BUAD 332 - Exam #3
what is the most expensive show for broadcast TV advertising for a 30 second ad in the 2020-2021 season?
NBC Sunday Night Football at $783,718
define franchises
a contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one of more units in the franchise system -very successful way for companies to grow - allows companies to grow without investing their own capital ex. - McDonalds (franchiser) and owner who opens new location (franchisees)
define selective distribution
a form of distribution achieved by screening dealers to eliminate all but a few in any single area - not that hard to find but not found everywhere - somewhere in between ex. Ralph lauren
Define intensive distribution
a form of distribution aimed at having a product available in every outlet where target customers might want to buy it ex. Doritos
Define exclusive distribution
a form of distribution that establishes one or a two outlets per market area - specialized handling - status - don't want it everywhere ex. rolex
define discount store
a retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volumes ex. - walmart - dollar general -ALDI
define hybrid marketing system
a single firm sets up two or more marketing channels to reach multiple customer segments producer -> a consumer segment 1 via the internet // business segment 2 via direct sales force // -> retailer -> consumer segment 2 // -> value added distributors -> value added resellers -> business segment 1 ex. chapter 10 slide 13
define voluntary chain
a wholesaler-sponsored group of independent retailers that engages in bulk buying and common merchandising ex. - IGA (independent grocers of America)
define setting advertising objectives
an advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time - always deals with your target market - "I want to build more brand awareness" - communication objectives - sales objectives classified by purpose: - inform: something new - persuade: do something - compare: ours vs. theirs - remind: reinforce our brand (most common)
what is a big selling point for online?
analytics - if you can't measure it, it doesn't count - performance counts... but what is performance
define product assortment
brand of manufacturing merchandising events
define public relations
building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events
define promotion decisions
can use any or all of the promotion tools - advertising, personal selling, sales promotion, public relations, and direct marketing - to reach consumers
define department stores
carry a wide variety of product lines - typically clothing, home furnishings, and household goods - each line is operated as a separate department managed by specialist buyers or merchandisers ex. - macy's - Bloomingdales - nordstrom's - J.C. Penny
define specialty stores
carry narrow product lines with deep assortments within those lines ex. - yankee candle - sunglass hut - footlocker - popcorn store
what are some issues with channels of distribution?
channel design and channel management
what was the estimated global advertising spending in 2021
$747 billion
what are the three conventional channels of distribution?
*- every time you add a new connection you add: - cost - time - logistics - inventory - complexity - removing flexibility* 1. producer (farmers at farmers market) -> consumer 2. producer (Levis) -> retailer (kohl's) -> consumer 3. producer (Budweiser) -> wholesaler (eagle distributing) -> retailer (Kroger) -> consumer
define the message strategy
*1. identify customer benefits* 2. developing compelling creative concept the "big idea" 3. advertising appeals should be meaningful, believable and distinctive
Describe CPM
- CPM or cost per thousand = cost of running the ad/number of total contacts (expressed in thousands!!) ex. ad shown on Sunday night football - average viewership is 16.8 million - cost if ad is $783,718 - CPM = $783,718/16,800 - CPM = $46.64
what are a few effects from disintermediation?
- Macy's closes 15% of stores - traditional retailers struggling (Nordstrom) - leads to lots of disruption to technology/internet
who uses advertising?
- business firms - nonprofit organizations - professionals - social agencies - government
what are some organizational classifications of a product line?
- chain stores - organizational classification - franchise
define campaign evaluation
- communication, impact, sales impact - very hard to measure whether ads are impacting sales - measure the communication effect of an ad = "copy testing" - measure the sales effects of an ad
describe the pull promotion strategy
- consumer demands product and pulls demand from producer consumers -> demand -> retailers and wholesalers -> demand -> producer -> producer marketing activities (consumer advertising, sales promotion) -> back to consumer
what are some factors that are changing the face of marketing communications?
- consumers are differently/better informed and more communications empowered - mass markets have fragmented, leading to a shift away from mass marketing - changes in communications technology have created new media for interacting with targeted consumers
what are some relative prices classifications of a product line?
- discount store - off-price retailer - factory outlet -warehouse club
when will a channel be the most effective?
- each member is assigned tasks it can do best - all members cooperate to attain overall channel goals and satisfy the target market (when this doesn't happen horizontal and vertical conflict occurs)
explain a vertical marketing system
- gain control manufacturer, wholesaler, and retailer -> consumer
why advertise online?
- go where the audience is - build awareness - communicate detailed information - target specific audience (google, Facebook) - generate sale leads - measure results - engage through interactivity - easy to share something good (viral) - faster production and adjustment
what are some international advertising issues?
- greater need for standardization of global brand advertising strategies - specific advertising programs must usually be adapted to local cultures and other factors
explain a conventional distribution channel
- independent - make own choices manufacturer -> wholesaler -> retailer -> consumer
why is there a strong need for IMC?
- integrated marketing communications exists because conflicting messages from different sources can create confusion or blur brand perceptions - the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands
what are firms doing as a response to this changing environment?
- less broadcasting and more narrowcasting - granular audience - smaller group of consumers ex. social media, you tube ads, podcasts, product placement in TV and video games - companies have started spending more money on product placement because viewing is larger during TV
what are some caveats to using the CPM
- measures efficiency, not effectiveness - can't be compared across different medias - can be misleading even within a medium
what are some facts that play into deciding on media timing?
- must decide how to schedule the advertising over the course of a year - follow seasonal pattern? - oppose seasonal pattern? - same coverage all year? - choose the pattern of the ads - continuity or pulsing?
what are some media types and their media vehicles?
- network television and young sheldon - cable television and game of thrones - social media and facebook - online and ESPN.com
what are some public relation tools?
- news - speeches - special events - buzz marketing - mobile marketing - written materials - audiovisual materials - corporate identity materials - public service activities - company web site
what 4 factors go into setting the advertising budget?
- not really a clear way to determine ad budget 1. affordable: - based on what the company thinks it can afford 2. percentage of sales - based on a percentage of current or forecasted sales 3. competitive-parity: - see budget to match competitors 4. objective-and-task: - set objectives, determine tasks to achieve objectives, sum of task costs equals budget
what are some basic measurements for analytics?
- overall impressions -unique users - impressions per user - clickthrough rates (behavior) (customers interacting like clicking on the ad)
define media decisions
- reach, frequency, impact, major media types. specific media vehicles, media timing
what are some amount of service classifications of a product line?
- self-service retailers - limited-service retailers - full-service retailers
what are a few typical approaches to message execution?
- slice of life - lifestyle - fantasy - mood or image - musical - personality symbol - technical expertise - technological expertise - scientific expertise - testimonial evidence or endorsement
define warehouse club
- special example of off-price retailers - off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees ex. -costco - sams club
define factory outlet
- special example of off-price retailers - off-price retailing operating that is owned and operated by a manufacturer or retailer and that normally carries surplus, discontinued, or irregular goods ex. - tanger outlets - any outlet stores
what are some breadth and depth classifications of a product line?
- specialty stores - department stores - super markets - convenience stores - superstores - category killers
describe the push promotion strategy
- spends $ to push products to retailer who pushes them to consumer producer -> producing market activities (personal selling, trade promotion) -> retailers and wholesales -> reseller marketing activities (personal selling, advertising, sales promotion) -> consumer
define the retailer strategy
- target market - segmentation and targeting - retail store differentiation and positioning - retail marketing mix *retailers cannot make meaningful decisions related to the retail marketing mix until they first define and profile their target market*
why are companies moving to media such as internet?
- that's where the eyeballs are moving - there are some creative new ways to measure effectiveness, and link it to actual purchase behavior
what should you always consider when choosing a media type?
- the media habits of your target consumers - where are your target consumers eyes? - the nature of the product - type of message - cost
why are distribution channels used?
- the use of intermediaries results from their greater efficiency in making goods available to target markets - offers the firm more than it can achieve on its own through the intermediaries: - contacts - experience - specialization - scale of operation purpose: match supply from products to demand from consumers
why is it hard to assess advertising effectiveness for traditional media?
- what is the ultimate impact on sales? lots of contributing factors - can use sampling techniques to measure things like recall, brand attitudes, etc. - linking those measures to actual sales is very difficult
who are "the players" in advertising?
-web site owner ( ESPN.com) - advertiser (nike, pepsi) - ad agency - media agencies - ad serving and analytics companies
what are the 4 types of classifications retailers are based on?
1. amount of service they offer 2. breadth and depth of product lines 3. relative prices charged 4. how they are organized
what are some types of vertical marketing systems from highest degree of direct control to lowest
1. corporate to VMS - common ownership at different levels of channel (retailer owns manufacturer of retailers own wholesaler, etc.) ex. apple in the mall (not independent and retailer is owned by apple) 2. contractual VMS - contractual agreements among channel members - franchise ex. McDonalds on the strip (has a contract with UT)
what are the two elements to developing an advertising strategy consist of?
1. creating advertising messages 2. selecting advertising media
what are the 6 factors in the future of retailing?
1. new retail forms and shortening retail life cycles 2. growth of non store retailing 3. rise of mega-retailers 4. growing importance of retail technology 5. global expansion or major retailers 6. retail stores ads "communities" or "hangouts" ex. dick's sporting goods climbing wall"
what are the 5 major decisions in advertising?
1. objectives setting 2. budget decisions 3. message decisions 4. media decisions 5. campaign evaluation
what are the 3 factors that play into selecting adverting media?
1. reach - percentage of those in the target market exposed to an ad at least once during a specified time period 2. frequency - average number of times a person from the target is market exposed to ad during a specified time period 3. media impact - reach x frequency, sometimes expressed as GRP's or gross rating points
Mondelez International is a company that markets snack foods (Such as Oreo Cookies and Triscuit Crackers). Which distribution strategy do you think that Mondelez Employs? A. intensive distribution B. selective distribution C. exclusive distribution
A. intensive distribution
if the CPM to advertise on Monday night football is $46.64, and the CPM to advertise on Facebook is $8.60, then what conclusion should an advertiser draw? A. it makes sense to advertise on facebok B. it makes sense to advertise on Sunday Night Football C. I can't draw any conclusion - there's more to it than CPM
C. I can't draw any conclusion - there's more to it than CPM
when you see a first horizon bank branch located in a Kroger store, this is an example of: A. vertical marketing system B. hybrid marketing system C. horizontal marketing system D. strategic alliance system
C. horizontal marketing system
"any paid form of non-personal presentation and promotion of ideas, goods, or services by an unidentified sponsor" is the definition of: A. sales promotion B. personal selling C. public relations D. advertising E. direct marketing
D. advertising
what are the 5 promotion tools for marketing communications and what do they need to convey?
convey consistent, clear, and compelling company and brand messages 1. advertising: - any paid form of "shooting it t to the world" non personal presentation and promotion of ideas, goods, or services by an identified sponsor 2. sales promotion: - short term incentives to encourage the purchase or sale of a product or service - can be targeted toward consumers, businesses, or channel partners - big idea: to generate *immediate sales* ex. coupons 3. public relations: - building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events 4. personal selling: - personal presentation by the firm's sales force for the purpose of making sales and building customer relationships so the consumer will continue buying from you 5. direct marketing: direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships - the use of telephone, mail, fax, e-mail, the internet, and other tools to communicate directly with specific consumers
define services mix
different numbers and types of service are key to non-price store differentiation
T/F: You can measure the impact advertising has through how much of your products are selling
false
T/F: if sales of a product rise following an advertising campaign, this is definitive proof that the campaign was successful?
false
T/F: one of the real advantages of public relations was a part of the communication mix is that it gives the marketer maximum control over the message
false
T/F: online advertising is growing in popularity at least in part because it's harder to track online advertising effectiveness that it is to track traditional media advertising effectiveness
false
define category killers
giant specialty stores that carry a very deep assortment of particular line and is staffed by knowledgeable employees ex. - Home Depot and Lowes (home improvement) - staples (office supplies) - dick's (sporting goods) - REI (outdoor equipment) - IKEA (furniture)
if i don't own the channel and I don't have contracts with my channel partners, how do I get them to cooperate?
incentives to encourage product availability: - new products--higher marking, introductory discounts - "old products" -- encourage adequate inventory levels - buy-back allowances (discounts) - volume discounts (manage their inventory for them) - vendor managed, or co-managed, inventory relationships incentives to encourage promotional activity: - personal selling--push money or spins (sales personal incentive funds) - cooperative advertising programs - free POS promotions incentives to encourage high levels of customer service: - company-sponsored training programs - high margins on spare parts
when professor moon played an ad for us in class from Apple that was played in the 1984 Super Bowl about the woman setting the other people free from the weird man on the TV what kind of purpose was that? https://youtu.be/2zfqw8nhUwA
inform or compare - the creepy guy on the screen is "big brother" (IBM) - the woman setting everyone free is apple
define supermarket
large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of food, laundry, and household products ex. - publix - krooger - pavilions - whole foods
define superstores
much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services ex. - Walmartsuper center first super center: Tesco in eurpoe
in class professor moon showed us an add by coca-cola about all the people singing together holding a coke what kind of message execution approach was that? https://youtu.be/1VM2eLhvsSM
musical executions and remind
in class when professor moon showed us the Dos Equis ad about the most interesting man in the world what kind of message execution approach was that? https://youtu.be/oP0DaZBmwQI
personality symbol
define store atmosphere
physical layout and "feel" of the store`
define price decisions
price policy must fit its target market and positioning, product and service assortment, and competition
what is an example of disintermediation
producer -> consumer (skips the retailer) ex. estee lauder offers auto subscribing from website to consumer - adds value to consumers
what is another example of disintermediation
producer -> e-retailer -> consumer ex. Etsy
what is the brand in channels for consumer goods?
producer -> retailers (Lowes, Costco, target, home depot, Kroger, Walmart) -> consumer
what is disintermediation
product and service producers are bypassing intermediaries and going directly to final buyers or that new types of channel intermediaries are emerging to displace traditional ones
what are some channel design issues?
product availability: have the product available with the desired level of coverage - intensive, exclusive, selective distribution - have the product available in a desired location within the retail outlet promotional effort: - effective point-of-purchase promotion - effective personal selling support customer service: - installation, training, repair market information
what are the pros and cons of PR
pros: - inexpensive - can be very credible ex. Tesla getting good PR on CBS news about their new cars cons: - loss of control - timing - the message itself ex. having Cbs say bad things about a brand is a BIG problem
define limited-service retailers
provide more sales assistance because they carry more shopping goods about which customers need information ex. - Best Buy helps customers to select the best product for them via helpful sales people in the store
define off-price retailer
retailer that buys at less-than-regular wholesale prices and sells at less than retail ex. - T.J. Max - Marshalls
define place decisions
retailers can located in CBDs (central business districts), various types of shopping centers, storm malls, etc.
what is the textbook definition of retailing and what is wrong with it?
retailing includes all the activities involved in selling products or services directly to final consumer for their personal use - don't retailers also serve business markets? ex. restaurant buying products from staples
define self-service retailers
serve customers who are willing to perform their own "locate-compare-select" process to save money ex. - piggy wiggly is the first self-service retailer
what is a distribution channel?
set of *interdependent organizations* involved in the process of making a product or service available for use or consumption by the consumer or business user
in class when professor moon showed us the Budweiser ad about a farmer raising a horse and selling it to the horse race what kind of message execution approach was that? https://youtu.be/eJucRz8kYo0
slice of life and remind
define convenience stores
small stores located near residential areas that are open long hours 7 days a week and carry a limited line of high-turnover convenience goods ex. - 7-Eleven - Weigles
who has the largest number of franchise stores in the U.S.
subway with 25,908
how can a nice little family owned company like Orbit Irrigation products, Inc., from Salt Lake City, Utah sell its products everywhere from Portland, Maine to SanDiego, California?
through channels of distribution
define horizontal marketing system
two or more companies at one channel level join together to follow a new marketing opportunity ex. subway and pilot combined stores
define chain stores
two or more outlets that are owned and controlled, have central buying and merchandising, and sell similar lines of merchandise ex. - target - sax's fifth avenue - dick's - publix
define full-service retailers
usually carry more specialty goods for which customers like to be "waited on" ex. - high end jewelry stores - car dealerships
what is the largest franchise operation in terms of number of stores in the world?
7-eleven with 64,600 has a lot of stores outside the US
what is the biggest franchise operation in terms of revenue?
McDonalds with $90,910,000,000
what was the example professor moon provided about two companies in the same industry using the push and pull promotional strategy
Michelin tires = pull continental tires = push
