Marketing Chapter 17

After the firm has piqued the interest of its target market, the goal of subsequent IMC messages should move the consumer from "I like it" to

"I want it."

Click through rate

# of times a user clicks on an online ad divided by the # of impressions CTR = clicks / impressions

Impressions

# of times an advertisement appears in front of a user

Planning and Measuring IMC Success

-understand the outcome they hope to achieve before they begin -short-term or long-term -should be explicitly defined and measured

Methods of Promotion

1.) Advertising 2.) Public Relations 3.) Personal Selling 4.) Sales Promotion 5.) Direct Marketing 6.) Online/Social Media

Rule-of-Thumb Methods

1.) Competitive Party DEFINITION: -the communication budget is set so that the firm's share of communication expenses equals its share of the market LIMITATION: -does not allow firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets their market shares will stay approximately the same over time. 2.) Percentage-of-Sales DEFINITION: -the communication is a fixed percentage of forecasted sales LIMITATION: -assumes the same percentage used in the past, or by competitors, is still appropriate for the firm. Does not take into account new plans (e.g. introduce a new line of products in the current year) 3.) Available Budget DEFINITION: -marketers forecast their sales and expenses, excluding communication during the budgeting period. The difference between the forecast sales and expenses plus desired profit is reserved for the communication budget. That is, the communication budget is the money available after operating costs and profits have been budgeted LIMITATION: -assumes communication expenses do not simulate sales and profit

Setting and Allocating the IMC Budget

1.) Objective and Task Method 2.) Rule-of-Thumb methods ADVERTISING -Brochures (36,000 at .35 per) -Point of Sale Displays (1200 at $1 per) -Road Runner Baseball Cap (4800 at $1.50 per) -Trade Magazine (2,000 total) DEMONSTRATION -140 at $60 (set-up cost) per -travel expenses (19,000 total) TRADE SHOWS -2 shows at $2000 per TOTAL EXPENSES (year 1) =$54,400

If a sponsored link was delivered 100 times and 10 people clicked on it, then the number of impressions is 100, the number of clicks is 10, and the click-through-rate (CTR) would be

10 percent.

Which of the following would qualify as being a service retailer?

A health spa

The U.S. government promoted public participation in the 2010 census during the televised Super Bowl game in its efforts is to raise awareness of when and how the census works. This is an example of which of the following promotional elements?

Advertising

Which of the following is considered the greatest advantage offered to consumers by brick-and-mortar stores compared to online shopping?

Being able to use all five of their senses

Patagonia reinforces its image of selling high-quality, environmentally friendly sports equipment in its stores, catalogs, and website. Which of the following omnichannel challenges has Patagonia overcome by emphasizing function, not fashion, in the descriptions of its products in all of its channels?

Brand image

IMC Done Correctly

CHIPOTLE

Which of the following falls into the category of being a general merchandise retailer?

Category specialist

Search Engine Marketing

Clicks Impressions Click through Rate Return on Investment (ROI) Click through rate = clicks / impressions

Transit IMC goals and results

Communication Objectives: 1.) Awareness: -what stores sell sneakers? 2.) Knowledge: -what stores would you rate outstanding on the following characteristics? 3.) Attitude: -on your next shopping trip for sneakers, which store would you visit first? 4.) Visit: -which of the following stores have you been to?

Based on the recommendation of its advertising agency, Home Depot chose to advertise on HGTV. In this situation, HGTV represents which component of the communication process?

Communication channel

Which of the following food retailers is a self-service retail food store offering groceries, meat, and produce with limited sales of nonfood items?

Conventional supermarket

When developing strategies for working with retailers, manufacturers must consider whether they should sell in more than one outlet (e.g., store, catalog, and Internet). Which of the following factors for establishing a relationship with retailers deals with this?

Determining whether or not to use an omnichannel strategy

Macy's is conducting marketing research to determine whether or not its advertising message could be clearly understood by its customers. This relates to which component of the communication process?

Feedback loop

Objective and Task Method

IMC Budgeting method that determines cost requirements to under take specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs

_____ is (are) the number of times an ad appears in front of the user.

Impressions

Distribution intensity is commonly divided into three levels. What are they?

Intensive, exclusive, and selective

_______ offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price.

Off-price retailers

The old cliché claiming the three most important things in retailing are "location, location, location" corresponds to which of the following components of the retail strategy?

Place

What factors are used in the rule-of-thumb methods to determine the communication budget?

Prior sales and communication activities

how consumers perceive communication

RECEIVERS decode messages differently SENDERS adjust messages according to the medium and receivers' traits

Which of the following formulas is accurate for calculating gross rating points (GRP)?

Reach multiplied by frequency

Transit: Click through results

SNEAKER STORE: clicks: no cost: $10/day sales: $35/day revenue-cost: $25 ROI: 250% NYC SNEAKERS: clicks: 40 cost: $25/day sales: $40/day revenue-cost: $15 ROI: 60%

_____ distribution helps a seller maintain a particular image and control the flow of merchandise into an area which makes this approach attractive to many shopping goods manufacturers, such as most apparel items, home items like branded pots and pans or sheets and towels, branded hardware and tools, and consumer electronics.

Selective

_____ tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise.

Specialty stores

Home Depot hired an advertising agency to develop television ads for its grand opening in southern Maine. The advertising agency represents which of the following components of the communication process?

Transmitter

Which of the following firms operates more than 3,000 supercenters in the United States accounting for the vast majority of total supercenter sales—far outpacing its competitors?

Walmart

_____ are large retailers (100,000 to 150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses.

Warehouse clubs

objective of promotions: the AIDA Model

a common model of the series of mental stages through which consumers move as a result of marketing communications: Awareness Interest Desire Action Think, Feel, Do

The fact that a particular advertisement might not cause a consumer to make an immediate purchase is referred to as

a lagged effect.

Luxury goods firms such as Coach use _____ distribution strategy to limit sales to one or only a few select, higher-end retailers in each region, because selling its product in full-line discount stores or off-price retailers would weaken its image.

an exclusive

A brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold exclusively by the retailer is referred to as

an exclusive brand.

If Kleenex produced a new, eco-friendly personal-sized package of tissues, which it intended to get into as many retail outlets as possible, it should choose _____ distribution strategy.

an intensive

Transit

an upscale sneaker store in NYC modeled after vintage NYC subway trains

Limitations of the _____ budgeting method include not allowing firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets, their market shares will stay approximately the same over time.

competitive parity

Since her firm's share of the market has increased from 2.5 to 3 percent, Allyson had determined she would set her share of communication expenses at 3 percent of sales, which is an example of the use of the _____ method.

competitive parity

Salespeople can be particularly helpful when purchasing a(n) _____ product.

complicated

There are three elements in any integrated marketing communication strategy: the _______, the channels through which the message is communicated, and evaluation of the results of the communication.

consumer being targeted

When choosing retail partners, a high-end cosmetics manufacturer like Estée Lauder would most likely not choose to sell to CVS or Dollar General due to

customer expectations.

In the communication process, _____ refers to the process by which the receiver interprets the sender's message.

decoding

The AIDA model represents a series of mental stages a consumer goes through and includes awareness, action, interest, and

desire

Omaha Steaks sending e-mail coupons for items that customers have purchased previously and mailing slick pictures of gourmet steaks and meal packages to addresses that have received orders in the past is an example of

direct marketing.

Personalized e-mail marketing is an online, passive form of persuasive communication and would be classified as an example of

direct marketing.

When designing in-store signage, retailers often develop yellow signs and shelf tags with bold lettering to catch consumers' attention. The use of visuals in this manner represents the _____ component of the communication process.

encoding

Although the number of their physical stores is limited, L.L.Bean is widely known for offering unique, high-quality merchandise. Adding an Internet channel was particularly attractive because it allowed the company to _____ without having to build new stores.

expand its market presence

Dollar General and Family Dollar stores are small, full-line discount stores that offer a limited merchandise assortment at very low prices, so they would be classified as

extreme value retailers.

Measuring Success Using Marketing Metrics

frequency reach gross rating points Gross Rating Points (GRP) = Reach x Frequency

Jacob determined one of the metrics he would use to gauge the level of exposure his marketing message had with his target market was the number of times the target was exposed to his message throughout the six weeks of the campaign, representing its

frequency.

Walmart, Target, and Kmart offer a broad variety of merchandise, limited service, and low prices, which would classify them as

full-line discount stores.

Generally, the _____ and _____ sophisticated the channel member, the less likely that it will use supply chain intermediaries.

larger; more

Reach

measure of consumer's exposure to marketing communications; the specific percentage (%) of the target population exposed to a specific marketing communication, such as an advertisement at least once

Frequency

measure of how often the audience is exposed to a communication within a specified period of time

GRP

measure used for various media advertising--print GRP= reach x frequency

Online/Social Media

media content used for social interactions such as youtube, facebook, and twitter delivered electronically -websites, blogs, social media "like" us on Facebook

The _____ method determines the budget required to undertake specific tasks to accomplish communication objectives.

objective-and-task

Advertising

paid form of commutation through a communication channel and designed to persuade the receiver to take some action, now or in the future. paid, from identified source, mass media -most visible element of IMC -Extremely effective at creating awareness and generating interest

From the consumer's perspective, the elements of an IMC strategy can be viewed as being either

passive or interactive.

Traditionally, advertising has been _____ and _____.

passive; offline

Offering live, online chat options to shoppers is a way of increasing the value of online shopping because it provides

personalized customer service.

To support the other promotional efforts, firms use _____ to generate "free" media attention.

public relations

Nathan gauged the level of exposure to his marketing campaign using the percentage of the target population exposed at least once to his advertisement, representing its

reach

When customers purchase merchandise in stores, the physical presence of the store _____ their perceived risk of buying and _____ their confidence that any problems with the merchandise will be corrected.

reduces; increases

Google's AdWords system provides a Quality Score as a measure of _____, which indicates the usefulness of an ad message to consumers doing a Google search.

relevance

IMC

represents the promotion of the 4 p's: encompasses a variety of communication disciplines-- general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media-- in combination to provide clarity, consistency, and maximum communicative impact

The set of business activities that adds value to products and services sold to consumers for their personal or family use is referred to as

retailing.

Direct Marketing

sales and promotional techniques that deliver promotional materials individually delivery of promotional materials individually -growing element of IMC -includes e-mail and mobile marketing -database technology improves example: overstock.com

Retailers may modify product, price, and/or promotion to attempt to increase their _____, which is the percentage of the customer's purchases made from that particular retailer.

share of wallet

According to your text, sales promotions such as free samples and point-of-purchase displays are designed to build

short-term sales.

Stores are limited by their _____, which is generally not an issue when shopping on the Internet.

size

Customers can use the Internet to share their opinions about products and services via YouTube, Facebook and Twitter. In doing so, they can help facilitate the consumer decision process through use of

social media.

Sales Promotion

special incentives or excitement building programs that encourage the purchase of a product/service such as: -coupons -rebates -contests -free sampling -point of purchase displays -can be aimed at both end user consumers or channel members -used in conjunction with other forms of IMC -can be used for both short-term and long-term objectives

Offering a one-stop shopping convenience to customers, _______ combine a supermarket with a full-line discount store.

supercenters

Both Walmart and JCPenney initially had separate organizations for their Internet channel but subsequently integrated them with stores and catalogs to address the _____ challenge of omnichannel retailing.

supply chain

Return on Investment (ROI)

the amount of profit divided by the value of the investment -in the case of advertising, the ROI is the: = (sales rev generated by ad- ads costs) / ads cost

In thinking about the channel structure, the level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by all of the following except

the degree to which the channel is horizontally integrated.

Public Relations

the organizational function that manages the firm's communications to achieve a variety of objectives including building/maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with media actions to maintain positive relationship with community -"free" media attention -importance of PR has grown as cost of other media has increased -consumers becoming more skeptical about marketing, PR becoming more important

Personal Selling

the two way flow of communication between a buyer and seller that is designed to influence the buyer's purchase decision two way flow of information -some products require the help of a salesperson -more expensive than other forms of promotion -salespeople can add significant value, which makes the expense worth it

The AIDA model is also known as the _____ model.

think, feel, do

Harley Davidson has _____ if a consumer responds "Harley" when asked about American-made motorcycles.

top-of-mind awareness

The highest level of awareness is

top-of-mind awareness