Exam 3 study guide
Exam 3 study guide BADM 3401
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This 21 page Study Guide was uploaded by Camille Duarte on Friday November 13, 2015. The Study Guide belongs to BADM 3401 at George Washington University taught by Sung Ham in Summer 2015. Since its upload, it has received 139 views. For similar materials see Basic Marketing Management in Business Administration at George Washington University.
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CH 14 The Promotion Mix: 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, internet, outdoor o Ex- Ipad mini billboard Sales promotion: short-term incentives to encourage purchases or sales of a product or service. o Discounts, coupons, displays, demonstrations o Ex- purchase Ipad mini at time of release and get $50 itunes discount Personal selling: personal presentation by firm’s sales force for the purpose of marking sales and building customer relationships. o Sales presentations, trade shows, incentive programs. o Ex- Apple business experts Public Relations: building good relations with company’s various public by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories and events. Ex: Press release of iPad Mini. o Press releases, sponsorships, special events, web pages. Direct Marketing: direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Ex: purchase online o Direct mail, telephone, direct-response television, e-mail, Internet, catalog, telemarketing, kiosks. Integrated Marketing Communication: The New Marketing Communications Model Consumers are changing o Consumers are better informed and more communication empowered Marketing strategies shift o Less mass marketing, more digital advertising than traditional advertising. Advances in communications technology o New info and communication tools (social media//mobile marketing) o Content marketing 5 promotion mix elements are consistent, clear and compelling company and brand messages. A View of the Communication Process Sender: party sending to another party. Encoding: process of putting thought into symbolic form Message: set of symbols the sender transmits. Media: channels through which the message moves from sender to receiver. Decoding: process by which the receiver assigns meaning to the symbols. Receiver: party receiving the message sent by another party. Response: reaction of the receiver after being exposed to the message. Feedback: part of the receiver’s response communicated back to the sender. Noise: unplanned static or distortion during the communication process, which results in the receiver’s getting a different message than the one the sender sent. Ex of communication: listen Linda kid video. Miscommunication between mom and child. Steps in Developing Effective Marketing Communication: Identify the target audience determine the communication objective design the message choose the media select the message source collect feedback. Effective Messages o Sender’s encoding must mesh with the receiver’s decoding process. o Consist of words and other symbols that are familiar to the receiver. o Marketers may not share their consumer’s field of experience but must understand the consumer’s field of experience. Marketers typically seek a purchase response that results from a consumer decision-making process that includes the stages of buyer readiness. The objective could be to increase mainly awareness. Ex: Gildan, last year they had a superbowl ad, made a statement and made people aware of their product. Designing a Message AIDA Model: get Attention, hold Interest, arouse Desire, obtain Action. Message content: appeal or theme that produces desired response. o Rational appeal: relate to the audience’s self-interest (quality, economy, value, performance) Ex: Colgate Total, clinically proven to fight germs for 12 hours. o Emotional appeal: stir up positive or negative emotions. Ex: Dentyne Ice gum commercial o Moral appeal: focus on what is right and proper. Ex: Donating blood, Red Cross Message structure: o Draw a conclusion or leave it to the audience. o Present strongest arguments first or last. o One-sided or two-sided argument. Message format: color, text, sound, etc… Choosing Media Personal Communication: involves two or more people communicating directly with each other. Ex: Bag called Skyroll for suits. Roll suits so they don’t get as wrinkled. Company gave free samples to Forbes and such so they could try it out and write good things about the product if they liked it. o Face-to-face, phone, mail, e-mail, internet chat o Company controlled channel (sales people) o Independent experts (consumer advocates, online buying guides and others) o Word of mouth influence. Ex: Direct TV. Discount for referring new customers, both get rewarded o Buzz marketing: involves cultivating opinion leaders and getting them to spread info about a product or service to others in their communities. Ex: the bump, website related to pregnancy. o Ex- skyroller bag, for suits. You roll your suits instead of folding suits. (Independent experts, Forbes provide assessments about this product) Non-personal Communication: media that carry messages without personal contact or feedback that still affect the buyer directly. o Major media: print, broadcast, display and online media. o Atmospheres: designed environments that create or reinforce the buyer’s leanings toward buying a product (ex: doctor’s office or a hospital) o Events: staged occurrences that communicated messages to target audiences. Press conferences, grand openings, exhibits, public tours. Selecting the Message Source: The message’s impact on the target audience is affected by how the audience views the communicator. o Celebrities Athletes Entertainers o Professionals Health Care Providers. Ex: Neil Patrick Harris on Old Spice commercial pretending to be doctor because of character he used to play, Doobie Houser. Collecting Feedback Involves the communicator understanding the effect on the target audience by measuring behavior resulting from the behavior. Selecting the Total Promotion Budget Affordable Budget Method: sets budget at an affordable level. o Ignores effect of promotion on sales o Lowest and last priority. Percentage of Sales Method: sets budget at a certain percentage of current or forecasted sales or unit sales price. o Easy to use and helps management think about the relationship between promotion, selling price, and profit per unit. o Wrongly views sales as the cause rather than the result of promotion. o May prevent increased promotion needed to grow sales. o Difficult to plan long-term Competitive-Parity Method: sets the budget to match competitor outlays. o Represents industry standards. o Avoids promotion wars. Objective-and-Task Method: (most effective and most logical) sets the budget based on what the firm wants to accomplish with promotion and includes: o Defining specific promotion objectives o Determining the tasks needed to achieve the objectives o Estimating costs of tasks. Nature of Each Promotion Tool Advertising: reaches masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. o Large-scale advertising sends positive signal to the market. o Trigger quick scales o Disadvantages: impersonal, not entirely persuasive, costly. Personal Selling: is the most effective method at certain stages of the buying process, particularly buyers’ preferences, convictions, actions and developing customer relationships. o Most expensive promotion tool ($350 per sales call) Sales Promotion: coupons, contests, cents-off deals, premiums and others that attract consumer attention and offer strong incentives to purchase, and can be used to dramatize product offers and boost sagging sales. o Tends to be short-lived. Public Relations: a very believable form of promotion that includes news stories, features, sponsorships and events. o Ex- zillow Direct marketing: a non-public, immediate, customized and interactive promotional tool that includes direct mail, catalogs, telemarketing and online marketing. Ex: Lands End, most revenue generated through their catalogs. Sears built company on catalog, purchased Lands End and now they are their own separate company. o Less public o Customized and immediate messages o Well-suited to highly targeted marketing efforts and building one-to-one customer relationships. o Ex- Land’s End catalogs they send to customers Promotion Mix Strategies Push Strategy: involves pushing the product to the consumers by inducing channel members to carry the product and promote it to final consumers. Pull Strategy: when the producer directs its marketing activities toward final consumers to induce them to buy the product and create demand from channel members. Main difference: push- things flowing from manufacturers, pushing product out. Pull- producers goes directly to consumers. Socially Responsible Marketing Communication Advertising and Sales Promotion o Communicate openly and honestly with consumers and resellers. o Avoid deceptive or false advertising. Ex: Redbull, “Redbull gives you wings” o Avoid bait-and-switch advertising: bring consumer in with one product, then don’t have that product at all (ex: sold out) Ex: Dell. o Conform to federal, state and local regulations. Ex: Monster, deaths related to teens. Changed classification from dietary supplement to beverage, don’t have to disclose deaths anymore. Personal Selling o Cannot lie or mislead consumers o Three-day cooling-off rule for called on customers. o May not bribe, offer competitor information or lie about the competition. Ex: The Office, Michael trying to regain clients by giving gift baskets. CH 15 Major Advertising Decision Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising Objectives: Informative Advertising: used frequently when introducing a new product category (build primary demand). Ex: Diet Coke commercial 1983, also introduced additional products available, caffeine free diet coke. o Communicate customer value o Build a brand and company image o Tell the market about a new product o Explain how a product works o Suggest new uses for a product o Inform the market of a price change o Describe available products and support o Correct false impressions Persuasive advertising: important with increased competition to build selective demand. o Comparative advertising: when a company directly compares its brand with one or more other brands. Ex: The weaker brands use comparative advertising. Pepsi Godfather commercial that aired during Oscars, ad comparing it to coke. o Build brand preference. o Encourage switching o Change customer perceptions of product value. o Persuade customers to purchase now. o Persuade customers to receive a sales call. o Convince customers to tell others about the brand. Reminder Advertising: important with mature products to help maintain customer relationships and keep customers thinking about the product. Ex: Coca Cola classic never goes out of style. Halloween related products and services: Godiva. Advertising during off season to remind consumers. Seasonal product ads start earlier and earlier. o Maintain customer relationships o Remind consumers that the product may be needed in the near future. o Remind consumers where to buy the product. o Keep the brand in a customer’s mind during the off-season. Setting the Advertising Budget Specific methods discussed in Ch 14 Product life-cycle o Introduction stage requires large budgets to build awareness and gain consumer trial o Decline stage requires lower budgets Market share o Building or stealing market share requires larger budgets o Maintaining market share requires lower budgets. o Ex- Geico Competitiveness o Undifferentiated brands require large advertising to position their brand distinctly o Differentiated brands still require budgets to point out differences. Developing Advertising Strategy Advertising strategy: how the company accomplishes its advertising objectives and consists of creating advertising message and selecting advertising media. Costs $324,000 to create a 30 second ad Costs $122,000 to air it. Ex-Scandal ($217,000 for 30 second add), how to get away with murder, the voice, modern family, big bang theory, MNF, TNF, walking dead, empire, SNF ($637,000 for 30 second add) For 30 sec ad on superbowl: $4.5 million Breaking through the clutter: o Ads are cluttered together o Gain attention by being imaginative, entertaining and emotionally engaging. Creating the Advertising Message Madison and Vine: the intersection of Madison Avenue and Hollywood -represents the merging of advertising and entertainment. o Advertainment: making ads entertaining it itself Superbowl o Branded Entertainment: making eh brand an inseparable part of some form of entertainment. Product Placements (10 Bil+) Ex: Heineken paid 5 mil for James Bond to drink a Heineken in trailers/commercials Step 1: Message Strategy: the general message that will be communicated to consumers. o Begins by identifying consumer benefits o Follows the company or brand’s broader positioning Step 2: Creative Concept: the compelling big idea that will bring the advertising message strategy to life in a distinctive and memorable way. Ex: Rice Krispies commercial o Ads should have appeals which include being: Meaningful: point out benefits that make the product desirable or interesting Believable: consumers must believe the benefits are deliverable Distinctive: tell consumers why it is better than competing brands. Step 3: Message Execution: turning the big idea into an actual ad. Execution Styles o Slice of life: shows one or more “typical” people using the product in a normal setting. Ex: Rice Krispies commercial o Lifestyle: shows how a product fits in with a particular lifestyle. Ex: LL Bean o Fantasy: creates a fantasy around the product or its use; for instance, many ads are built around dream themes. Ex: The Scarecrow from Chipotle o Mood/Image: builds a mood or image around the product or service, such as beauty, love, intrigue or serenity. Ex: Ad with Angelina Jolie for Louis Vuitton, emphasizing core values o Musical: Shows characters singing (about the product) Ex: Peyton and Eli Manning rap for Direct TV o Personality Symbol: creates a character that represents the product. Ex: E- Trade babies (now Kevin Spacey), Geico gecko o Technical Expertise: shows the company’s expertise in making the product. Ex: McDonalds potato supplier, expertise of suppliers o Scientific Evidence: presents (scientific) evidence that the brand is better. Ex: New Coke vs Pepsi taste tests. Coke won taste test o Testimonial Evidence or Endorsement: believable or likeable people endorsement. Ex: Angelina Jolie as a spokesperson. Jarrod from Subway o Message execution also includes: Tone Ex: cigarette ads Positive or negative Attention-getting words Ex: Burger King ad “It’ll blow your mind away” BK super seven incher Format Ex: Sharpie Illustration: strong enough to draw attention Headline: effectively entice right people to read Copy: main block of text in ad must be simple but strong and convicing. Consumer generated content: Ex- YouTube videos; contests. Doritos super bowl commercial o Low expense, new creative ideas, fresh perspective on brand, boost consumer involvement Selecting Advertising Media Major steps include: o Deciding on reach-frequency-impact. Reach: measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency: measure of how many times the average person in the target market is exposed to the message. Impact: qualitative value of a message exposure through a given medium. Ex: Chipotle Scarecrow Engagement: measure of how engaged the consumer is in the show or ad. Ex: “Like us on Facebook.” End of Scarecrow, showed app for game. o Selecting media vehicles. o Deciding on media timing Seasonality Ex: Major sports ads during the season. Pattern of the advertising Continuity: scheduling within a given period. Pulsing: scheduling unevenly within a given period. Ex: Movie ads before movie is released. Medium Advantages Limitations Good mass-marketing Television coverage; low cost per High costs; high clutter; fleeting exposure; appeals to sight and exposure; less audience selectivity sound senses Flexibility; timeliness; good Newspapers local coverage; broad Short life; poor reproduction acceptability; high believability quality; small pass-along audience High selectivity; low cost; Internet immediacy; interactive Potentially low impact; audience controls exposure capabilities High selectivity; flexibility; no High cost per exposure; “junk Direct Mail ad competition within same mail” image medium; personalization High geographic and demographic selectivity; credibility and prestige; high- Long ad purchase lead time; high Magazines quality reproduction; long life cost; no guarantee of position and good pass-along readership Good local acceptance; high Audio only; fleeting exposure; low Radio geographic and demographic attention; fragmented audiences selectivity; low cost Flexibility; repeat exposure; low cost; low message Little audience selectivity; creative Outdoor competition; positional limitations selectivity Selecting Media Vehicles Selecting Media Vehicles: Involves decisions presenting the media effectively and efficiently to the target customer and must consider the message’s: o Effectiveness Ex: Advertise Gogurt on Nickelodeon/Disney Channel, not during Scandal. Audience quality Audience engagement Vehicle’s editorial quality o Cost Narrowcasting: focuses message on selected segments by rifling in rather than the shotgun approach. o Lowers cost o Targets more effectively o Engages customers better o Ex- Watch ESPN app, watch ABC app Alternative Media and Media Multi-taskers. Ex: KFC on fire hydrants. Using more than one device for media. Evaluating the Effectiveness and Return on Advertising Investment Return on advertising investment: net return on advertising investment costs of the advertising investment. Communication effects: indicate whether the ad and media are communicating the ad message well and should be tested before or after the ads runs. Sales and profit effects: compare past sales and profits with past expenditures or through experiments. Developing and Advertising Programs Other Advertising Considerations Organizing for advertising o Agency vs. in-house Ex: BBDO and the large range of companies they represent Specialization? International advertising decisions o Standardization Ex: Doritos logo change Lower ad cots Greater coordination More consistent worldwide image o Localization Ex: Korean product trying to expand in US market, SoJu, Korean vodka. Taylor to specific population tastes Adapt to country specific laws Public Relations Public relations: involves 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. o Used to promote product, people, ideas and activities. Ex: Negative PR: pink slime McDonalds, Subway bread. Poor food quality and ingredients. Positive PR: Ronald McDonald Charity. o Includes: Press relations or press agency: involves the creation and placing of newsworthy information to attract attention to a person, product or service. Product publicity: involves publicizing specific products. Public affairs: involves building and maintaining national or local community relations. Lobbying: involves building and maintaining relations with legislators and government officials to influence legislation and regulation. Investor relations: involves maintaining relationships with shareholders and others in the financial community. Development: involves public relations with donors or members of nonprofit organizations to gain financial or volunteer support. Role and impact of PR o Lower cost than advertising o Stronger impact on public awareness than advertising Ex: iPad uses a lot of PR instead of heavy advertising o Should work together with advertising Major public relation tools o News o Special Events: news conferences and speeches, press tours, grand openings, fireworks or laser light display, hot air balloon releases, multimedia presentations, educational programs. o Written materials: annual reports, brochures, articles and company newsletters and magazines. o Audiovisual materials: DVD and online videos. o Corporate identity materials: logos, stationary, brochures, signs, business forms, business cards, buildings, uniforms, company cars and trucks. Ex: UPS toys and such (costumes) for kids. o Public service activities. Ex: Odwalla juice company, plant a tree campaign. CH 16 Personal Selling Personal selling: Personal presentations by the firm’s sales force for the purpose of making sales and building customer relationships. o Called salespeople, sales representatives, district managers, account executives, sales engineers, agents, sales consultants. Salesperson: Individual representing a company to customers by performing one or more of the following activities: prospecting, communicating selling, servicing, information gathering and relationship building. Ex: Traditional view of salesperson, National Lampoon’s vacation. o Role of the sales force Represent the company to customers Represent customers to the company Work closely with marketing. Managing the Sales Force Sales force management is the analysis, planning, implementation and control of sales force activities. Designing sales force strategy and structure o Sales force size: workload approach o Size = number of calls required / average calls per salesperson Ex- Pepsi Co- 36,000. AMEX- 23,400 o Outside salespeople: travel to call on customers in the field. o Inside salespeople: conduct business from their offices via telephone, internet or visits from prospective buyers and often provide support for the outside salespeople (more effective at prospecting than outside) o Team selling: uses people from sales, marketing, engineering, finance, technical support and management to service large, complex accounts. Examples: IBM, P&G and Xerox. Designing Sales Force Structure Territorial Sales Force Structure: Salesperson has an exclusive geographic area and services customers in territory o Defines role and fixes accountability o Lowers sales expenses o Improves local relationship building and selling effectiveness Product Sales Force Structure: Salesperson sells along product lines. o Improves product knowledge. Advantages: specialization, expertise. o Can lead to territorial conflicts (i.e. duplication of effort) Customer Sales Force Structure: Salesperson or sells along customer or industry lines. o Serve different industries; current vs new customers; major vs regular accounts. o Improves customer relationships o May not lower sales expenses Complex Sales Force Structure: Various of products are sold to many types of customers over a broad geographic area and combines several types of sales force structures. Managing the Sales Force Recruiting and selecting salespeople o Careful selection and training increases sales performance. o Poor selection increases turnover costs via lost sales and disruptive customer relationships. Training salespeople o Customers needs, buying motives and buying habits; how to sell effectively and the selling process; company’s objectives, organization, products and competitors. Compensating salespeople o Pay includes: fixed, variable, expenses and fringe benefits o Variable includes: commissions or performance based bonuses o Most common mix of fixed vs variable pay? 67% salary, 33% incentive. Container Store pays their retail salespeople an average Supervising and Motivating the Sales Force o The goal of supervision is to help salespeople work smart by doing the right things in the right ways (CRM) o The goal of motivation is to encourage salespeople to work hard and energetically toward sales for goals o Sales morale and performance can be increased through: Organizational climate: feelings about opportunities, values and rewards for good performance. Sales quotas: standards starting how much they should sell by product. Positive incentives: sales contests and sales meetings (socialization with peers and management; break from routine job) Evaluating Salespeople and Sales Force Performance o Sales reports, Call reports, Expense reports Sales Reports: weekly or monthly work plans and territory marketing plans. The Personal Selling Process The goal of the personal selling process is to get new customers and obtain orders from them. Step 1: Prospecting and Qualifying o Prospecting: identifies qualified potential customers Referrals, lists or cold calling o Qualifying: identifying good customers and screening out poor ones by looking at it. Ex: Friends, Joey being screened by an encyclopedia salesperson Financial ability, volume of business, needs, location, growth potential. Step 2: Preapproach o Conduct research and determine call objectives Qualify the prospect; gather information; make the sales; determine the best approach (visit, phone call, letter) Step 3: Approach o Involves appearance, opening lines and follow up remarks to make a good impression. Ex: Stepbrothers, job interviewing clothing Step 4: Presentation and Demonstration Ex: Wolf of Wall Street, selling penny stocks scene o Presentation: when the salesperson tells the product story to the buyer, presents customer benefits and shows how the product solves the customer’s problems. Need-satisfaction approach: buyers want solutions and salespeople should listen and respond with right products and services to solve customer problems. Bad traits: Pushy, late, deceitful, disorganized and unprepared. Good traits: Good listener, empathetic, honest, dependable, thorough and follow-up types. Step 5: Handling Objections and Negotiating Buyer Concerns o Use a positive approach to seek out hidden objections, seek out hidden objections, take objection as an opportunity to provide more information and turn objection into reason for buying. Step 6: Closing o Process where salespeople should recognize signals from the buyer – including physical actions, comments and questions- to close the sale. Asking for the order Reviewing points of agreement Asking if the buyer wants this one or that one Probing method Ex: In Good Company Making note that the buyer will lose out if the order is not placed now Ex: Boiler Room Offering incentives to buy, including lower price or additional quantity Step 7: Follow-Up o Last step in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business. Sales Promotion Sales Promotion: short-term incentives to encourage purchases or sales of a product or service. Ex: Used by Red Lobster, Olive Garden (never ending pasta bowl salad and breadsticks), Longhorn Steakhouse. Growth of sales promotions o Product managers are under pressure to increase current sales. o Companies face more competition o Competing brands offer less differentiation o Advertising efficiency has declined due to rising costs, clutter and legal constraints. o Consumers have become more deal-oriented. o Ex- Priceline Negotiator Sales promotion objectives o Consumer promotions urge short-term customer buying or enhance brand involvement. o Trade promotions urge retailers to carry new items or more inventory, buy in advance, promote company products and give more shelf space. o Sales force promotion objectives include getting more sales force support for new or current products or getting salespeople to sign up new accounts. Consumer Promotion Tools Samples: offer a trial amount of a product. Ex: Cosmetics Coupons: certificates that give buyers a saving when purchasing specified products. Cash refunds or rebates: price reductions that occur after the purchase. Price packs (cent-off-deals): offer consumers savings off the regular price of a product (2 for 1 or bundle discount) Premiums: goods offered either for free or at a low price as an incentive to buy. Ex: McDonalds kids meal toy Advertising specialties: useful articles imprinted with the advertiser’s name, logo or message that are given as gifts to consumers. Ex: t-shirts Point-of-purchase promotions: include displays and demonstrations that take place at the point of sales. Contests, sweepstakes and games: give consumers chance to win cash, trips or goods by luck or through extra effort. Ex: Axe Apollo Space Academy Event marketing or event sponsorship: involves crating a brand-marketing even or serving as a sole or participating sponsor of events created by others. Ex: Macy’s Thanksgiving day parade. McDonalds happy meal toys Trade and Business Promotion Tools Trade promotion tools: persuade resellers to: o Carry a brand o Give the brand more shelf space o Promote the brand in advertising o Push the brand to consumers Discounts, allowance, free goods, specialty advertising Business promotion tools: used to generate business leads, stimulate purchases, reward customers and motivate salespeople. o Conventions and trade shows: are effective to reach many customers not reached with the regular sales force. o Sales contests: are effective in motivating salespeople or dealers to increase performance over a given period. Developing the Sales Promotion Program Size of the incentive Conditions for the participation: everyone or select group. Promote and distribute the program. Length of the promotion o Too short: some prospects lose out o Too long: act now effect diminishes Evaluation of the program o Did the promotion attract new customers or more purchasing from the current customers? o Can we hold onto these new customers and purchases? o Will long-run customer relationship and sales gains justify the costs? CH 17 Forms of Direct Marketing: Direct Marketing: connecting directly with carefully targeted segments or individual consumers, often on a one-to-one interactive basis. o Face to face selling, direct mail, catalogs, telemarketing, direct response TV, kiosks, online marketing. Direct Marketing Direct Marketing Model Ex: Tupperware built its name around model o Marketing channel without intermediaries (part of the promotion mix) o Fastest-growing form of marketing. o Ex- tupperware Benefits to buyers o Convenient, easy and private o Ready access to many products o Access to comparative information about companies, products and competitors. o Immediate and interactive. Benefits to Sellers o Tool to build customer relationships (more one-to-one interaction) o Low-cost, efficient, fast alternative to reach markets and for channel and logistics functions. o Flexible: quickly adjust price and promotions o Access to buyers not reachable through other channels (beyond local markets) Customer Databases and Direct Marketing Customer database: an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic and behavioral data. Why companies use databases for direct marketing : o Locate good and potential customers o Generate sales leads o Learn about customers o Develop strong long-term relationships o Ex: Data through Siri is kept. Siri has been banned in IBM. o Ex- google data center Forms of Direct Marketing Direct-mail marketing: sending an offer, announcement, reminder or other item to a person at a particular address. Ex: Publishers clearing house (saying you are a finalist for something, want you to take action to enter sweepstakes o Personalized and flexible o Easy-to-measure results o Costs more than mass media o Better results than mass media o Careful selection of targets due to junk mail or spam perception Catalog direct marketing: direct marketing through print, video or digital catalogs mailed, available in stores or presented online. Ex- Gucci catalog, can place orders through it o Benefits of printed catalogs: Creates emotional connection with customers Drives online sales o Benefits of Web-based catalogs Lower cost than printed catalogs Unlimited amount of merchandise Real-time merchandising Instant updating of product, features and prices. Telephone direct marketing: using the telephone to sell directly to consumers and business customers. Ex: Seinfeld response to telemarketer o Benefits: Purchasing convenience Increased product service and information o Challenges: Unsolicited telephone marketing Do-Not-Call registry Kiosk Marketing. Ex: Redbox dvd rentals Direct-Response television (DRTV) marketing: involves 60- to 120- second ads that describe products or give customers a toll-free number or website to purchase and 30-minute infomercials such as home shopping channels and interactive television. Ex: Infomercial thighmaster, proactive (number 1 successful infomercial, $1 billion in revenue) o Less expensive than other forms of promotion and easier to track results. Online Marketing Internet: a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository. o Business to consumer (B2C): involves selling goods and services online to final consumers. Ex: Amazon o Business to business (B2B): involves using online marketing to reach new customers, serve current ones more effectively and obtain buying efficiencies and prices. Ex: Amazon, eBay o Consumer to consumer (C2C): online exchanges between final consumers of goods and information. Ex: Ebay, baseball cards Blogs Offer fresh, original and inexpensive ways to reach fragmented audiences. Difficult to control Consumer to business (C2B): online exchanges in which consumers search out sellers, learn about their offers, initiate purchase and even drive transaction terms. Ex: Priceline Negotiator Setting Up an Online Marketing Presence Creating a Web site: requires deigning an attractive site and developing ways to get consumers to visit the site, remain on the site and return to the site. o Types of sites Corporate (brand) Web site: designed to build customer goodwill and supplement other channels (rather than to sell products directly), provide information and collect feedback. Ex: Snickers Marketing Web site: designed to engage consumers that will move them closer to a direct purchase or other marketing outcome. Ex: Lindt chocolates Placing Ads and Promotions Online Forms of online advertising o Display ads Ex: advertising for Netflix Banners are banner-shaped ads found on a Web site Interstitials: ads that appear between screen changes Pop-ups: ads that appear in a new window. Rich media ads incorporate animation, video, sound and interactivity. o Search-related ads: ads in which text-based ads and links appear alongside search results on sites and are effective in linking consumers to other forms of online promotion. Ex: Google o Content sponsorships: companies gain name exposure through the sponsorship of special content (news or financial info). Ex: Weather Channel o Viral Marketing: Internet version of word-of-mouth marketing and involves the creation of a web site, e-mail message, or other marketing event that customers pass along to friends. Ex: Psy’s Gangnam Style. 22 Jump Street parody of Volvo split commercial Online Marketing Creating or Participating in Online Social Networks o Social Networks (Web communities) allow members to congregate online and exchange views on issues of common interest. Ex: Lulu app rating guys Facebook, Twitter, YouTube, Flickr, Company’s own targeted Web community. Using E-mail Ex: Burberry new arrivals emails o Marketers are developing enriched messages that include animation, interactivity and personal messages with streaming audio and video to compete with the cluttered e-mail environment. Spam is unsolicited, unwanted commercial e-mail messages. Permission-based marketing allowing users to opt in or opt out of e- mail marketing. Using Mobile Marketing Ex: lulu app o Ring-tone giveaway; mobile games; contests and sweepstakes; ad- supported content to retailer announcements of discounts, brands and gift suggestions. http://www.forbes.com/sites/capitalonespark/2013/10/29/5-mobile-marketing- fails-to-avoid/ SHORT ANSWER ON TEST Public Policy Issues in Direct Marketing Irritation: annoying and offending customers Unfairness: taking unfair advantage of impulsive or less-sophisticated buyers. Deception: mailers and write copy designed to mislead consumers. Ex: Publishers clearing house Fraud: identity theft and financial scams. o Phishing and online security Invasion of Privacy: the concern is that marketers may know too much about consumers and use this information to take unfair advantage. o Sale of databases CH 20 Social Criticisms of Marketing Prices are too high o Distribution costs o Advertising and promotion costs o Excessive markups o Ex- Generic brand medicine. Read CNN article about generic brands Deceptive pricing, promotion and packaging o Ex- Tmobile. Non contract price is shown, down payment and monthly payment, did not mention that if you cancelled you had to pay remaining balance High pressure selling Shoddy, harmful or unsafe products o Ex- Carnival cruise ships. Stranded at sea for days, experiencing technical issues, huge plumbing problem many days left out at sea Planned obsolescence o Ex- Iphone wants you to upgrade every year Poor service to disadvantaged consumers o Ex- LA riots in front of stores Marketing’s Impact on Society as a whole False wants and too much materialism o $7093 average credit card debt o New product failures suggest that marketers do no have full control over consumers Too few social goods o Producers and consumers should pay social costs Cultural pollution o Commercial interruptions (noise) o Hits targeted audience and keeps consumer costs down o Ex- companies who want to advertise are paying for us to use Google Environmentalism o Environmentalism o Internal: Pollution prevention- eliminating or reducing waste before it is created New clean technology- developing new sets of environmental skills and capabilities o External Product stewardship- minimizing environmental impact throughout the entire product life cycle Sustainability vision- creating a strategic framework for future sustainability o Ex- water bottle companies have tried to reduce the labels and adjust shape to reduce plastic use. Business Actions Toward Sustainable Marketing Consumer-Oriented Marketing: view marketing activities from the consumer’s point of view Customer-Value Marketing: invest in customer-value building marketing and create value for customers Innovative Marketing: company seeks real product and marketing improvements Sense-of-mission Marketing: define mission in broad social terms rather than narrow product terms o Ex- facebook goal: give people the power to share and make the world more open and connected Societal Marketing: consider consumer’s wants, company’s requirements and consumers’ and society’s long-run interests. Societal Marketing Deficient products: have neither immediate appeal nor long-run benefits Pleasing products: give high immediate satisfaction but may hurt consumers in the long run Salutary products: have low immediate appeal but may benefit consumers in the long run Desirable products: give both high immediate satisfaction and high long-run benefits Try to produce desirable products The Sustainable Company Goes beyond caring for the needs of today’s customers and has concern for tomorrow’s customers and the broader world o Ex- Soul Kitcehn. Pay what you want pricing model. Allow people to pay more to sustain costs (do something good for society), people who don’t have a lot of money can pay very little. SHORT ANSWER QUESTIONS ON TEST Martin Agency presentation Creative process Create ides with staying power Sales overnight, brand over time 4 Essential Questions The assignment brief: what do we want people to do? The creative brief: why will people care? The big idea: what story are we telling? The media plan: will people notice? Will they share? Players Account manager Strategic planner Creative Analyst Producer Media Ecosystem Awareness drivers (TV $), video hubs, amplification channels (social media). 1. Mobile Marketing Article Reasons why mobile marketing fails 2. Media vehicles strengths and weaknesses In-class exercise CH 15 3. Approach stage of personal selling CH 16 Explain how one can make a good impression on a job interview: appearance, opening lines and follow-up remarks.
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