mkt 3 study guide

The primary sources of value that retailers can offer

- Add value for customers by providing services and assisting in selections - Enhances customers' perceptions of the value of products by making shopping experiences more convenient - Facilitate comparison shopping - Sales personnel - Add value to supply chain - Major role in creating time, place, and possession and, in some cases, form utility - Perform marketing functions

Trends (what is changing) in the world of personal selling

- Increased professionalism - Driven by data and buyer insights - AI and predictive analytics - More focus on alignment between Sales and Marketing

Brokers and agents both:

- Negotiate purchases and expedite sales in exchange but do not take title to products - Perform a limited number of services in exchange for a commission, which generally is based on the product's selling price - Know their markets well and often form long-lasting associations with customers - Enable manufacturers to expand sales when resources are limited, benefit from the services of a trained sales force, and hold down selling costs

Many organizations use an advertising agency to help develop the advertising campaign

- Ordinarily, a firm relies on the agency for copywriting, artwork, technical production, and formulation of the media plan - Agency personnel often have broad advertising experience and are usually more objective than a firm's own employees - Traditionally, paid as a percentage (commission) of the money spent on media - the standard has been 15% but that rate has generally declined over time

wholesalers may engage in supply-chain management activities:

- Primary responsibility for physical distribution of products from manufacturers to retailers - May establish information systems that help producers and retailers manage the supply chain - Use information technology and the internet to share information among intermediaries, employees, customers, suppliers, and facilitating agencies - Make databases and marketing information systems available to their supply-chain partners to facilitate order processing, shipping, and product development and to share information about changing market conditions and customer desires

part of the sales effort, usually with responsibility for customer retention, upsells, and cross-sales. They also are the first contact from customers who have a specific question or problem

Account Manager

a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media

Advertising

represent wither buyers or sellers on a permanent basis

Agents

a posttest that asks respondents to identify recent ads and provides clues to jog their memories

Aided recall test

bring buyers and sellers together temporarily

Brokers

packaging together two or more complementary products and selling them for a single price (the single price is generally markedly less than the sum of the prices of the individual products)

Bundle Pricing

a temporary price reduction to resellers buying specific quantities of a product

Buying allowance

a retail strategy of managing groups of similar, often substitute products produced by different manufactures

Category Management

the limit on the volume of information a communication channel can handle

Channel capacity

converting meaning into a series of signs or symbols

Coding process

the medium of transmission that carries the coded message

Communications channel

Common sources of prospects

Company sales records, trade shows, databases, public records, responses to ads, seminars and meetings, referrals

trying to match competitors' advertising outlays (often with the goal of preserving market share)

Competition-matching approach

For products and services consumed on a consistent basis throughout the year

Continuous

an arrangement in which a manufacturer agrees to pay a certain amount of retailer's media costs for advertising the manufacturer's products

Cooperative advertising- - A retailer must show proof that advertisements did appear before the manufacturer pays the agreed-upon portion of the advertising costs

has the responsibility to make sure that a product helps customers achieve whatever goals they have

Customer success

converting signs or symbols into concepts and ideas

Decoding process

charging different prices to different buyers for the same quality and quantity of pricing (market must consist of multiple segments with different price sensitivities, risk of confusing or antagonizing customers)

Differential Pricing

The decisions and activities that make products available to consumers when and where they want to purchase them

Distribution

Typical criteria for qualifying prospects and turning them into leads

Does the prospect represent a good fit (in our target market)? Has the prospect indicated interest? Do they have the ability and authority to buy?

(desk jobbers) limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products

Drop shipper

__________________ is one in which a slight decrease in price results in a relatively large increase in demand, or units sold; inelastic demand is the opposite

Elastic demand

using a single outlet in a fairly large geographic area to distribute a product (Suitable for products purchased infrequently, consumed over a long period of time, or that require a high level of customer service or information; used for expensive, high-quality products with high profit margins, not appropriate for convenience products and many shopping products, used as an incentive to sellers when a limited market is available for products

Exclusive distributions

the receiver's response to a decoded message

Feedback

For products with distinct seasonal patterns

Fighting

an arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration

Franchising

How many times, on average, were they exposed to ads

Frequency

perform the widest range of wholesaling functions

Full-service wholesaler

have a wide product mix but limited depth within product lines

General-merchandise wholesalers

What is the total communication impact of the campaign, across media channels or over a particular channel

Gross Rating Points

using all available outlets to distribute a product (appropriate for products that have a high replacement rate, require almost no service, or are bought based on price cues; must be available at a store nearby and be obtained with minimal search time)

Intensive distribution

developing and maintaining adequate assortments of products to meet customers' needs

Inventory Management

provide some services and specialize in a few functions

Limited-service wholesaler

___________ involving physical distribution, relates to planning, implementing, and controlling the efficiency products and includes order processing, inventory management, materials handling, warehousing, transportation

Logistics

planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption in order to meet customers' needs and wants

Logistics management

a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain

Marketing Channel

middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products; play key role in customer relationship through distribution activities by maintaining databases and information systems to help all members of the marketing channel maintain effective customer relationships

Marketing Intermediaries

the difference between the cost of a good and its selling price; Grocery store markup average is -10 % ; ?

Markup

budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them

Objective-and-task approach

stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts

Off-price retailers

Reorder points are a function of:

Order lead time (The average time lapse between placing the order and receiving it), Usage rate (The rate at which a product's inventory is used or sold during a specific time period), Safety stock (The amount of extra inventory a firm keeps guarding against stockouts resulting from above-average usage rates and/or longer-than-expected lead times)

set a relatively low price to drive market share/value perceptions (designed for high market share (hence penetration), volume over margin, discourages competition, good for elastic products)

Penetration Pricing

multiplying the firm's past and expected sales by a standard percentage (often an industry average)

Percentage-of-sales approach

a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation

Personal Selling

Evaluation of advertising effectiveness after the campaign

Posttest

extra compensation to salespeople for pushing a line of goods

Premium money (also "push money" or "spiff")

Evaluation of advertisements performed before a campaign begins

Pretest

set a relatively high price at first and then lower it over time (popular in electronics, allows for sunk costs, good for inelastic demand, encourages competition)

Price Skimming

emphasizing price as an issue and matching or beating competitors' prices; need to be the low-cost seller of the product, have ability to change prices rapidly and aggressively

Price competition

company operated facilities for storing and shipping their own products

Private warehouses

processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information

Procurement

"the paid inclusion of branded products or brand identifiers through audio and/or visual means, within mass media programming" ; Sometimes it is a minor part of an IMC campaign - but at other times it is central

Product Placement

strategies that encourage purchases based on consumers' emotional responses, rather than on economically rational ones

Psychological Pricing

communication efforts used to create and maintain favorable relations between an organization and its stakeholders

Public relations - Can be directed at either internal and/or external stakeholders - Can be used to promote people, places, ideas, activities, and even countries - Is often used by nonprofit organizations as well as corporations Focuses on enhancing the image of the total organization

storage space and related logistics facilities that can be leased by companies

Public warehouses

For some products consumed year-round but with some seasonality (ect. Swimwear)

Pulsing

To determine whether or not someone who is interested in your services is a good fit as a customer. If yes, they are worthy of your time and effort to turn them into a customer

Qualifying a prospect

full-service, specialty-line wholesalers that own and maintain display racks in stores

Rack Jobbers

How many people (raw number) or what percentage of the target audience were exposed to ads

Reach

sales-promotion techniques in which a consumer receives a specified amount of money for making a single project purchase

Rebates

the individual, group, or organization that decodes a coded message

Receiver

a posttest in which respondents are shown the actual ad are asked if they remember seeing or hearing it

Recognition test

sales-promotion techniques that offer consumers a specified amount of money when they mail in a proof of purchase, usually for multiple product purchases

Refunds

the amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than expected lead times

Safety stock (reorder point)

a sales promotion method used to motivate distributors, retailers, and sales personnel through recognition of outstanding achievements

Sales contests - Advantages: can achieve participation at all distribution levels - Disadvantages: positive effects may be temporary, and prizes are usually expensive

provides salespeople with what they need to engage their target buyers including: - Content that sales will provide to the buyer - Best practices, research and tools that Sales will consume internally

Sales enablement

__________ is the most expensive sales-promotion method because production and distribution entail high costs; 92% of respondents said they would purchase a product if they liked it after getting

Sampling

using only some available outlets in an area to distribute a product (appropriate for shopping products, desirable when a special effort, such as customer service from a channel member, is important to customers; often used to motivate retailers to provide adequate service

Selective distributions

a person, group, or organization with a meaning it tries to share with a receiver or an audience

Source

all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer

Supply chain

the group of people at whom advertisements are aimed

Target Audience

the use of a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal selling process

Team selling it is increasingly important because: - Team buying, more people are involved in the prospect's buying process - Long time periods involved - Products and solutions are increasingly complex

(truck jobbers) limited-service wholesalers that transport products directly to customers for inspection and selection

Truck wholesalers

a posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues

Unaided recall test

an individual or organization that sells products that are bought for resale, for making other products, or for general business operations

Wholesaler

transactions in which products are bought for resale, for making other products, or for general business operations

Wholesaling

Personal, informal exchanges of communication that customers share with one another about products, brands, and companies

Word-of-mouth communication

When it comes to using consumer premiums, marketers need to make sure there is a good fit between the product sold and the accompanying product offered as a bonus. Which of the following represents the best "fit"? a) A free bottle of face and body lotion with the purchase of a razor b) A food coupon with the purchase of sunglasses c) A free hat with the purchase of swim goggles d) An entry into a sweepstakes for a space trip with the purchase of a ticket to Disney World

a) A free bottle of face and body lotion with the purchase of a razor

Imagine that you ran an advertising campaign targeted to young women in the Southeast US who purchase jewelry. Research tells you that 40 percent of that audience saw or heard your ad at least once. In the language of media planning, your campaign generated a(n) ___ of 40: a) Frequency b) Gross rating c) Accumulation d) Reach e) Expansion

a) Frequency

Which of the following is an advantage for public relations, compared to other options in the promotional mix? a) Marketers have direct control over the message and how it appears b) Messages delivered as a result of PR have higher credibility with target audiences c) Public relations is essentially free d) Marketers can predict the timing of when PR-generated messages will ultimately appear

b) Messages delivered as a result of PR have higher credibility with target audiences

Considering all the costs involved, the most expensive part of the promotional mix is usually: a) Public relations b) Personal selling c) Sales promotion d) Advertising

b) Personal selling

This advertising medium has several advantages including low cost, the opportunity for geographic targeting, and availability 24/7. However, there is no way to be selective in who sees your message and audiences have only a very limited amount of time to notice your message: a) Radio b) TV c) Outdoor d) Direct mail e) Newspapers

c) Outdoor

When companies find themselves with too much inventory they suffer from "carrying costs." Which of the following is NOT an example of a carrying cost? a) Products become outdated or obsolescent b) Products are more at risk of being stolen c) The company misses out on opportunities to sell the inventory d) The company spends extra money on freight and storagee) More products get damaged or broken in transport

c) The company misses out on opportunities to sell the inventory

Many times retailers, such as grocery stores, sell products which actually have a negative markup (meaning, they lose money on the sale of that particular product). What is the most common business reason for this? a) The retailer chose a push strategy based on volume b) There aren't enough profitable products for retailers to sell c) Retailers lack the systems and data necessary to track the profitability of individual products d) A loyal customer's lifetime value is more important to retailers than an individual product

d) A loyal customer's lifetime value is more important to retailers than an individual product

Let's say you wanted to own and operate a Firehouse Subs location, and you successfully made that agreement. In that scenario you would be considered the _____ and Firehouse Subs would be the _____. a) franchisor; franchisee b) provider; distributor c) broker; agent d) franchisee; franchisor e) promoter; distributor

d) franchisee; franchisor

Most companies have an _____________ force to take orders, follow up on deliveries, and provide technical information

inside sales

anything that reduces a communication's clarity and accuracy

noise

Redemption rates have been changing over time:

o Typical redemption rates of printed coupons range from 0.5% to 2% o Average coupon redemption rates from email coupons via desktop channels are at 2.7% o Coupons received via smartphone applications have higher redemption rates of between 8% to 16% o Retailers who offer both email and SMS coupons see even higher redemption rates of between 15% and 25%

ending prices in odd or non-round numbers limited processing capacity, specific price makes consumers think it is lowest possible price, record keeping)

odd-even pricing

generally the most expensive element in the promotion mix

personal selling

items offered free or at a minimal cost as a bonus for purchasing a product

premiums

The inventory level that signals the need to place a new order

reorder point

Not enough inventory means

stockout costs