BA 390 Final Study Guide
BA 390 Final Study Guide BA 390
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This 16 page Study Guide was uploaded by Samantha Tucker on Monday March 7, 2016. The Study Guide belongs to BA 390 at Oregon State University taught by Toombs in Winter 2016. Since its upload, it has received 202 views. For similar materials see Marketing in Business at Oregon State University.
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BA 390 Final Study Guide Chapter 9: New-Product Development and Product Life-Cycle Strategies Two ways to obtain new products: Acquisition (buying a company for example) or new product development. States in new product development o Idea Generation: search for new ideas Internal, External, Crowdsourcing o Idea screening: identify good ideas and drop poor ones RWW (real? Win? Worth it?) o Concept Development and Testing Product idea Product concept Product image Concept testing o Marketing Strategy Development: initial marketing strategy for introduction of product Description of target market Value proposition Sales and profit goals o Business analysis: review of the sales, costs, and profit projections; satisfy objectives? o Product Development Creation & testing of one or more physical products by R&D or engineering Requires increase in investment Can product idea = a workable product? o Test marketing: introducing product and marketing program to realistic market settings When firms will test a market: new product with large investment or uncertainty about product or marketing program When firms will not test: i. Simple line extension ii. Copy of competitor product iii. Low costs iv. Management confidence Types of test markets i. Standard ii. Controlled iii. Simulated o Less expensive, faster, restricts access by competitors o Not considered as reliable or accurate o Commercialization: introduction of product i. When to launch? Where to launch? Planned market rollout Managing new-product development: New-product development strategies o Customer-centered: new ways to solve customer problems and create more customer satisfying experiences o Team-based: company departments work closely together in cross-functional teams, overlapping in the product-development process to save time and increase effectiveness o Systematic: innovative development approach that collects, reviews, evaluates, and manages new-product ideas Creates innovation-oriented culture Yields large number of new-product ideas Product Life Cycle Strategies Product Life cycle o Product development: sales zero; investment costs increasing o Introduction: slow sales, no profits, high distribution and promotion expenses o Growth: market acceptance and increasing profits; sales increase; new competitors enter market; promotion and manufacturing costs gain economies of scale. o Maturity: sales slow, profits level off; many suppliers and substitute products; increasing promotion and R&D to support sales; modify market, product, or marketing mix. o Decline: sales fall, profits drop; maintain, harvest, and drop product. Chapter 10: Pricing: Understanding and Capturing Customer Value What is a price? The amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service Only P that produces revenue Major Pricing Strategies Customer Value-based pricing: uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. o Good-value pricing: combination of quality and good service at fair price. o Everyday low pricing (EDLP): constant lowest price; few temporary price discounts (ex: Aldi) o High-low pricing: constant high prices with frequent promotions (ex: sears) o Value-added pricing: attaches value-added features and services to differentiate offers, support higher prices, and build pricing power (ex: Nordstrom, Ritz Carlton) Cost-based pricing: setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk; Takes into account fixed and variable costs Fixed costs: do not vary with production and sales levels (Ex: rent, heat, interest) Variable costs: vary with level of production (Ex: packaging, raw materials o Cost-plus pricing: add standard markup to the cost of product Sellers certain about costs; prices similar in industry, buyers feel it is fair Ignores demand and competitor prices o Break-even pricing: price at which total costs = total revenues = no profit o Target return pricing: where firm will break even or make target profit goal o Competition-based pricing: setting prices based on competitor’s strategies, costs, prices, and market offerings. Consumers will base their judgments of a product’s value on the prices that competitors charge for similar products. Other considerations affecting pricing Target costing: starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met. Organizational considerations: who sets price? Who influences prices? Market and Demand o demand curve shows the number of units the market will buy in a given period at different prices o Generally, demand and price are inversely related (i.e., as demand goes up, price goes down) o Price elasticity of demand illustrates the response of demand to a change in price Inelastic demand demand doesn’t change with a small change in price Elastic demand demand changes with a small change in price Price elasticity of demand = % change quantity demanded / % change in price Competition Misc: economic conditions, government, social concerns Chapter 11: Pricing Strategies: Additional Considerations New-Product Pricing Strategies Market-skimming pricing is a strategy with high initial prices to “skim” revenue layers from the market o Product quality and image must support the price o Buyers must want the product at the price o Costs of producing the product in small volume should not cancel the advantage of higher prices o Competitors should not be able to enter the market easily Market-penetration pricing: sets a low initial price in order to penetrate the market quickly and deeply attract a large number of buyers quickly to gain market share o Price sensitive market o Low prices must keep competition out of the market Product Mix Pricing Strategies Product line pricing: takes into account the cost differences between products in the line, customer evaluation of their features, and competitors’’ prices Optional-product pricing: takes into account optional or accessory products along with the main product. Captive-product pricing: involves products that must be used along with the main product (ex: cruises, Disneyland) Product bundle pricing: combines several products at a reduced price (ex: toolsets) Price-adjustment strategies Discount and allowance pricing: reduces prices to reward customer responses such as paying early or promoting the product Segmented pricing: used when a company sells a product at two or more prices even though the difference is not based on cost Customer-segment Product-form Location-based Time-based o To be effective: Market must be segmentable Segments must show different degrees of demand (i.e., senior discount) Costs of segmenting and reaching the market cannot exceed the extra revenue obtained from the price difference Must be legal Psychological pricing: occurs when sellers consider the psychology of prices and not simply the economics Reference prices: prices that buyers carry in their minds and refer to when looking at a given product. o Noting current prices o Remembering past prices o Assessing the buying situations Promotional pricing: when prices are temporarily priced below list price to increase demand o Special event pricing, cash rebates, low-interest financing, longer warranties, free maintenance o Risks: used too frequently, and copied by competitors, can create “deal-prone” customers who will wait for promotions and avoid buying at regular price. Geographical pricing: used for customers in different parts of the country or the world o OB-origin (free on board) pricing: goods are delivered to the carrier and the title and responsibility passes to the customer. o Uniform-delivered pricing: company charges the same price plus freight to all customers, regardless of location. o Zone pricing: the company sets up two or more zones where customers within a given zone pay a single total price o Basing-point pricing: seller selects a given city as a “basing point” and charges all customers the freight cost associated from the city to the customer location, regardless of the city from which the goods are actually shipped o Freight-absorption pricing: means the seller absorbs all or part of the actual freight charge as an incentive to attract business in competitive markets Dynamic pricing: prices are adjusted continually to meet the characteristics and needs of the individual customer and situations International pricing: prices are set in a specific country based on country-specific factors o Economic and competitive conditions o Laws and regulations o Infrastructure o Company marketing objective Price changes Initiating pricing changes o Price cuts occur due to: excess capacity & increased market share o Price increases from: cost inflation, increased demand, lack of supply Buyer reactions to pricing changes o Price increases: product is “hot” or company greed o Price cuts: new models available, models are not selling well, quality issues Responding to price changes; solutions o Reduce price to match competition o Maintain price but raise the perceived value through communications o Improve quality and increase price o Launch a lower-price “fighting” brand Public policy and pricing Price fixing: sellers must set prices without talking to competitors Predatory pricing: selling below cost with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business Robinson-Patman Act: precents unfair price discrimination by ensuring that the seller offer the same price terms to customers at a given level of trade o Price discrimination is allowed if the seller can prove that costs differ when selling to different retailers or manufactures different qualities of the same product for different retailers Retail price maintenance: manufacturer requires a dealer to charge a specific retail price for its products. Laws prohibit this. Deceptive pricing: occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers Chapter 12: Marketing Channels: Delivering Customer Value Supply Chains and the Value Delivery Network Supply chain partners: o Upstream: Raw material suppliers, components, parts, information, finances, and expertise o Downstream: marketing and distribution channels looking towards customer (retailers and wholesalers) Supply chain views: supply chain = “make and sell” view; demand chain = “sense and response” view Value Delivery network: suppliers, distributors, and consumers who partner to improve performance of the system. Importance of marketing channels Channel members add value: o Intermediaries: encourage greater efficiency by making goods available to target markets. Use contacts, experience, specialization, and scale of operations. Economic view: transform assortment of products available into the assortment wanted by consumers. Bridge time, place, and possession gaps. Offer more than a firm could achieve on its own o Information, Promotion, contact, matching, negotiation, physical distribution, financing, and risk taking Number of channel levels o Consumer marketing channels: Producer Consumer Producer retailer consumer Producer wholesaler Retailer Consumer o Business marketing channels work the same way but with business distributors. o Connected by: physical flow of products, flow of ownership, flow of payment, information and promotion flow. Channel Behavior and Organization Marketing channel: consists of firms that have partnered for their common good with each member playing a specialized role o Channel conflict: disagreement over goals, roles, and rewards by channel members o Horizontal v. vertical conflict Conventional distribution systems o Consists of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict. Vertical marketing systems: provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system o Corporate marketing systems: integrates successive stages of production and distribution under single ownership o Contractual marketing systems: Independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone (ex: franchises) o Administered marketing systems: Few dominant channel members without common ownership. Horizontal marketing systems: Two or more companies at one level join together to follow a new marketing opportunity. Companies combine financial, production, or marketing resources to accomplish more than any one company could alone. (Doritos Tacos at Taco Bell) Multichannel distribution systems (hybrid marketing channels) are when a single firm sets up two or more marketing channels to reach on or more customer segments. (ex: Walmart and Sam’s Club) Changing channel organization: o Disintermediation: when a product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones Channel Design Decisions 1. Analyze consumer needs: what do target consumers want from the channel? Best channel? 2. Set channel objectives: determine targeted levels of customer service 3. Identify major alternatives: types of intermediaries, responsibilities of channel members a. Intensive distribution b. Exclusive distribution c. Selective distribution 4. Evaluate major alternatives: against economic criteria, control, and adaptability criteria Channel management decisions: selection, management, motivation, and evaluation of members Public policy and distribution decisions: Exclusive distribution: seller allows only certain outlets to carry its products Exclusive dealing: seller requires that the sellers not handle competitor’s products Exclusive territorial agreements: producer or seller limit territory Tying agreements: where the dealer must take most or all of the line Marketing logistics Marketing logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit Supply chain management: process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers Major logistics functions o Warehousing o Inventory management Just in time systems, RFID (knowing exact location of a product), Smart Shelves o Transportation: affects pricing, delivery performance, and condition of goods at arrival o Logistics Information Management: managing the flow of information including customer orders, billing , inventory levels, and customer data EDI (electronic data interchange) VMI (vendor-managed inventory) Integrated logistics management: recognition that providing customer service and trimming distribution costs requires teamwork internally and externally Third-party logistics: the outsourcing of logistics functions to third-party logistics providers (3PLs) Chapter 13: Retailing and Wholesaling Retailing Includes all the activities in selling products or services directly to final consumers for their personal, non-business use First moment of truth: no longer takes place only in stores growth of digital shopping Retailers are classified as: self-service, limited service, full service Product line o Specialty stores: narrow product line, deep assortment o Department stores: wide variety of product lines o Convenience stores: limited line of high-turnover goods o Superstores: food and non-food goods o Category killers: deep in category with sales staff (ex: Petsmart) Relative Prices o Discount stores: Target and Walmart o Off-price retailers: rather than discounting through the store, companies sell at a discount to these retailers (TJ Maxx, Overstock.com) o Factory outlets: relatively new, discounts effective because they are far enough away from the “mother” retail center o Warehouse clubs: Costco ; make more money selling memberships than products Organizational Approach: o Corporate chains: two or more outlets commonly owned and controlled. Size = buy in large quantities at low prices promotional economies o Voluntary chains: allows retailing in secluded areas Wholesale-sponsored groups of independent retailers engage in group buying and common merchandising o Retail cooperatives: independent retailers banding together to set up joint-owned, central wholesale operation. Join merchandising and promotion effects o Franchise organizations: based on method of doing business, unique product or service offers or the trade name, goodwill, or patent o Merchandising conglomerates: Target Retail marketing decisions o Retail strategy: retail segmentation and targeting; store differentiation and positioning o Price Decisions: Price policy must fit the target market and positioning, product and service assortment, and competition High markup on lower volume (ex: jewelry store) Low markup on higher volume (ex: Costco) High-low pricing: involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions Everyday low price (EDLP) involves charging constant, everyday low prices with few sales or discounts o Promotion decisions: advertising, personal selling, sales promotion, public relations, etc. o Place Decisions: Central business districts: located in cities and include department and specialty stores, banks, and move theaters Shopping center: a group of retail businesses planned, developed, owned, and managed as a unit. New Retail forms o Retail convergence involves the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings Speed and Content o Growth of non-store retailing o Growing importance of retail technology provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems and connecting with customers o Green retailing; environmentally sustainable practices o Global expansion o The rise of mega-retailers involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions Wholesaling: includes all activities involved in selling goods and services to those buying for resale or business use 1. Selling and promoting: helping the manufacturer reach many smaller customers at lower cost 2. Buying assortment building: selection of items and building of assortments needed by their customers, saving the customers work 3. Bulk breaking: buying in larger quantity and breaking into smaller lots for its customers 4. Warehousing: wholesaler holding inventory, reducing its customers’ inventory cost and risk 5. Transportation: quick delivery due to its proximity to the buyer 6. Financing: providing credit and financing suppliers by ordering earlier and paying on time 7. Risk bearing: absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence 8. Market information: providing information to suppliers and customers about competitors, new products, and price developments 9. Management services and advice: helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems Types of wholesalers: o Merchant wholesalers: largest group; Full-service wholesalers who provide a full set of services Limited service o Brokers and agents: don’t take title, perform few functions, specialize by product line Bring buyers and sellers together; assist negotiations o Manufacturers’ sales branches and offices: sellers or buyers themselves rather than through wholesalers Trends: o Need for greater efficiency o Added-value customer relationships o Increase in customer demand for more services o Increase use of technology to boost productivity Chapter 14: Communicating Customer Value: Integrated Marketing Communications Strategy Promotion mix: the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships Advertising: any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor o Broadcast, print, online, mobile, outdoor Sales promotion: a short-term incentive to encourage the purchase or sale of a product or service (coupons, discounts, displays, demonstrations) Personal selling: the personal interaction 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 and digital marketing: engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. New Marketing communications model: consumers and marketing strategies are changing with advances in digital technology Integrated marketing communications (IMC): carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products Steps for effective marketing communication 1. Identify target audience; (what, how, when, where, and to whom it will be said) 2. Determine communication objectives 3. Design the message a. AIDA model: i. Get Attention ii. Hold Interest iii. Arouse Desire iv. Obtain Action b. Message content i. Rational appeal: relates to audience’s self-interest ii. Emotional appeal: stir up negative or positive emotions to motivate iii. Moral appeal: directed to audience’s sense of what is right c. Message structure and format 4. Choose the media to send the message a. Personal communication: two or more people communicating with each other directly b. Opinion leaders: people whose opinions are sought by others i. Buzz marketing: cultivating opinion leaders and getting them to spread information about a product or service to others in their communities c. Non-personal communication channels: media that carry messages without personal contact or feedback, including major media, atmospheres, and events d. Message’s impact depends on view of communicator (i.e., celebrities and professionals) 5. Select message source and collect feedback Setting the total promotion budget Affordable method: sets budget at the level management thinks the company can afford Percentage-of-sales method: budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. Competitive-parity method: budget to match competitors’ outlays Objective-and-task method: develops the promotion budget by specific promotion objectives and the costs of tasks needed to achieve these objectives The nature of each promotional tool Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. Personal selling: most effective method at certain stages of the buying process, particularly in building buyers’ preferences, conviction, actions, and developing customer relationships (perhaps the most expensive) Sales promotion: coupons, contests, cents-off deals, and premiums that attract consumer attention and offer strong incentives to purchase Public relations: very believable form of promotion that includes news stores, features, sponsorships, and events Direct and digital marketing: immediate, customized, and interactive promotional tool that includes direct mail, catalogs, telephone marketing, online, mobile, and social media Promotion mix strategies Push: the company “pushes” the product to resellers which in turn “push” it to consumers Pull: company promotes directly to final consumers, creating a demand vacuum that “pulls” the product through the channel Chapter 15: Advertising and Public Relations Advertising: any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor Major advertising decisions: o Advertising objective: communication task to be accomplished with a specific target audience during a specific time Informative advertising: used when introducing a new product category to build primary demand Persuasive advertising: important with increased competition; build selective demand Reminder advertising: important with mature products to maintain customer relationships o Setting an advertising budget: stage in product life cycle, market share, competition o Advertising strategy: how the company accomplishes its advertising objectives Creating advertising messages & selecting advertising media o Creating advertising message: break through the clutter; gain attention and communicate well Madison & Vine: represents the merging of advertising and entertainment Message strategy: general message communicated to consumers Identifies consumer benefits & follows company’s broader positioning and customer value creation strategies Creative concept: idea that brings message strategy to life; guide specific appeals to be used in an advertising campaign Meaningful, believable, distinctive Message execution: advertiser turns big idea into actual ad execution that captures the target market’s attention and interest Tone (positive or negative), attention-getting words, and format (illustration, headline, copy) Consumer generated messages Youtube videos, brand website contests; Love expense, new creative ideas, fresh perspective on brand, boost consumer involvement. o Selecting advertising media: Decide on reach-frequency-impact Reach: % of people in target market exposed to campaign during a given period of time Frequency: how many times the average person in the target market is exposed to message Impact: qualitative value of a message exposure through a given medium Selecting media vehicles: decisions presenting the message effectively and efficiently (consider message’s impact, effectiveness, and cost) Deciding on media timing Seasonality Pattern of advertising (continuity: scheduling evenly in a given period or pulsing: scheduling unevenly) Narrowcasting: Focuses message on selected market segments (lowers cost, targets more effectively, engages customers better) o Evaluating the effectiveness and return on advertising investment: Return on advertising investment: net return on advertising investment divided by the costs of the advertising investment Communication effects: indicate whether the ad and media are communicating the ad message well and can be tested before and after the ad runs Sales and profit effects: compare past sales and profits with past expenditures or through experiments 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. Press relations or press agency: creation and placing of newsworthy information to attract attention to a person, product, or service Product publicity: publicizing specific products Public affairs: building and maintaining national or local community relations Lobbying: building and maintaining relations with legislators and government officials to influence legislation and regulation Investor relations: maintaining relationships with shareholders and others in financial community Development: public relations with donors or members of nonprofit organizations to gain financial or volunteer support. Role and impact of public relations: Lower cost than advertising Stronger impact on public awareness than advertising Power to engage consumers and make them a part of the brand story Major Public relations tools: news, speeches, special events, written materials, corporate identity materials, public service activities, buzz marketing, social networking, and internet. Chapter 16: Personal Selling and Sales Promotion Personal selling: the interpersonal part of the promotion mix and can include: face-to-face, telephone, or video/web communication. Salespeople: effective link between the company and its customers to produce customer value and company profit by: Representing the company to customers Representing customers to the company Working closely with marketing Sales Force Structure Territorial sales force structure: each salesperson is assigned an exclusive geographic area and sells the company’s full line of products and services to all customers in that territory. (Defines salesperson’s job, fixes accountability, lowers sales expenses) Product sales force: each salesperson sells along product lines (improves product knowledge, can lead to territorial conflicts) Customer sales force structure: each salesperson sells along customer or industry lines (improves customer relationships) Complex sales force: wide variety of products is sold to many types of customers over a broad geographic area and combines several types of sales force structures Outside salespeople: call on customers in the field Inside salespeople: conduct business from their offices and often provide support for the outside salespeople. Sales morale and performance can be increased through: organizational climate, sales quotas, and positive incentives. Evaluating salespeople and sales force performance: sales reports, call reports, expense reports Steps in Personal selling: Prospecting, qualifying (identifying good customers), pre-approach (learning as much as possible about the prospect), approach (salesperson meets and greets the buyer), presentation, closing, and follow-up. Major sales promotion tools: samples, coupons, rebates, price packs, premiums (goods offered for free or at a low price), advertising specialties, point-of-purchase promotions (displays and demonstrations), contests, sweepstakes, and games. Chapter 17: Direct and Online Marketing: Building Direct Customer Relationships Direct and Digital marketing Engaging directly with targeting individual consumers and customer communities to: o Obtain an immediate response (Speed) o Build lasting customer relationships (content) Build customer engagement, brand community, and sales Rapid growth of direct and digital marketing Fastest-growing form of marketing Direct marketing becoming more internet-based Claims a surging share of marketing spending and sales o Online display and search advertising, video, social media, mobile, email For buyers: convenient, easy, and private; easy buyer-seller interaction; quick access to products and information; brand engagement and community For sellers: low-cost, efficient, speedy; build close, personalized, interactive, one-to-one customer relationships; greater flexibility Marketing, the Internet, and Digital Age Digital and social media marketing: using digital marketing tools to engage consumers anywhere, anytime via their digital devices Multichannel marketing: using both tradition and digital marketing channels Online Marketing Marketing via the Internet using company websites, online ads and promotions, email, online video, and blogs Marketing websites: interact with consumers to move them closer to a direct purchase or other marketing outcome Branded community websites: present brand content that engages consumers and creates customer community around a brand. Online videos: viral marketing: videos, ads, and other marketing content that customers seek out or pass along to friends Blogs and other online forums: online journals of narrowly defines topics where people and companies post their thoughts and other content o Benefit –offers a fresh, original, personal, and inexpensive way to enter into consumer online conversations o Limitation—consumer-controlled medium Social Media marketing Social media: independent and commercial online communities where people congregate, socialize, and exchange views and information Advantages: targeted and personal, interactive, immediate and timely, cost effective Challenges: still being experimented, difficult to measure results, largely user controlled Mobile marketing: promotional content delivered to consumers through their mobile devices Engage customers anywhere, anytime during the buying and relationship-building processes Direct mail marketing: sending an offer, announcement, reminder, or other item directly to a person at a particular address Tangible and creates emotional connection with customers Effective component of a broader integrated marketing campaign Direct and personalized Sent to consumers who want to receive it Catalog marketing: print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online o Eliminates printing and mailing costs, no space constraints o Broader assortment of presentation formats o Real-time merchandising capabilities Telemarketing and direct-response television (DRTV) marketing Telemarketing: selling directly to customers using the telephone o Outbound and inbound telephone marketing o Rise of do-not-call legislation resulted in opt-in calling systems Direct-response television (DRTV) marketing Public Policy issues in direct and digital marketing Irritation, unfairness, deception, and fraud: Cheating o Irritation: loud, long, and insistent TV commercials, junk mail and spam o Unfairness: taking unfair advantage of impulsive buyers o Deception and fraud Investment scams or phony collections for charity Internet fraud Phishing Online and digital security Access by vulnerable or unauthorized groups Consumer privacy o Fear of invasion or privacy o Ready availability of information leaves consumers open to abuse o Personal information used to cost money Need of action: regulation o Government actions Do not call, do not mail, do not track lists Can Spam legislation Congressional legislation—give more control to consumers over use of online information Federal trade commission (FTC)—policing online privacy o Marketers’ actions Self-regulatory principles Advertising option icon Privacy rights of children o Companies’ actions Own security measures Industry-wide measures
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