Principles of Marketing Study Guide Exam 6
Principles of Marketing Study Guide Exam 6 MKTG 3310 - 001
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This 8 page Study Guide was uploaded by Kelsey Bixler on Sunday April 24, 2016. The Study Guide belongs to MKTG 3310 - 001 at Auburn University taught by Jeremy Scott Wolter in Fall 2015. Since its upload, it has received 410 views. For similar materials see Principles of Marketing in Marketing at Auburn University.
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Date Created: 04/24/16
April 11 : Promotion I: IMC (Chapter 11) What are the parts of the communication process? Send >encoding > message (Media) Noise> Decoding> receiver> response> feedback How do these translate into marketing promotions? Companies are trying to get their message across in a way that is relevant to the audience in order for them to decode the message they are trying to send. But advertising is usually miserable for customers- it could be that the target market is different than the person who is watching the commercial. If you don’t have the field of experience they are targeting then you won’t understand/enjoy it. Marketers need to understand this and apply it to their advertisements. What must marketers understand to communicate with customers? (from book) Too often marketing communication is focused on immediate awareness, image or preference goals in the target market. Today, marketers are moving toward viewing communication as managing ongoing customer engagement and relationships with the company and its brand. Communication programs need to be developed for specific segments niches and even individuals. In terms of the communication process, explain why the KFC ad on Walking Dead could have been potentially troubling. KFC Fresh is better commercial- seems like a good tagline- but it was played after a Walking Dead scene where a someone is being eaten by zombies- this is an example of noise- it actually kind of worked for them because it got them attention. What are the five main categories of promotion covered in Chapter 11? • Advertising, Sales promotion, Public relations, Direct marketing What is the approximate amount of spending on each category? Advertising 49% $160b Promotion 12% $40b Digital 15% $50b Direct 13% $44b Sponsorship 6% $20b PR 2% Social Media 2% Cause 1% What are the strengths and weaknesses of each category? Advertising: Reach / Cost Promotions: Purchase incentive / Bad for branding? Discounting a product in the minds of a customers if you constantly discount the brand people won’t buy it unless its on sale PR: Credibility / Lack of control Personal Selling: Customizable / Cost Personal interaction can be affective. But this can be expensive Direct: Customizable / Low response? Collecting data on people can show who you can sell to. But a lot of these things that are sent out have very low responses Be familiar with “The Nature of Each Promotional Tool” from the book. Advertising Any paid form of nonpersonal communication about an organization or product Sales Promotion Shortterm incentives to encourage the purchase or sale of a product Personal Selling Personal customer interactions by the firm’s sales force for the purpose of engaging customers, making sales, and building customer relationships. Public Relations Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Direct/digital marketing Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. What is breakage in regards to sales promotions? What is an argument for and against breakage? There is an idea that the lower the amount that gets reimbursed through rebates (through the sales promotion) actually saves the company money so sometimes companies try to maximize the amount of people who won’t use the rebate. Is this a good tactic? By doing this you are decreasing the customer experience shows lack of customer/marketing orientation you aren’t making it customer friendly • What are the methods of promotion budgeting? Affordable method Percentage of sales method Competetive parity method Objective a task method Which is most representative of the marketing concept? Objective and task method What are the deficiencies of each? Affordable this method completely ignores the effects of promotion sale. Tends to place promotion last among priority spending. Long range marketing planning is difficult. Often results in under spending. Percentage of sales wrongly views sales as the cause of promotion rather than the results. Based on the availability of funds rather than on opportunities. Long range planning is difficult. Method does not provide any basis for choosing a specific percentage. Competitive parity there is no grounds for believing that the competitor has a better idea of what the company should be spending on promotions. Companies needs differ greatly. No evidence that this method prevents promotion wars. Objective and task most difficult method to use. It is difficult to figure out which specific tasks will achieve the objective • What is a “pull” and “push” strategy? Pull the producer directs its marketing activities toward final consumers to induce them to buy the product Push involves pushing the product through marketing channels to final customer • What is integrated marketing communications? The concept of designing marketing communications programs that coordinate all promotional activities Carefully integrating and coordinating the company’s communication channels to deliver a clear, consistent and compelling message about the organization and its products. What are the two things that IMC helps a firm obtain? Synergy if you use the channels well then they help each other. This means that you need to help each channel even when they aren’t your most important channels. A clear consistent message What is IMC not? A common mistake is to imagine that having the same look and feel across different channels "matching luggage" will create successful integration. But that's a terrible basis for creating an integrated campaign. Just because the press ad and website have the same look and copy, it won't necessarily connect with consumers. It may just get boring. Or a bureaucratic nightmare How is the overall use of promotion changing? What are the three factors pushing this change (in “The New Marketing Communications Model” in the book) Customers are changing Marketing strategies are changing Sweeping advances in digital technology are causing remarkable changes in the ways companies and customers communicate with each other • What are touch points? Customer touch point Any point where there is an interface between an organization and a stakeholder. An interface can be through a product, front line employee, marketing communication, etc. What is silo mentality? A mindset present when certain departments or sectors do not wish to share information with others in the same company. Why is IMC hard? IMC is difficult because …you are aligning different functional areas …you are aligning different external partners …the manifestations of the “brand message” has to make sense in the promotional channel …the organization’s nimbleness must be maintained How well did Nike’s Write the Future campaign do as compared to other companies affiliated with the World Cup? An example of IMC Nike’s write the future campaign. They decided not to sponsor the world cup but ran a giant campaign centered around it. Campaign played off the idea that you control your own destiny.. Took their idea and spread it across a lot of different mediums. They stole the show for a while. Had the most response of anyone who actually sponsored the World Cup. Was Nike a sponsor of the World Cup? No April 13 : Promotion II: Advertising (Lecture and Chapter 11) • What does advertising spending fluctuate with? GDP goes up spending on advertising goes up companies will have more money so they will have more to spend on advertising. What does this tell us about firm’s advertising spending? Most likely, how do firms probably see advertising? There is a theory that if you do not have a strong enough action component meaning it pushes people to buy within the first 24 hours then your ad is useless. Given the marketing concept, how should they see advertising? The above theory is not necessarily true not all ads have a call to action some ads are meant to build brand recognition. • What is AIDA? (in Chapter 11) Designing the advertisement AIDA a good ad has Attention, interest, desire, action. Do advertisements have to have all of the AIDA parts to be good? No some ads may not have a call to action. Some may just be brand building What are the different types of advertising appeals? (some are in in Chapter 11) Message content Rational appeals( informational, persuasive, comparative) Moral appeals, emotional appeal (fear, humor) sex appeals, bandwagon appeals. What happens if fear, humor, and sex appeals do not have a link with why someone buys a product? Humor Appeals fear appeals and sex are similar in that they must connect to the product in a meaningful way…i.e. in a way that connects to reasons people purchase. Using these may catch people’s attention without moving sales Can you combine appeals? Yes example is Old Spice random and funny with sex appeal but it had a strong appeal Can an appeal such as fear or humor go too far? Some people say that you should not have too strong of a fear appeal because people may just tune it out. Ex some youth smoking commercials are so Ludacris that youths find it funny Some also believe you can go too far with humor What is reach and frequency? Reach: Number of different people exposed to an ad Rating: % of houses that watch a channel or program Frequency: Avg # of times a person is exposed to an ad What is CPM and how do you calculate it? CPM: Cost per thousand impressions How to calculate CPM= (cost of cost/ audience size) x 1,000 or Cost of ad/ (audience size/1,000) Is the Superbowl considered a good buy? Super Bowl has a huge audience base if you can afford to advertise Super Bowl commercial CPM Cost= 3,000,000 Audience= 110,000,000 answer= $27. This is a good deal. Why may the Superbowl be considered a bad buy? What’s the problem with this though not everyone has 3,000,000 to spend on advertising. Also there is a wide variety of people that you are advertising to. You can’t have too segmented of an advertisement. This means that you can be paying to put your advertisement in front of people who don’t care. This is defined as waste. What percentage of advertising spending is generally considered wasted? 50% April 7 & 9 : Promotion III: Inbound marketing, viral marketing, WOM, & social media marketing • What is content marketing? (see Real Marketing 11.1 in chapter 11) • Write what you know but DON’T create lame blog posts, Write about what your customers ask you. Find “long tail keywords What is the difference between paid, owned, and earned media? Paid media: Impressions gained through paid media Advertising, sponsorships, display ads, paid search Owned media: Impressions gained through your media Company web site, blogs, twitter account Earned media: Impressions gained through others’ media WOM, SEO, buzz, “viral” What is permission marketing? (see slide #11) The solicitation of a consumer’s consent (called “optin”) to receive email and advertising based on personal data supplied by the consumer. Why are the two above so different from typical forms (i.e. outbound) of promotions? In other words, what are the conceptual differences between inbound and outbound marketing. (see slide #9) Outbound marketing tries to find customers and grab their attention in a specific moment Inbound marketing focuses on earning a customer’s attention What is viral marketing? (see slide #24) A promotional strategy that encourages individuals to forward marketer initiated messages to others via email, social networking websites, and blogs. • What is STEPPS? (see slide # 42). Be somewhat familiar with each STEPP based on its description. Social currency, Triggers, emotion, public, practice value, stories
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