MKT360 Exam 3

Advertising

Mass Fees paid for space or time Efficient means for reaching large numbers of people High absolute cost, difficult to receive good feeback

Public Relations

Mass No direct payment to media Often most credible source in the consumer's mind Difficult to get media cooperation

Sales Promotion

Mass Wide range of fees paid, depending on promotion selected Effective at changing behavior in the short run, very flexible Easily abused, can lead to promotional wars, easily duplicated

Channel Intermediaries

Middleman, agent or broker, wholesaler, retailer, distributor, dealer

Types of Product Advertisements

Pioneering (Informational) - New products Competitive (Persuasive) - also comparative (ex. Kindle v IPad) Reminder (Reinforcement) - established brands

Vertical Marketing Strategy

Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. (Producer & Wholesaler & Retailer to Consumer)

Appeals in Advertising

Rational, moral, emotional, fear, sex, humor, spokesperson

Time Utility

Service available for long hours (ex. Walmart open 24 hours)

Demand-Oriented Approaches

Skimming, penetration, prestige, price lining, odd-even, target, bundle, yield management

Cost-Oriented Approaches

Standard markup, cost-plus, experience curve

Profit-Oriented Approaches

Target profit, target return on sales, target return on investments

Push Strategy

The promotional mix is directed toward intermediaries (ex. car dealerships receiving incentives for reaching sales goals)

Value of an Intermediary

Time utility, place utility, form utility, possession utility

Multichannel Retailer

Using multiple channels to reach multiple segments Pros - Increased sales/market coverage Cons - Potential for conflict

Horizontal Conflict

a channel conflict that occurs among channel members on the same level

Dealer

a more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler, and so forth

Price Skimming

a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

Distributor

an imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including selling, maintaining inventories, extending credit, and so on; a more common term in business markets but may also be used to refer to wholesalers

Middleman

any intermediary between the manufacturer and end-user markets

Wholesaler

any intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

Agent or Broker

any intermediary with legal authority to act on behalf of the manufacturer

Vertical Conflict

conflict between different levels of the same channel

User-generated content (UGC)

consists of the various forms of online media content that are publicly available and created by end users.

Marketing Channel

individuals and firms involved in the process of making a product or service available for use or consumption by consumers or individual users

Types of Distribution

intensive, selective, exclusive

Value

perceived benefits/price

Traditional Channel

producer to wholesaler to retailer to consumer

Product Line Depth

A large assortment usually within one main product category (ex. Best Buy - Tech, Victoria's Secret)

Promotional Mix

Advertising, public relations, sales promotions, direct marketing, personal selling

Possession Utility

Agents help buyers take possession (ex. car dealership helping a buyer get new plates)

Retailer

An intermediary who sells to consumers

Integrated Marketing Communications (IMC)

Communications that coordinate all promotional activities to provide a consistent message

Place Utility

Convenient location (ex. ATMs, gas stations, etc)

Measures linked to input

Cost per thousand (ex. 50 cents for every 1000 times an ad loads) Cost per click (ex. pay X amount for every click on a link to a website) Cost per action (ex. pay X amount for every purchase made as a result of the ad)

Competition-Oriented Approaches

Customary, above- at- or below-market, loss leader

Direct Marketing

Customized Cost of communication through mail, telephone, or computer Messages can be prepared quickly, facilitates relationship with consumer Declining customer response Database management is expensive

Personal Selling

Customized Fees paid to salespeople as either salaries or commissions Immediate feedback, very persuasive, can select audience, can give complex information Extremely expensive per exposure, messages may differ between salespeople

Situations When Skimming is Successful

Inelastic demand, unique advantages/superior, legal protection of product, technological breakthrough, encourage competitors to enter

What do Consumers Want?

Information, convenience, variety, pre- or post-sale service

Product Line Breadth

Lots of different product categories in the same story (ex. Walmart, Macy's, JCPenny)

Pull Strategy

the promotional mix is directed at final consumers (ex. ads for prescription drugs)

Sales per Square Foot

total sales/selling area in square feet

Same Store Growth %

(Store sales: Year 2 - Store sales Year 1)/ Store sales year 1 x 100

Form Utility

(ex. Coca Cola sells concentrate while licensed bottlers sell the finished product to consumers)

Measures linked to output

fans/followers, visitors, share of voice, average page views, fan source, interaction rate, click-through rate