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Chapter 10 Product Branding and Packaging Decisions 1 Product Assortment and Product Line Decisions a Product assortment or product mix complete set of all products offered by a rm i Product lines groups of associated items 1 Product category assortment of items that the customer sees as reasonable substitutes for another Brands names terms designs symbols that identify one seller s goodservice as distinct from other sellers Breadth represents the number of product lines offered by the rm 4 Depth number of categories within a product line b Changing product mix breadth i Increase Breadth adding new product categories ie jean company expands to produce apparel belts swimwear etc ii Decrease Breadth delete product lines ie delete belts and just sell apparel and jeans 0 Changing product assortment depth i Increase Depth adding items to address consumer preferences and boost sales ii Decrease Depth delete stock keeping units SKUs to realign resources d Top 5 global brands in right order 1 Coca Cola IBM Microsoft Google General Electric GE I A whoop 2 Branding a Brand elements i Name spoken component of branding it can describe the product or serviceproduct characteristics Ex Comfort Inn Saturn Adidas ii URLsuniform resource Iocatorsdomain names location of page on the internet Ex Yahoo Amazon 39ii LogosSymbol visual branding elements that stand for corporate namestrademarks Logos without words Ex Nike check Mercedes star iv Characters brand symbols that could be human animal or animated Ex Pillsbury Doughboy Keebler Elves v Slogans short phrase used to describe the brand Ex Nike Just Do it State Farm Like A Good Neighbor vi Jingles audio message about the brand Ex Intel s four note sound signature that accompanies the Intel Inside slogan b Ways in which brands add value for both customers and the firm i Brands facilitate purchasing 1 Easily recognizable by consumers contain familiar attributes ii Brands establish loyalty iv V 1 Companies apply innovative techniques to strengthen brand loyalty with consumers Consumers are loyal to certain brands Ex Coca Cola users wont go buy Dr Pepper Brands protect from competition and price competition 1 Strongermore established brands are protected from competition bc these brands have such loyal consumer bases Jordan shoes reguardless of price Brands reduce marketing costs 1 Firms with well known brands spend less on marketing than smaller rms bc the brand sells itself Brands are assets 1 Brands need to be protected from counterfeits Ex Louis Vuitton bags 0 Brand Equity set of assets and liabilities linked to a brand that addsubtract from value provided by the productservice Brand Awareness measure how many consumers in a market are familiar w the brand and what it stands for and have an opinion about that brand Brand loyalty occurs when a consumer buys the same brand s productservice repeatedly overtime ratherthan buy from multiple supplies within the same category 3 Branding strategies a Brand Ownership Manufacturernational brands ownedmanaged by the manufacturer Ex Nike CocaCola Marriott Manufacturer develops and produces the merchandise Invests in it to establish brand Image Privatelabel brandsstore brandshouse brands products developed by retailers 1 Premium brands offer consumer a private label that compares to a manufacturers quality 2 Generic brands target a pricesensitive segment by offering a nofrills product at a discount price 3 Copycat brands imitate the manufacturers brand is appearance and packaging 4 Exclusive cobrands brand that is developed by a national brand vendor sold exclusively by the retailer Naming brands and Product lines 1 Corporate or family brands Use name to brand all products General Electric brand appliances with GE Gap clothes say Gap on them 2 Corporate and product line brands uses a combination of corporate and product brands to distinguish its products Ex Kellogg s Fruit Loops 3 Individual brands individual names for same products Ex Detergents Tide Gain Cheer Downy Febreze Brand Extension use of same brand name for new products 1 Advantages to using the same brand name for new products a Name is already well established C39 If rst brand name had strong acceptance perception will carry over for second one When brands are used for complementary products synergy exists between the two that increases sales 2 Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold 3 What firms should consider in orderto prevent negative consequences of brand extensions a Evaluate the t between product class of core brand and extension Evaluate consumer perceptions of attributes of core brand and seek similar for extension Refrain from extending brand name to too many products Consider if brand extension will be distanced from core brand v Cobranding practice of marketing two or more brands together on the same package or promotion 0 C39 0 0 vi Brand licensing contractual arrangement between firms whereby one firm allows anotherto use its brand name logo symbols and characters in exchange for a negotiated fee 4 Packaging Chapter 11 Developing New Products 1 Innovation process by which ideas are transformed into new products and services that will help firms grow a Longterm reasons that compel rms to introduce new products and services Satisfys the changing needs of current and new customers Without new products the value of the firm will ultimately decline The portfolio of products that innovation can create helps the firm diversify its risk and therefore enhances rm value better than a single product can iv In some industries most sales come from new products Ex Movies Pioneers or breakthroughs establish a completely new market or radically change both the rules of competition and consumer preferences in a market i First movers rst to create the market or product category they become readily recognizable to consumers and establish a commanding and early market share lead 2 Diffusion of Innovation process by which the use of an innovation productservice spreads throughout a market group over time and over various categories of adopters a Five categories or adopters i Innovators 25 buyers who want to be the rst on the block to have the new productservice C39 V Early Adopters 135 don t take as much risk as innovators but wait and purchase the product after careful review Early Majority 34 members don t take as much risk and tend to wait until the bugs are worked out ofa product Late Majority 34 last group of buyers to enter a new product market when this occurs the product has achieved its full market potential Laggards 16 these consumers like to avoid change and rely on traditional products until they are no longer available 3 How rms develop New products a Know six stages of product development process ldea Generation Development of viable new product ideas Concept Testing Testing the new product idea among a set of potential customers Product I 39 product Market Testing Testing the actual products in a few test markets Product Launch Fullscale commercialization ofthe product Evaluation of Results Analysis ofthe performance ofthe new product and making appropriate modifications ILD 39 Itofr n andorthe b ldea generation Sources of new product ideas 1 Internal RampD scientists work to solve complex problems and develop new ideas 2 RampD Consortia explore new ideas or obtain solutions for developing new products a Clinical trial medical study that tests the safety and effectiveness of a drugtreatment Licensing for many new scientific and technological products firms buy the rights to use the technology or ideas from other researchintensive firms through a licensing agreement Brainstorming use to generate ideas No idea can be immediately accepted or rejected Competitor s Products understand competitor s products and then bring an improved product to the market a Reverse engineering taking apart a product analyzing it and creating an improved product that does no infringe on the competitor s patents Consumer lnput listening to the consumers a Lead users innovative product users who modify existing products according to their own ideas to suit speci c needs A A 01 O 0 Product development process of balancing various engineering manufacturing marketing and economic considerations to develop a product sservice s form and features Prototype the rst physical formservice description of a new product still in roughtentative form Alpha and beta testing 1 Alpha testing the firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended Beta testing uses potential consumers who examine the product prototype in real use setting to determine its functionality performance potential problems and other issues speci c to use d Market Testing tests the market with the new product with a trial batch of products i Premarket tests conducted before product is brought to market to determine how many customers will try and then to continue to use the product ii Test marketing introduces the product to a limited geographical area usually a few cities 4 Product Life cycle the stages that new products move through as they enter get established and leave the marketplace and thereby offers marketers a starting point for their strategy planning a Know four stages of product life cycle i Introduction starts with a single firm and innovators are the ones to try the new offering ii Growth has a growing number of product adopters rapid growth in industry sales and increase in both number of competitors and available product versions iii Maturity adoption ofthe product by the late majority and intense competition for market share among rms iv Decline rms in decline stage position themselves for a niche segment ofdiehard consumers or those with special needs or they completely exit the market b Characteristics of Different Stages ofthe Product Life I Introduction Growth Maturity Decline Sales Low Rising Peak Declining Pro ts NegativeLow Rapid Rise PeakDecline Declining Typical Consumers Innovators Early AdoptMajorityLate Majority Laggards Competitors One or few Few but Increasing High comp Low comp c Know different common shapes fad high learning low learning fashion Chapter 12 Services The Intangible Product 1 De nition of Service any intangible offering that involves a deed performance or effort that cannot be physically possessed 2 Services Marketing Differs from Product Marketing a Intangible cannot be touched tasted or seen like a pure product can b Inseparable services are produced and consumed at the same time c Variability characteristic of a service Its quality may vary because it is provided by humans d Perishable cannot be stored for use in the future 3 The Gaps Model a Know the four service gaps and the reason for each Knowledge Gap reflects difference between customer s expectations and the firm s perception of those customer expectations Firms can close this gap by matching customer expectations w actual service through research Standards Gap difference between the firm s perceptions of customer s expectations and the service standards it sets Gap can be closed by setting appropriate service standards and measuring service performance Delivery Gap difference between the rm s service standards and the actual service it provides to customers Gap can be closed by getting employees to meet or exceed service standards Communication Gap difference between actual service provided to customers and the service that the rm s promotion program promises Gap can be closed by firms being more realistic about services and manage customer expectations effectively b Knowledge gap Understanding customer expectations Evaluating service quality 1 Reliability ability to perform the service dependably and accurately 2 Responsiveness willingness to help customers and provide prompt service 3 Assurance knowledge of and courtesy by employees and their ability to convey trust and confidence 4 Empathy caring individualized attention provided to customers 5 Tangibles appearance of physical facilities equipment personnel and communication materials 0 Standards Gap Achieving goals through training 1 Employees should be involved in goal setting Commitment to service quality 1 If management strives for excellence employees should follow d Delivery Gap Methods to reduce delivery gaps 1 Empowering employees empowerment means allowing employees to make decisions about how service gets provided to customers 2 Provide support amp incentives a Emotional support demonstrating a concern for their wellbeing and standing behind their decisions b Instrumental support systems and equipment to deliver the service properly 3 Use of technology a RFleradio frequency identification devices tiny computer chips that automatically transmit to a special scanner all the information about a container s contents or individual products 4 Reduce delivery gaps e Communication Gap bad communication between marketers and their customers can result in a mismatch between an ad campaign s or a salesperson s promises and the service the rm can actually offer 4 Service recovery a Listening to customers ways to find out about service failures b Finding a fair solution i Distributive versus procedural fairness 1 Distributive fairness pertains to a customer s perception of the bene ts he or she received compared with the costsinconvenience or loss 2 Procedural fairness the perceived fairness ofthe process used to resolve them c Resolving problems quickly the longer it takes to resolve the more irritated the customer will become and the more people he or she is likely to tell about the problem Chapter 13 Pricing Concepts for establishing Value 1 De nition of price the overall sacrifice a consumer is willing to make to acquire a speci c product or service 2 The Five Cs of Pricing a Company Objectives 39 Pro toriented institute a companywide policy that all products must provide for at least an 18 profit margin to reach a particular profit goal for the firm ii SalesOriented set prices very low to generate new sales and take sales away from competitors even if pro ts suffer iii CompetitorOriented to discourage more competitors from entering the market set prices very low iv Customer Oriented target a market segment of consumers who highly value a particular product benefit and set prices relatively highreferred to as premium pricing b Customers i Demand Curves and Pricing 1 Demand curve shows how many units of a productservice consumers will demand during a specific period of time at different prices 2 Prestige products or services consumers purchase for their status rather than their functionality ii Price elasticity of demand 1 change in quantity demand change in price iii Factors influencing price elasticity 1 Income effect change in the quantity ofa product demanded by consumers due to a change in their income 2 Substitution effect consumers ability to substitute other products for the focal brand 3 Crossprice elasticity percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B a Complementary products ex Dvds and dvd players both rise and fall together b Substitute products ex Vcr players were substituted for dvd players c Costs 39 Variable costs costs primarily labor and materials that vary with production volume 1 Fixed costs remain at the same level reguardless of change in volume of production 2 Total costs sum of variable and fixed costs Breakeven Analysis technique that enables managers to examine the relationships among cost price revenue and pro t over different levels of production and sales 1 Breakeven point point at which the number or units sold generates just enough revenue to equal the total cost at this point profits are zero 2 Calculate by fixed costs Contribution per unit d Competition 3 levels i Oligopolistic competition only a few firms dominate 1 Price war occurs when two or more firms compete primarily by lowering their price Monopolistic occurs when there are many rms competing for customers in a given market but their products are differentiated Pure different companies that consumers perceive as substitutable sell commodity products e Channel Members manufacturers wholesalers and retailers Chapter 14 Strategic Pricing Methods 1 Pricing strategies a Costbased methods determine the final price to charge by starting with the cost b Competitorbased methods set prices to reflect the way the firms want the consumers to interpret their own prices relative to the competitors offerings i Some companies use this method to gain market share or to exploit a cost advantage they achaieved c Valuebased methods setting prices that focus on the overall value of the product offering as perceived by the consumer i Improvement value an estimate of how much more or less consumers are willing to pay for a product relative to other comparable products 2 Psychological Factors affecting Valuebased Pricing strategies a Consumers use of reference prices i Reference price the price against which buyers compare the actual selling price ofthe product and that facilitatestheir evaluation process External reference price a higher price to which the consumer can compare the selling price to evaluate the deal lnternal reference price price information stored in the consumer s memory that the person uses to assess a current price offering ex The last price he paid or what he expects to pay Everyday low pricing versus highlow pricing i Everyday low pricing EDLP companiestheir retail prices at a level somewhere between the regular nonsale price and the deep discount sale prices their competitors may off ii Highlow pricing relies on the promotion of sales during which prices are temporarily reduced to encourage purchases 0 Odd Prices prices that end in odd numbers usually 9invented so that clerks don t steal money since they would have to open the register d Pricequality relationship consumers judgment of the quality of the product compared to the price 3 New Product Pricing C39 a Price skimming appeals to the segments of consumers who are willing to pay the premium price to have the innovation first b Market penetration pricing set the initial price low for the introduction of the new product or service 0 Know graphs of price skimming and penetration pricing only in lecture not in textbook 4 Pricing tactics a BZB pricing tactics relies on price to convey its different quality offering b Pricing tactics aimed at consumers i Markdowns reductions retailers take on the initial selling price of the product or service ii Quantity Discounts for Consumersto encourage consumers to purchase larger quantities each time they buy 5 Legal and ethical aspects of pricing a Deceptive or illegal price Advertising 39 Deceptive Reference Prices Loss Leader Pricing lowering the price below the store s cost Bait and Switch stores lure customers in with a very low price on an item only to aggressively pressure these customers into purchasing a higherpriced model by disparaging the lowprice item Predatory Pricing a firm sets a very low price for one or more ofits products with the intent to drive its competition out of business 0 Price Discrimination when firms sell the same product to different resellers at different prices Price fixingpractice of colluding with other firms to control over prices i Horizontal price xing occurs when competitors that produce and sell competing products collude or work togetherto control prices 039 Q ii Vertical price fixing occurs when parties at different levels ofthe same marketing channel manufacturers and retailers collude to control prices passed on to consumers Chapter 15 Supply Chain Management 1 De nition of supply chain management a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers manufacturers warehouses stores and transportation intermediaries into a seamless operation in which merchandise is produced and distributed in the right quantities to the right locations and at the right time as well as to minimize costs while satisfying customers 2 Supply chain Marketing channels and logistics are related a Marketing channel set of institutions that transfer the ownership or and move goods from the point of production to the point of consumption b Logistics management describes the integration of two or more activities forthe purpose of planning implementing and controlling the efficient ow of raw materials inprocess inventory and finished goods from the point of origin to the point of consumption 3 Supply Chains Add Value a Supply chain management streamlines distribution order creation order processing physical delivery b Supply chain management affects marketing a facility for the receipt storage and redistribution of goods to company stores or customers may be operated by retailers manufacturers or distribution specialists 4 Making Information Flow a Know Flow 1 Flow 6 39 Flow 1customer to store Sales associate scans the UPCbar code and the customer receives a receipt Flow 2store to buyer pointof salePOS terminal records the purchase information and electronically sends it to the buyer at the corporate office This information is incorporated into an inventory management system and used to monitor and analyze sales iii Flow 3buyer to manufacturer purchase information from each store is typically aggregated by the retailer as a whole which creates an order for new merchandise and sends it to the manufacturer iv Flow 4store to manufacturer in some situations sales transaction data are sent directly from the store to the manufacturer and they decide when to ship more merchandise to the distribution centers and the stores v Flow 5store to distribution center stores also communicate with the distribution center to coordinate deliveries and check inventory status When a store drops to a specified level more products are shipped to the store Flow 6manufacturer to distribution center and buyerwhen the manufacturer ships the product to the distribution center it sends an advanced shipping notice to the distribution centers An v39 advanced shipping noticeASN is an electronic document that suppliers sends the retailer in advance ofa shipment to tell exactly what will be in the shipment b Data warehouse purchase data collected at the point of sale is stored here Electronic Data Interchange is the change of business documents through EDI Electronic data interchange EDI is the computerto computer exchange of business documents from a retailer to a vendor and back Intranets secure communication systems contained within one company Extranet collaborative network that uses Internet technology to link businesses with their suppliers customers or other businesses 0 d Pull and Push Supply Chains Pull a supply chain in which orders for merchandise are generated at the store level on the basis of sales data captured by POS terminals Push a supply chain in which merchandise is allocated to stores on the basis of forecasted demand 5 Making Merchandise Flow a Distribution Centers versus Direct Store Delivery i Advantages of using a Distribution Center 1 More accurate sales forecasts are possible 2 Enable retailerto carry less merchandise in the individual store 3 Easierto avoid running out of stock or having too much stock in any particular store 4 Retail store space is typically more expensive than space at a distribution center b The Distribution Center i Dispatcher person who coordinates deliveries to the distribution center Checking is the process of going through the goods upon receipt to make sure they arrived undamaged and that the merchandise ordered was the merchandise received iii RFID tags tiny computer chips that automatically transmit to a special scanner all the information about a container s contents or individual products iv Crossdocked merchandise prepackaged by the vendor for a speci c store v Floorready merchandise merchandise that is ready to be placed on the selling oor Ticketing and marketing refers to af xing price and identification labels to the merchandise v39 vii Pick ticket a document or display on a screen in a forklift truck indicating how much ofeach item to get from specific storage areas c Inventory Management through JIT systems i Justintime inventory systems aka quick response systems in retailing are inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems 6 Managing the supply chain a Supply chain or channel conflicts when supply chain members are not in agreement about their goals roles or rewards this is caused b Managing supply chains through strategic relationships i Independentconventional supply chain several independent membersmanufacturer wholesalers and retailereach attempt to satisfy their own objectives and maximize their own pro ts often at the expense of the other members Chapter 16 Retailing and Multichannel Marketing 1 De nition of retailing and multichannel strategy a Retailing the set of business activities that add value to products and services sold to consumers for their personal or family use b Multichannel strategy sell in more than one channel ex Store catalog and internet 2 Choosing Retail Partners a Channel structure the level ofdifficulty a manufacturer has in getting retailers to purchase its products is determined by the degree to which the channel is vertically integrated b Customer Expectations manufacturers need to know where their target market customers expect to nd their products and those of their competitors c Channel Member characteristics the factors pertaining to the channel members themselves will help determine the channel structure d Distribution intensity the number of channel members to use at each level ofthe marketing channel 3 lndentify types of retailers page 493502 know this section thoroughly a Food retailers b Supermarkets i Conventional supermarket a selfservice food store offering groceries meat and produce with limited sales of nonfood items such as health and beauty aids and general merchandise Limited assortment supermarketsextreme value food retailers retailers that offer only one or two brands or size of most products usually including a store brand and attempt to achieve great ef ciency to lower costs and prices Supercenters the fastest growing retail category large stores that combine a supermarket with a fullline discount store Warehouse clubs larger retailers that offer a limited and irregular assortment of food and general merchandise Convenience stores provide a limited variety and assortment of merchandise at a convenient location small stores with speedy checkout Department stores retailers that carry a broad variety and deep assortment offer customer services and organize their stores into distinct departments for displaying merchandise Fullline discount stores retailers that offer a broad variety of merchandise limited service and low prices Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level or service in relatively small stores Drugstores specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise j Category specialistsbig box retailerscategory killers discount stores that offer a narrow but deep assortment of merchandise House improvement center category specialist offering equipment and material used by doityourselfers and contractors to make home improvements Extreme value retailers small fullline discount storesthat offer a limited merchandise assortment at very low prices Offprice retailerscloseout retailers offer an inconsistent assortment of brand name merchandise at low prices i lrregulars merchandise that has minor mistakes in construction ii Outlet stores offprice retailers owned by manufacturers or department or specialty store chains 4 Facilitating Retail Strategy a Product b Price c Promotion Cooperative advertising an agreement between a manufacturer and retailer in which the manufacturer agrees to defray some advertising costs Share of wallet percentage ofthe customer s perchases made from that particular retailer d Place 5 Exploring multiple channel options know this section thoroughly a Channels for selling to customers i Each channelstores catalogs and the internet offers its own unique benefits b Store channel i Browsing shoppers often have only a general sense of what they want ii Touching and feeling product customers can use all five senses more information 0 O 39D h 339 X 3 iii Personal service sales associates have the capability to provide meaningful personal information iv Cash and credit payment stores are the only channel that accepts cash payments v Entertainment and social experience instore shopping can be a stimulating experience vi Immediate grati cation stores have the advantage ofallowing customers to get the merchandise immediately after they buy it vii Risk reduction when customers purchase merchandise in store the physical presence ofthe store reduces their perceived risk of buying and increase their con dence that any problems with the merchandise will be corrected c Catalog Channel 39 Convenience the information in a catalog is easily accessible for a long period oftime Information catalogs have information about the products and how they can be used Safety security in malls and shopping areas is becoming an important concern for many shoppers d Internet Channel i Broader selection vast number of alternatives available to consumers ii More information to evaluate merchandise firms can provide as much information as each customer wants and more info than customer can get from store or catalog iii Personalization internet has the ability to personalize information for each customer economically Chapter 17 Integrated Marketing Communications 1 De nition of integrated marketing communications represents the promotion dimension ofthe four Ps encompasses a variety of communication disciplines general advertising personal selling sales promotion public relations direct marketing and electronic mediain combination to provide clarity consistency and maximum communicative impact 2 Communicating with consumers a the communication process 39 Sender where the message originates must be clearly identified to the intended audience Transmitter sender works with the creative department whether in house or from a marketing agency to develop marketing communications Encoding converting the sender s ideas into a message verbal visual or both iv Communication Channel the mediumprint broadcast internet that carries the message v Receiver person who reads hears or sees and processesthe information contained in the messageadvertisement vi Noise any interference that stems from competing messages lack of clarity in the message poses a problem for all communication channels vii Feedback loop allows the receiverto communicate with the sender and thereby informs the sender whether the message was received and decoded properly b How consumers perceive communication C Receivers Decode Messages Differently each receiver decodes a message in his or her own way Sender Adjusts Messages According to the Medium and Receivers Traits different media communicate in very different ways so marketers make adjustments to their messages and media depending on whether they want to communicate with suppliers shareholders customers or the general public as well as speci c segments of those groups the AIDA model 39 Awareness potential customer s ability to recognize or recall that brand name is a particular type of retailer or productservice 1 Aided recall when consumers indicate they know the brand when the name is presented to them ii Interest when consumers are aware of a company they must work to increase their interest level iii Desire the firm should move the consumer from I like it to I want itquot iv Action ultimate goal to drive the receiver to action 1 Lagged effect delayed response to a marketing communication campign 3 Elements ofan Integrated Marketing communication Strategy a C39 O 39D 0 Advertising most visible component entails the placement of announcements and persuasive messages in time or space purchased in any ofthe mass media by business firms Personal Selling the twoway flow of communication between a buyer and a seller that is designed to influence the buyer s purchase decision Sales Promotions special incentives or excitementbuilding programs that encourage the purchase ofa product or service coupons Direct Marketing marketing that communicates directly with target customers to generate a response or transaction Public relations organizational function that manages the firm s communications to achieve a variety of objectives Electronic media i Web site ii Blog Social Shopping communication channel where consumers use the internet to engage in the shopping process by exchanging preferences with others 4 Legal and ethical issues in IMC m Commercial speech a message with an economic motivation to promote a product or service to persuade someone to purchase Noncommercial speech a message that does not have an economic motivation and therefore is fully protected under the First Amendment 039 Chapter 18 Advertising Public Relations and Sales Promotions 1 De nition of advertising a paid form of communication delivered through media from an identifiable source about an organizationproductservice designed to persuade the receiver to take some action 2 Steps in planning and executing and ad campaign a ldentify Target Audience b Set Advertising Objectives i Pull strategy get consumers to pull the product into the supply chain by demanding it c Determine the Advertising Budget d Convey the Message redbullgives you wings e Evaluate and Select Media i Media planning the process of evaluating and selecting the media mixcombination of the media used and the frequency of advertising in each mediumthat delivers clear message f Create Advertisements g Asses lmpact using Marketing Metrics 3 Public relations managing communications and relationships to achieve various objectives 4 Sales promotion Coupon certificate with a stated price reduction for a specific item or percentage ofa purchase Deal sortterm price reduction Premium item for free or at bargain price to reward behavior Contests brandsponsored competition requiring some skill or effort Sweepstakes promotion offering prizes based on chance of drawing Samples offers potential customers ability to try product Loyalty Programs promotion to retain customer by offering premiums Pointof Purchase Displays items located at checkout counter Rebates price reduction where portion of purchase price is returned to buyer in form of cash Product Placement include product in nontraditional situations 5 quotlt9quotr czrgtcr Chapter 19 Personal selling and Sales management Relationship selling sales philosophy and process that emphasizes a commitment to maintaining the relationship overthe long term and investing opportunities that is mutually bene cial to all parties Ways Personal selling Adds value a adds value to the product or service mix I b educates and provides advice saving the customertime and making things easier for the customer 3 Personal Selling Process KNOW THOROUGHLY a Step 1 Generate and Qualify Leads generate a list Leads potential customers Qualify potential to buy Trade shows offer excellent forum for finding leads Cold calls method of prospecting in which sales people telephone or go see potential customers with appointments Telemarketing same as cold calls but always is over a phone b Step 2 Preapproach occurs prior to meeting the customer for first time and extends qualification of leads described in step 1 Role playing salesperson acts out a simulated buying situation while a colleaguemanager acts as buyer c Step 3 Sales Presentation and Overcoming Reservations once all info is obtained sales person is ready for facetoface meeting Handling Reservations integral part ofthe sales presentation is handling reservations or objections that the buyer might have on a product or service d Step 4 Closing the Sale means obtaining a commitment from the customer to make a purchase e Step 5 Follow Up offers a prime opportunity for a salesperson to solidify the customer relationship through great service quality 4 Managing the Sales Force a Sales management involves the planning direction and control or personal selling activities including recruiting selecting training motivating compensating and evaluating as they apply to the sales fo rce Calculations We will do another Breakeven calculation on this exam Breakeven point Fixed Costs selling price variable costs
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