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by: Mrs. Oleta Okuneva


Mrs. Oleta Okuneva
GPA 3.74

Claire Bolfing

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Claire Bolfing
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This 23 page Class Notes was uploaded by Mrs. Oleta Okuneva on Saturday September 26, 2015. The Class Notes belongs to COB 300D at James Madison University taught by Claire Bolfing in Fall. Since its upload, it has received 21 views. For similar materials see /class/214038/cob-300d-james-madison-university in College of Business at James Madison University.

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Date Created: 09/26/15
Marketing Final Exam Study Guide CH 18 15 17 19 20 8 16 CH 18 INTEGRATED MARKETING COMMUNICATIONS AND DIRECT MARKETING Promotional mix A combination of one or more communication tools including advertising personal selling sales promotion public relations and direct marketing Used to 1 Inform prospective buyers about the benefits of the product 2 Persuade them to try it 3 Remind them later about the benefits they enjoyed while using the product Integrated marketing 39 39 IMC the concept of designing a program that coordinates all promotional activities to provide a consistent message across all audiences L01 Discuss IMC and the communication process Communication the process of conveying a message to others requires 6 elements Source Company or person who has information to convey 2 Message Information sent by the source 3 Channel of communication Conveys the message 4 Receiver Consumers who read hear or see the message 5 Encoding the process of having a sender transform an idea into a set of symbols 6 Decoding the process of having the receiver take a set of symbols the message and transform them back into an idea Performed by receivers according to their own frame of reference attitudes values and beliefs Errors Idea not adequately used in effective symbols by source sent through wrong channel and doesn t make it to receiver receiver doesn t properly transform symbols into idea and feedback may be delayed or distorted Field of experience a similar understanding and knowledge applied to message by both sender and receiver Response feedback loop the impact the message had on the receiver s knowledge attitudes or behaviors Feedback the sender s interpretation of the response and indicates whether the message was decoded and understood as intended m extraneous factors that can work against effective communication by distorting a message or the feedback receive L02 Describe the promotional mix and the uniqueness of each component Mass selling used with groups of perspective buyers advertising public relations sales promotions Customized interaction between a seller and perspective buyer personal selling direct marketing Advertising any paid form of nonpersonacommunication about an organization good service or idea by an identified sponsor I Mass I Fees paid for space and time I Advantages Efficient means for reaching large numbers of people attention getting communicates specific product benefits company has control I Disadvantages High absolute costs difficult to receive feedback Personal Selling the twoway flow of communication between buyer and seller designed to influence a person s or group s purchase decision usually facetoface Publicity a nonpersonal indirecty paid presentation of an organization good or service ie news story editorial or public announcement I Customized I Fees paid to salespeople as salaries or commissions I Advantages Immediate feedbackcan gage reaction and modify message if needed very persuasive can select and audience can give complex information I Disadvantages Extremely expensive per exposure messages may differ between salespeople Public Relations Form of communication management that seeks to influence the feelings opinions or beliefs held by customers prospective customers stockholders suppliers employees and other publics about a company and its products or services I Mass I No direct payment to media I Advantages Often very credible to consumer I Disadvantages Difficult to get media cooperation Sales Promotion A shortterm inducement of value offered to arouse interest in buying a good or service I Mass I Wide range of fees paid depending on selected promotion I Advantages Effective at changing short run behavior very flexible I Disadvantages Easily abused can lead to promotion wars easily duplicated customers may question value of product customers may delay purchase until they have a coupon Direct Marketing Uses direct communication with customers to generate a response in the form ofan order a request for further information or a visit to a retail outlet I Customized I Cost of communication through mail telephone or computer I Advantages Messages and be prepared quickly facilitates relationship with customer I Disadvantages Declining customer response database management is expensive L03 Select promotional approach appropriate Developing promotional mix considerations 1 Balance of elements must be considered I The Target Audience I The Product Life Cycle 0 Introduction stage informing consumers in an effort to increase their level of awareness 0 Growth stage persuade consumer to buy the product 0 Maturity stage the need is to maintain existing buyers remind buyers of product s existence 0 Decline stage period of phase out little money is spent on promotion I ProductCharacteristics 0 Complexity technical sophistication of product and understanding required to use it 0 Risk assessed in terms of financial risk social risk and physical risk 0 Ancillary Services the degree of service or support required after sale I Stages of Buying Decision 0 Pre purchase stage advertising more helpful informs sale promos gain low risk trial 0 Purchase stage personal selling highest advertising lowest promotions can encourage demand direct marketing 0 Post purchase stage more personal contact the higher the satisfaction of customer need to assure buyer of purchase I Channel Strategies 0 Push strategy directing the promotional mix channel members to gain their cooperation in ordering and stocking the product personal and promotions important 0 Pull strategy directing promotional mix at ultimate consumers to encourage them to ask the retailer for a product 2 Coordinating a consistent promotional effort L04 Describe elements ofthe promotion decision process Developing an IMC program Planning 1 Identify target audience I To the extent that time and money permit the target audience is the target market I The more a firm knows about the market the easier it is to develop program 2 Specify promotion objectives I Hierarchy of effects sequence of stages a prospective buyer goes through 0 Awareness ability to recognize product or brand name 0 Interest increased desire to learn about features of product or brand 0 Evaluation appraisal of the product or brand on important attributes 0 Trial first purchase or use of the product 0 Adoption repeat purchase or use of the product or brand I Objectives should be 0 Designed for welldefined targetaudience o Measurable 0 Cover a specified time period 3 Set the promotional budget I Percentage of sales budgeting funds are allocated to promotion as a percentage of past or anticipated sales in terms of either dollars or units sold I Competitive parig budgeting matching the competitors absolute level of spending or the proportion per point of market share I Allyoucanafford budgeting money is allocated to promotion only after all other budget items are covered I Ob39ective and task budgeting best approach 0 Determines promotional objectives 0 Outlines the tasks to accomplish these objectives 0 Determines the promotion cost of performing these tasks 4 Select the right promotional tools I Many combinations may achieve same objective analytical approach and experience are particularly important I Important to assess the relative importance of the various tools 5 Design promotion I Consists of advertising copy and the artwork that the target audience is intended to see or hear characteristics and skills of personal sellers specific promotional details etc I Design plays a primary role in determining the message the is communicated to audience I Requires the most creativity I Challenge is to design each to communicate the same message 6 Schedule promotion I The order and frequency each promotional tool is introduced during the campaign I Effected by seasonality and competitive promotion activity Implementation Pretest the promotion 8 Carry out the promotion I Facilitate its design and use Evaluation 9 Posttest the promotion 10 Make needed changes I MC Audit L05 Explain the value of direct marketing for consumers and sellers Direct Marketing direct mail catalogs television home shopping telemarketing email and direct selling The Growth of Direct Marketing I Increased interest in customer relationship management I The ability to design and use direct marketing has increased with the availability of customer information databases and new printing technologies I Increasing popularity of the internet The Value of Direct Marketing I Indicated by level of use of various forms I Customer benefits 0 O O O O O 0 Offers more privacy Don t have to go to store Can shop 24 hours a day Saves time Avoid hassles from salespeople Save money Provides excellent customer service I Direct orders the result of offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction I Lead generation the result of an offer designed to generate interest in a product or service and a request for additional information I Traffic generation the outcome ofan offer designed to motivate people to visit a business Technological Global and Ethical issues in Direct Marketing I Information technology and databases key elements customer profiles demographics I Mandatory 1opt in customers must give permission to include name on list for direct marketing solicitations I Need for improved reliability and security in countries has slowed growth of direct marketing I Different forms of payment create alternatives around the world I Privacy concerns donotcalldonotmail registries CH 15MANAGNG MARKETING CHANNELS AND WHOLESALING L01 Explain what is meant by a marketing channel of distribution and why intermediaries are needed Marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users make possible the flow of goods from a producer through intermediaries to a buyer Intermediaries I Middleman any intermediary between manufacturer and enduser markets I Agent or broker and intermediary with legal authority to act on behalfof the manufacturer 0 O 0 Do not take title to merchandise and perform fewer channel functions Profits made from commissions or fees paid for services Manufacturer s agent or manufacturer s representative work for several producers and carry 39 39 39 y 39 quot in an exclusive territory principally responsible for the transactional channel functions primarily selling Selling agents represent a single producer and are responsible for the entire marketing function of that producer Brokers independent firms or individuals whose principal function is to being buyers and sellers together to make sales usually have no continuous relationship with buyer or seller but negotiate a contract between the two parties and then move on to another task I Wholesaler any intermediary who sells to other intermediaries usually to retailers term usuay applies to consumer markets 0 Merchant wholesaler independently owned firms that take title to the merchandise they handle I Full service General merchandise fullline wholesalers perform all channel functions I Full service Specialty merchandise limitedline wholesalers perform all functions I Limited service Rackjobbers furnish racks or shelves that display merchandise in retail stores perform all functions and sell on consignment retain the title to products displayed and bill retailers for merchandise sold I Limited service Cash and carry wholesalers take title to merchandise but sell only to buyers who call on them pay cash for merchandise and furnish their own transportation carry limited product assortment don t make deliveries extend credit or supply market information I Limited service Drop shippers or deskjobbers own the merchandise they sell but don t physically handle stock or deliver it they solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer used for bulky products sold in large quantities I Limited service Truckjobbers small wholesalers with small warehouses handle limited assortments for fast moving fast perishable items sold directly from trucks with original packaging I Retailer any intermediary who sells to consumers I Distributor an imprecise term usually used to describe intermediaries who perform a variety of distribution functions including selling maintaining inventories extending credit and so on a more common term in business markets buy may also be used to refer to wholesalers I Dealer a more imprecise term than distributor that can mean the same as a distributor retailer wholesaler and so forth I Manufacturer s branches and offices wholly owned extensions of the producer that perform wholesaling activities when there are no intermediaries to perform these actions customers are few in number and are geographically concentrated or orders are large and require specific attention 0 Branch office carries producers inventory and performs functions of a fullservice wholesaler 0 Sales office does not carry inventory performs only sales function and serves as an alternative to agents or brokers Value of intermediaries Makes selling goods and services more efficient because they minimize the number of sales contacts necessary to reach a target market Reduced total number of industry transactions lower producer cost benefits customers Four utilities Time having product when you want it Place having product or service available where consumers want it Form enhancing product or service to make it more appealing to buyers Possession entails efforts by intermediaries to help buyers take possession of a product or service Important functions performed by intermediaries Make possible the flow of products from producers to buyers by these functions all three functions must be performed in channel though each channel member may not participate in all three I Transactional function 0 Buying purchasing products for resale or as an agent for supply ofa product 0 Selling contacting potential customers promoting products and seeking orders 0 Risk taking assuming business risks in the ownership of inventory that can become obsolete or deteriorate I Logistical function 0 Assorting creating product assortments from several sources to serve customers 0 Storing assembling and protecting products at a convenient location to offer better customer service 0 Sorting purchasing in large quantities and breaking into smaller amounts desired by customers 0 Transporting physically moving a product to customers I Facilitating function 0 Financing extending credit to customers 0 Grading inspecting testing orjudging products and assigning then quality grades 0 Marketing information and research providing information to customers and suppliers including competitive conditions and trends L02 Distinguish among traditional and electronic marketing channels and different types of vertical marketing systems Marketing channels for consumer goods and services As the number of intermediaries increases the channel length increases Direct channel producer and ultimate consumer deal directly with each other 0 Having no intermediaries means producer must perform all channel functions 0 Producer gt consumer Indirect channel intermediaries are inserted between producer and consumer and perform numerous channel functions 0 Producer gt retailer gt consumer common when retailer is large cost of inventory is too expensive to use a wholesaler 0 Producer gt wholesaler gt retailer gt consumer common for lowcost lowunit value items that are frequently purchased by consumers 0 Producer gt agent gt wholesaler gt retailer gt consumer common when there are many small manufactures and many small retailers agent is used to coordinate a large supply of a product Marketing channel for business to business goods and services Business channels are typically shorter as businesses are fewer in number and tend to be concentrated geographically and buy in larger quantities Direct channel 0 Firms maintain their own sales force and perform all channel functions 0 Buyers are large and well defined requires extensive negotiation and products are high unit value and require handson expertise in terms of installation or use 0 Producer gt industrial user Indirect channel 0 Industrial distributor performs a variety of marketing channel functions including selling stocking delivering and full product assortment and financing like wholesalers in consumer channels 0 Producer gt industrial distributor gt industrial user 0 Producer gt agent gt industrial user agent serves primarily as the independent selling arm of producers and represents producer to industrial users rather than employing its own sales force 0 Producer gt agent gt industrial distributor gt industrial user uses agents to call on distributors who sell to industrial users Electronic marketing channels employ the internet to make goods and services available for consumption or use by consumers or business buyers Combines traditional and electronic intermediaries to create time place from and possession utility for buyers Electronic intermediaries can perform transactional and facilitating functions at lower cost than traditional intermediaries but cannot perform elements of logistical functions Company gt wholesaler gt virtual retailer gt consumer amazoncom Company gtdealer gt virtual broker gt consumer autobytelcom Company gt virtual agent gt consumer orbitzcom Company gt consumer delcom Direct and Multichannel Marketing Direct marketing channels allow consumers to buy products by interacting with various advertising media without facetoface meeting a sales person includes mailorder selling directmail sales catalog sales telemarketing interactive media and televised home shopping Multichannel marketing the blending of different communication and deliver channels that are mutually reinforcing in attracting retaining and building relationships with consumers who shop and buy in traditional intermediaries and online seeks to integrate electronic and delivery channels can leverage the valueadding capabilities ofdifferent channels Dual distribution and strategic channel alliances Dual distribution an arrangement whereby a firm reaches different buyers by employing two are more different types of channels for the same basic product Strategic channel alliances whereby one firm s marketing channel is used to sell another firm s products popular in global marketing where the creation of marketing channel relationships is expensive and time consuming Vertical marketing systems and channel partnerships Vertical marketing systems professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact I Corporate systems the combination of successive stages of production and distribution under a single ownership 0 Forward integration a producer might own the intermediary at the next level down in the channel 0 Backward integration a retailer might own a manufacturing operation 0 Companies seeking to reduce distribution costs and gain greater control over supply sources or resale of their products pursue forward and backward integration both cause increased capital investment and fixed costs I Contractual systems independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone most popular vertical system 0 Wholesalersponsored voluntary chains involve wholesaler that develops a contractual relationship with small independent retailers to standardize and coordinate buying practices merchandising programs and inventory management efforts 0 R tail p u r 39 smal39 39 I 39 retailers form an organization that operates a wholesale facility cooperatively member retailers concentrate their buying power through the wholesaler and plan collaborative promotional and pricing activities 0 Franchising a contractual agreement between a parent company franchisor and an individual or firm franchisee that allows the franchisee to operate a certain type of business under an established name and according to specific rules can be manufacturer or service sponsored franchise or wholesale systems I Administered systems achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership Channel partnerships consists ofagreements and procedures among channel members for ordering and physically distributing a producer s products through the channel to the ultimate consumer collaborative use of information and communication technology to better serve customers and reduce time and cost of performing channel functions L03 Describe the factors and considerations that affect a company s choice and management of a marketing channel Factors I Environmental changing family lifestyles advances in technology regulatory factors etc I Consumer characteristics who are they Where do they buy When do they buy How do they buy What do they buy I Product sophistication stage in life cycle standardization unit value I Company financial human or technological capabilities Considerations I Target market coverage best coverage requires attention to density 0 Intensive distribution firm tries to place its products and services in as many outlets as possible usually chosen for convenience products or services 0 Exclusive distribution only one retailer in a specified geographical area carries firm s products chosen for specialty products or services Selective distribution a firm selects a few retailers in a specific geographical area to carry its products most common form I Satisfying buyer requirements 0 Information important when buyers have limited knowledge or desire specific data about a product or service 0 Convenience proximity time and hassle Variety buyer s interest in having numerous competing and complementary items of which to choose breadth and depth of products and brands 0 Pre or postsale services delivery installation credit etc 0 O I Profitability determined by margins earned for each channel member and for the channel as a whole channel cost is critical Global dimensions understand traditions customs geography and economic history but basic marketing functions must still be performed L04 Recognize how conflict cooperation and legal considerations affect marketing channel relationships Channel conflict arises when one channel member believes another member is engaged in behavior that prevents it from achieving its goals vertical or horizontal It is necessary to secure cooperation among marketing channels Channel captain channel member that coordinates directs and supports other channel members has ability to influence others behavior due to economic influence expertise identification with a particular channel member or a legitimate right to direct the behavior of other members Must consider legal considerations I Clayton act 0 Vertical integration 0 Tying arrangements 0 Exclusive dealing o Refusal to deal 0 Dual distribution I Sherman act 0 Dual distribution 0 Resale restrictions CH 17 RETAILING Retailing includes all activities involved in selling renting and proving products and services to the ultimate consumers for personal family or household use where the customer meets the product L01 Identify retailers in terms ofthe utilities they provide To consumers the value of retailing is in the form of utilities provided Consumer utilities offered by retailing offered by all retailers in various degrees but one is often emphasized more than others I Time Sports Authority I Place Wells Fargo I Form Ralph Lauren I Possession Saturn L02 Explain the alternative ways to classify retail outlets Form of ownershig distinguished retail outlets based on whether individuals corporate chains or cont6ractual systems own the outlet I Independent retailer most common owner can be own boss offers convenience personal service and lifestyle compatibility to customers I Corporate chain multiple outlets under common ownership centralization in decision making size has advantage in working with manufacturers buying power multiple buying outlets with consistent merchandised and management policies for consumers I Contractual system independently owned stores that act like a chain see Ch 15 Level of service used to describe the degree of service provided to the customer I Selfservice customers perform many functions and little is provided by the outlet make consumers co creators of the value they receive I Limited service provide some services but not others I Full service includes specialty stores and department stores provide many services to customers Merchandise line describes how many different types of products a store carries and in what assortment I Depth of product line store carries a large assortment of each item ie running shoes dress shoes and children s shoes o Limitedline stores carry considerable assortment depth ofa related line of items Sports authority 0 Singleine carry tremendous depth in one primary line of merchandise Victoria s secret I Breadth of product ine refers to the variety ofdifferent items a store carriers ie appliances and CDs 0 General merchandise stores carry a broad product line with limited dept o Scrambled merchandising offering several unrelated product lines in a single store 0 Hypermarket form of scrambled merchandising successful in Europe usually a large store quoteverything under one roof 0 Supercenter developed variation for Americans uncomfortable with size of hypermarkets combines typical merchandise store with fullsize grocery store ie WalMart Kmart target 0 Eliminate number of stops for consumer o W competition between very dissimilar types of retail outlets L03 Describe the many methods of non store retailing I Automatic vending vending machines serves customers where stores cannot higher prices because of machine maintenance operating costs and location leases I Direct mail and catalogs eliminates the cost ofa store and clerks value created through fast and convenient means of making a purchase I Television home shopping I Online retailing 24hour access comparison shopping inhome privacy and variety for consumer I Telemarketing involves using the telephone to interact with and sell directly to consumers more efficient than direct mail I Direct selling doorto door retailing personal interactions and demonstrations in their home or office L04 Classify retailers in terms of the retail positioning matrix and specify retailing mix actions Positioning a retail store I Retail positioning matri developed by MAC Group nc positions retail outlets by two dimensions breadth of product line and value added includes location product reliability or prestige Retailing mi includes activities related to managing the store and the merchandise in the store similar to marketing mix I Retail pricing must decide on markup markdown and timing for markdowns 0 Everyday low pricing everyday fair pricing warehouse clubs outlet stores singleprice or extreme value retailers o Offprice retailing selling brandname merchandise at lower than regular prices TJMaxx bought from manufacturers with excess inventory at prices below wholesale prices I Store location where and how many stores to have 0 Central business district oldest retail setting community s downtown area often viewed as less convenient 0 Regional shopping centers consist of 50150 stores that typically attract customers who live or work within a 510 mile range contain 2 or 3 anchor stores 0 Community shopping center limited approach typically has one primary store and about 2040 smaller outlets serve consumers within 1020 minute drive 0 Strip mall clusters of stores in neighborhoods serve customers within 510 minute drive Power center variation of strip mall huge shopping strip with multiple anchor stores convenient locations I Retail communication message communicated by promotion and other retailing mix elements image defined by functional qualities psychological attributes impressions category of store brands in categories merchandise and service quality atmosphere and ambiance physical surroundings consumer shopping experience I Merchandise breadth and depth 0 Categom management assigns a manager the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other with the objective of maximizing sales and profits in the category 0 0 Consumer marketing at retail CMAR research and analyzing data to identify shopper problems translating the data into mix actions executing friendly instore programs and monitoring performance of the merchandise 0 Marketing metrics used to assess the effectiveness ofa store or retail format I Measures related to customers number of transactions per customer average transaction size per customer number of customers per day or hour average length of store visits I Measures related to products number of returns inventory turnover inventory carrying cost average number of items per transaction I Financial measures gross margin sales per employee return on sales markdown percentage I Most popular sales per square foot and same store sales growth L05 Explain changes in retailing with the wheel of retailing and the retail life cycle concepts Wheel of retailing describes how new forms of retail outlets enter the market I Usually enter as lowstatus lowmargin stores I Gradually outlets add fixtures and establishments to increase attractiveness to customers I Prices and status rise with editions I Cycle repeats itself with new retail outlets I Leads to new products and services Retail life gcle process of growth and decline that retail outlets like products experience I Early growth in stage ofemergence with a sharp departure from existing competition market share graduay rises profits low due to startup costs I Accelerated development market share and profit reach greatest growth rates multiple outlets established focus on distribution element later competitors may enter establish dominant position and fight for market share I Maturity stage some competitors drop out try to maintain market share price discounting occurs I Decline stage market share and profit fall rapidly encourage customers to not move to other outlets Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs television home shopping and online retailing I Makes shopping simpler and more convenient I Broader profile of customers I Benefit from synergy of sharing information among different channel operations CH 19 ADVERTISING SALES PROMOTION AND PUBLIC RELATIONS Advertising any paid form of nonpersonal communication about an organization a good a service or an idea ny an identified sponsor L01 Explain the differences between product advertising and institutional advertising and the variations within each type Product advertisements focused on selling a good or service I Pioneering informationa used in introductory stage of PLC tell people what a product is what it can do and where it can be found key objective is to inform target market found to be interesting convincing and effective I Competitive persuasive promotes a specific brand s features and benefits objective is to persuade target market to select the firm s brand rather than that ofa competitor 0 Comparative advertising shows one brand s strengths relative to those of competitors attract attention and increase perceived quality of advertiser s brand need market research to support claims I Reminder used to reinforce previous knowledge of a product good for products that have achieved a wellrecognized position and are in the mature phase of their product life cycle 0 Reinforcement ad used to assure current users they have made the right choice Institutional advertisementsobjective is to build goodwill or an image for an organization rather than promote a specific good or service builds confidence in company name used to support the public relations plan or counter adverse publicity Advocacy advertisements state the position ofa company on an issue or organizations make a request related to a particular action or behavior Pioneering institutional advertisements used for announcements about what a company is what it can do or where it is located informs people about the company and its products Competitive institution advertisements promote the advantages of one product class over another and are used in markets where different product classes compete for the same buyers ie Got milk Ads Reminder institutional advertisements like product form they being that company s name to the attention of the target market again ie army ads reminding potential recruits about opportunities within the army L02 Describe the steps used to develop execute and evaluate an advertising program Identifying the target audience 0 All aspects of an advertising program arelikely to be influenced by the characteristics of the prospective consumer lifestyles attitudes and demographics Specifying advertising objectives ps advertisers with other choices in the promotion decision process such as selecting media and evaluatinga campaign 0 Factors such as product category brand and consumer involvement in the purchase decision may change in importance and possible the sequence of the stages of the hierarchy of effects Setting the advertising budget 0 Most alternatives represent substantial financial commitments and require a formal budgeting process Designing the advertisement 0 Usually focus on key benefits of the product that are important to a prospective buyer in making trial and adoption decisions depends on general form or appeal used in the ad and the actual words included in the ad 0 Message content make up of both informational and persuasive elements so intertwined it is difficult to tell them apart I Fear appeals I suggest to consumer that he or she can avoid some negative experience through the purchase and use of a product or service a change in behavior or a reduction in the use ofa product I advertiser must be sure the appeal is strong enough to get the audience s attention and concern but not so strong that it will lead them to turn out the message I Sex appeals I suggest to the audience that the product will increase the attractiveness of the user I found in almost every product category I sex appeals increase attention by helping advertising stand out in today s cluttered media environment I does not always lead to change in recall retention or purchase intent I content is most effective when there is a strong fit between the use of sex appeal in the ad and the image and positioning of the brand I Humorous appeals I Imply either directly or subtly that the product is more fun or exciting than competitor s offering I Found it many product categories I Advertiser s believe humor improves effectiveness of ads although studies suggest humor wears out quickly losing interest of consumers I Effectiveness may very across cultures if used in a global campaign 0 Creating the actual messages I Celebrity spokesperson image may change to be inconsistent with the image of company or brand I Complex process of translating the copywriter s ideas into actual advertisements is costly and time consuming designing quality artwork layout and production I Selecting the right media 0 Advertising media the means by which the message is communicated to the target audience 0 Choosing a medium and vehicle within that medium when choosing where to place advertisements companies have several media to choose from and a number ofalternatives or vehicles within each medium I advertisers use a mix of media forms and vehicles to maximize exposure of the message to the target audience while minimizing costs 0 Basic terms I Reach the number ofdifferent people or households exposed to an advertisement exact definition varies among alternative media I Objective is to maximize reach in their target market at lowest cost I Rating the percentage of households in a market that are tuned to a particular TV show or radio station I Fregueng the average number of times a person in the target audience is exposed to a message or advertisement I repeated exposure to advertisements causes consumers to respond more favorably to brand extensions I consumers often do not pay close attention to ads some of which contain large amounts of relatively complex information I advertisers want to reach same audience more than once greater frequency is generally viewed as desirable I Gross rating points GRPs reference number obtained when reach as of total market is multiplied by frequency I to obtain appropriate number of GRPS media planners must balance reach and frequency which is influenced by cost I Cost per thousand CPM refers to the cost of reaching 1000 individuals or households with the advertising message in a given medium M is roman numeral for 1000 L03 Explain the advantages and disadvantages of alternative advertising media Media alternatives selection criteria depends on media habits of target audience product attributes often necessitate certain media usage and cost I Television 0 Advantages communicates with sight sound and motion reaches large audience can target specific audiences o Disadvantages high cost to prepare and run ads short exposure time perishable message difficult to convey complex information ad length can restrict amount of information and emotion that can be conveyed high likelihood of wasted coverage to people outside of target market 0 Infomercials programlength advertisement that take an educational approach to communication with potential customers I Radio 0 Advantages segmented medium can target specific local audiences low cost ads places quickly uses sounds humor and intimacy effectively college students listen 1824 years 0 Disadvantages no visual element short exposure time perishable message difficult to convey complex information large number of media options today has reduced time spent listening to radio ease of customers tuning out by switching stations competes for attention with other activities driving working relaxing etc I Magazines 0 Advantages narrowly targets highly defined audiences highquality color long life ads can be clipped and saved can convey complex information specialized medium more trustworthy quotinspirationalquot and engaging than other media 0 Disadvantages long time needed to place ad relatively high cost competes for attention with other magazine features infrequency weekly at best often monthly or even longer consumer interests can be difficult to translate into a magazine theme I Newspapers 0 Advantages excellent coverage of local markets ads placed and changed quickly ads can be saved quick consumer response low cost daily publication allows for focus on specific current events 0 Disadvantages ads compete for attention with other newspaper features short lifespan poor color customers rarely save 0 trends in I dramatic decline of circulation and advertising revenue I Growth of online newspapers I Growth in new types of new organizations covering entertainment media living business politics etc I Yellow Pages 0 Advantages excellent coverage of geographic segments long use period available 24hours365 days inexpensive let people know where purchases can be made after other media have created awareness and demand 0 Disadvantages proliferation of competitive directories in many markets difficult to keep upto date limited accountability and ROI metrics many yellow pages customers migrating to the web I Internet 0 Advantages video and audio capabilities animation can capture attention or entertain can be interactive rich media and link to advertiser reaches younger consumers o Disadvantages animation and interactivity can require large files and more time to load effectiveness is still uncertain difficult to measure impact technical and administrative standards for formats are still evolving due to newness 0 Paid search display banner ads classified ads video I Outdoor 0 Advantages low cost local market focus high visibility opportunity for repeat exposures shown to increase purchase rates good supplemental reinforcement for wellknown products flexible o Disadvantages message must be short and simple low selectivity of audience criticized as traffic hazard good site depends on traffic patterns and sight lines o Billboards transit advertising I Direct Mail 0 Advantages high selectivity of audience can contain complex information and personalized messages highquality graphics 0 Disadvantages high cost per contact poor image asjunk mail I Other media nontraditional o Outof home advertising placebased media messages placed in locations that attract a specific target audience Scheduling the advertising I 3 factors to consider 0 Buyer turnover how often new buyers enter the market to buy the product 0 Purchase frequency the more frequent the purchases the less repetition is required 0 Forgetting rate speed with which buyers forget the brand if advertising is not seen I Approaches companies follow based on understanding of how market behaves 0 Continuous steady schedule when seasonal factors are unimportant advertising is run at a continuous or steady schedule throughout the year ie breakfast cereals O Flighting intermittent schedule periods of advertising are schedule between periods of no advertising to reflect seasonal demand ie snow skis and suntan lotion 0 Pulse burst schedule a flighting schedule is combined with a continuous schedule because of increases in demand heavy periods of promotion or introduction of a new product ie toys or automobiles Pretesting the advertising conducted before the advertisements are placed in any medium to determine whether the advertisement communicates the intended message or to select among alternate versions of the advertisement Portfolio tests used to test copy alternatives ad is placed in portfolio with several ads and stories and consumers are asked to read through portfolio and give impressions of the ads on several evaluative scales Jury tests involve showing the ad copy to a panel of consumers and having them rate how they liked it how much it drew their attention and how attractive they thought it was approach is similar to portfolio test in that consumer reactions are obtained however ad is not hidden in other ads Theatre tests most sophisticated consumer invited to view new television shows or movies with test commercials viewers register feelings about advertisements Carrying out advertising program responsibility can be handled in one of three ways Fullservice agency provides marker research selects media develops copy produces artwork coordinates integrated campaigns with all marketing efforts Limitedservice ageng provides specialization in one aspect of the creative process usually provides creative production work buys previously unpurchased media space nhouse agency provides range of services full or limited depending on company needs made up of company s own advertising staff Assessing the advertising program Posttesting the advertising done after it has been shown to the target market to determine whether it accomplished it s intended purpose 0 Aided recall after being shown an ad respondents are asked whether their previous exposure to it was through reading viewing or listening 0 Unaided recall questions without any prompting to determine whether they saw or heard advertising messages 0 Attitude tests respondents asked questions to measure changed in their attitudes after an advertising campaign 0 Inquiry tests additional products information samples or premiums are offered to an ad s readers or viewers ads generating the most inquiries are presumed to be the most effective 0 Sales tests studies such as controlled experiments consumer purchase tests most sophisticated allows manipulation of advertising variables Making needed changes L04 Discuss the strengths and weaknesses of consumer oriented and trade oriented sales promotions C a roriented sales consumer sales tools used to support a company s advertising and personal selling directed to ultimate consumers Coupons usually offer a discounted price to consumer often key element of IMC program 0 Objectives stimulate demand 0 Advantages encourage retailer support 0 Disadvantages consumers delay purchases Deals shortterm price reductions o Objectivesincrease trial retaliate against competitor s actions 0 Advantages reduce consumer risk makes competitor s introduction more difficult o Disadvantagesconsumers delay purchases reduce perceived product value Premiums merchandise offered free or at significant savings over its retail price price charged to consumer often just covers cost of the item 0 Objectives build goodwill encourages customers to return frequently or to use more of the product 0 Advantages consumers like free or reducedprice merchandise 0 Disadvantages consumers buy for premium not product deal prone or value seeking consumers I Contests consumers apply their skill or analytical or creative thinking to try and win a prize 0 Objectivesincrease customer purchases build business inventory 0 Advantages encourage customer involvement with product matches trend toward consumer generated content 0 Disadvantages requires creative or analytical thinking I Sweepstakes require participants to submit some kind of entry but are purely games ofchance requiring no analytical or creative effort by the consumer o Objectivesencourage present customers to buy more minimize brand switching 0 Advantages get customer to use product and store more often 0 Disadva ntages sales drop after sweepstakes I Samples offering the product free or at a greatly reduced price often used for new products 0 O jectives encourage new product trial 0 Advantages low risk for consumer puts product in consumer s hands 0 Disadvantages high cost for company I Loyalty programs acknowledges each purchase made by a consumer and offers a premium as purchases accumulate 0 Objectives encourage repeat purchases 0 Advantages help create loyalty o Disadvantages high cost for company I Pointofpurchase displays advertising signs which sometimes hold or display product located in heavy traffic areas near register or at end ofaisles 0 Objectives increase product trial provide instore support for other promotions 0 Advantages provides good product visibility do not rely on customer s ability to remember product 0 Disadvantages hard to get retailer to allocate hightraffic space I Rebates offers the return of money based on proof of purchase 0 Objectives encourage customers to purchase stop sales decline 0 Advantages effective at stimulating demand many buyers never take advantage 0 Disadvantages easily copied steals sales from future reduces perceived product value I Product replacements involve use of brandname product in movie television show video game or commercial for another product 0 Reverse product placement brings fictional products to the marketplace 0 Objectives introduce new products demonstrate product use 0 Advantages positive message in a noncommercial setting 0 Disadvantages little control over presentation of product Tradeoriented sales 39 trade sales tools used to support a company s advertising and personal selling directed to wholesalers retailers or distributors I Allowances or discounts o focused on maintaining or increasing inventory levels in channel of distribution 0 Overuse can lead to retailers changing their ordering patterns in the expectation of such offerings 0 Three common approaches I Merchandise allowance reimbursing a retailer for the extra instore support or special featuring of the brand percentage deduction from list case price ordered during promotional period not paid until proof of purchase seen Case allowance discount on each case ordered during a specific time period deducted from invoice I Finance allowance paying retailers for financing costs or financial losses associates with consumer sales promotions floor stock protection program freight allowances I Cooperative advertising programs by which a manufacturer pays a percentage of the retailer s local advertising expense for advertising the manufacturer s products I Training of distributors sales forces manufacturer helps L05 Recognize public relations as an important form of communication Publicity tools methods of obtaining nonpersonal presentation of an organization good or service without direct cost such as news releases news conferences and public service announcements Increasing value of promotion I Building strong relationships I Selfregulation o Facilitates the development of new promotional methods 0 Minimizes regulatory constraints and restrictions 0 Helps consumers gain confidence in the communication efforts used to influence their purchases CH 20 PERSONAL SELLING AND SALES MANAGEMENT L01 Discuss the nature and scope of personal selling and sales management in marketing Personal selling involves twoway flow of communication between a buyer and seller often in a facetoface encounter designed to influence a person s or group s purchase decision Advances in telecommunications allow personal selling to also take place over the phone through video conferencing and internetenabled links between buyers and sellers although it still remains highly humanintensive Sales management involves planning the selling program and implementing and evaluating the personal selling effort of the firm Tasks include setting objectives organizing the sales force recruiting selecting training and compensating sales people and evaluating the performance of individual sales people Personal selling serves 3 major roles in marketing efforts I Sales people are critical link between the firm and its customers I Sales people are the company in the consumer s eyes I May play dominant role in a firm s marketing program push marketing Sales people create value by I Being close to customer can identify creative solutions to problems I By easing the customer buying process I By sales people who follow through after the sale Relationship selling the practice of building ties to customer s based on a salesperson s attention and commitment to customer needs over time involves mutual respect and trust focus on longterm customers not one time sale Partnership selling enterprise selling buyers and sellers combine their expertise and resources to create customized solutions commit tojoint planning and share customer competitive and company information for their mutual benefit and ultimately the consumer relies on crossfunctional business specialists L02 Identify the different types of personal selling I Order taker processes routine orders or reorders for products that were already sold by the company primary responsibility is to preserve an ongoing relationship with existing customers and maintain sales 0 Outside order takers visit customers and replenish inventory stocks of resellers such as retailers or wholesalers often provide assistance in arranging displays 0 Inside order takers order clerks or sales clerks typically answer simple questions take orders and complete transactions with customers I Inbound telemarketing the use of a tollfree telephone number that customers can call to obtain information about products or services and make purchases I Order getter sells in a conventional sense and identifies prospective customers provides customers with information persuades customers to buy closes sales and follows up on customer s use of product or service involves high creativity and customer empathy typically required for selling complex or technical products with many options 0 Outbound telemarketing is the practice of using the telephone rather than personal visits to contact current and prospective customers Customer sales support personnel segment the selling efforts of order getters by performing a variety of services 0 Missionary salespeople do not directly solicit orders but rather concentrate on performing promotional activities introducing new products 0 Sales engineer salesperson who specializes in identifying analyzing and solving customer problems and brings in knowhow and technical expertise to the selling situation but does not actually sell products or services 0 Team selling cross functional the practice of using aan entire team of professionals in selling and servicing major customers used when specialized knowledge is needed to satisfy the different interests of individuals in a customer s buying center 0 Conference selling a salesperson and other company resource people meet with buyers to discuss problems and opportunities 0 Seminar selling a company team conducts an educational program for a customer s technical staff describing the stateoftheart developments L03 Explain the stages in the personal selling process Personal selling process Prospecting the search for and qualification of potential customers 0 Generated through advertising referrals and cold canvasing or cold calling sales person contacts through a directory 0 Lead the name of the person who may be a possible customer 0 Prospect a customer who wants or needs the product 0 Qualified prospect want to buy can afford to buy it and is the decision maker Preapproach involves obtaining further information on the prospect and deciding on the best method of approach 0 Important in situations where customs dictate protocol 0 Info sources include personal observation other customers and own salespeople Approach involves the initial meeting between the salesperson and prospect objectives are to gain the prospect s attention stimulate interest and build the foundation for sales presentation itself and the basis for a working relationship 0 First impression is critical 0 Gain attention and interest through reference to common acquaintances a referral or product demonstration Presentation core of order taking process objective to convert a prospect into a customer by creating a desire for the product or service 0 Involving the customer in the product or service through attention to needs is critical 0 Important to deal professionally and ethically with prospect skepticism indifference or objections o Stimulusresponse presentation assumes that given the appropriate stimulus by a salesperson the prospect will buy tries one appeal after another hoping to hit the right one 0 Formula selling presentation format based on the view that a presentation consists of information that must be provided in an accurate thorough and stepbystep manner to inform the prospect treats every prospect the same I Advantageous when differences between prospects are unknown or with novice salespeople who are less knowledgeable about the product and selling process than experienced salespeople I Lacks flexibility and spontaneity does not provide feedback o Needsatisfaction presentation emphasizes the probing and listening by the salesperson to identify the needs and interests of prospective buyers presentation then tailored to highlight product benefits valued by prospect I Adaptive selling involves adjusting the presentation to fit the selling situation such as knowing when to offer solutions and when to ask for more information I Consultative selling focuses on problem identification where the salesperson serves as an expert on problem recognition and resolution problem solutions are not simply a matter of choosing from an array of existing products or services rather novel solutions often arise businesstobusiness 0 Handling objections excuses for not making a purchase commitment or decision I Acknowledge and convert the objection using objection as reason for buying I Postpone objection will be dealt with later in the presentation I Agree and neutralize agrees but then shows it s not important I Accept the objection for valid objections probe for reason behind objections and attempt to stimulate further discussion on objection Denial objection is based on misinformation and is clearly untrue Ignore the objection used when objection appears to be stalling mechanism and is not important to the project I Close the selling process involves obtaining a purchase commitment salesperson must determine id prospect is ready to buy Salesperson asks for purchase 0 Trial close involves asking the prospect to make a decision on some aspect of the purchase 0 Assumptive close entails asking the prospect to consider choices concerning delivery warranty or financing terms under the assumption that a sale has been finalized o Urgency close used to commit a prospect quickly by making reference to the timeliness of purchase I Followup includes making certain the customer s purchase has been properly delivered and installed and difficulties experienced with the use of the item are addressed 0 Resolve any problems faced by the consumer to assure customer satisfaction and future sales possibilities L04 Describe the major functions of sales management I Sales plan formulation setting direction 0 Sales plan a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed 0 Setting objectives specifies what is to be achieved I Output related dollar or unit sales volume number of new customers added or profit I Input related number of sales and selling expenses I Behaviorally related product knowledge customer service satisfaction ratings selling and communication skills I Should be precise measurable specify time period I Serve as performance standards for the evaluation of the sales force 0 Organizing the sales force I Should company use its own sales force or should it use independent agents such as manufacturer s representatives I economic factors form of breakeven analysis setting costs against sales amount I behavioral factors control flexibility effort availability of independent and company salespeople I Should they be organized geographically customer type or product or service I Organization should reflect marketing strategy of the firm I Geographical sales organization simplest structure divided into regions then districts or territories salespeople assigned to each district with defined geographical boundaries o minimizes travel time expenses and duplication of selling effort 0 Unsuitable if products or customers require specialized knowledge I Customer sales organization different sales force calls on each separate type of buyer or marketing channel 0 Specialized support and knowledge provided to buyers 0 Higher administrative costs some duplication of selling effort because several sales forces used to represent same products 0 Key account management practice of using team selling to focus on important customers so as it build mutually beneficial longterm cooperative relationships results in quotcustomer specialists I Product sales organization when specific knowledge is required to sell certain types of products 0 Salespeople develop expertise with technical characteristics applications and selling methods 0 High administrative costs duplication of efforts as two company salespeople may call on the same customer I How many company salespeople should be employed I Consider number ofaccounts served frequency of calls on accounts length of the average sales call and the amount of time a salesperson can devote to selling NCCFCL I W formulabased NS AST NS number of salespeople NC number of customers CF call frequency necessary to service a customer each year CL length of average call 0 AST average amount of selling time available per year 0 Developing account management policies I Account management policies specify whom salespeople should contact what kinds of selling and customer service activities should be engaged in and how these activities should be carried out I Sales plan implementation putting the plan into action 0 Sales force recruitment and selection entails finding people who match the type of sales position required by the firm I Job analysis the study of a particular sales position including how the job is to be performed and the tasks that make up the job Job description a written document that describesjob relationships and requirements that characterize each sales position explains I To whom the salesperson reports I How a salesperson interacts with other company personnel I The customers to be called on I Specific activities to be carried out I The physical and mental demands of thejob I Types of products and services to be sold Statement ofjob qualifications includes aptitudes knowledge skills and a variety of behavioral characteristics considered necessary to perform the job successfully qualifications for ordergetters mirror expectations for buyers and include I Imagination and problem solving ability I Strong work ethic I Honesty Intimate product knowledge I Effective communication and listening skills OOOO I Attentiveness reflected in responsiveness to buyer needs and customer loyalty and followup I Firms use personal interviews reference checks background information on application forms I Emotional intelligence the ability to understand one s own emotions and the emotions of people with whom one interacts on a daily basis I Qualities are important for adaptive selling I Difference for effective and ineffective ordergetting salespeople 0 Sales force training ongoing process covers much more than selling practices expensive to train new people I Onthejob and individual instruction by experience people are most common I Other forms formal classes seminars taught by sales trainers computerbased training 0 Sales force motivation and compensation I Ways to produce motivated workers I A clearjob description I Effective management practices I A personal need for achievement I Proper compensation incentives or rewards I Straight salary compensation plan salesperson is paid a fixed fee per week month or year I Easy to administer gives management large measure of control over effort allocation I Provides little incentive to expand sales volume I Used when salespeople engage in many nonselling activities I Straight commission compensation plan salesperson s earnings are directly tied to the sales or profit generated I Provides maximum selling incentive I Can detract salespeople from providing customer service I Common when nonselling activities are minimal I Combination compensation plan contains a specified salary plus a commission on sales or profit generated I Most preferred by salespeople I Attempts to build on the advantages of salary and commission plans while reducing potential shortcomings of each I Used by majority I Nonmonetary rewards trips honor societies distinguished salesperson awards letters of commedation I Sales force evaluation measuring results 0 Quantitative assessment based on objectives set forth in the sales plan Measures actual activities performed I Sales guota contains specific goals assigned to a salesperson sales team branch sales office or sales district for a stated time period 0 Behavioral evaluation assessments of a person s attitude attention to customers product knowledge selling and communication skills appearance and professional demeanor Sometimes subjective Sales force automation SFA the use of these technologies to make the sales function more effective and efficient applies to wide range of activities including each stage of personal selling process and sales force management I Sales force technology salespeople supplied with laptops to process orders plan time allocations forecast sales and communicate with personnel and customers provide interactive presentations I Sales force communication facsimile electronic mail voice mail allows people to exchange data text and voice transmissions internet mobility CH 8 MARKETING RESEARCH FROM CUSTOMER INSIGHTS TO ACTIONS L01 Identify the reason for conducting marketing research Marketing research the process of defining a marketing problem and opportunity systematically collecting and analyzing information and recommending actions used to reduce risk and improve marketing decisions Good market research is challenging I Would customers really know if they are likely to buy a product they ve never thought about before I Would a customer honestly reveal answers I Would actual purchase behavior match stated interests and intentions L02 Describe the five step marketing research approach that leads to marketing actions Decision a conscious choice from among two are more alternatives Decision making the act of consciously choosing from alternatives managers and researchers use structured formal approach STEP 1 Define the problem I Set research objectives specific measureable goals the decision maker seeks to achieve in conducting the marketing research 0 Exploratory research provides ideas about a relatively vague problem 0 Descriptive resea rch involves trying to find frequency that something occurs or the extent of a relationship between two factors 0 Causal research most sophisticated tried to determine the extent to which the change in one factor changes another o If objectives are too broad the problem may not be researchable o If too narrow value of research may be lessened I Identify possible marketing actions 0 Measures of success criteria or standards used in evaluating proposed solutions to the problem different research options lead to different marketing actions based on measures of success STEP 2 Develop the research plan I Specify constraints 0 Constraints the restrictions placed on potential solutions to a problem I Identify data needed for marketing actions 0 Focus on collecting data helpful to make clear choice I Determine how to collect data 0 Concepts ideas about products or services 0 Methods approaches that can be used to collect data to solve all or part of a problem L03 Explain how marketing uses primary and secondary data STEP 3 Collect relevant information I E the facts and figures related to the problem divided in to primary and secondary I Secondary data facts and figures that have already been recorded before the project at hand 0 Internal often a starting point results in huge time and cost savings includes sales breakdowns as well as customer inquiries and complaints External published data from outside the organization ie census bureau used to identify trends of ultimate consumers O Syndicated panel market research companies will pay households and businesses to record all their purchases 0 Advantages tremendous time savings low cost greater level ofdetail o Disadvantages may be out of date may not be specific to project L04 Discuss the uses of observations questionnaires panels experiments and newer data collection methods I Primam data facts and figures that are newly collected for the project 0 Observational data watching people facts and figures obtained by watching either mechanically or in person how people actually behave I Mechanical methods electronic meters measuring behavior Personal methods useful and flexible but can be costly and unreliable when different observers report different conclusions when watching the same event can reveal what but not why I Ethnographic approach specialized observational approach in which trained observers seek to discover subtle behavioral and emotional reactions as consumers encounter products in their quotnatural use environment such as their home or car I Neuromarketing methods merge of the study of the brain with marketing 0 Questionnaire data asking people facts and figures obtained by asking people about their attitudes awareness intentions and behaviors I idea generation methods coming up with ideas I individual interview involves a single researcher asking questions of one respondent able to probe for additional ideas with followup questions can be expensive I depth interview researchers ask lengthy freeflowing kinds of questions to probe for underlying ideas and feelings I focus groups informational sessions of 610 past present or prospective customers in which a discussion leader or moderator asks their opinions about the firm s and its competitor s products how they use the products and special needs they have that these products don t address able to hear and watch reactions uncover ideas hidden in individual interviews I idea evaluation methods testing an idea to help marketing managers recommend actions I often involve conventional questionnaires using personal mail telephone fax or online surveys I mall intercept interview personal interviews of consumers visiting shopping centers reduce cost of personal visits provides flexibility to show visual cues may not represent targeted consumers causing bias I design precision questions that get clear unambiguous answers very efficiently OO O 0 define precisely so that all respondents interpret the same question similarly openended question allows respondents to express opinions ideas or behaviors in their own words without being forced to choose among alternatives that have been predetermined by a marketing researc er closedend or fixed alternative questions require respondents to select one or more response options from a set of predetermined choices dichotomous question simplest form choose quotyesquot or quotnoquot semantic differential scale a scale in which opposite ends have one or two word adjectives that have opposite meanings likert scale the respondent indicates the extent to which he or she agrees or disagrees with a statement typical problems I leading question I ambiguous question I unanswerable question I two in one questions I nonmutually exclusive questions 0 Other sources of primary data Social networks consumers share opinions about the offerings they use or want on these sites information collected transcribed tabulated and analyzed to see signals to trends in the marketplace that can lead to marketing action I Panels and experiments I Panel a sample of consumers or stores from which researchers take a series of measurements 0 Need to recruit new members continuously to replace dropouts Experiment involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect an example of causal research 0 Drivers independent variables of interest 0 Test markets offer a product for sale in a small geographic area to help evaluate potential marketing actions 0 Outside factors can distort results and affect dependent variable L05 Explain how information technology and data mining lead to marketing actions I Information technology and data mining strategies for dealing with complex changing views of the competition the market and the consumer task is to convert data ocean into useful information that leads to marketing actions Information technology involves operating computer networks that can store and process data Marketer queries the databases in the information system with marketing questions that go through statistical models that analyze relationships between data models select and link pertinent data in data warehouse Data warehouse ocean of data is collected and stored Sensitivity analysis queries database with quotwhat if questions to determine effects of hypothetical changes in drivers I Data mining the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions Success in data mining depends on the judgments of marketing managers and researchers in how to select analyze and interpret the information STEP 4 Develop findings Analyze the data explain what s going on Present the findings should be clear and understandable from the way the data are presented managers are responsible for actions STEP 5 Take marketing actions Make action recommendations convert the market research findings into specific marketing recommendations with a clear objective Implement the action recommendations Evaluate the results 0 Evaluating the decision itself involves monitoring the marketplace to determine if action is necessary in the future 0 Evaluating the decision process used was the marketing research and analysis effective Could it be improved for similar situations in the future L06 Describe three approaches to developing a company s sales forecast Sales forecast the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts I Judgments of the decision maker 0 Direct forecast involves estimating the value to be forecast without any intervening steps 0 Lost horse forecast involves starting with the last known value of the item being forecast listing factors that could affect the forecast assessing whether they have a positive or negative impact and making the final forecast I Surveys of knowledgeable groups ask people who are likely to know something about future sales


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