New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here


by: Reina Davis


Reina Davis
GPA 3.71


Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Class Notes
25 ?




Popular in Course

Popular in Marketing

This 44 page Class Notes was uploaded by Reina Davis on Tuesday October 13, 2015. The Class Notes belongs to MKT 3401 at Louisiana State University taught by Staff in Fall. Since its upload, it has received 14 views. For similar materials see /class/222531/mkt-3401-louisiana-state-university in Marketing at Louisiana State University.

Similar to MKT 3401 at LSU




Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/13/15
Chapter 16 Integrated Marketing Communications 0 Marketing cannot be accomplished in isolation must permeate the entire organization 0 The role of promotion 0 Promotional strategy I A plan for the optimal use of the elements ofpromotion 0 Advertising 0 Public relations 0 Sales promotion 0 Personal selling 0 The role of promotion in the marketing mix 0 Combine the elements of the promotional strategy into a coordinated plan 0 Must show customers that their product has a competitive advantage 0 Competitive advantage 0 Definition I A set of unique features ofa company and its products that are perceived as superior over the competition High product quality Rapid delivery Low prices Excellent service Unique features 0 The promotional mix 0 Combination ofpromotion tools used to reach the target market and fulfill the organization s goals I Advertising 0 Most commonly distributed by traditional media though increasingly through nontraditional media such as web sites email and blogs Media 0 Tv radio newspapers magazines books billboards New media 0 Internet 0 Banner ads 0 Viral marketing 00000 0 Email 0 Interactive video 0 Advantages 0 Reach a large number ofpeople 0 Low cost per contact 0 Can be microtargeted Disadvantages 0 Total cost is high 0 National reach is expensive for small companies I Public relations Helps an organization communicate with customers suppliers stockholders government officials employees and the community Function 0 Maintain a positive image 0 Educate the public about the company s objectives 0 Introduce new products 0 Support the sales effort 0 Generate favorable publicity I Sales promotion Marketing activities other than personal selling advertising and public relations that stimulate consumer buying and dealer effectiveness Generally a short run tool to increase demand Used to improve other aspects of the promotion mix Can be aimed at 0 End consumers 0 Trade customers 0 Company s employees Tools 0 Free samples contests premiums trade shows vacation giveaways coupons I Personal selling Communication Planned presentation to one or more prospective buyers for the purpose ofmaking a sale Buyer 0 Minimize cost and assure a quality product Seller 0 Maximize profits and revenue Traditional selling 0 Attempts to persuade the buyer into a specific point ofview win lose outcome Relationship selling 0 Long term relationships create a win win outcome Increasingly dependent on the internet to attract potential buyers seeking information o The process by which meanings are exchanged or shared through a common set of symbols I Company must communicate a selling message to potential customers 0 Marketing communication 0 Categories I Interpersonalcommunication 0 Direct face to face of 2 or more people I Mass communication 0 Communicating a concept or message to larger audiences usually through a mass medium such as tv or newspaper o Roles as sender I Inform persuade remind o Roles as receivers I Develop messages adapt messages spot new communication opportunities 0 Marketing communication is a 2 way process 0 The communication process 0 Sender to encoding to message channel to decoding to receiver noise interferes in middle 0 Characteristics of advertising 0 Indirect and impersonal 0 Low communication control 0 Little feedback 0 Delayed feedback 0 One way message ow 0 Message content controlled 0 Sponsor identified 0 Fast at reaching large audiences 0 Same message to all audiences 0 Characteristics of public relations 0 Usually indirect and impersonal 0 Moderate to low communication control 0 Little feedback delayed 0 One way message ow 0 No content control 0 No sponsor id 0 Fast at reaching large audiences 0 Usually no direct control of message exibility 0 Characteristics of sales promotion 0 Indirect and impersonal 0 Moderate to low com Control 0 Feed back speed varies 0 Mostly one way message ow 0 Message content controlled 0 Sponsor id 0 Fast at reaching large audience 0 Same message to varied target 0 Characteristics ofpersonal selling 0 Direct face to face 0 High com Control 0 Much feedback immediate 0 Two way message ow 0 Message content control 0 Sponsor id 0 Slow at reaching large audience 0 Tailored to prospect message exibility Web 20 0 Blogs podcastng vodcasts social networks Blogging 0 Corporate blogs I Sponsored by a company or one ofits brands and maintained by one or more of the company s employees 0 Non corporate blogs I Independent and not associated with the marketing efforts of any particular company or brand Goals and tasks of promotion 0 Informing I In early growth stage and introduction 0 Reminding I In maturity stage 0 Persuading I In growth maturity stage Informative promotion 0 Increase awareness 0 Explain how product works 0 Suggest new uses 0 Build company image Persuasive promotion 0 Encourage brand switching 0 Change customers perceptions ofproduct attributes 0 In uence immediate buying decision 0 Persuade customers to call Reminder promotion 0 Remind customers that product my be needed 0 Remind customers where to buy a product 0 Maintain customer awareness The AIDA concept 0 Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message 0 quotAttention interest desire action 0 Cognitive thinking to affective feeling to Conative doing Factors affecting the choice ofpromotional mix 0 Nature of the product 0 Stage in the PLC I Introduction stage 0 Light advertising 0 Then heavy advertising and public relations sales promotion for trial I Growth stage 0 Advertising public relations brand loyalty personal selling I Maturity stage 0 Ads decrease promotion personal selling reminder and persuasive I Decline stage 0 Ads and public relations decrease limited sales promotion personal selling for distribution 0 Target market factors I Advertising I Sales promotion I Less personal selling I For 0 Widely scattered market 0 Informed buyers 0 Brand loyal repeat purchasers 0 Type of buying decision I Routine 0 Advertising 0 Sales promotion I Neither routine nor complex 0 Advertising 0 Public relations I Complex 0 Personal selling 0 Print advertising 0 Promotion funds I Trade offs with funds available I Number ofpeople in target market I Quality of communication needed I Relative costs ofpromotional elements 0 Push or pull strategy I Push strategy 0 Use of aggressive personal selling and trade advertising to convince a wholesaler to carry and sell their merchandise I Pull strategy 0 Stimulates consumer demand to obtain product distribution I Company typically uses a miX ofpush pull 0 Integrated marketing communications o The careful coordination of all promotional messages to assure the consistency ofmessages at every contact point where a company meets the consumer o Popularity growth I Proliferation of thousands ofmedia choices I Fragmentation of the mass market I Slash of advertising spending in favor ofpromotional techniques that generate immediate response Chapter 17 Advertising and public relations The effects of advertising 0 Us advertising are expected to decline in difficult economic times 0 In recent years 30 companies spent more than 1 billion each Advertising and market share 0 New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share I Diminishing returns set in beyond a certain level of spending I New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits The effects of advertising on consumers 0 Average US citizen exposed to hundreds of ads daily 0 Advertising may change a consumer s negative attitude toward a product or reinforce a positive attitude 0 Advertising can affect consumer ranking ofa brand s attributes Major types of advertising 0 Institutional advertising I Enhances a company s image rather than promotes a particular product 0 Corporate identity 0 Advocacy advertising 0 Product advertising I Touts the benefits ofa specific good or service 0 Pioneering o Stimulates primary demand for new product of category 0 Used in the PLC introductory stage 0 Competitive o In uences demand for brand in the growth phase of the PLC 0 Often uses emotional appeal 0 Comparative o Compares 2 or more competing brands product attributes 0 Used if growth is sluggish or if competition is strong Advertising campaign 0 A series of related advertisements focusing on a common theme slogan and set of advertising appeals Steps in decision making in advertising 0 Determine the advertising objectives 0 Make creative decisions make media decisions 0 Evaluate the campaign Setting objectives the dagmar approach 0 defining advertising goals for measured advertising results 0 Define target audience 0 Define desired percentage change 0 Define the time frame for the change Creative decisions 0 Identify product benefits I Sell the benefits not the attributes I What s in it for me 0 Develop and evaluate advertising appeals o Execute the message 0 Evaluate the campaign s effectiveness Advertising appeals 0 Profit I Product saves makes or protects money 0 Health I Appeals to body conscious or health seekers 0 Love or romance I Used in selling cosmetics and perfumes 0 Fear I Social embarrassment old age losing health 0 Admiration I Reason for use of celebrity spokespeople 0 Convenience I Used for fast foods and microwave foods 0 Fun and pleasure I Key to advertising vacations beer parks 0 Vanity and egotism I Used for expensive or conspicuous items 0 Environmentalconsciousness I Centers around environmental protection Unique selling proposition 0 A desirable exclusive and believable advertising appeal selected as the theme for a campaign 0 Slogan Media decisions in advertising 0 Monitored media Newspapers magazines yellow pages internet radio television 0 Unmonitored media N ewsp ap ers o Advan Direct mail trade exhibits cooperative advertising brochures coupons catalogs special events tages Geographic selectivity Short term advertiser commitments News value and immediacy Year round readership High individual market coverage Coop and local tie in availability Short lead time o Disadvantages Limited demographic selectivity Limited color Low pass along rate May be expensive Cooperative advertising 0 An arr angement in which the manufacturer and the retailer split the costs of advertising the manufacturer s brand Magazines 0 Advan tages Good reproduction Demographic selectivity Regional local selectivity Long advertising life High pass along rate 0 Disadvantages Long term advertiser commitments Slow audience build up Limited demonstration capabilities Long lead time 0 Ex autos apparel computers cigs Radio 0 Advan tages Low cost Immediacy ofmessage Short notice scheduling No seasonal audience change Highly portable Short term advertiser Entertainment carryover o Disadvantages I No visual treatment I Short advertising life I High frequency to generate comprehension and retention I Background distractions I Commercial clutter Television 0 Advantages I Wide diverse audience I Low cost per thousand I Creative opportunities for demonstration I Immediacy ofmessages I Entertainment carryover I Demographic selectivity with cable 0 Disadvantages I Short life ofmessage I Consumer skepticism I High campaign cost I Little demographic selectivity with stations I Long term advertiser commitments I Long lead times for production I Commercial clutter Outdoor media 0 Advantages I Repetition I Moderate cost I Flexibility I Geographic selectivity o Disadvantages I Short message I Lack of demographic selectivity I High noise level Internet 0 Advantages I Fast growing I Ability to reach narrow target audience I Short lead time I Moderate cost 0 Disadvantages I Difficult to measure ad effectiveness and ROI I Ad exposure relies on click through from banner ads I Not all consumers have access to internet Alternative media 0 Shopping carts screen savers dvd s ads in movies video game ads Qualitative factors in media selection 0 Attention to the commercial and the program 0 Program liking 0 Lack of distractions o Other audience behaviors 0 Media scheduling 0 Continuous media schedule I Advertising is run steadily throughout the period 0 Tide detergent o Flighted media schedule I Advertising is run heavily every other month or every two weeks 0 Movie ads on tv on Thursday night 0 Pulsing media schedule I Advertising combines continuous scheduling with ighting 0 Back to school sale ads 0 Seasonal media schedule I Advertising is run only when the product is likely to be used 0 Cold medicine sun tan lotion 0 Public relations 0 The element in the promotional miX that I Evaluates public attitudes I Identifies issues ofpublic concern I Executes programs to gain public acceptance 0 Functions I Press relations product publicity corporate communication public affairs lobbying employee and investor relations crisis management 0 Tools I New product publicity product placement consumer education event sponsorship issue sponsorship internet web sites 0 Managing unfavorable publicity 0 Crisis management I A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event Chapter 18 Sales Promotion and Personal Selling 0 Sales promotion 0 Marketing communication activities other than advertising personal selling and public relations in which a shortterm incentive motivates a purchase 0 Used to increase the effectiveness of other promotional efforts 0 Advertising 0 Reason to buy 0 Sales promotion 0 Incentive to buy 0 Objectives of sales promotion 0 Loyal customers I Reinforce behavior I Increase consumption I Change purchase timing 0 Competitor s customers I Breakloyalty I Persuade to switch 0 Brand switchers I Persuade to buy your brand more often 0 Price buyers I Appeal with low prices I Supply added value 0 Tools for consumer sales promotion 0 Coupons and rebates I Coupon 0 A certificate that entitles consumers to an immediate price reduction 0 Encourage trial and repurchase I Rebate 0 A cash refund given for the purchase ofa product during a specified period 0 Premiums I An eXtra item offered to the consumer usually in exchange for some proof ofpurchase o Loyalty marketing programs I A promotional program designed to build long term mutually beneficial relationships between a company and key customers 0 Frequent buyer program I A loyalty program in which loyal consumers are rewarded for making multiple purchases 0 Contests and sweepstakes I Contests 0 Promotions that require skill or ability to compete for prizes I Sweep stakes o Promotions that depend on chance of luck with free participation 0 Sampling I A promotional program that allows the consumer the opportunity to try a product or service for free I Methods of sampling 0 Direct mail 0 Door to door delivery 0 Packaging with another product 0 Retail store demonstration 0 Point ofpurchase promotion I Include shelf talkers ads on carts end aisle displays I Build traffic I Advertise the product I Induce impulse buying 0 Online sales promotion 0 Effective types I Free merchandise I Sweep stakes I Free shipping with purchases I Coupons 0 Internet growth and popularity has greatly increased online sales promotion 0 Trade sales promotion push a product in attempt to in uence supply 0 Trade allowances I A price reduction offered by manufacturers to intermediaries such as wholesalers and retailers 0 Push money I Money offered to channel intermediaries to encourage them to push products that is to encourage other members of the channel to sell the products 0 Training 0 Free merchandise 0 Store demonstration o Conventions and trade shows 0 Benefits of trade promotions 0 Help manufacturers gain new distribution 0 Obtain wholesaler and retailer support for consumer sales promotions 0 Build or reduce dealer inventories 0 Improve trade relations 0 Personal selling 0 Direct communication between sales representative and prospective buyers in an attempt to in uence each other in a purchase situation 0 More important if I Product has high value I Product is custom made I There are few customers I Product is technically compleX I Customer are concentrated 0 Advertising and sales promotion more important it I Product has low value Product is standardized There are many customers Product is simple to understand Customers are geographically dispersed 0 Advantages ofpersonal selling Detailed explanation or demonstration Variable sales message Directed to qualified prospects Controllable adjustable selling costs More effective than other promotion in obtaining sale and gaining customer satisfaction Relationship selling consultative o A sales practice that involves building maintaining and enhancing interactions with customers in order to develop long term satisfaction through mutually beneficial partnerships Aspects of 0 Traditional selling Sell products Focus on closing sales Limited sales planning Discuss product Assess product specific needs Lone wolf approach Pricingproduct focus Short term sales follow up 0 Relationship selling Sell advice assistance counsel Focus on customer s bottom line Sales planning is top priority Build problem solving environment Conduct discovery in scope of operations Team approach Profit impact and strategic benefit focus Long term sales approach Steps in the selling process and time traditional then relationship 0 Generate leads High Low 0 Qualify leads Recognized need Buying power Receptivity and accessibility Low High 0 Probe customer needs Low High 0 Develop solutions 0 Handl Low High e objections View objections as requests for information Anticipate specific objections Investigate with the customer Be aware of competitors products Stay calm Use the objection to close the sale High Low 0 Close the sale Look for customer signals Keep an open mind Negotiate Tailor to each market High Low 0 Follow up Cold calling Low High 0 A form oflead generation in which the salesperson approaches potential buyers without prior knowledge of the prospects needs or financial status Needs assessment 0 A determination of the customer s specific needs and wants and the range of options a customer has for satisfying them Sales person must know everything about 0 Product or service 0 Customers 0 Competition 0 Industry Developing and proposing solutions 0 Sales presentation Powerful presentations Be well prepared Use eye contact Ask open ended questions Be poised Use hand gestures Focus on the customers needs Incorporate visual elements Know how to operate the Av equipment Make sure the equipment works 0 Practice 0 Sales proposal Impact of technology on personal selling 0 Cell phones Laptops Pagers Email Electronic organizers Internet 00000 Chapter 19 Pricing concepts The importance ofprice 0 Price is revenue to the seller 0 Price is the cost of something to the consumer 0 Price allocates resources in a free market economy 0 Price is that which is given up in an exchange to acquire a good or service 0 Can be time or money Revenue 0 The price charged to customers multiplied by the number of units sold Profit 0 Revenue minus expenses Trends in uencing price 0 Flood ofnew products 0 Increased availability of bargain priced private and generic brands 0 Price cutting as a strategy to maintain or regain market share 0 Internet used for comparison shopping Pricing objectives 0 Profit oriented I Profit maximization 0 Setting prices so that total revenue is as large as possible relative to total costs I Satisfactory profits I Target return on investment 0 Net profit after taxes divided by total assets 0 Sales oriented I Market share 0 A company s product sales as a percentage of total sales for that industry I Sales maximization 0 Short term objective to maximize sales 0 Ignores profits competition and the marketing environment 0 May be used to sell off excess inventory 0 Status quo I Maintain existing prices I Meet competition s prices 0 Pricing during a recession 0 Increase advertising when your competitors are cutting back to improve market share and return on investment 0 Motivate distributers to stock your full product line 0 Offer temporary price promotions 0 Know your cost structure to ensure than any cuts or consolidations will save money with minimum customer impact 0 The demand determinant ofprice 0 Demand I The quantity ofa product that will be sold in the market at various prices for a specified period 0 Supply I The quantity ofa product that will be offered to the market by a supplier at various prices for a specified period 0 Price equilibrium I The price at which demand and supply are equal 0 Elasticity of demand I Consumers responsiveness or sensitivity to changes in price I Elastic demand 0 Consumers buy more or less ofa product when the price changes I Inelastic demand 0 An increase or decrease will not significantly affect demand I Unitary elasticity 0 An increase in sales exactly offsets a decrease in prices and revenue is unchanged 0 Factors that affect elasticity of demand 0 Availability of substitutes 0 Price relative to purchasing power 0 Product durability o A product s other uses 0 Rate of in ation 0 Yield management systems o A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity 0 Examples I Discounting early purchases I Limiting early sales at discounted prices I Overbooking capacity 0 Allows a company to I Stimulate demand when demand is low I Maximize profits when demand is high 0 The cost determinant ofprice 0 Variable cost I Varies with changes in level of output 0 Fixed cost I Doesn t change as level of output changes 0 Methods used to set prices I Markup pricing The cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for I Keystoning The practice of marking up prices by 100 or doubling the cost I Profit maximization pricing A method of setting prices that occurs when marginal revenue equals marginal cost Marginal revenue 0 The extra revenue associated with selling an extra unit of output or the change in total revenue with a one unit change in output I Break even pricing Where no profits are earned total costs equal total revenue 0 Other determinants ofprice 0 Stages of the product life cycle I Price increases til maturity then declines 0 Competition I High prices may induce firms to enter the market I Competition can lead to price wars I Global competition may force firms to lower prices 0 Distribution strategy I Manufacturers Offer a larger profit margin or trade allowance Use exclusive distribution Franchising Avoid business with price cutting discounters Develop brand loyalty I Wholesalers retailers 0 Sell against the brand 0 Stocking well known branded items at high prices in order to sell store brands at discounted prices 0 Buy gray market goods 0 Promotion strategy 0 Perceived quality 0 The impact of the internet 0 Product selection 0 Second opinions from expert sites 0 Shopping bots 0 Internet auctions o Prestige pricing 0 Charging a high price to help promote a high quality image 0 Dimensions of quality 0 Ease of use Versatility Durability Serviceability Performance Prestige OOOOO Chapter 20 Setting the Right Price 0 How to set a price on a product or service 0 Establish pricing goals I Profit oriented I Sales oriented I Status quo 0 Estimate demand costs and profits 0 Choose a price strategy I Price strategy 0 A basic long term pricing framework which establishes the initial price for a product and the intended direction for price movements over the product life cycle 0 Fine tune with pricing tactics 0 Price strategies 0 Price skimming I A firm charges a high introductory price often couple with heavy promotion I Successful when 0 Inelastic demand 0 Unique advantages 0 Legal protections ofproduct o Technologicalbreakthrough 0 Blocked entry to competitors 0 Penetration pricing I A firm charges a relatively low price for a product initially as a way to reach the mass market I Advantages o Discourages or blocks competition from market entry 0 Boosts sales and provides large profit increases 0 Can justify production expansion I Disadvantages o Requires gear up for mass production 0 Selling large volumes at low prices 0 Strategy to gain market share may fail 0 Status quo pricing I Charging a price identical to or very close to the competition s price I Advantages o Simplicity o Safest route to long term survival for small firms I Disadvantages 0 Strategy may ignore demand and or cost 0 The legality and ethics of price strategy 0 Unfair trade practices I Laws that prohibit wholesalers and retailers from selling below cost 0 Price fixing I An agreement between two or more firms on the price they will charge for a product 0 Price discrimination I There must be a price discrimination I Transaction must occur in interstate commerce I Seller must discriminate by price among two or more purchasers I Products sold must be of like grade and quality I There must be significant competitive injury I Seller defenses 0 Cost 0 A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings 0 Market conditions 0 Price variations are justified if designed to meet uid product or market conditions 0 Competition O o A reduction in price may be necessary to stay even with the competition Predatory pricing I The practice of charging a very low price for a product with the intent of driving competitors out ofbusiness or out ofa market Tactics for fine tuning the base price 0 O 0 Discounts I Quantity discounts I Cash I Functional I Seasonal I Promotional allowances I Rebates I Zero percent financing I Value based pricing 0 Setting the price at a level that seems to the customer to be a good price compared to the prices of other options Geographic pricing I FOB origin pricing 0 The buyer absorbs the freight costs from the shipping point I Uniform delivered pricing 0 The seller pays the freight charges and bills the purchaser an identical at freight charge I Zone pricing 0 The US is divided into zones and a at freight rate is charged to customers in a given zone I Freight absorption pricing 0 The seller pays for all or part of the freight charges and doesn t pass them on to the buyer I Basing point pricing 0 The seller designates a location as a basing point and charges all buyers the freight costs from that point Special pricing tactics Pricing products too low 0 0 Managers attempt to buy market share through aggressive pricing Decisions based on current costs rather than long term Other pricing tactics O 0 Single price tactic I All goods offered at the same price Flexible pricing I Different customers pay different price Professional services pricing I Used by professionals with experience training or certification Price lining I Several line items at specific price points 0 Leader pricing I Sell product at near or below cost Bait pricing I Lure customers through false or misleading price advertising 0 Odd even pricing I Odd number prices imply bargain I Even number prices imply quality Price bundling I Combining two or more products in a single package 0 Two part pricing I Two separate charges to consume a single good 0 Consumer penalties o Businesses impose consumer penalties if I An irrevocable loss of revenue is suffered I Additional transaction costs are incurred 0 Product line pricing 0 Setting prices for an entire line ofproducts 0 Joint costs 0 Costs that are shared in the manufacturing and marketing of several products in a product line 0 In ation 0 High in ation I Cost orientated tactics o A high volume of sales on an item with a low profit margin may still make the item highly profitable Eliminating a product may reduce economies of scale Eliminating a product may affect the price quality image of the entire line I Demand orientated tactics 0 Price shading o The use of discounts by salespeople for one or more products in a line 0 Strategies to make demand more inelastic o Cultivate selected demand I Target prosperous customers who will pay eXtra for convenience or service 0 Create unique offerings I Seller can design distinctive products to fit a buyers needs and establish a beneficial relationship 0 Change the package design I Companies pass on higher costs by shrinking the product sizes but keep prices the same 0 Heighten buyer dependence I Provide additional value added services and training with product offerings to freeze out competition and support higher prices 0 O 0 Recession 0 Value based pricing I Stresses that customers are getting a good value for their money 0 Bundling or unbundling I Gives perception ofhigher value 0 Supplier strategies during recession 0 Renegotiating contracts I Demanding lower prices or rebidding the contracts 0 Offering help I Help suppliers plants reorganize and increase productivity 0 Keeping the pressure on I Set annual across the board cost reduction targets 0 Paring down suppliers I Reduce the number of suppliers and boost purchases from those that remain Vocabulary for the test 0 Promotion 0 Communication by marketers that informs persuades and reminds potential buyers ofa product in order to in uence an opinion or elicita response 0 Promotional strategy 0 A plan for the optimal use of the elements ofpromotion advertising public relations personal selling and sales promotion 0 Advertising 0 Impersonal one way mass communication about a product or organization that is paid for by a marketer 0 Public relations 0 Marketing function that evaluates public attitudes identifies areas within the organization the public may be interested in and executes a program of action 0 Marketing activities other than personal selling advertising and public relations 0 Encoding 0 Conversion of sender s ideas 0 Aida concept 0 Attention interest desire action 0 Process for achieving promotional goals in terms of stages of consumer involvement with the message Push strategy 0 Uses aggressive selling and trade advertising Pull strategy 0 Stimulates consumer demand Advertising response function 0 Spending on advertising raises sales to a point then eventually diminishing Product advertising 0 Touts benefits ofa specific good lx w i39ii o Views on controversial issues expressed Pioneering advertising 0 Stimulate demand for a new product Competitive advertising 0 In uence demand for a specific brand Comparative advertising 0 Compares 2 or more specifically named brands Advertising campaign 0 Series of related advertisements focusing on a common theme Advertising appeal 0 A reason for a erson to buy a product o A des1rable appeal selected as a theme for a campaign Cooperative advertising 0 Manufacturer and retailer split advertising cost Audience selectivity o The ability of an advertising medium to reach precisely define market Flighted media schedule 0 Ads run every month or every two weeks increased frequency at times Consumer sales promotion 0 Sales promotion activities targeting the ultimate consumer Trade sales promotion 0 Sales promotion activities targeting a marketing channel member such as a wholesaler or a retailer 0 An eXtra item offered to a consumer Trade allowance 0 A price reduction offered by manufacturers to intermediaries Push money 0 Money offered to intermediaries to help push the products Relationship selling o A sales practice that involves building maintaining and enhancing interactions with customers in order to develop long term satisfaction through mutually beneficial partnerships Lead generation 0 Identification of those firms and people most likely to buy the seller s offerings Referral 0 A recommendation to a salesperson from a customer or business associate 0 Seller approaches potential buyers without knowing about them Lead qualification 0 Recognize need buying power receptivity and accessibility Status quo pricing 0 Maintains existing prices or meets the competitions pricing Demand 0 Quantity sold at specific price Supply 0 O offered at specific price st 0 Demand sensitive to price Inelastic demand 0 Demand not sensitive to price Unitary elasticity 0 Total revenue remains same when prices change Yield management systems 0 Complex software to max profits and capacity Keystoning o Markup by 100 Profit maximization o Marginal revenue equals marginal cost Selling against the brand 0 Stocking well known branded items at high prices to encourage buying store brands Extranet 0 Private electronic network that links suppliers with customers 39 high price to promote high image quality 0 High intro price with heavy promotion Penetration pricing 0 Low price charges initially to reach mass market Unfair trade practice acts 0 Cant sell below cost Price fixing o Areement on price they will charge 2 i m 0 Very low price to drive competitors out of market 0 Cumulative quantity discount 0 Deduction from a list price that applies to the buyer s total purchases made during a specific period w 1 o Offered for a return for prompt payment ofa bill 39 m 0 Given for performing channel discounts o Promotional allowance 0 A payment to a dealer for promoting the manufacturers products Value based pricing 0 Setting price at a level that seems fair to customers 0 Buyer absorb the freight costs Uniform delivered pricing 0 Seller pays actual freight charges and bills every purchaser same at rate Zone pricing 0 US into zones charges at rate to different zones Freight absorption pricing 0 Seller pays all or part ofactual freight charges and doesn t pass on to buyer Basing point pricing 0 Freight charged from a given point regardless of city where goods are shipped Single price tactic o All goods and services at same price Flexible pricing 0 Customers pay different prices for same product Price lining o Offerin a it lw H u u roduct line with several items at specific price points 0 Fr ductso store ld near or below cost to get shoppers to buy other items in Bait pricing 0 False price advertising and high pressure selling to buy more expensive items 0 Odd is bargain 0 Even is quality Two part pricing 0 Charges 2 separate amounts to consume a single good or service Ioint costs 0 Costs shared in the manufacturing and marketing of several products in a product line 0 Delayed quotation pricing 0 Price isn t set until item is finished or delivered 0 Final selling price re ects cost increases incurred between the time the order is placed and the time the delivery is made 0 Price shading 0 Use of discounts by salespeople to increase demand for one or more products in a line MKT 3401 Exam 3 Study Guide Stephanie Mangus Chapter 15 The Role of Retailing o Retailing all the activities directly related to the sale of goods and services to the ultimate consumer for personal nonbusiness use I Enhances the quality of our lives I Affects us directly or indirectly 0 Ownership Independent Part ofa Chain Franchise I Independent owned by a single person or partnership and not operated as part of a larger retail institution 0 Majority of retailers 0 Ex local florists ethnic food markets I Chain stores 0 Owned and operated as a group by a single organization 0 Many administrative tasks are handled by the home office 0 Home office buys most of the merchandise sold in the stores 0 Ex Gap Starbucks I Franchise owned and operated by individuals but licensed by a larger supporting organization 0 Combines the advantages of independent ownership with those of chain ownership 0 Ex Subway Quiznos Major Types of Retail Operations 0 Department Stores I Carries a wide variety of shopping a specialty goods including apparel cosmetics house wares electronics and sometimes furniture I Purchases are made in each individual department 0 Departments controlled by a buyer I Central management is responsible for overall advertising program credit policies store expansion and customer service I Rare these days I Ex Macy s JC Penny Sears Dillard s 0 Specialty Stores I Allows retailers to tailor their merchandise to specific target markets I Not only a type of store 9 but a method of retail operations specializing in a given type of merch I Ex Children s Clothing Pet Store Baked Goods I Carries deeper but narrower assortment of specialty merch than dept stores I Offer more attentive Customer Service I Consumers buy more clothing from these stores I Price is secondary to Consumers o Distinctive merch store s physical appearance and caliber of staff determine popularity 0 Supermarkets I Large departmentalized selfservice retailers that specialize in food and some nonfood items I Have been experiencing a recent decline in sales 0 Result of increased competition from discounters Sams amp Walmart 0 Demographic and Lifestyle changes 0 People eat out more instead of cooking at home I Conventional stores replaced by larger superstores 0 They meet the needs of variety convenience and service with their onestop shopping center scrambled merchandising I Shift towards loyalty marketing programs 0 Drugstores I Stock pharmacyrelated products as well as OTC medicine cosmetics healthbeauty aids seasonal merch etc I Added services like 24 Hour drive through pharmacies and low cost health clinics 0 Convenience Stores I Mini supermarket carrying a limited line of highturnover convenience goods I Typically located near residential areas and are open 247 I Prices are almost always higher I Expanded their offerings to video rentals healthbeauty aids etc 0 Discount Stores I A retailer that competes on the basis of low prices high turnover and high volume 0 Restaurants Non store Retailing 0 Shopping without visiting a store I Automatic Vending the use of machines to offer goods for sale 0 Red box Blockbuster I Direct Retailing the selling of products by reps who work door to door 0 Avon Mark I Direct Marketing techniques used to get consumers to make a purchase from their home office or other non retail setting 0 Telemarketing direct mail catalogs 0 Usually consumers who live in rural areas I Electronic Retailing online retailing 24hour home shopping networks Franchising 0 Franchise a continuing relationship in which a franchiser grants to a franchisee the business rights to operate or sell a product I 2 basic forms Product and Trade Name Business Format 0 Product and Trade Name a dealer agrees to sell certain products provided by a manufacturer or a wholesaler 0 Used most often in auto and truck soft drink bottling tire and gas service I Michelin 0 Business Format ongoing business relationship between a franchisor and franchisee 0 Used most often in restaurant food service hotel and motel printing and real estate Retail Marketing Strategy 0 Presentation of the Retail Store I Helps determine the store s image and positions the retail store in consumers minds I Main element Atmosphere Key factor Layout 0 Must use all space effectively 0 Product placement is important 0 Marketbasket analysis looks for products that are commonly purchased together to help retailers find ideal products for each product I Most influential factors 0 Employee type and density 0 Merchandise type and density 0 Fixture type and density 0 Sound 0 Odors 0 Visual Factors 0 Personnel and Customer Service I Sales personnel provide their customers with the amount of service prescribed by the retail strategy of the store I Sales personnel persuade customers to buy 0 Trading Up persuading the customer to by something more expensive 0 Suggestion selling persuading the customer to buy something that will compliment their original purchase 0 Paper to go with your printer Chapter 16 The Role of Promotion in the Marketing Mix o Promotionai Strategy a pian for optimai use ofthe eiements of promotion 39 Advertising Pubiic Reiations Personai Seiiing Saies Promotion 39 Main function to convince target customers thatthe good and services offered provide a competitive advantage over the competition Competitive Advantage the set of unique features ofa company and its productsthat are received by the target market as significant and superior to the competition Overall marketing obieckives Mime 3m P m duct V Flaw tuin bu unt Pmmn iou Price 7 Promotionai Mix 0 Advertising 39 Impersonai onerway mass communication about a product ororganization that is paid for by a marketer 39 Traditionai media tv radio newspapers magazines books direct maii etc o Pubiic Reiations 39 Evaiuates pubiic attitudes identi es areas within the organization the pubiic may be interested in and executes a program of action to earn pubiic understanding and acceptance 39 Used to maintain a positive image and educate the pubiic aboutthe company s goais 39 Ex Target s quotTake Charge of Education 0 Saies Promotion 39 Marketing activities otherthan Personai Seiiing PR and Advertising that stimuiate consumer buying and deaier effectiveness 39 Usuaiiy a short runtooi used to stimuiate immediate increases in demand 0 Personai Seiiing 39 A purchase situation invoiving a personai paideforcommunication between two peopie in an attempt to infiuence each other Diner advenisemems News anic es omer slore displays Encoding Mas ga Decuding me sender 399 I message charms Receiver message Marketing Advertisement Mad a Receiver Customers anager Sales s perso interpralaiion Viewers Advenising prasenialion etaii store of massage Store display Local news show oupon I Press release Market research Sales results ange in market share Marketing Communication 0 Mass Communication Communicating a concept or message to large audiences Mode of Communication Communicator an frb l over Situation Amount of Feedback Speedl39ofFeedback Direction of Message 39EO ntrol ovei Message Cbintent Identi cation of Sponsor Slie dlin Reaching Large Ageienee 39 Message Flexibility The Goals and Tasks of Promotion Indirect and impersonal tow Little Delayed One way Yes Yes P6151 Same message to all audiences Usually indirect and impersonal Mode rategto lQW39 Little Delayed One way No No Usual I yhfast Usually indirect and impersonal Moderate tojiow Little to moderate Varies Mostly oneway Yes Yes Fast Usually no direct control Same message over message audiences to varied targets 0 Inform what is the product Intro early growth stages 0 Persuade convince manipulate Growth matu rity stages 0 Remind hey we re still here Matu rity stage Promotional Goals and the AIDA Concept Direct and face toface High Much immediate Twoway Yes Yes Slow Tailored to prospective buyer 0 AIDA the stages of consumer involvement with a promotional message Attention cognitive thinking o Gain the attention ofthe target market Interest affective feeling o Create interest in the product Desire conative doing 0 Convince the customer that your product is the best solution to their need Action buying 0 Promotions and price discounts to solidify the sale Factors Affectingthe Promotional Mix Nature ofthe Product industrial machine vs shampoo Stage in the Product Life Cycle I Intro stage 9 attention getting ads I Growth stage 9desire personal selling 0 Target Market Characteristics I Brand loyal customers need less info 0 o 0 Type of buying decision I Complexv Routine I High Risk v Low Risk I High Involvement v Low Involvement 0 Available Promotional Funds Ads v Sales Staff I Money orlack there of I Tradeoffs with funds available I Number of people in target market 39 Quality of communication needed I Relative costs of promotional elements 0 Push or Pu Strategy I How you strategize on promotions I Push Manufacturer promotes to wholesaler 9Wholesalerto Retailer 9 Retailerto Consumer 9 Consumer buys I Pull Manufacturer promotes to Consumer 9 Consumerto Retailer 9 Retailerto Wholesaler 9 Wholesaler demands form Manufacturer Integrated Marketing Communications 0 Careful coordination ofall promotional messages I EX The Expendable and Sylvester Stallone o IMC Popularity Growth I Proliferation of thousands of media choices I Fragmentation of the mass market I Slash of advertisingspending in favor of promotional techniques that generate immediate response Chapter 17 The Effects of Advertising 0 US advertising declined in 2009 due to economic conditions o In 2008 37 companies spent more than 1 billion each 0 850000 people work in media advertising such as newspapers magazines television radio and internet media 0 More than 100 companies spend over 300 million annually on advertising Major Types of Advertising 0 Product I The uses offers of a specific product 0 Pioneering introductory advertising 0 Competitive focused on only your product 0 Comparative saying you re better Bounty v Great Value 0 Institutional I Brand promotion 0 Corporate Identity 0 Advocacy Advertising Creative Decisions in Advertising 0 Advertising Campaign I Series of related ads focused on a common theme slogan and set of advertising appeals o DAGMAR Approach I Defining Advertising Goals for Measured Advertising Results 0 All advertising objectives should precisely define the target audience the desired percentage change in some specified measure of effectiveness and the time frame in which that change should occur 0 Identifying Product Benefits I Sell sizzle not the steak I Tells the benefits not the attributes o What will it do for you 0 Developing and Evaluating Advertising Appeals I Advertising appeal reason for a person to buy a product I Unique Selling Proposition 0 A desirable exclusive and believable advertising appeal selected as the theme for the campaign 0 Usually becomes the slogan 0 Effective slogans become recognizable I Ex llImagination at Work 9 General Electric I llShare Moments Share Lifequot 9 Kodak I quotYou re in good hands 9 Allstate Pro t Lets consumers know whether the produrr will save them money make rhem money or keep them from losing money it I tin Fear Can center around social embarrassment growing old or losing one s healrh because of its power requira advertiser roexerclse are in execution Convenience Is often used for fasbfaod restaurants and microwave foods 91quot iFTr lief r r Vanity and Egotlsm Are used most often for expensive or conspicuous Items sum as cars and clothan o Executingthe Message I The way an ad portrays its info 0 Referto picture on page 270 Media Decisions in Advertising Internet Public Relations 0 The element in the promotional mixthat I evaluates public attitudes I identifies issues of public concern I executes programs to gain public acceptance 0 Functions of PR I Press relations I Product publicity I Corporate communication I Public Affairs I Lobbying I Employee and Investor Relations I Crisis Management 0 Coordinated effort to handle the effects of unfavorable publicity or an unexpected unfavorable event 0 PR Tools I New Product Publicity I Product Placement I Consumer Education I Sponsorship I Company Websites Chapter 18 Sales Promotion 0 Shortterm incentive to get you to make a purchase 0 Used to increase the effectiveness of other methods 0 Lowerthe price or add value to the purchase 0 ConsumerSales Promotion I Activities targetingthe ultimate consumer 0 Trade Sales Promotion I Activities targetingthe market channel member 0 Objectives Sales Promotion Examp es Type of Buyer Desired Results 0 Tools for Consumer Sales Promotion I Coupons 0 Entitles consumers to an immediate price reduction when they buy the product I Rebates o A cash refund given for the purchase of a product during a specific period I Premiums 0 An extra item offered to the consumer I Loyalty Marketing Programs 0 Designed to build longterm mutually beneficial relationships between a company and key customers I Contests 0 Promotions in which participants use some skill or ability to compete for prizes I Sweepstakes o Promotions that depend on chance with free participation I Sampling 0 A promotional program that allows the consumer the opportunity to try a product or service for free 0 Methods I Direct mail I Door to door delivery I Point of Purchase Promotion 0 Offers captive audience in retail stores 0 Can increase sales by as much as 65 percent I Online Sales Promotion 0 Effective types 0 Free merchandise Sweepstakes Free shipping with purchases OOO Coupons 0 Personal Selling I One on one selling I Advantages 0 Provides detailed explanationdemonstration 0 Message can be varied according to motivations of each customer 0 Can be directed only to qualified prospects 0 Most effective promotion form in obtaining sale and satisfying customer 0 Relationship Selling Consultative I Sales practice that involves building and maintaining relationships order to build long term satisfaction ethis is the ultimate goal 0 Steps in the Selling Process I Generate Leads 0 Advertising 0 Trade shows 0 Direct mail 0 Telemarketing 0 Referral 0 Advantages I Highly qualifies leads I Higher closing rates I Larger initial transactions I Shorter sales cycle 0 Networking 0 Linkedln 0 Cold Calling o Approaching potential buyers without any prior knowledge I Qualify Leads 0 Recognize need 0 Make sure they need what you re selling 0 Buying power 0 Verify that they have the power to make the purchase decision 0 Receptivity and Accessibility 0 Willing to see the salesperson and accessible to the salesperson I Probe Needs Approach Customer 0 Needs Assessment 0 Preapproach I Do your homework on the customer before you approach them 0 Consultative Salesperson 0 Must know everything about I ProductService I Customers and their needs I Competition I The Industry 0 Create customer profile I DevelopProposeSolutions 0 Sales Proposal 0 Written document that overviews what you re selling and how it will meet their needs I Handle Objections 0 View objections as requests for info 0 Anticipate specific objections 0 Investigate the objection with the customer 0 Be aware of the competitor s products 0 Stay calm 0 Use the objection to close the sale 0 Point out weaknesses in the competitor I Close Sale 0 Look for customer signals 0 Changes in expression gestures and questions asked 0 Keep an open mind I Be prepared for a yes and a no 0 Negotiation o The salesperson and the prospect offer special concession in order to arrive to a sales agreement I Effective negotiators avoid price cuts I Follow Up 0 Ensure delivery schedules are met 0 Goods and service perform as promised 0 Buyers employees are properly trained to use the products Chapter 19 The Importance of Price 0 To the seller 9 price is revenue 0 To the buyer 9 price is the costworth of something 0 Price allocated resources in a free market economy 0 What is price I What is given in exchange to acquire a good or service I Sacrifice Effect 0 What is sacrificed to get a good 0 Money time dignity I Information Effect 0 We infer quality information from the price 0 High priceHigh quality 0 Conveys status I Value Based upon Perceived Satisfaction o Reasonable price Perceived Reasonable Value 0 Price paid is based on the satisfaction consumers expect to receive not necessarily on what they actually receive 0 Importance of price to Marketing Managers I Prices are the key to revenues which turn into the key to profits I Trends influencing price 0 Flood of new products 0 Increased availability of bargain pricegeneric brand 0 Price cutting as a strategy 0 Internet used for comparison shopping 0 Motorcycle store charging to enter 0 US recession from 2007 to 2009 Pricing Objectives 0 ProfitOriented Pricing Objectives I Profit maximation 0 Total revenue is as large as possible I Satisfactory Profits 0 Reasonable level of profits 0 Risky industry 9 35 profit 0 Low Risk Industry 9 7 profit I Return on Investment ROI 0 Most common 0 Net profit after taxes divided by total assets 0 Higher the ROI 9 better off the firm is o SalesOriented Pricing Objectives I Objective based on either market share or dollarunit sales I Sales maximization 0 Short term objective 0 Ignores profits competition and the marketing environment 0 May be used to sell off excess inventory 0 Status Quo Pricing Objectives I Maintain existing prices I Meet competitions prices 0 Airlines Demand Determinant of Price 0 How demand and supply determine price I Price equilibrium 0 SupplyDemand I Elasticity 0 Elastic customers buy moreless as the price changes 0 Inelastic price doesn t really affect demand 0 Factors that affect elasticity O O O O 0 Availability of substitutes Price relative to purchasing power I If price is low enough to have minor affect on buyer s budget 9 inelastic Product durability Product s other issues I High versatility 9 more elastic Rate of inflation The Power of Yield Management Systems 0 Software that does the pricing of inventory work for a system I Helps manage inventory and prices I Discounting early purchases I Limiting early sales at discounted prices I Overbooking capacity 0 Hotels The Cost Determinant of Price 0 Types of cost I Variable I Fixed 0 Methods used to set price I Mark up pricing 0 Cost of buying the product plus amounts for profit and expenses not otherwise accounted for I Keystoning o Doubling the price I Profit Maximization 0 Marginal costMarginal revenue I Break even Analysis 0 Total costTotal revenue Other Determinants 0 Stages in Product Life Cycle I Intro high price I Growth price stabilizes I Maturity price declines I Decline price decline 0 Competition I High prices may induce firms to enter the market I Competition can lead to price wars 0 Distribution Strategy 0 Impact of Internet and Extranets I Shopping bots a program that searches the Web for the best price for a particular item I Internet Auctions BZB auctions are likely to be the dominant form of online auctions in the future 0 Promotion Strategy I Price is often used as a promotional tool to increase consumer interest I Examples 0 Pittsburgh Zoo 5 admission for wearing a tiedye shirt 0 Crested Butte Ski Resort free skiing between Thanksgiving and Christmas 0 Bugle Boy uncut competition by offering pants to retailers at wholesale prices 0 Perceived Quality I Prestige pricing Charging a high price to help promote a highquality image I Dimensions of Quality 0 Ease of use 0 Versatility o Durability 0 Serviceability 0 Performance 0 Prestige Chapter 20 How to Set a Price on a Product 0 4 step process I Establish pricing goals 0 Profit sales status quo oriented I Estimate demand costs and profits I Choose a price strategy to help determine a base price 0 Price strategy A basic longterm pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle 0 Price Skimming heavy intro price coupled with heavy promotion I Lowers price over time o Penetration Pricing charging a relatively low price as a way to reach the mass market 0 Status Quo Pricing meeting the competitiongoing rate pricing I Finetune the base price with pricing tactics 0 Discounts 0 Quantity discounts 0 Cash Discounts 0 Functional Discounts 0 Seasonal Discounts 0 Promotional Allowances o Rebates o Zeropercent Financing 0 Geographic Pricing Special Pricing Tactics Product Line Pricing 0 Setting prices for an entire line of products 0 Relationships among Products I Complementary I Substitutes I Neutral 0 Joint Costs I Costs shared in the manufacturing and marketing of several products in a product line


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.