mkt 300 exam 3 outline
mkt 300 exam 3 outline MKT300
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This 30 page Study Guide was uploaded by Lyndsey Kubbe on Friday February 13, 2015. The Study Guide belongs to MKT300 at Michigan State University taught by Gill Harrel in Fall. Since its upload, it has received 150 views. For similar materials see Managerial Marketing 300 in Marketing at Michigan State University.
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Date Created: 02/13/15
Chapter 9 12 questions 0 The Concept of Products 0 A product is any physical object service idea person event place or organization that can be offered to satisfy consumers needs and wants 0 Can be tangible or service 0 Services represent more than 80 of US GDP and nearly 75 of the US workforce is employed in service industries 0 Core Products 0 A core product sometimes called the generic product is the physical item or intangible service that the customer receives 0 Basic function 0 Ex Generic drugs Branded Products 0 A branded product is the core product plus characteristics consumers use to differentiate it from similar products 0 Uses packaging styling features quality and brand name 0 Ex Apple was worlds most branded impact lines in a volkswagan Augmented Products 0 An augmented product has characteristics that enhance value beyond that of the core and branded products 0 Delivery methods warranty conditions and credit terms are way to augment a product 0 Another aspect of augmentation is product bundling strategy that combines many products into a single offering Ex Stereo equipment 0 The movement toward green marketing is a form of augmentation 0 Ex Dishwasher installed delivered and warranty 0 Consumer Product Classi cation 0 Unsought products are not thought about frequently nor perceived as very necessary The need is usually felt just brie y before purchase 0 Emergency products are purchased when an unexpected event takes place and the consumer has an urgent need for a product 0 Convenience products are relatively inexpensive items that consumers purchase frequently and with minimum effort Brand name is very important for convenience products because buyers don t spend much time selecting their purchase milk toilet paper 0 Shopping products are generally purchased only after the consumer has compared several alternatives Comparisons are made on such elements as style quality features and packaging cars furniture 0 Specialty products have unique characteristics that provide unusual value to the purchaser Consequently customers are brand loyal and often refuse to accept substitutes Gucci purse Godiva chocolates Business Product Classi cations 0 Capital products facilities that contain operations installations and equipment 0 ex Office buildings stores distribution centers items used to manufacture products and support the business 0 ex Drills computers desks robots 0 Production products substances in a natural stateraw materials 0 Ex Crude oil sand gas water Basic substances used to manufacture products processed 0 Ex Re ned oil steel plastic aluminum 0 Component parts and Subassemblies Products that are elements of other product products 0 Ex Brakes transmissions Activities purchased to help run the business services 0 Ex Consulting accounting waste removal Consumable items used supplies 0 Ex Paper pens folders Product Line Decisions 0 Product lines must be con gured for domestic and global markets Decisions about how many lines to carry how many products in each line and the degree of standardization across markets shape the overall offering of an organization 0 An item is a speci c version of a product within a product line Each item in turn consists of several units A unit refers to the speci c product amount container size or type and formula Retailers call these stockkeeping units SKUs to identify the variations they regularly have on the shelves 0 Product Depth and Breadth The depth of a product line refers to the number of items A product line with many items is deep a product line with few items is shallow 0 Shallow few items vs deep many items Breadth of product lines refers to the number of different lines a company markets Companies with several different lines are considered broad companies with few product lines are considered narrow 0 Narrow few lines vs broad many different lines pg 236 0 Diversity in Brand and Joint Marketing 0 O 0 Joint Marketing of Brands Cooperation between 2 companies to sell their products which tend to be complimentary Need to create positive impression before a cobranded product Ex Ticketmaster marketing itunes to encourage the venue Diversity in Brand Marketing Marketers increase brand equity by meeting the needs of various groups cultures nationalities and age groups 0 Global Product Decisions 0 O The globalization of business creates several productrelated dilemmas Among the most critical is determining the optimal amount of standardization for individual products and lines across market regions Standardization plays a major role in global company strategy In efforts to standardize the products it markets companies often standardize its suppliers to consolidate worldwide supply purchasing improve material quality and reduce costs The focus is to invest in strategic brands reduce supply chain costs strengthen the portfolio and to streamline nonstrategic selling general and administrative SGampA expenses 0 Brand Management 0 O A brand is a distinguishing name or symbol intended to identify and differentiate products from those offered by competitors Historically brands were used to identify a product s manufacturer 0 They also protected both the customer and the product by ensuring that the products met certain quality standards and came from a reputable source o The greater the perceived value the greater the sale Trademarks o The brand name is the wording attached to the product 0 The trademark brand mark is a distinctive or gure that O 0 identi es the brand A picture is called a trademark symbol Distinctively shaped letters are called a logo 0 Trademark Piracy O O O O The brand name and the trademark symbol or logo are protected by law if they are registered Gives the owner sole right to use them in anyway they choose ln advanced economies trademark protection is considered is considered essential for sound competitive industrial policy Brandnappingcopying products and af xing illegal labels China accounts are nearly 23 of all counterfeit goods Ex Disney characters Top 10 most pirated brands Cialis apple nike Louis Vuitton adidas Viagra Gucci hello kitty chanel walt Disney 0 Brand Strategies 0 Generic brand strategy 0 Uses no brand name whatsoever Firms usually select this approach when they want to gain a lowcost commodity market position Popular with pharmaceutical companies Individual brand strategy Assigns a unique brand name to each major product or product line 3 approaches where this approach is likely to be used 0 Companies may have different product lines that compete against one another 0 Products within one line may be matched with unique market segment needs 0 A company may make highly dissimilar products 0 Family brand strategy Uses a single brand name for the entire group of products in the company s lines Consteffective because advertising promotion and distribution resources can be focused to create a single image in the marketplace The result is increased consumer awareness of the company and its products 0 Manufacturer39s brand strategy Named after the maker Sometimes they are called national brands since the products often are found throughout the country Company s reputation is closely tied to the product Examples Kodak FisherPrice Gerber 0 Private Brand Strategy When wholesalers or retailers place their own name on a product Since these are promoted locally rather than nationally they can be sold at a lower price than manufacturer s brands Allow the reseller to build and enhance its own reputation Enable retailers and wholesalers to differentiate themselves form competitors 0 Hybrid brand strategy Combination of two or more approaches Often happens when mergers and acquisitions join organizations using different strategies 0 Brand Equity Connecting with a Successful Brand 0 Brand equity refers to the assets linked with the brand name and symbol that add value to the product or service 0 Brands carry denotative and connotative meanings Denotative means identify what the brand is Connotative meanings grow over time and become tremendously valuable and means producing an image of the brand 0 Brand equity is an intangible asset with 5 dimensions Brand awareness is the extent to which consumers recognize the name and are likely to include it among the set of brands they consider Brand loyalty occurs when consumers select a particular brand over others on a regular basis In effect the firm s customers are an asset 0 Distribution channel members are more likely to provide a good location within their outlet for the sale of an item with high brand loyalty 0 Companies with faithful customers tend to be less susceptible to economic downturns or new competitors 0 Brand loyalty is highest among more mature segments that tend to nd a brand they like and stick with it whereas younger generations are more willing to experiment with various brands 0 The 910 age group tweens is the transitional generation when quotcollective individualismquot is a big trend the 1315 age group is more aware of what is cool and less affected by other advertisers 0 Brand insistence means that buyers are not willing to accept substitutes Perceived brand quality is the degree to which brands consistently produce satisfaction by meeting customer expectations Brand associations evoke positive attitudes and feelings in consumers minds This enables rms to create messages that gain consumers attention more easily It also allows the brand equity to be extended to additional products Competitive advantage refers to a company seing vaue rather than to compete on the basis of price alone Maintaining Brand Value 0 Often the rst manufacturer of a new technology or product becomes synonymous with the entire product cass Developing a Successful Brand Name 0 Some rms have chosen brand names that communicate product attributes or bene ts 0 Examples Wheaties Weight Watchers etc Packaging and Labeling o 7 functions Contain and protect items Be environmentally friendly Communicate messages to customers Contain product codes Make the product more convenient to use Protect against misuse Facilitate product storage 0 The labels on a package inform consumers and help promote the product 0 The Fair Packaging and Labeling Act of 1966 requires that consumer products carry clear and easily understood abes They should contain the brand name and symbol the manufacturer s name and address the product content and amount and recommended uses 0 In 1990 Congress passed the Nutritional Labeling and Educational Act which applies to food Ethical Issues Surrounding Product Safety and Liability 0 Product liability refers to the fact that marketers and manufacturers are held responsible for injuries and damages caused by a faulty product Product Warranties 0 Warranties are written or implied expectations about product performance under use conditions 0 Product Recalls are the withdrawal of a potentially harmful product from the market by either a manufacturer or the federal government for its repair replacement or discontinuation The Consumer Product Safety Commission CPSC is the federal agency responsible for protecting consumers from productrelated injuries Chapter 10 8 questions a The Concept of Services 0 Services are intangible ideas tasks experiences performances or activities that one party can offer another A major difference between a service and a good is that services generally involve suppliers connecting directly with consumers for performance of the service 0 For more than a quarter century the dollar volume of services in the US economy has grown at nearly 4 annually approximately double the growth rate for products Trade in services is also very important globally representing about 60 of all trade among nations 0 Global Forces Creating Growth in Services 0 The industrial revolution brought about productivity gains through the substitution of machines for human and animal capabilities 0 Air transportation and telecommunications including explosion of the Internet as a means of global communication are examples of service that have brought us closer to the reality of a global community 0 Growth in services have affected technology quality of life government deregulation competition in professional services privatization need for specialization and growth of franchising 0 Technology 0 Producing more sophisticated services more rapidly o The technological revolution is making an information revolution possible which facilitates nearly every human endeavor Moore s law states that the number of transistors on a microchip doubles every two years 0 Cisco is a leading company in the technology revolution today 0 Quality of Life 0 Quality of life is de ned more by how people feel and experience life than by how people feel and experience life than by how much they consume 0 Government Deregulation of Services O 0 Understanding that competition provides vast opportunities for economic growth legislators have deregulated many services that were traditionally controlled by government agencies Major deregulation has occurred in transportation nance telecommunications and energy Competition in Professional Services Privatization O O Occurs when government services are contracted to private organizations for them to manage In the US there is a de nite trend toward privatization of local state and federal government services The Need for Specialization O O Occurs when an organization chooses to focus its resources on core business activities In order to utilize resources and build strength in the core business many organizations rely on service providers for basic support of their business Access to Knowledge 0 0 Today fundamental competencies required to run many service business are accessible to individuals or small groups of experts Through subscription services on the Internet experts everywhere have access to vast quantities of information Growth of Franchising O A franchise is a contractual agreement in which an entrepreneur pays a fee and agrees to meet operating requirements in exchange for the franchise name and marketing plan Service Characteristics that Affect Marketing Strategy Contrasts Between Goods and Services 0 O 0 Marketing lntangibles services only become real until they are performed Based on promises Relationship of Provider to Customer The Service Encounter Connection Service encounter is the contact between the consumer and the seller Simultaneous Production and Consumption No Storage and Inventory Services are extremely perishable their value exists for a short time airplane seats Service Quality Control Consumer Evaluation of Services 0 Product Qualities Affecting Consumer Evaluation Search Qualities 0 Found mostly in goods 0 They make it easy for consumers to judge one product relative to another 0 Use senses ex Text drive cars to pick best one Experience Qualities Goods and services are high in experience qualities 0 Consumers cannot asses the amount of pleasure derived from them until they have used it 0 Half goods half services Ex Seeing photos of the cruise then experiencing it then decided what they feel Credence Qualities 0 Found only in services and cannot be evaluated before during or after consumption Refers to persons belief in something is trustworthy Outcomes are largely unobservable to the customer until indirect bene ts emerge o The more intangible the result the higher the credence qualities involved 0 Examples medical diagnosis auto service legal service 0 Consumer Evaluation and Buying Behavior The Personal Factor In selecting services buyers rely more on information from personal sources Postpurchase Evaluation Because services are not easily evaluated before purchase most assessments are made during or after the fact Surrogates forJudgment When a product is high in credence quality consumers use surrogate cues to make judgments 0 One such cue is price many people equate high priced services with greater value 0 Another cue is physical features such as how the service provider dresses or the appearance or location of of ces Small Sets of Acceptable Brands or Suppliers 0 Consumers are likely to consider a small set of providers when seeking a service 0 Since services have no search qualities consumers will not bene t from elaborate comparisons Once a reliable provider is found customers tend to beloyal Slow Adoption 0 Because prepurchase evaluation is almost impossible the risk of buying a service is greater than for goods 0 Therefore many new services are adopted very slowly by consumers Examples ATMs Internet shopping etc Strong Brand Loyalty The Customer as Competitor In most instances the tradeoff is between time and money Service Quality signi cant for purchase decision pg 268 Developing Service Mix pg 271 0 Core basic bene t delivered O Healthy and safe birth Branded characteristics to make it different Hospital brand sparrow health m care health central Augmented package of bundled goods and services differentiated from another provider nursing staff education support bed side manner Functional element what a service is supposed to accomplish Interactive element personal behaviors and atmosphere of the service environment Service complexity number of steps involved in producing a service Divergence degree to which a service involves customization beyond standardizations pg 271 0 An Expanded Concept of Services 0 O 0 Person Marketing involves promoting an individuals character personality and appeal which in turn may be used to promote a service or product Entertainment and Event Marketing are the promotion 5 of an event in order to generate revenues and enhance the reputation of an organization Place Marketing enhances a location in order to appeal to businesses investors and tourists Political Marketing involves the promotion of an individual or idea with the aim of in uencing public policy and voters Cause Marketing involves gaining public support and nancing for a cause in order to bring about a change or a remedy Internal Marketing occurs when one part of an organization markets its capabilities to others within the same rm Nonpro t Services 0 O 0 Activities performed by an organization not motivated by pro t to in uence consumers to support them Need for Excess Revenues 1 Tax exempt but revenues uctuate from year to year 2 Can t raise money if they aren t running 3 They hire professionals to grow They raise revenues by acquiring money from third parties and by expanding into a number of business operations 0 Have to provide positive social bene ts by using the internet and the arts 0 Ethical issues always raises a question about tax exempt status for at least some especially when they compete with forpro t organizations Chapter 11 10 questions 0 The Concepts of Product Development and Product Management 0 Speed and responsiveness the ability to develop products quickly is extremely important in gaining competitive advantage 0 Product mix all the product lines and products a company offers 0 The main objective of product management is to ensure a steady ow of products that supports the company s mission 0 Balance management of existing products and identify new ones 0 Product Planning and Types of Innovation 0 Product Planning Outlines the focus given to core businesses current products in current segments market development new segments for current products or diversi cation products totally new to the company for new segments 0 Core Business Focus Emphasizes the marketing of existing products to existing market segments pg 287 0 Success by focusing on core on core products and mkt segments 0 Market Development offer existing products to new market segments 0 Ex Selling products to outlets expanding market out of local 0 Product Development offer existing products to existing market segments 0 Line extension new product closely related to others in same line Ex dr pepper extending to dr pepper 10 with only 10 calories 0 Diversification new products into new market segments 0 Ex Using wii to focus on simplicity of gaming market 0 Types of Product Innovation Continuous innovation is a minor change in an existing product such as a new style or model that can easily be adopted without signi cant alterations in consumer behavior Ex Of photoshop upgrading with new features A dynamically continuous innovation endows a familiar product with additional features and bene ts that require or permit consumers to alter some aspect of their behavior Ex Shift in how we listen to music from casettes and now CDs A discontinuous innovation is an entirely new product with new functions Ex Buyers had to evaluate airbags before they became standard within the price 0 Why Innovations Succeed novelty itself is not as important as meeting consumer needs Relative Advantage is the amount of perceived superiority of the new product in comparison to existing ones making it easy for consumers to see bene ts of switching Compatibility compatible products t easily into the consumer s current thinking or system to meet needs Product Complexity is the degree to which a new product is easy to understand and use Trialability refers to the ease with which potential users can test a new product at little or no expense free samples lowcost trials interactive showroom techniques textdrive Observability means that the product s bene ts can be easily seen by potential buyers weight watchers apple ipod users 0 The NewProduct Development Process Success depends on translating core competencies into goods or services that provide superior value to the customer Researches have suggested the following will improve the chances of bringing innovations to market successfully O O A champion who believes in the new idea A sponsor high enough in the organization to provide access to major resources A mix of creative minds and experienced operators A team process that moves ideas throughout the system quickly so that they get toplevel endorsement resources and attention early in the game A focus on customers at every step o NewProduct Strategy Use new technologies and innovative processes to create value 0 Idea Generation The use of a range of formal and informal methods to stimulate new product concepts from a number of sources Ensure a continuous ow of new products and services Examples obtain ideas throughEmployees customers technology analysis distributers and suppliers competitors RampD environmental trend analysis and outside consultants o Idea Screening I Identi es newproduct ideas with the strongest potential for success Match ideas with market opportunity and company resources Categorize ideas by the market competition required resources technology the environment legal and liability issues and nancial factors Develop screening criteria by consumer need amount of education availability of distribution channel probability that product will meet requirements competitive and government response t with corporate goals and objectives Obtain estimates of likely success Prioritize diverse projects and focus organization 0 Concept Development Identify product bene ts functions features Develop a de nition of product for internal external communication Create speci cation for product prototype Change customer uncertainty about products and maintain exibility about characteristics 0 Business Analysis Assesses the attractiveness of a product from a sales cost pro t and cash ow standpoint Determine nancial viability of the stratedgy Forecast demand and price sensitivity Identify xed and variable costs Determine break even points and cash ow Starts with the product concept which re nes the idea into written descriptions pictures and speculations Concept testing helps identify the facilitators and inhibitors to a product s success likely to succeed 0 Prototype Product Development Create a working model of the product Develop the product in limited quantities for market testing Openness among team members and a clear sense of direction led by a product champion greatly increase the chances for prototype success regardless of the competitive situation Test product internally Measure product performance vs speci cations 0 Market Testing A limited trial of the strategy for the product under real or simulated conditions Evaluate market response in a controlled environment A test market is a small geographical area with characteristics similar to the total market where the product is introduced with a complete marketing program Results rarely make or break the product unless complete failure A controlled test market uses consumer panels or other techniques to attempt to gain the same type of information obtained from real test markets also less expensive A stimulated product test is an experiment in arti cial conditions Drawbacks Time Sacri ce secrecy to potential competitors lmpractical for many products because prototypes are costly Extremely expensive to make trial products stock stores train people and run ads lntroduce product to selected customers Conduct research to determine distribution and customer satisfaction levels Track sales and market share o Commercialization Introduces the product to the market Establish structure for launch and sustained growth Needs heavy company support through advertising sales promotion and free samples Determine responsibility for product commercialization Establish manufacturing and distribution network Introduce product to market regional national and global The Ethics of Product Imitation 0 Organizations that want to remain competitive are responsible with keeping up with the market which calls for imitated other competitors products 0 Organizational structure and product management 0 Simultaneous new product development people from all functional areas work together to develop products Want this because gain more returns quickly and at lower cost 0 Sequential new product development people from various functional areas work on different stages of product development 0 Organizational trends Downsizing several product lines brought to 1 management team Delayering number of personnel and positions between executives and those who manage market activities is reduced Fewer functional silos less functions in isolation from others so there s personnel with experience in multiple areas 0 Fundamental Structures Product managers oversees one or several products targeted at all market segments Market managers responsible for 1 or several similar product lines targeted at a speci c market segments Product managers must rely on functional managers from various areas of the organization to help them build a strong team and all are not on the same page can lead to miscommunication or lack of productivity New product department responsible for identifying product ideas and preparing them for commercialization New product committee group of key personnel brought together periodically to develop new products Venture team group formed for a set period to accomplish a set objective Consulting organizations hire specialty consulting rms to save money and time during the innovation process 0 Product Life Cycles 0 Stages in the Product Life Cycle Stage One Introduction Sales slowly take off and grow shipments from the factory may be high and channels of distribution are lled as wholesalers and retailers stock the item The rst products on the market are often so dominant that they become generic names Kleenex Xerox Few competitors so marketers concentrate on customer acceptance of the entire product class Introductions represent advances in technology manufacturing and service Successful launch of a product objective Early adopters important like underpricing Ex Drone delivering packages Stage Two Growth Pace of consumer acceptance and sales quickens Rivals develop competitive products so brand loyalty is critical Product technology often enters its second generation Standardized production can be used to achieve economies of scale and cost savings Price higher so it s worth more communicative value Ex Apple always in growth Stage Three Maturity 0 Sales level off and may remain at for long periods Weaker rivals may drop out and use resources on more promising products 0 Product line size becomes especially important The primary focus is on improving the manufacturing process 0 Ex Microsoft Stage Four Decline 0 Sales of new units diminish 0 Companies are likely to return to a much shallower product line focusing on the products that generate adequate cash ow 0 Strong companies plan ahead and add products at various stages in the life cycle to ensure a viable business 0 Ex Blackberry hitting the apple and exploding 0 Variations in Product Life Cycles Hightech products just when sales achieve a healthy pace another generation hits the market Fad sales rise sharply in the introductory and growth phases and then quickly fall 0 Ex barney Clothing fashions when a style is rst introduced it is likely to experience relatively fast growth and then trail off only to be resurrected a few years later 0 Ex Bell bottoms are always going to come back 0 Extending the Product Life Cycle Selling to New Segments Stimulating More Frequent Use Encouraging More Use per Occasion supersized Promoting More Varied Use baking soda 0 Ex Mens cosmetics and got milk 0 Consumer Acceptance of Innovation 0 Adoption Process Comprises the ve steps that consumers go through in making a product choice knowledge persuasion decision implementation and con rmation 0 Diffusion Process Describes the spread of innovations from one individual or group to another over time Need to understand segments not focus on product No movement without rst follower ex The dancing clip early adopter stage 5 groups of consumers expected to purchase a product over time 25 innovators 13 early adopters 34 early majority buyers 34 late majority buyers 16 Iaggards pg 55 graphs Chapter 12 The Concept of Integrated Marketing Communications 0 Communication is the exchange of meaning between or among parties 0 Promotion the process designed to in uence consumers can be used to inform educate persuade remind and reinforce through communication 0 Integrated Marketing Communication IMC is the coordination of advertising sales promotion personal selling public relations and sponsorships to reach consumers with a powerful uni ed effect 0 The MC concept has three parts 0 The overall marketing strategy 0 Utilize the communication process characteristics to improve communications 0 Each type of communication in the mix accomplishes a unique task Two important goals of IMC are to establish a onetoone relationship with consumers and to encourage meaningful communication between a rm and its customers Objectives of Integrated marketing Communications 0 Provide Information 0 When it is working most effectively information helps consumers make the buying decision Create Demand for Products 0 It stimulates people to desire what they do not have and inspires them to earn the money to acquire items that improve their standard of living 0 Communicate Value 0 A great deal of communication focuses on conveying a product39s bene ts in a memorable way 0 Communicate Product Uniqueness o Marketers attempt to communicate uniqueness in order to differentiate their product from others 0 Close the Sale 0 Communication also helps close the sale 0 If purchasing a product leads to a good experience for the consumer changes are that consumer will purchase it again or recommend that others do so 0 Build Relationships and Loyalty o Reminder communications reinforce the popularity of existing goods by reassuring loyal customers that they have made the correct choice The Communication Process 0 Messages move from the sender marketer to the receiver consumer 0 Traditionally communication has been seen as a oneway process o It is more useful to envision a twoway or continuous ow 0 The Message Sender 0 As the sender it is the marketer s responsibility to make sure the message is received by the targeted audience is understood as intended helps the audience become knowledgeable and elicits an appropriate response 0 Communications take valuable time from the receiver so it is up to the sender to provide relevant information 0 Once a relationship is created between the two parties communication is much easier for two reasons The sender learns the most useful information to supply The receiver is more inclined to listen 0 The reputation of the sender in uences how consumers receive a message 0 Spokespersons are judged according to their expertise trustworthiness and attractiveness o Expertise They may believe he or she has specialized training a great deal of experience or exceptional knowledge Rely on someone with a lifestyle similar to their own which accounts for the surge in advertising featuring average everyday people 0 Trustworthiness Gained a great deal of credibility because of their trustworthiness Consumers perceive them as unbiased o Attractiveness Personal Demeanor and Appeal Attractiveness is not about good looks A source is more attractive if he or she is reliable pleasant to be around and helpful 0 Presentation Creation Encoding o Encoding is the process of translating a message into terms easily understood by the target audience 0 Consumers screen out many messages Need to grab their attention and keeping it 0 Message Characteristics 0 Onesided and Twosided Messages A onesided message presents only aspects favorable to the source A twosided message recognizes the elements against a position and often provides the recipient with reasons why those arguments are invalid When the source and receiver have relatively similar views a onesided message is more appropriate When there is disagreement a twosided message often is more useful 0 Recommendations or conclusions Messages with conclusions are more easily understood but those that allow the audience to draw their own conclusions are more lily to gain acceptance 0 Order Presentation People are more likely to remember messages at the beginning and end of a message so advertisements often open and close with strong statements leaving weaker arguments for the middle 0 Humor Humor is effective when viewers nd it novel and enjoyable but it should not obscure the message There are several things for marketers to keep in mind a Mention brand name within rst 10 seconds a Subtle humor is better a Humor must be relevant to the brand a Do not make fun of the potential user The intention of humor is to make people laugh enough to tell their friends which is an efficient way to pass around the message 0 Fear Appeals In many instances fear appeals are very effective a Higher attention and interest in the message a By Betty and Cacioppo s theory of persuasion fear appeal works more successfully in high involvement product than in lowinvolvement product 0 Comparative Messages Media Claims and counterclaims have been used in comparative messages References to the competition may inadvertently cause the consumer to recall that product at the time of purchase In general comparative messages may be more useful for companies with a lower market share since they little to lose by confronting the leader 0 Media are the means for transmitting messages from the sender to the receiver Personal mass and mixed 0 Personal media involve direct contact 0 Mass media include television radio magazines billboards brochures and oneway Internet 0 The mixed media approach combines personal and mass communication and has many of the bene ts of both Materials can be developed well in advance and offer in both print and audio formats Very cost effective 0 Interpretation by Receivers Decoding 0 People are not passive receivers of communications 0 Highly intelligent people are more likely to be in uence by logical precise and complex information 0 Consumer Feedback 0 Listening is an important way to learn what consumers think The Communication Mix 0 Types of Communication Activities 0 Five main types of communication activities Personal selling Sales promotion Advertising Public relations Sponsorship 0 Personal Selling Requires persontoperson communication between buyer and seller Despite its relatively high cost personal selling continues to be the most important part of the 328 marketing and is also signi cant in sales of big ticket consumer items such as autos computer and housing I Build loyal relationships 0 Advertising The paid impersonal communication from an identi ed sponsor using mass media to persuade or in uence an audience 0 Sales Promotion Is the communication designed to stimulate immediate purchases using tools such as coupons contests and free samples 0 Public Relations PR The use of publicity and other unpaid forms of communications designed to present the rm and ties products positively The most common pr channel is the news media 0 Sponsorship A major form of communication is sponsorship which are reaching 10 to 15 percent of promotion budgets A sponsorship is the exchange of money in return for a public association with an event Sponsorship are usually integrated with all other aspects of the communication mix 0 Factors Affecting the Communication Mix 0 Business Versus Consumer markets Personal selling is most important in marketing to businesses whereas advertising dominates in the consumer products arena 0 Pull Versus Push Strategies A Pull strategy attempts to in uence consumers directly Communication is designed to build demand so consumers will quotpullquot the product through the channel of distribution a Consumers demand is high so retailers want to carry the product I The push strategy involves communicating to distribution channel members which in turn promote to the end user Often the pushpull strategy is appropriate 0 Product s Stage in the Life Cycle The appropriate use of the communication mix is related to the products stage in the life cycle Communications were adjusted to match the stages of the product life cycle 0 Opinion Leadership Onestep communication all members of the target audience are simultaneously exposed to the same message Multiplestep communications uses in uential members of the target audience know as opinion leaders to lter a message before it reaches other group members modifying its effect positively or negatively for the rest of the group Developing the Integrated Marketing Communications Plan 0 Selecting and Understanding Target Audiences Determining Objective and Selecting the lMC Mix 0 This process of increasing involvement can be described by hierarchical models 0 AIDA which stands for Attention Interest Desire Action 0 Developing the Communication Budget 0 The IMC budget is usually determined in two steps The total allocation is decided The amount for each type of communication is assigned 0 Determine the overall Budget The rst issue is how much it will cost to accomplish the objective Generally for existing products communication objectives are established once a year Two thirds of advertising budgets for the following years are submitted to top marketing management during September or October and nearly 80 are approved by November Percentage of sales method simply estimates the sales level and then allocates a certain percentage of sales to communications Competitive budgeting involves determine what rivals are spending and setting the budget accordingly The payout plan method is generally sued for new products that require high communication expenditures The task method sets speci c sales targets or other objectives and then determines what activities and amounts are required to accomplish them 0 Allocating the Budget 0 Implementation 0 Implementation of an IMC plan tends to be done by functional specialists with considerable experience in their eld 0 The rst decision is how much to do inhouse and how much to outsource Measuring IMC Results 0 Why is it dif cult to estimate the results of communication The major problem is isolating the effects of one part of the IMC plan to determine its relative in uence on product performance 0 One performance measures are selected the task of assessing IMC in uence can begin Issues in Communication 0 Diversity 0 Include people like those with disabilities 0 Ethics 0 Marketers must be careful about how they communicate 0 Technology that Builds Relationships 0 IN communication marketers often use technology to reach consumers and establish relationships Chapter 13 o The Concept of Mass Communications Advertising Sales Promotion and Public Relations Spending in the US for Mass communication is about 628 billion with growth of 7 percent annually 0 Much of the increase in mass communication is due to competitive factors 0 Mass communications is composed of advertising sales promotion and public relations Technological Perspective 0 The history of mass communication mirrors a number of technological advances Global Mass Communications 0 Global adverting sales promotion or PR occurs when a marketing team standardizes key elements of these activities across national boundaries 0 Because standardization provides numerous economies the cost of developing creative promotions can be shared across many marketers 0 Global standardization works best when customers not countries are the basis for identifying segments and when the product is compatible across cultures 0 Sincerely culture has a different view of marketing global standardization cannot be applied to every concept 0 Sales promotion and publicity often have a very local avor 0 Ethical issues in Advertising Sales Promotion and Public Relations 0 The most serous ethical issue is deception o Deception occurs when a false belief is created or implied and interferes with the ability of consumers to make rational choices Advertising 0 The Multiple Purposes and Roles of Advertising 0 Informative Advertising Provide messages that consumers can store for later sue o Persuasive Advertising Designed to change consumers attitudes and opinions about products as well as create attitudes where none exist 0 Reminder Advertising Keeps the product at the forefront of the consumer s mind a Simply draw a connection between the brand and some aspect of life O Reinforcement Advertising Calls attention to speci c characteristics of products experienced by the user a Features that created the greatest amount of satisfaction 0 Advantages of Advertising 0 000000 Control content Builds brand position Cost effective Many communication needs Easy to reach most audiences Find professional to create effective advertising Disadvantage Reaches many nonuser Has high level of audience avoidance Contains brief oneway messages Can be costly in long run 0 Categories of Advertising 0 000000 0 National or Brand Advertising Retail advertising Directory advertising B2B advertising Institutional Advertising DirectResponse Advertising Public Service Advertising Political Advertising 0 Advertising Agencies 0 Independent businesses that develop prepare and place advertising in the appropriate media More than 90 of all advertising is placed through outside agencies The Advertising Plan 0 Six major steps in developing a strong advertising plan 0 Setting objectives 0 Each objective should be developed in such a way that its accomplishment can be measured 0 Developing the Advertising Budget 0 O In setting the budget the rst question to answer is how much it will cost to accomplish the objective Most advertising budgets are determined using one of the following methods Percentage of sales Competitive budgeting Payout Task 0 Developing the Theme and Message 0 In the creative strategy that will govern and coordinate the development of individual ads and assure that their visual images and words convey precommunicate 0 An advertising campaigns is a series of different ads with the same creative strategy 0 To be effective the theme and message must reach the consumer and be creative understandable and memorable o Reaching the consumer Exposure Stopping power 0 Creativity 0 Once a consumer gives an advertisement their attention they are likely to become aware of the message and internalize it o Pulling power holds the interest of the consumer to the end of the message Understandability 0 It s important that the information selected for communication be clearly understood or it will be remembered Memorability 0 Ad needs to be memorable Repetition 3 times before it is remembered Selecting and Scheduling Media 0 Media Options Newspaper Television Radio Magazines Outdoor ads lnternet Social media Mobile 0 Media Popularity 0 TV advertising is most popular followed by newspapers magazines Internet radio outdoor and cinema 0
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