Marketing Exam #3

personal selling process

1. Prospecting 2. Preapproach 3. Approach 4. Making the presentation 5. Overcoming objectives 6. Closing the sale 7. Follow-up

Supply Chain

All the activities associated with the flow and transformation of product from raw materials through to the end consumer

Retailer

An organization that purchases products for the purpose of reselling them to ultimate consumers •Retailers are important to the economy

Advertising

Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor, directed at a target audience.

Michael's, PetSmart, and Staples are all examples of

Category killers

promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

1. If Target were to base its advertising appropriation on the amount that Walmart spends, it would be using the ____ approach.

Competition-matching

Types of Advertising cont

Product advertising promotes the uses, features and benefits of products •Two types of product advertising: •Pioneer advertising - tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product •Used most often for products before they hit the market •Competitive advertising - tries to stimulate demand for a specific brand by promoting its features, uses and advantages; sometimes through indirect or direct comparisons with competing brands

Promotional Mix

Resources, objectives, polices, push and pull channel polices, characteristics of the target market, Cost and availability of promotional methods, Characteristics of the product

Fragile products that require special handling are more likely to be distributed through

Shorter channels

Taylor works for a company that buys snacks such as chips, cookies, and candy in bulk from manufacturers. Taylor's company then repackages them and sells them to vending companies who have vending machines at government institutions. Taylor most likely works for a(an) ___, while the vending machine company is a(an) _____.

Wholesaler, retailer

direct channel

a distribution channel in which producers sell directly to consumers

1. To increase sales of its cereals, Kellogg offered a free pound of bananas to customers who bought the large-size box. This form of sales promotion is called a

coupon

Promotional Objectives

create awareness, stimulate demand, encourage product trial, identify prospects, retain loyal customers, facilitate reseller support, combat competitive promotional efforts, reduce sales fluctuations

1. Chris sees a television commercial for Arby's promoting its roast beef sandwiches at 5 for $5.95. Later that day he goes to the nearest Arby's for a roast beef feast, but is told that the special offer is not available at that location. Arby's seems to lack

integrated marketing communications.

indirect channel

intermediaries are inserted between the producer and consumers and perform numerous channel functions

1. _________is anything that reduces the clarity and accuracy of communication.

noise

1. Selective demand is demand for a

particular brand.

1. By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the following physical distribution activities except

unit pricing.

Retailing

• All transactions in which the buyer intends to consume the product through personal, family or household use •Retailing often takes place in stores or service establishments but also occurs through direct selling, direct marketing, and vending machine sales •There is a clear expectation that consumers will increasingly buy their goods online

Characteristics of the Product

•Business products concentrate on: •Personal selling •Sales promotion •Consumer products concentrate on: •Convenience goods = advertising •Durables and expensive products = personal selling •Both = public relations •Product price is an important factor

Off-price retailers

•Buy manufacturers' seconds, overruns, returns and off-season merchandise for resale to consumers at deep discounts •Offer limited lines of national-brand and designer merchandise, usually clothing, shoes or housewares •Keep prices low by offering few services and sustaining high inventory turnover •Ensure a regular flow of merchandise by establishing long-term relationships with suppliers that provide large quantities of goods at reduced prices

Identify Prospects

•Certain types of promotional efforts aim to identify customers who are interested in the firm's product and are likely potential buyers •Techniques Include: •Television advertisement encouraging the viewer to visit the company's website to share information and receive something of value •Company should respond with phone calls, e-mail, or personal contact by salesperson

Encourage Product Trial

•If customers stall in the evaluation stage, marketers can use methods to encourage product trial in order to move them to product adoption •Trial Techniques: •Free samples •Coupons •Test drives •Limited free-use offers •Contests •Games

Distribution Intensity of Product

•Intensive Distribution •Advertising, sales promotion •Selective Distribution •Promotion mixes vary •Exclusive Distribution •Personal selling

Personal Selling

•Is the two-way flow of communication between a buyer and seller... •Often in a face-to-face encounter... •Designed to influence a person's or group's purchase decision.

Channel Power

•The ability of one channel member to influence another channel member's goal achievement

Strategic Issues: Store Image

•To attract customers, a retail store must project an image that appeals to its target market •Atmospherics are the physical elements in a store's design that appeal to consumers' emotions and encourage buying •Music, color, complexity of layout and merchandise presentation •Used to influence customers based on shopping motivation •Helps to create an image and position a retailer

Wholesaler

•an individual or organization that sells products that are bought for resale, for making other products or for general business operations •There are approximately 435,000 wholesaling establishments in the U.S. and more than half of all products sold pass through these firms

Marketing Intermediaries

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products

1. Which of the following types of promotion informs potential customers about a product and what it is?

Pioneer

1. A person, group, or organization that has a meaning it intends and attempts to share with a receiver or an audience is a

Source

1. The ___________ type of promotion informs potential customers about a products and what that product is.

pioneer

Create Awareness

•Awareness is crucial to initiating the product adoption process for new products •For existing products, promotional efforts create increased awareness of •Brands •Product features •Image-related issues •Operational characteristics

Wholesaler's services to producers

•Serves as an extension of the producer's sales force and acts as a conduit of information •Provides financial assistance •Reduces the producer's expenses and inventory •A source of working capital

Why is sales promotion a short-term concept?

Triggers behavioral change (i.e. purchases) Provides customer value

Category Killers

•Big box retailer that focuses on one or a few product categories •Makes it hard for general merchandisers to compete

Presentation Stage

•Presentation stage involves making the formal pitch to customer and is critical in moving toward a close. •Uses three major presentation formats. •Stimulus-Response Format •Formula Selling Format •Need-Satisfaction Format

Designing and Scheduling the Promotion

•The design of the promotion: •Determines the message that is communicated to the target audience. •Requires the most creativity. •Are the result of insights into consumers' interests and behaviors. • •One of the challenges of IMC is to design each promotional activity to communicate the same message.

Channel Captain (Channel Leader)

•The dominant leader of a marketing channel or a supply channel •May be a producer, wholesaler, or retailer

Follow-Up

•The follow-up stage makes certain that: •The customer's purchase has been properly delivered and installed. •Difficulties experienced with the use of the item are addressed •The cost and effort to obtain repeat sales from a satisfied customer are half of those incurred when acquiring a new customer.

Pre-Approach: Preparing for the Sales Call

•The pre-approach involves: •Obtaining background information on the prospect •Personality and interaction style •Prospect's needs and current initiatives •Buying role of the prospect •Deciding on the best method of approach •Best time to contact a prospect •Receptivity to a formal or informal presentation

STEPS USED TO DEVELOP AN ADVERTISING CAMPAIGN

1.Identify and Analyze Target Audience 2.Define Advertising Objectives 3.Create Advertising Platform 4.Determine Advertising Appropriation 5.Develop Media Plan 6.Create Advertising Message 7.Execute Campaign 8.Evaluate Advertising Effectiveness

important media planning measures

1.reach-•refers to the number of different people or households exposed to an ad at least once during a given period 2.frequency- •is the average number of times a person in the target audience is exposed to a message or advertisement 3.gross rating points (GRPs)-•are reference measurements that advertisers use to assess campaign performance / potential 4.cost per thousand (CPM)-•is the cost of reaching 1,000 individuals or households with the advertising message in a given medium

Marketing Channel(Channel of Distribution, Distribution Channel)

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

Sales Promotion

A short-term inducement of value offered to arouse interest in buying a product or service. Examples include coupons, samples, rebates, and contests.

Supply Chains includes

All entities that facilitate product distribution

Three types of competitive advertising:

Comparative advertising - a form of competitive advertising, which compares the sponsored brand with one or more identified brands on the basis of one or more product characteristics Reminder advertising - used to remind consumers about an established brand's uses, characteristics and benefits Reinforcement advertising - assures users they chose the right brand and tellsthem how to get the most satisfaction from it

Selecting Marketing Channels factors

Customer characteristics, product attributes, Characteristics of intermediaries, type of organization, Competition, Marketing environmental forces

Step 7 & 8: Execution & Evaluation of the Advertising Campaign

Executing and evaluating the advertising campaign involves: 1.Pretesting the advertising copy. 2.Carrying out the advertising campaign. 3.Post-testing the advertising. Evaluating advertising efforts both (1) before and (2) after the ads are run in the campaign ensures that advertising expenditures are not wasted.

1. An advertisement that persuades a consumer to avoid a negative outcome or experience through a behavior change is using a(n) ___________.

Fear appeal

Types of Advertising

Institutional advertising -Promotes organizational images, ideas and political issues -Can be used to create or maintain an organizational image -May aim to create a more favorable view of the organization in the eyes of noncustomer groups Advocacy advertising (a form of institutional advertising) •Advertising that promotes a company's position on a public issue •May be used to promote socially approved behavior such as recycling or moderation in consuming alcoholic beverages

The three levels of Intensity of Market Coverage

Intensive, Selective, Exclusive

1. Which of the following services would a wholesaler least likely provide to a manufacturer?

Look for and coordinate supply sources

Step 6: Create Advertising Message

Message Content An advertising message should focus on the key benefits of the product that are important to prospective buyers •Most ad messages contain informational and persuasive elements •The messages should provide consumers with a reason to act

1. Joanna's job is to find new customers for her company's telecommunication services. She encourages existing customers to add more services and finds customers who are completely new to the company. Joanna would best be classified as a(n)

Order getter

1. Olivia is the manager of Human Recourses for Zappos.com. She is currently in the process of revising the firm's compensation method for its sales force. She would like to have selling expenses relate directly to sales resources, an aggressive sales force, and minimization of non-selling tasks. What compensation method(s) would best fulfill his requirements?

Straight salary

Types of Salespeople

Support Personnel- Sales staff members who facilitate selling but usually are not involved solely with making sales Missionary salespeople- usually employed by a manufacturer, assist the producer's customers in selling to their own customers Trade salespeople- involved mainly in helping a producer's customers promote a product •Technical salespeople- give technical assistance to a firm's current customers

Distribution

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

Supply Management

The processes that enable the progress of value from raw materials to final customer and back to redesign and final disposition •Purchasing, procurement, sourcing

Step 1: Identify & Analyze Target Audience

The target audience is the group of people at whom advertisements are aimed Advertisers identify the target audience to develop more effective and efficient advertising. The demographic, psychographic and geographic characteristics of target consumers influence all aspects of an advertising program. These characteristics of the target consumer affect when and where the ad is scheduled or placed. •(e.g., Florida tourism industry may target Michigan seniors in the Fall). These characteristics affect what is in the ad (content) and how the advertising is carried out •(e.g., a print ad in AARP's magazine alongside a feature article about grandchildren)

Operations Management

The total set of managerial activities used by an organization to transform resource inputs into products, services, or both

Dual Distribution

The use of two or more marketing channels to distribute the same products to the same target market

1. If during an advertising campaign a certain portion of advertising runs continuously, and then during specific periods additional advertising is used to intensify the level of communication, a(n) ____ media schedule is being used.

pulsing

Strategic Issues: Location

•"Location, location, location" is a common saying because of its critical importance •Location is the least flexible of the strategic issues but is important because it dictates where the store will draw its customers •Retailers consider various factors when evaluating potential locations, including: •Location of the firm's target market •Kinds of products being sold •Availability of public transportation •Customer characteristics •Competitors' locations

Reduce Sales Fluctuations

•A business cannot operate at peak efficiency when sales fluctuate widely •Holidays •Seasonal products •Promotional activities are often designed to stimulate sales during slumps

Step 5: Media Plan

•A media plan specifies the media vehicles to be used and the schedule for running advertisements •Determines how many people in the target audience will be exposed to the message and how the message will effect them •This is a complex task requiring analysis of the target audience •Advertisers spend tremendous amounts on advertising media •The primary goal of the media plan is to reach the largest number of people in the advertising target the budget will allow •The secondary goal is to achieve the appropriate message reach and frequency for the target audience while staying within budget •Reach refers to the percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period •Frequency is the number of times these targeted consumers are exposed to the advertisement

Supply Chain Management

•A set of approaches used to integrate the functions of operations management, logistics management, supply management and marketing channel management so products are produced and distributed in the right quantities, the right locations and at the right time •The goal is to achieve optimal levels of efficiency and service •The supply chain includes all entities that facilitate product distribution and benefit from cooperative efforts

Step 3: Advertising Platform

•Advertising platforms are basic issues or selling points to be included in an advertising campaign •The platform should consist of issues important to customers •A single advertisement in an advertising campaign may contain one or several issues from the platform •Because the platform is a base on which to build the advertising message, marketers should analyze this stage carefully

Wholesaler's services to retailers

•Assists with the distribution component •As market specialists, helps retailers select inventory •Reduces retailer's burden of looking for and coordinating supply sources •Wholesalers have a consistent, wide-range of products

Direct marketing occurs through:

•Catalog marketing - a type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone or the Internet •The advantages of catalog retailing includes efficiency and convenience for customers and lower costs for retailers •Generates $1.9 trilling in sales and 1.7 million jobs •Direct-response marketing - a type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders •Direct-response marketing through TV is a $300 billion industry •Telemarketing - The performance of marketing-related activities by telephone •Telemarketing can help generate sales leads, improve customer service, speed up payments, raise funds for nonprofit organizations and gather marketing data •Online Retailing - Makes products available to buyers through computer connections •Forrester Research projects online retail sales in the U.S. will climb to nearly $327 billion by 2016

Channel Conflict

•Channel conflict occurs when: •Self-interest creates misunderstanding about role expectations of channel members •Communication is poor between channel members

Communication Process cont

•Coding process (Encoding) - Converting meaning into a series of signs or symbols •Communication Channel - The medium of transmission that carries coded message from the source to the receiver •Decoding Process - Converting signs or symbols into concepts and ideas •Noise - Anything that reduces a communication's clarity and accuracy •Feedback - The receiver's response to a decoded message

Communication Process

•Communications - A sharing of meaning through the transmission of information •Process of conveying a message to others that requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding. •Source - A person, group, or organization with a meaning it tries to share with a receiver or an audience •Message - Information sent by a source to a receiver •Receiver - The individual, group, or organization that decodes a coded message

Types of Sales Promotions

•Consumer-oriented sales promotions (or simply consumer promotions) are sales tools used to support a company's advertising and personal selling directed to ultimate consumers. •Trade-oriented sales promotions (or simply trade promotions) are sales tools used to support a company's advertising and personal selling directed to wholesalers or retailers.

Characteristics of the Target Market

•Crucial Elements of the Target Market: •Size •Often drives what promotional elements are chosen •Small target markets often rely on personal selling •Geographic distribution •Dispersed customers often rely more heavily on advertising •Demographic characteristics •Age, income, education, etc. will affect consumers' media consumption patterns and are important considerations when developing the promotion mix

Overcoming objectives

•Effective salespeople anticipate and counter objections before the prospect raises them •Anticipate and counter them before the prospect raises them •Handle objections as they arise •CRC Technique for Handling Objections •Clarify •Respond •Confirm

Intensity of Market Coverage

•Intensive Distribution •Uses all available outlets to distribute a product •For most convenience products •Multiple channels may be used •Selective Distribution •Uses only some available outlets to distribute a product •For shopping products •Desirable when a special effort is important to customers

Criticisms and Defenses of Promotion

•Is promotion deceptive? •Some are, but not all promotion should be condemned •Laws, government regulation, and industry self-regulation have helped decrease deceptive promotion •Does promotion increase prices? •If promotion is working to stimulate demand, producing and marketing larger quantities can actually help reduce prices •Does promotion create needs? •Marketing does not create needs, but makes consumers aware of needs they already have

Integrated marketing communication:

•Is the concept of designing marketing communications programs that... •Coordinates all promotional activities to... •Provide a consistent message across all media •For maximum informational and persuasive impact.

Customer Retention

•Listening to the customer •Loyalty programs to reward most-valued customers •e-Communications - e-newsletters, e-cards, or e-alerts •Interactive promotions - Sweepstakes and contests •Events - Seminars, workshops, etc. •Client appreciation programs - Invitations to special events, etc.

Costs and Availability of Promotional Methods

•National Advertising / Sales Promotion •Have higher expense but low cost per individual •International Promotion •Can be difficult because of lack of promotional channels •Personal selling •Is dependent on recruiting and hiring qualified sales people

Closing the sale

•Obtaining the purchase commitment from the prospect! •A salesperson can use one of three closing techniques when a buyer is ready to make a purchase: •Trial close. Involves asking the prospect to make a decision on some aspect of the purchase. •Assumptive close. Entails asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized. •Urgency close. Is used to commit the prospect quickly by making reference to the timeliness of the purchase.

Stimulate Demand

•Primary Demand •Demand for a product category rather than a specific brand •Pioneer Promotion •A way to stimulate primary demand •Promotion that informs consumers about a new product •Selective Demand •Demand for a specific brand

Combat Competitive Promotional Efforts

•Promotional activities may aim to offset or lessen the effect of a competitor's promotional and marketing activities •This type of promotional activity does not necessarily increase sales or market share •A combative promotional objective is used most often by firms in highly competitive consumer markets

Public Relations

•Publicity - a news story type of communication about an organization and/or its products transmitted through a mass medium at no charge •Publicity-based public relations tools include •News release - a short piece of copy publicizing an event or product •Feature article - a manuscript of up to 3,000 words prepared for a specific publication •Captioned photograph - a photo with a brief description of its contents •Press conference - a meeting used to announce major news events

Push and Pull Channel Policies

•Push Policy •Promoting a product only to the next institution down the marketing channel •Pull Policy •Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel • •Organizations may use both push and pull policies at the same time

Strategic Issues: Positioning

•Retail positioning •Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment •The large variety of shopping centers and the expansion of product offerings by traditional stores has intensified competition •Many discount and specialty store chains have positioned themselves to appeal to time and cash-strapped consumers with convenient locations and layouts as well as low prices

Retailers

•Retailers add value for customers by providing services and assisting in making product selections •New store formats and advances in information technology make the retail environment highly dynamic and competitive •Retail brick-and-mortar stores are being challenged by direct marketing channels such as catalogs, television and the Internet •Retailers are finding global opportunities with some seeing significant growth in international markets

Step 2: Define Advertising Objectives

•Specifying Advertising ObjectivesObjectives help advertisers select media and evaluate an ad campaign. •Generally, the goal of most advertising (business) is increasing sales (i.e. increasing dollar sales or unit sales, increasing sales by a percentage or increasing market share). •However, other examples of advertising objectives can include: -Creating / increasing awareness -Increasing favorability (e.g., given intense competition or bad press) -Repositioning (e.g., making Old Spice a younger brand). -Various social media metrics (e.g., increasing Facebook pageviews or Twitter followers).

Facilitate Reseller Support

•Strong relationships with resellers are important to an organization's ability to maintain a sustainable competitive advantage •Various promotional methods help achieve this goal •Resellers view promotion as form of support •Share promotional expense •Special offers/buying allowances

Step 4: Advertising Appropriation

•The advertising appropriation is the advertising budget for a specific time period •Corporate budgets tend to be set annually •Media prices vary: •A 30 second ad during the 2015 NCAA Men's D1 Basketball Tournament on CBS = $1.55 million. •CPM on Hulu for video ads (in 2015) = $35. •Business products have small appropriations relative to sales, while consumer convenience items have large appropriations relative to sales

The Approach

•The approach stage involves the initial meeting between the salesperson and a prospect. •First impression of the salesperson may be long-lasting •Must create a relationship, not just sell products

Retain Loyal Customers

•The primary goal of marketing is to maintain long-term customer relationships •Keeping current customers is less costly than acquiring new customers •Retention techniques include: •Frequent-user programs •Special offers for existing customers

Prospecting

•The prospecting stage is the search for and qualification of potential customers. •The three types of prospects are: •A lead is the name of a person who may be a possible customer. •A prospect is a customer who wants or needs the product. •A qualified prospect is an individual who: •Wants the product. •Can afford to buy it. •Is the decision maker.

Managing the Sales Force

•The sales force is directly responsible for generating sales revenue •They are important to a firm's success •Ethics is important •A firm's reputation is determined by the behavior of its sales force

Promotional Resources, Objectives, and Policies

•The size of an organization's promotional budget affects the number and intensity of promotional methods used •A company's objectives and policies influence the types of promotions used •Different objectives will require different promotional mixes

Stage of the Product Life Cycle

•The stage of a product's life cycle affects decisions regarding the promotion mix •Introduction •Advertising plus personal selling and sales promotion to generate awareness •Growth/Maturity •Consumer goods = advertising •Business advertising = personal selling and sales promotion •Decline •Reduction of all promotional activities

Direct marketing

•The use of the telephone, Internet and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone or the Internet •Direct marketing is one type of nonstore retailing and sales amount to $1.8 trillion per year

Marketing Channels Create Utility

•Time Utility - Having products available when the customer wants them •Place Utility - Making products available in locations where customers wish to purchase them •Possession Utility - Customers have access to the product to use now or store for future use •Form Utility - Formed by assembling, preparing, or otherwise refining the product to suit customer needs