of information consumers are willing to receive, how often they are willing to receive transmissions, and where they are willing to receive it.  This means an accurate customer database that is updated in real time. 

The future holds great success in terms of knowledge management and use in marketing applications.  There are currently partial solutions for knowledge management in applications, and with further studying and experimenting; there can be a full solution.  Customer service and automation of marketing processes can be applied through the applications.  There is a vision of what such a solution would look like.  We have all of the technology available, hard work just needs to be put in to the challenges of automation and integration.  Applications can provide the customer with an individualized screen displaying information specifically for that consumer, this allows for easier and less confusing interactions.  Companies have considerable information about customers and can use it in ways that have a good chance of being productive.

Think about your own Internet experience, can you think of a specific encounter in which information or knowledge clearly improved your interaction with a human agent? Can you think of an encounter in which the human agent lacked the information or knowledge to make your experience satisfactory?  Be prepared to discuss both positive and negative experiences and what could have transformed negative encounter into a positive one. 

An internet experience I had was when I was looking for a fragrance similar to one that I had previously purchased, but I didn’t want to purchase they same brand again.  I looked for information online to see what category my fragrance was in, whether it was floral, woody, oriental, or fresh.  I was able to see what perfumes might be similar to my current one.  When I went to the store, I was able to tell the sales person that I was looking for a floral perfume.  I was able to see if what they showed me was what the Internet suggested for me.  At times I feel that the human agent did not provide as much information as the Internet did, but at least I had an idea of what I wanted from what information the Internet provided me with. 

The internet DOES have the capacity to increase customer expectations about service levels and also to be the vehicle that delivers service that meets or exceeds hose expectations.  Consumers want timely response to inquiries, informative content, communication with a real person, product displayed clearly and prominently, and 24-hour availability.  The Internet can provide all of this for the consumer, with hard work on the marketer’s end of course.  The Internet lets helps companies to strategically manage large account customers, develop effective customer service systems, proactively identify customer problems and communicate resolution options, leverage customer information from the service process, and prevent customer problems via customer education. 

What is the concept of anticipatory customer service?  What role can it play in successful customer service delivery?

This concept means that the marketer is being proactive and is not passively waiting for customers to request service.  Companies must anticipate potential problem areas before they become troublesome, develop solutions, and provide service that exceeds customer expectations.  They must build customer scenarios to determine what they can do to prevent problems.  Must make customer service pervasive by fulfilling common requests before the customer even asks.  Design the service process that guides the customers to the service they need without having to move through frustrating layers of information that the customer does not need.

Anticipatory customer service can play a major role in successful customer service delivery by making the customer’s experience seamless and satisfying.  This can also build a more loyal customer, and customer lifetime value. 

Can you identify any ethical issues that are inherent in sophisticated customer service programs?

If a company doesn’t feel that a customer serves them any value, they might not provide them with proper customer service.  Companies can measure exactly what a services costs on an individual level and assess the return on each dollar.  They know exactly how much business someone generates, what he is likely to buy, and how much it costs to answer the phone. 

Cookies, customer profiles, registration, offer products you might like based on what you have viewed.  Customer loyalty programs (easy to use, immediate rewards, make the customer see its value, offer an exit strategy so the customer doesn’t feel trapped.)

Users of gmail are now able to set up to do lists, how every they are not easily accessed.  You must click through other links to finally find your task list.  Gmail has another to-do list option called ‘Remember the Milk’.  You can create two separate to do lists under both options. 

Link: http://www.nytimes.com/external/venturebeat/2008/12/08/08venturebeat-forget-the-milk-gmail-gets-its-own-task-lis-101266.html

Clerk Dogs is a new website that will allow consumers to find a movie depending on what mood you are in.  If you are familiar with the internet radio site Pandora, then this is the same thing, except for movies.  You can type the title of a movie that you love, and Clerk Dogs will give you a list of similar movies that you might enjoy as well.  Another option is to tell them what you are in the mood for, and they will recommend movies for you.

Link: http://bits.blogs.nytimes.com/2008/12/09/your-personal-video-store-clerk-on-the-web/

Title: Can Panels.net Make Useful, Real Time Pop-Ups?

 Panels.net has come up with a new system of pop-ups that include much more useful information than the typical pop-up adds we see now.  Instead of having an advertismet pop-up in addition to a website you are visiting, panels.net has created a service that allows for a small icon to be placed next to any “entity” link.  You can then click on the icon and get real-time info about the “entity”, whether it be a person or a company website.  This type of pop-up can be considered to be less obstrusive and more informative that typical pop-ups.