bait-and-switch

Examples of bait-and-switch in the following topics:

• Illegal Price Advertising

  • Deceptive price advertising uses misleading or false statements in advertising and promotion and is usually illegal.
  • Malt and cocoa butter have been used as filler in peanut butter.
  • Bait-and-switch is legal in the United States, provided that ads state that there is a limited supply and that no rain checks will be offered.
  • From 1921 until the mid-1970s, Listerine was also marketed as a preventive and remedy for colds and sore throats.
  • In 1976, the Federal Trade Commission ruled that these claims were misleading, and that Listerine had "no efficacy" at either preventing or alleviating the symptoms of sore throats and colds.

• Competition

  • Competition is a never ending challenge that must be addressed on an ongoing basis because consumers are exposed to many types of products, to many different marketing concepts which, if compelling enough will prompt them to switch and make different choices on the products or services they buy.
  • Typically, barriers to entry can be in the form of capital requirements, advertising expenditures, product identity, distribution access, or switching costs.
  • In industries such as steel, automobiles, and computers, the power of buyers and suppliers can be very influential.
  • Powerful buyers exist when they are few in number, there are low switching costs, or the product represents a significant share of the buyer's total costs.
  • This is common for large retailers such as Walmart and Home Depot.

• Repositioning

  • Many upscale hotels and restaurants suffered because people couldn't afford the prices.
  • If a change is volatile and is unprecedented, there may not be enough information available to use to make a decision.
  • Understanding the strengths and weaknesses of a company can help determine when repositioning may be necessary and how the change should occur.
  • When Apple switched their focus to iPod and its successors, for example, the company was able to change its financial situation and achieve success.
  • Indicate the characteristics and application of a re-positioning as it applies to competitive perceptual positioning

• Stages of Adopters

  • The stages of adopters for the diffusion of innovation include knowledge, persuasion, decision, implementation, and confirmation.
  • In later editions of The Diffusion of Innovations, Rogers changes the terminology of the five stages to: knowledge, persuasion, decision, implementation, and confirmation.
  • Persuasion: In this stage, the individual is interested in the innovation and actively seeks information and details about it.
  • Decision: In this stage, the individual takes the concepts of change (switching cost), weighs the advantages and disadvantages of using the innovation, and decides whether to adopt or reject the innovation.
  • During this stage the individual determines the usefulness of the innovation and may search for further information about it.

• Intangibility

  • To reassure the buyer and build his confidence, marketing strategists need to give tangible proof for the quality of service.
  • Service providers can inspire confidence in the service by having a clean facility that customers can see, an easy-to-navigate website that shows service offerings, and a reliable and courteous staff to help customers.
  • Because of service intangibility, consumers are less likely to switch brands or try new ones.
  • Given the intangibility of services, marketing them becomes a particularly challenging and yet extremely important task.
  • Hence, marketers can leverage the service offering to differentiate themselves from the competition and attract consumers.

• Organizational Objectives

  • On the other hand, too many business and sales staff leave "money on the table. " The objective is to adopt a pricing strategy and manage costs such that profit will be maximized.
  • One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs and behaviors of customers and clients.
  • In their book,The Strategy and Tactics of Pricing, Thomas Nagle and Reed Holden outline nine "laws" that influence how a consumer perceives a given price and how price-sensitive they are likely to be with respect to different purchase decisions.
  • Perceived alternatives can vary by buyer segment, by occasion, and other factors.
  • Switching costs effect – The higher the product-specific investment a buyer must make to switch suppliers, the less price sensitive that buyer is when choosing between alternatives.

• Elasticity of Demand

  • Only goods which do not conform to the law of demand, such as a Veblen good and a Giffen good, have a positive PED.
  • The overriding factor in determining PED is the willingness and ability of consumers after a price change to postpone immediate consumption decisions concerning the good and to search for substitutes ("wait and look").
  • Availability of substitute goods: The more and closer the substitutes available, the higher the elasticity is likely to be, as people can easily switch from one good to another if an even minor price change is made.
  • If no close substitutes are available, the substitution of effect will be small and the demand inelastic.
  • Duration: For most goods, the longer a price change holds, the higher the elasticity is likely to be, as more and more consumers find they have the time and inclination to search for substitutes.

• Reminding and Retaining Customers

  • E-commerce sites help customers select and prioritize choices by organizing items based on past online behavior and purchases.
  • Amazon is one company that pioneered the "one-to-one marketing" and personalization tactics that delivered targeted offers and related products to users.
  • Increasing switching costs (adding termination costs, such as mortgage termination fees)
  • Interact with customers and gather data on their requirements and behavior patterns.
  • Implementing these relationship marketing practices helps companies counterbalance new customers and opportunities with current and existing customers to maximize profit.

• Growth

  • The concept of having a tablet larger than a smart phone but smaller than a full-sized tablet (such as an iPad) is relatively new, and companies such as Amazon and Apple are in the stage where they are attempting to convince users to switch use them.
  • The growth stage is the period during which the product eventually and increasingly gains acceptance among consumers, the industry, and the wider general public.
  • During this stage, the product or the innovation becomes accepted in the market, and as a result sales and revenues start to increase .
  • Promotion is increased beyond the initially high levels, and word-of-mouth advertising leads to more and more potential customers hearing about the product, trying it out, and--if the company is lucky--choosing to use the product regularly.
  • Costs reduced due to economies of scale: as production and distribution are ramped up, economies of scale kick in and reduce the per unit costs.

• Identifying the Target Market

  • In marketing and advertising, a target audience is a specific group of people within the target market at which a marketing message is aimed at.
  • They recently redesigned 1,200 of its 6,200 stores to appeal to women, including shorter wait times for prescriptions, wider and better-lit shopping aisles, and more beauty products.
  • Target markets are groups of individuals separated by distinguishable and noticeable aspects.
  • Apply a valuation approach - Market growth, barriers to entry, market access, and switching is used to valuate segments.
  • The biggest mistake that it's possible to make in targeting is trying to reach everybody and ending up appealing to no one.