Marketing 300 CH(9,10,12)

advertising media

(1) determining reach, frequency, impact, and engagement; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing.

Advertising

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Public relations (PR)

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.

market-penetration pricing

Companies set a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share.

captive-product pricing

Companies that make products that must be used along with a main product

Direct and digital marketing

Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

market-skimming pricing

Many companies that invent new products set high initial prices to skim revenues layer by layer from the market.

Earned media

PR media channels, such as television, newspapers, blogs, online video sites, and other media not directly paid for or controlled by the marketer but that incorporate the content because of viewer, reader, or user interest.

Personal selling

Personal customer interactions by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships.

Sales promotion

Short-term incentives to encourage the purchase or sale of a product or service.

channel conflict

Such disagreements over goals, roles, and rewards

break-even pricing or target return pricing

The firm tries to determine the price at which it will break even or make the target return it is seeking.

affordable method

They set the promotion budget at the level they think the company can afford. Small businesses often use this method, reasoning that a company cannot spend more on advertising than it has.

Mood or image

This style builds a mood or image around the product or service, such as beauty, love, intrigue, serenity, or pride.

Personality symbol

This style creates a character that represents the product. The character might be animated (Mr. Clean, the GEICO Gecko, or the Michelin Man) or real (perky Progressive Insurance spokeswoman Flo, Allstate's Mayhem, Ronald McDonald).

Fantasy

This style creates a fantasy around the product or its use. For example, a Calvin Klein "Drive in to Fantasy" ad shows a woman floating blissfully above a surf-strewn beach at sunset in her Calvin Klein Nightwear.

Testimonial evidence or endorsement

This style features a highly believable or likable source endorsing the product. It could be ordinary people saying how much they like a given product. For example, Whole Foods features a variety of real customers in its Values Matter marketing campaign. Or it might be a celebrity presenting the product, such as Beyoncé or Sofia Vergara speaking for Diet Pepsi.

Scientific evidence

This style presents survey or scientific evidence that the brand is better or better liked than one or more other brands. For years, Crest toothpaste has used scientific evidence to convince buyers that Crest is better than other brands at fighting cavities.

Lifestyle

This style shows how a product fits in with a particular lifestyle.For example, an ad for Athleta active wear shows a woman in a complex yoga pose and states: "If your body is your temple, build it one piece at a time."

Slice of life

This style shows one or more "typical" people using the product in a normal setting. For example, a Silk Soymilk "Rise and Shine" ad shows a young professional starting the day with a healthier breakfast and high hopes.

Musical

This style shows people or cartoon characters singing about the product.

Technical expertise

This style shows the company's expertise in making the product. Thus, Jim Koch of the Boston Beer Company tells about his many years of experience in brewing Samuel Adams beer.

marketing channel

a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

intensive distribution

a strategy in which they stock their products in as many outlets as possible.

cost-plus pricing (or markup pricing)

adding a standard markup to the cost of the product.

dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations.

Allowances

are another type of reduction from the list price.

Fixed costs

are costs that do not vary with production or sales level.

distribution centers

are designed to move goods rather than just store them. They are large and highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Total costs

are the sum of the fixed and variable costs for any given level of production.

disintermediationa

big term with a clear message and important consequences.

Marketing channel design

calls for analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

Marketing channel management

calls for selecting, managing, and motivating individual channel members and evaluating their performance over time.

multimodal transportation

combining two or more modes of transportation.

promotional pricing

companies will temporarily price their products below list price—and sometimes even below cost—to create buying excitement and urgency.

contractual VMS

consists of independent firms at different levels of production and distribution that join together through contracts to obtain more economies or sales impact than each could achieve alone.

conventional distribution channel

consists of one or more independent producers, wholesalers, and retailers.

vertical marketing system (VMS)

consists of producers, wholesalers, and retailers acting as a unified system.

promotion mix or marketing communications mix

consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships.

Advertising strategy

consists of two major elements: creating advertising messages and selecting advertising media.

indirect marketing channels

containing one or more intermediaries.

value-added pricing

features and services to differentiate their offers and thus support their higher prices

direct marketing channel

has no intermediary levels—the company sells directly to consumers.

price elasticity

how responsive demand will be to a change in price.

exclusive distribution

in which the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories.

horizontal marketing system

in which two or more companies at one level join together to follow a new marketing opportunity.

corporate VMS

integrates successive stages of production and distribution under single ownership.

push strategy

involves "pushing" the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final consumers.

Marketing logistics or physical distribution

involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Competition-based pricing

involves setting prices based on competitors' strategies, costs, prices, and market offerings.

Cost-based pricing

involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk.

discount

is a cash discount, a price reduction to buyers who pay their bills promptly.

advertising objective

is a specific communication task to be accomplished with a specific target audience during a specific period of time.

value delivery network

is made up of the company, suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system.

franchise organization

is the most common type of contractual relationship. In this system, a channel member called a franchisor links several stages in the production-distribution process.

administered VMS

leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members.

product line pricing

management must determine the price steps to set between the various products in a line.

supply chain management

managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers,

Shared media

media shared by consumers with other consumers, such as social media, blogs, mobile media, and viral channels as well as traditional word of mouth.

good-value pricing

offering the right combination of quality and good service at a fair price.

optional-product pricing

offering to sell optional or accessory products along with the main product.

Price

price is the amount of money charged for a product or a service. More broadly, price is the sum of all the values that customers give up to gain the benefits of having or using a product or service.

reference prices

prices that buyers carry in their minds and refer to when looking at a given product.

Owned media

promotional channels owned and controlled by the company, including company Web sites, corporate blogs, owned social media sites, proprietary brand communities, sales forces, and events.

Paid media

promotional channels paid for by the marketer, including traditional media (such as TV, radio, print, or outdoor) and online and digital media (paid search ads, mobile ads, email marketing, or Web and social media display ads and sponsored content).

integrated logistics management

recognizes that providing better customer service and trimming distribution costs require teamwork, both inside the company and among all the marketing channel organizations.

target costing

reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" Instead, it starts with an ideal selling price based on customer value considerations and then targets costs that will ensure that the price is met.

psychological pricing

sellers consider the psychology of prices, not simply the economics.

product bundle pricing

sellers often combine several products and offer the bundle at a reduced price.

percentage-of-sales method

setting their promotion budget at a certain percentage of current or forecasted sales.

competitive-parity method

setting their promotion budgets to match competitors' outlays.

demand curve

shows the number of units the market will buy in a given time period at different prices that might be charged.

third-party logistics (3PL) providers

such as Ryder, Penske Logistics, BAX Global, DHL Logistics, FedEx Logistics, and UPS Business Solutions.

creative concept or big idea

that will bring the message strategy to life in a distinctive and memorable way.

integrated marketing communications

the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

by-product pricing

the company seeks a market for these by-products to help offset the costs of disposing of them and help make the price of the main product more competitive.

segmented pricing

the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.

pull strategy

the producer directs its marketing activities (primarily advertising, consumer promotion, and direct and digital media) toward final consumers to induce them to buy the product.

selective distribution

the use of more than one but fewer than all of the intermediaries who are willing to carry a company's products.

content marketing

they create, inspire, and share brand messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared communication channels.

Customer value-based pricing

uses buyers' perceptions of value as the key to pricing. Value-based pricing means that the marketer cannot design a product and marketing program and then set the price.

Variable costs

vary directly with the level of production. Each PC produced by HP involves a cost of computer chips, wires, plastic, packaging, and other inputs.

advertising budget

we look at four common methods used to set the total budget for advertising: the affordable method, the percentage-of-sales method, the competitive-parity method, and the objective-and-task method.

multichannel distribution systems

when a single firm sets up two or more marketing channels to reach one or more customer segments.

objective-and-task method

whereby the company sets its promotion budget based on what it wants to accomplish with promotion.