marketing test 3

sources of earned media

-Some companies earn editorial coverage—with their goods and services or good works featured in articles, stories, and reviews in magazines, newspapers, or on televi- sion. If a firm has a really new message, a published article may get more attention than advertising can. Trade magazines carry articles featuring the newsworthy products of interest to people in a particular job or industry. -Opinion leaders like to share their views—and they also get attention from other cus- tomers who respect their views. Marketers value personal recommendations from opin- ion leaders. For example, some movie fans like to be the first to see new flicks. If they like a movie, they quickly tell their friends and word-of-mouth publicity does the real selling job. When online grocer FreshDirect opened in New York City, positive word-of- mouth was key to its fast growth.

types of owned media

-educational web pages -white papers and case studies -landing pages -blogs -infographics -branded apps -brand communities -email newlsetter

Factors of the Multiple buying Influence in B2B

1.Users—perhaps production line workers or their supervisors. 2.Influencers—perhaps engineering or R&D people who help write specifications or supply information for evaluating alternatives. 3. Buyers—purchasing managers who have the responsibility for working with suppliers and arranging the terms of the sale. 4. Deciders—people in the organization who have the power to select or approve the supplier—often a purchasing manager but perhaps top management for larger purchases. 5. Gatekeepers—people who control the flow of information within the organization. Gatekeepers might include purchasing managers, receptionists, secretaries, research assistants, bookkeepers, and many more.

commision

A commision is often based on a percentage of dollar sales, but it may be a financial incentive based on other outcomes—such as the number of new accounts, customer satisfaction ratings, or customer service problems resolved in some time period.

user-generated content

A company or brand can also earn word-of-mouth communication from customers. User-generated content refers to any type of communication created by customers for other customers. User-generated content can take many forms. Customers can recom- mend their hairstylist to a friend or demonstrate their new Samsung Galaxy phone to a coworker. A customer can also send a tweet praising a new book—or post a review at Amazon describing what he likes (and doesn't like) about his new nonstick frying pan. All of these types of user-generated content are examples of earned media.2

job descriptions

A job description is a written statement of what a salesperson is expected to do. It might list 10 to 20 specific tasks—as well as routine prospecting and sales report writing. Each company must write its own job specifications. And it should provide clear guide- lines about what selling tasks the job involves. This is critical to determine the kind of salespeople who should be selected—and later it provides a basis for seeing how they should be trained, how well they are performing, and how they should be paid.

Modified Re-buy Purchase

A new-task purchase that is changed on subsequent orders or when the requirements of a straight re-buy purchase are modified.

straight rebuy

A straight rebuy is a routine repurchase that may have been made many times before.

accumulating

Accumulating involves collecting products from many small producers. Much of the coffee that comes from Colombia is grown on small farms in the mountains. Accumu- lating the small crops into larger quantities is a way of getting the lowest transporting rate and making it more convenient for distant food-processing companies to buy and handle them. Accumulating is especially important in less-developed countries and in other situations, like agricultural markets, where there are many small producers. Accumulating is also important with professional services because they often involve the combined work of a number of individuals, each of whom is a specialized producer. A hospital makes it easier for patients by accumulating the services of a number of health care specialists, many of whom may not actually work for the hospital.

advertising agencies

Advertising agencies are often used to develop and implement advertising. Advertising agencies are specialists in planning and handling mass-selling details for advertisers. Agencies play a useful role. They are independent of the advertiser and have an outside viewpoint. They bring experience to an individual client's problems because they work for many other clients. They can often do the job more economically than a company's own department. And if an agency isn't doing a good job, the client can select another. Advertising agencies often do the work 410

advertising media

Advertising media are the various means by which the message is communicated to the target market. Exhibit 15-5 lists the most common kinds of media—digital (mobile phones and computers), television, radio, magazines, and out-of-home (including billboards, cin- ema, bus stops, etc.). It also provides a brief overview of each medium, listing advantages and disadvantages of each. Marketing managers seek the best medium, which varies with the situation. Effectiveness depends on how well the medium fits with the rest of a market- ing strategy—that is, it depends on (1) your promotion objectives, (2) what target markets you want to reach, (3) the funds available for advertising, and (4) the nature of the media, including whom they reach, with what frequency, with what impact, and at what cost.9

advertising objectives

Advertising objectives usually start with the marketing manager, who works with the advertising manager to develop the objectives and an appropriate budget to accomplish them. Good advertising objectives are specific, measurable, and include a timeframe. The following list contains some potential advertising objectives: - For our target market, position the new product as the most technologically advanced in the industry by January 1. - Increase unaided brand awareness to 50 percent in our target market by July 1. - Obtain trial of our product from 5 percent in the state of Oregon by the end of the year. - Get 100,000 new visitors to our website by December 1.

refferal program

Another way to motivate positive word-of-mouth is through a referral program. A referral program offers a current customer an incentive for recommending a new cus- tomer to a business. Usually referral programs require the new customer to make a purchase. To give both the person giving and the person receiving the referral an incen- tive, both are usually offered some sort of discount. So, for example, after a customer gives a positive review at Airbnb (a website where customers can rent lodging), they are asked if they would like to refer a friend. The friend is sent a $25 discount—and after the friend books a place to stay through Airbnb, a similar credit is given to the person who made the referral.29

competitive advertising

Competitive advertising tries to develop selective demand for a specific brand. A firm is forced into competitive advertising as the product life cycle moves along—to hold its own against competitors. For exam- ple, as smartphones moved to the growth stage of the product life cycle, advertising emphasized features and benefits to per- suade target customers they needed more megapixels for the camera, more space, or lower prices.

customers service reps

Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. Unlike other supporting sales activ- ities, which are needed only in certain selling situations, every marketing-oriented com- pany needs good people to handle customer service. Customer service is important to both business customers and final consumers. There are times when a customer's prob- lem simply can't be resolved without a personal touch.

branded services

Customers gain experience with a brand in many ways. Most often customers gain experience with a brand by using its Product—its goods and/or services. Some firms use Promotion to enhance customer experiences. Branded services are valued services a brand provides that are not directly connected to a core product offering. The services are designed to share a message—typically that the brand cares about its customers by offering them some free service. This helps customers perceive a company or brand as caring about the customers' welfare. Customers experience these benefits and develop a positive attitude that fosters trust.10

white paper and case studies

Customers gain experience with a brand in many ways. Most often customers gain experience with a brand by using its Product—its goods and/or services. Some firms use Promotion to enhance customer experiences. Branded services are valued services a brand provides that are not directly connected to a core product offering. The services are designed to share a message—typically that the brand cares about its customers by offering them some free service. This helps customers perceive a company or brand as caring about the customers' welfare. Customers experience these benefits and develop a positive attitude that fosters trust.10

Discrepancy of quantity

Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. For example, most manufacturers of golf balls produce large quantities—perhaps 200,000 to 500,000 in a given time period. The average golfer, however, wants only a few balls at a time. Adjusting for this discrepancy usually requires intermediaries— wholesalers and retailers.

earned media

Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. The company or brand is assumed to earn the attention of journalists or customers because there is an interesting story to tell or because others would value this information. Earned media can be positive or negative—for example, poor customer service might earn a restaurant a bad review on Yelp.

Integrated Marketing Communications

Effective blending of all the firm's promotion efforts should produce integrated marketing communications—the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. The GEICO case at the start of this chapter is a good example of integrated market- ing communications. Different promotion methods handle different parts of the job. Yet the methods are coordinated so that the sum is greater than the parts. The separate messages are complementary, but also consistent.

exclusive distribution

Exclusive distribution is selling through only one intermediary in a particular geographic area. For an overview, see Exhibit 10-5. As we move from intensive to exclusive distribution, we give up exposure in return for some other advantage—including, but not limited to, lower cost.

personal selling

Good salespeople don't just try to sell the customer. Rather, they try to help the cus- tomer buy—by understanding the customer's needs and presenting the advantages and disadvantages of their products. Such helpfulness results in satisfied customers and long-term relationships. And strong relationships often form the basis for a competitive advantage, especially in business markets.

source and reciever

Here we see that a source—the sender of a message—is trying to deliver a message to a receiver—a potential customer. These elements can be used as a diagnostic tool, where a marketing manager can think about the various factors affecting a marketing communica- tion, and serves as a reminder of everything that has to go right to get a message across.

heterogeneous shopping good

Heterogeneous shopping goods should have outlets that provide information— knowledgeable salespeople who can provide insights about different brands and models and online stores with videos or information.

homogeneous shopping good

Homogeneous shopping goods favor low- cost retailers as customers focus mostly on low prices. Customers will search for spe- cialty goods, so the higher cost of widespread distribution may not be needed.

Team selling

If different people handle different sales tasks, firms often rely on team selling— when different people work together on a specific account. Sometimes members of a sales team are not from the sales department at all. If improving the relationship with the customer calls for input from the quality control manager, then that person becomes a part of the team, at least temporarily. Producers of big-ticket items often use team sell- ing. IBM uses team selling to sell information technology solutions for a whole busi- ness. Different specialists handle different parts of the job—but the whole team coordinates its efforts to achieve the desired result.

intensive distribution

Intensive distribution is selling a product through all responsible and suitable whole- salers or retailers who will stock or sell the product.

linked in

LinkedIn is a networking website for businesspeople who create personal or com- pany profiles. Globally it boasts more than 300 million registered users and about 27 percent of online American adults. The site has more high-income and professional users. Very young (18-24) and older (over 65) individuals are least likely to have a LinkedIn page. Individuals may have hundreds or thousands of connections; companies such as Microsoft, Apple, and HP have more than 2 million followers. Media compa- nies that target businesspeople, including The Wall Street Journal and Forbes magazine, have used LinkedIn to distribute articles.38

place

Managers must think about Place—making goods and services available in the right quantities and locations, when customers want them. And when different target mar- kets have different needs, a number of Place variations may be required. Our opening case makes it clear that new Place arrangements can dramatically change the competi- tion in a product-market. This is especially important in business today because infor- mation technology, including websites and e-commerce, makes it easier for firms to work together more efficiently and also to reach customers directly.

paid media

Media refers to the means used for mass communication. For example, advertising utilizes paid media or messages generated by a brand (or company or nonprofit organi- zation) and communicated through a message channel the brand pays to access. The source of the message is the organization doing the advertising.

missionary salespeople

Missionary salespeople are supporting salespeople who work for producers—calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. Missionary salespeople are sometimes called merchandisers or detailers.

retailers and wholesalers

Most retail and wholesale buyers see themselves as purchasing agents for their target customers—remember the old saying that "Goods well bought are half sold." They are experts at what their customers want—and won't be persuaded by a sales rep for a manufacturer that can't provide it.

combination pay

Most salespeople want some security, and most companies want salespeople to have some incentive to work smarter and harder, so the most popular method is a combination plan that includes some salary and some commission. Bonuses, profit sharing, pensions, stock plans, insurance, and other fringe benefits may be included too.

Multi-channel distribution

Multichannel distribution occurs when a producer uses several competing channels to reach the same target market—perhaps using several intermediaries in addition to selling directly. Multichannel distribution is becoming more common. A single target market can buy a new Apple iPad at Apple's website, an Apple store, an online retailer, or a physical store such as Target or a college bookstore. Dr Pepper also uses multichan- nel distribution; you can buy a Dr Pepper at a convenience store, grocery store, vending machine, or restaurant.

Prospecting

Narrowing down the personal selling effort to the right target requires constant, detailed analysis of markets and much prospecting. Basically, prospecting involves following all the leads in the target market to identify potential customers.

Noise

Noise—shown in Exhibit 13-3—is any distractionthat reduces the effectiveness of the communica-tion process. Conversations and snack-getting dur-ing TV ads are noise. An industrial buyer reading atext message during a salesperson's presentation is noise. Advertisers who plan messages must recognize that many possible distractions—noise—can interfere with communications.

how much to salespeople make

Normally, salespeople earn more than the office or production force but less than top management.

Sales presentations

Once the salesperson selects a target customer, it's necessary to make a sales presentation—a salesperson's effort to make a sale or address a customer's problem. But someone has to plan what kind of sales presentation to make. This is a strategy decision. The kind of pre- sentation should be set before the sales rep goes calling. And in situations where the customer comes to the salesperson—in a retail store, for instance— planners have to make sure that prospects are brought together with salespeople.

owned media

Owned media refers to promotional messages generated by a brand (or company or nonprofit organization) communicated through a message channel the brand directly controls. Owned media include the brochures and catalogs a company mails to target customers. A brand's product website, blog, and social media pages—YouTube channel, Facebook page, or Instagram—are also examples of owned media. As with paid media, the selling company is the source of the message.

Personal selling

Personal selling involves direct spoken communication between sellers and potential customers. Customer service is a form of personal communication between a customer and seller to resolve a problem with a purchase. Salespeople get immediate feedback, which helps them adapt. Although some personal selling is included in most marketing mixes, it can be very expensive. So it's often desirable to combine personal selling with advertising, sales promotion, and/or publicity.

Discrepancy of assortment

Producers typically specialize by product—and therefore another discrepancy devel- ops. Discrepancy of assortment means the difference between the lines a typical pro- ducer makes and the assortment final consumers or users want. Most golfers, for example, need more than golf balls. They want golf shoes, gloves, clubs, a bag, and, of course, a golf course to play on. And they usually don't want to shop for each item separately. So, again, there is a need for wholesalers and retailers to adjust these discrepancies.

promotion

Promotion is communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior. The promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. Promotion should be fine-tuned for specific target markets, fit with the other variables of the marketing mix, and reinforce the strategy's differentia- tion and positioning.

publicity

Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. Of course, publicity people are paid. But they try to attract attention to the firm and its offerings without having to pay media costs. Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral vid- eos, word-of-mouth communication, a company's Facebook page, and its "tweets" on Twitter. It can also include coverage it receives in the press—for example, when a movie or restaurant is reviewed in the newspaper.

selective distribution

Selective distribution is selling through only those intermediaries who will give the product special attention.

marketing automation software

Software can also be programmed to help firms respond to particular customer actions. Marketing automation software tracks individual customers' behavior and triggers actions in response to specific customer actions. For organizations with cus- tomers who spend a lot of time online, this software provides a low-cost way to learn more about customers and deliver the right messages at the right time. For example, a customer who visits a site three times might automatically be delivered a "pop-up" ques- tion "Can I answer any questions for you?" that links to a waiting salesperson.

sales promotion on sales

Some experts think that marketing managers—especially those who deal with consumer packaged goods—put too much emphasis on sales promotion. They argue that the effect of most sales promotion is temporary and that money spent on advertising and per- sonal selling helps the firm more over the long term. When the market is not growing, sales promotion may just encourage "deal-prone" customers (and intermediaries) to switch back and forth among brands. Here, all the expense of the sales promotion sim- ply contributes to lower profits. It also increases the prices that consumers pay because it increases selling costs.

What is the model of organizational buying?

Step 1:Defining the Problem Step 2: Decision Making Process Step 3: Managing the Buyer Seller Performance

Supporting sales people

Supporting salespeople help the order-oriented salespeople, but they don't try to get orders themselves. Their activities are aimed at enhancing the relationship with the customer and getting sales in the long run. For the short run, however, they are ambas- sadors of goodwill who may provide specialized services and information. There are three types of supporting salespeople: missionary salespeople, technical specialists, and customer service reps.

Product advertising

The chosen advertising objectives largely determine which of two basic types of adver- tising to use—product or institutional (see Exhibit 15-4). Product advertising tries to sell a product. We will discuss three catego- ries of product advertising—pioneering, com- petitive, and reminder—which focus on getting consumers to know, like, and remember something.

message channel

The communication process is complicated even more because the message is coming from a source through some message channel—the carrier of the message. A source can use many message channels to deliver a message. The salesperson does it in person with voice and action. Advertising must do it with media such as magazines, TV, e-mail, or Internet websites. A particular message channel may enhance or detract from a message. A TV ad, for example, can show that Dawn dish- washing detergent "takes the grease away"; the same claim might not be as convincing (or even opened) if it arrives in a consumer's e-mail.

institutional advertising

Then we will discuss institutional advertising, which promotes an organization's image, reputation, or ideas rather than a specific product.

Advertising Versus Publicity

This chapter takes a close look at different types of publicity. The chapter begins by comparing advertising (which uses paid media) to different types of publicity (unpaid media). Then the concepts of paid media, earned media, and owned media are introduced—explaining how each has advantages and disadvantages in the promo- tion blend. After briefly describing how information flows through search, pass-along, and branded experiences, we provide more details on different types of owned and earned media. Next, we explain the different types of social media and describe soft- ware used to manage online media.

Search Engine Optimization

To appear high on organic search results, marketing managers often use search engine optimization (SEO), which is the process of designing a website so that it ranks high in a search engine's unpaid results. SEO considers how target customers search, what key- words they use in a search, and how the search engine prioritizes its results. Although the technical elements of SEO are beyond the scope of this text- book, a range of techniques can be employed to influence standing in search results.

new-task buying

occurs when a customer organization has a new need and wants a great deal of information

three basic sales tasks

order-getting, order-taking, and supporting

more advertising objectives

-Awareness(Teaser campaigns Pioneering ads Jingles/slogans Viral advertising Announcements) -Interest (Informative or descriptive ads Image/celebrity ads E-mail ads Demonstration of benefits) -Evaluation and trial (Competitive ads Persuasive copy Comparative ads Testimonials Search ads) -Decision ( Direct-action retail ads Point-of- purchase ads Price deal offers) -Confirmation (Reminder ads Informative "why" ads)

B2b vs b2c

-B2B: Business to business, marketing of goods for use in a business -B2C: Business to consumer -"The key is intended use."

organizational customers

1. PRODUCERS OF GOODS AND SERVICES-including manufacturers, farmers, real estate developers, hotels, banks, and even doctors and lawyers. 2. INTERMEDIARIES- wholesalers and retailers. 3.- GOVERNMENT -federal agencies in the United States and other countries as well as state and local governments. 4. NON PROFIT ORGANIZATIONS- national organizations such as the American Red Cross and Girl Scouts as well as local organizations such as museums and churches.

steps in the personal selling process

1. select target customers 2. Preplan sales calls and presentations 3. make sales presentations 4.close sale 5. follow up after sales call to establish relationship 6. Follow up after purchase to maitain and enhance relationship

Straight salary

A salesperson on straight salary earns the same amount regardless of how he or she spends time. So the salaried salesperson is expected to do what the sales manager asks— whether it is order-taking, supporting sales activities, solving customer service prob- lems, or completing sales call reports. However, the sales manager maintains control only by close supervision. As a result, straight salary or a large salary element in the compensation plan increases the amount of sales supervision needed.

advertising and sales promotion

Advertising and sales promotion can play a central role in the Promotion blend because they reach many customers at the same time. On a per-contact basis, these promotion methods provide a relatively low-cost way to inform, persuade, and activate customers. Advertising and sales promotion can position a firm's marketing mix as the one that meets customer needs. They can help motivate channel members or a firm's own employees, as well as final customers.

Adversing

Advertising is a primary form of mass selling. Advertising is any paid form of non- personal presentation of ideas, goods, or services by an identified sponsor. It includes the use of traditional media such as magazines, radio and TV, signs, and direct mail as well as new media such as podcasts, Facebook, and Snapchat. Marketing managers pay for advertising to be placed on specific media.

Direct marketing

Another potentially confusing topic is the term direct marketing—direct commu- nication between a seller and an individual customer using a promotion method other than face-to-face personal selling. Sometimes direct marketing promotion is coupled with direct distribution from a producer to consumers. However, many firms that use direct marketing promotion distribute their products through interme- diaries. For example, Logitech, which produces personal computer peripherals, uses e-mails to communicate directly with customers who purchase Logitech products through retailers. So the term direct marketing is primarily concerned with the Promotion area, not Place decisions. We'll talk about direct marketing promotion in more detail in Chapter 13.5

assorting

Assorting means putting together a variety of products to give a target market what it wants. This usually is done by those closest to the final consumer or user—retailers or wholesalers who try to supply a wide assortment of products for the convenience of their customers. Thus, a wholesaler selling Yazoo tractors and mowers to golf courses might also carry Pennington grass seed and Scotts fertilizer.

Bulk Breaking

Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. The bulk-breaking may involve several levels in the chan- nel. Wholesalers may sell smaller quantities to other wholesalers or directly to retailers. Retailers continue breaking bulk as they sell individual items to their customers.

derived demand

Business demand that ultimately comes from (derives from) the demand for consumer goods.

negotiated contract buying

Then the relationship may involve negotiated contract buying, which means agreeing to contracts that allow for changes in the purchase arrangements. In such cases, the general project and basic price are described but with provision for changes and price adjustments up or down.

Buying Committee

Decisions to add or drop lines or change buying policies may be handled by a buying committee. The seller still calls on and gives a pitch to a buyer—but the buyer does not have final responsibility.

decoding

Decoding is the receiver translating the message. This process can be very tricky. The meanings of various words and symbols may differ depending on the attitudes and experiences of the two groups. People need a common frame of reference to communicate effectively (see Exhibit 13-4).

NAICS codes (North American Industry Classification System)

Detailed information is often available to help a marketing manager learn more about customers in different lines of business. The U.S. government collects and pub- lishes data by the North American Industry Classification System (NAICS) codes— groups of firms in similar lines of business. (NAICS is pronounced like "nakes.") The number of establishments, sales volumes, and number of employees—broken down by geographic areas—are given for each NAICS code.

advantages and disadvantages of media types

Digital: Mobile Ads link to more detailed website, some "pay for results," easier to track results, can be highly targeted, precise-location based/ Hard to compare costs with other media, more focused on later stages of purchase process Digital: Desktop/laptop Same as above (except not as precisely location based)/ Same as above TV Demonstrations, image building, good attention, wide reach, cable can be targeted/ "Clutter"—ads compete for attention, expensive, limited time (usually 30 seconds or less), often skipped by viewers Radio Wide reach, segmented audience, inexpensive, use of sound and voices can help create certain image of business/ Weak attention, many different rates, short exposure, declining audience, listeners cannot review the ad, ads interrupt entertainment Magazines High reader involvement, very targeted, good detail, some "pass along," image quality high—better for photos Inflexible, long lead times, cost can be high, limited flexibility on location of ad within magazine Out-of-home (including billboards, cinema, bus stops, etc.) Captive audience, can be geographic and local Outdoor: "glance" mediumCinema: primarily a younger audience

Primary Demand

During market introduction, the basic promotion objective is informing. If the product is a really new idea, the promotion must build primary demand—demand for the general product idea—not just for the company's own brand. Rooftop solar panels, "smart" appliances (that connect to the Internet), and self-driving long-haul trucks are good exam- ples of product concepts where primary demand is just beginning to grow. There may be few potential innovators during the introduction stage, and personal selling can help find them. Firms also need salespeople to find good channel members and persuade them to carry the new product. Sales promotion may be targeted at salespeople or channel mem- bers to get them interested in selling the new product. Customers often view new-product ideas as risky, so sales promotion may be helpful to stimulate interest and trial.

Reminding

If target customers already have positive attitudes about a firm's marketing mix—or a good relationship with a firm—a reminding objective might be suitable. Customers who have been attracted and sold to once are still targets for competitors' appeals. Remind- ing them of their past satisfaction may keep them from shifting to a competitor. An accountant working for a small local firm might phone her customers once every few months to "check in" and see if they have any questions. This serves as a reminder that the accountant is there and available.

task method

In light of our continuing focus on planning marketing strategies to reach objectives, the most sensible approach to budgeting promotion expenditures is the task method— basing the budget on the job to be done. It helps a marketing manager to set priorities so that the money spent on promotion produces specific and desired results. In fact, this approach makes sense for any marketing expenditure, but here we'll focus on promotion.

unfair advertising

In most countries, the government takes an active role in deciding what kinds of adver- tising are allowable, fair, and appropriate. For example, France and Japan limit the use of cartoon characters in advertising to children, and Canada bans any advertising tar- geted directly at children. In Switzerland, an advertiser cannot use an actor to represent a consumer. New Zealand limits political ads on TV. In the United States, print ads must be identified so they aren't confused with editorial matter; in other countries ads and editorial copy can be intermixed. Most countries limit the number and length of commercials on broadcast media.

purchasing specifications

In some situations, an organization will formalize the problem with a detailed set of purchase requirements. In this case, organizational buyers may buy on the basis of a set of purchasing specifications—a written description of what the firm wants to buy. When quality is highly standardized, as is often the case with manufactured items, the specification may simply consist of a brand name or part number.

FTC

In the United States, the Federal Trade Commission (FTC) has the power to control unfair or deceptive business practices, including deceptive advertising. The FTC has been policing deceptive advertising for many years. It is getting results now that adver- tising agencies, as well as advertisers, share equal responsibility for false, misleading, or unfair ads.

selective demand

In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand— demand for a company's own brand. The main job is to persuade customers to buy, and keep buying, the company's product.

Customer-Initiated Interactive Communication

In the process in Exhibit 13-5, a customer (receiver) initiates communication with a decision to search for information in a particular message channel. The most com- mon and far-reaching message channel used for information searching is the Internet— usually queried through a search engine such as Google or Bing and accessed by a personal computer, tablet, or cell phone. Sometimes a buyer immediately links to a particular seller's web page to seek out information. The message channel is still the carrier of the message, as was the case before, but searchable message channels usually feature an archive of existing messages on a number of topics. There may be many available topics—even millions.

intensive distribution

Intensive distribution is commonly needed for convenience products and business supplies—such as laser printer cartridges, three-ring binders, and copier paper—used by all offices. Customers want such products nearby. For example, Rayovac batteries were not selling well even though their performance was very similar to other batteries. Part of that was due to heavier advertising for Duracell and Energizer. But consumers usu- ally don't go shopping for batteries. They're purchased on impulse 83 percent of the time. To get a larger share of purchases, Rayovac had to be in more stores. It offered retailers a marketing mix with less advertising and a lower price. In three years, the brand moved from being available in 36,000 stores to 82,000 stores—and that increase gave sales a big charge.19

Promotion Blend

There is no one right promotion blend for all situations. Each one must be developed as part of a marketing mix and should be designed to achieve the firm's promotion objec- tives in each marketing strategy. So let's take a closer look at typical promotion blends for different situations.

Pulling

Most producers also focus a significant amount of promotion on customers at the end of the channel. This helps stimulate demand and pulls the product through the channel of distribution. Intermediaries want to carry products that customers are ready to buy. Pulling means getting customers to ask intermediaries for the product. Pulling is promotion targeted at end customers (see Exhibit 13-6). Pulling and pushing are usually used in combination. However, if intermediar- ies won't work with a producer—perhaps because they're already carrying a competing brand—a producer may try to use a pulling approach by itself. This involves a more aggressive promotion effort to final consumers or users—perhaps using coupons or samples—temporarily bypassing intermediaries. If the promotion works, the intermedi- aries are forced to carry the product to satisfy customer requests. However, this approach is risky. Customers may lose interest before reluctant intermediaries make the product available. At a minimum, intermediaries should be told about the planned pulling effort—so they can be ready if the promotion succeeds.

final consumer

Much of the sales promotion aimed at final consumers tries to increase demand— perhaps temporarily—or to speed up the time of purchase. Such promotion might involve developing materials to be displayed in retailers' stores, including point-of-purchase materials, rewards programs, or aisle displays. It might include sweepstakes contests as well as coupons designed to get customers to buy a product by a certain date.

Informing

Potential customers must know something about a product if they are to buy it. A firm with a really new product may not have to do anything but inform consumers of the product's features and benefits. An informing objective can show that it meets cus- tomer needs better than other products can. A small business might want to have a service regularly clean its offices. The owner might begin by searching on the Internet. There she might find a local cleaning company's website with information about vari- ous services.

direct marketing

One reason a producer chooses direct distri- bution is because it wants to maintain control of the marketing mix. Wholesalers and retailers often carry competing brands and make deci- sions that are in their own interests. This may not always be aligned with the interests of an indi- vidual producer. For example, Goodyear wants its target customers to know that its Assurance TripleTred All-Season tires get 21 percent better wet traction than a leading competitor. But if Roadmasters Auto and Tire Centers make a big- ger profit margin on that "leading competitor," the salesperson at Roadmasters may not deliver that "better wet traction" message. If Goodyear has a promotion to sell this tire at a lower price, Roadmasters may decide to keep the extra mar- gin and not pass the discount along to its custom- ers. At its own online store, Goodyear can be more certain that customers receive the message and price Goodyear prefers.

order getters

Order getters are concerned with establishing relationships with new customers and developing new business. Order-getting means seeking possible buyers with a well- organized sales presentation designed to sell a good, service, or idea.

order takers

Order takers sell to regular or established customers, complete most sales transactions, and maintain relationships with their customers. After a customer becomes interested in a firm's products through an order getter, supporting salesperson, or through adver- tising or sales promotion, an order taker usually answers any final questions and com- pletes the sale. Order-taking is the routine completion of sales made regularly to target customers. It usually requires ongoing follow-up to make certain that the customer is totally satisfied.

pioneering advertising

Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. Pio- neering advertising is usually done in the early stages of the product life cycle; it informs potential customers about the new product and helps turn them into adopters. For example, when Netflix launched one of the first major video streaming services, it needed to educate customers how a stream- ing (not cable or satellite) service worked.

Communication Process

Promotion is wasted when it doesn't communicate effectively. There are many reasons why a promotion message can be misunderstood or not heard at all. To understand this, it's use- ful to think about a whole communication process—which means a source trying to reach a receiver with a message.

Promotion Objectives

Promotion objectives must be clearly defined—because the right promotion blend depends on what the firm wants to accomplish. It's helpful to think of three basic pro- motion objectives: informing, persuading, and reminding target customers about the company and its marketing mix. All try to affect buyer behavior by providing customers with information.

regrouping activities

Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution. There are four regrouping activities: accumulat- ing, bulk-breaking, sorting, and assorting. When one or more of these activities is needed, a marketing specialist may develop them to fill this need.

Buyer-Seller Relationships

Relationships are not "all or nothing" arrangements. Many firms may have a close relationship in some ways and not in others. Thus, it's useful to think about five key dimensions that help characterize most buyer-seller relationships: cooperation, infor- mation sharing, operational linkages, legal bonds, and relationship-specific adaptations. Purchasing managers for the buying firm and salespeople for the supplier usually coor- dinate the different dimensions of a relationship. However, as shown in Exhibit 6-8, close relationships often involve direct contacts between a number of people from other areas in both firms.18

reminder advertising

Reminder advertising tries to keep the product's name before the public. It may be useful when the product has achieved brand preference or insistence, perhaps in the market maturity or sales declinestages. It is used primarily to reinforce previous promotion. Here the advertiser may use soft-sell ads that just mention or show the name—as a reminder. Hallmark, for example, often relies on reminder ads because most consumers already know the brand name and, after years of promotion, associate it with high-quality cards and gifts.

companys own sales force

Sales promotion aimed at the company's own sales force might try to encourage sales reps to provide better service, get new customers, sell a new product, or sell the company's whole line. Depending on the promotion objectives, the tools might be con- tests, bonuses on sales or number of new accounts, or holding sales meetings at fancy resorts.

sales promotion

Sales promotion refers to Promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. Sales promotion generally complements other promotion methods. Although advertising campaigns and sales force strategy decisions tend to have longer- term effects, a sales promotion activity usually lasts for a limited time. Sales promotion can often be implemented quickly and get sales results sooner than advertising.

sales promotion

Sales promotion refers to promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. Sales promotion may be aimed at consumers, at intermediaries, or at a firm's own employees. Examples include contests and coupons aimed at consumers, trade shows or calendars for wholesalers or retailers, or sales contests and meetings aimed at a company's own sales force. Relative to other promotion methods, sales pro- motion can usually be implemented quickly and get results sooner. In fact, most sales promotion efforts are designed to produce immediate results.

Indirect Distribution

Selling direct or indirect is not necessarily an either/or decision. When a company serves multiple target markets, it may choose to sell direct and through intermediaries. For example, a company like Autolite uses direct channels to sell its spark plugs to auto- makers like Ford. Yet it also sells to consumers through intermediaries like Pep Boys. Deciding whether to sell directly, indirectly, or both requires an understanding of discrepancies and separations (introduced briefly in Chapter 1), which will be dis- cussed later in this chapter. The most important reason for using an indirect channel of distribution is when an intermediary helps producers serve customer needs better and at lower cost. Marketing managers should carefully evaluate each target market's needs and determine its

Multiple buying influence

Several people share in making a purchase decision—perhaps even top management.

Govt Market

Some marketers ignore the government market because they think that government red tape is more trouble than it's worth. They probably don't realize how big the govern- ment market really is. Government is the largest customer group in many countries— including the United States. About 30 percent of the U.S. gross domestic product is spent by various government units. Different government units buy almost every kind of product. They run not only schools, police departments, and military organizations, but also supermarkets, public utilities, research laboratories, offices, hospitals, and even liquor stores. These huge government expenditures cannot be ignored by an aggressive marketing manager.

Sorting

Sorting means separating products into grades and qualities desired by different tar- get markets. For example, an investment firm might offer its customers shares in a mutual fund made up only of stocks for companies that pay regular dividends. Similarly, a wholesaler that specializes in serving convenience stores may focus on smaller pack- ages of frequently used products.

Technical specialists

Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. Technical specialists are often science or engineering gradu- ates with the know-how to understand the customer's applications and explain the advantages of the company's product. They are usually more skilled in showing the technical details of their product than in trying to persuade customers to buy it. Before the specialist's visit, an order getter probably has stimulated interest. The technical spe- cialist provides the details.

encoding

The basic difficulty in the communication process occurs during encoding and decoding. Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver.

consultative selling approach

The consultative selling approach involves developing a good understanding of the individual customer's needs before trying to close the sale. This name is used because the salesperson is almost acting as a consultant to help identify and solve the custom- er's problem. With this approach, the sales rep makes some general benefit statements to get the customer's attention and interest. Then the salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs and to close the sale. This is a problem-solving approach—in which the customer and salesperson work together to sat- isfy the customer's needs. That's why it's sometimes called the need-satisfaction approach. Exhibit 14-7 shows the participation of the customer and the salesperson during such a sales presentation.

sales quota

The incentive portion of a sales rep's compensation should be large only if there is a direct relationship between the salesperson's efforts and results. Otherwise, a salesperson in a growing territory might have rapidly increasing earnings, while the sales rep in a poor area will have little to show for the same amount of work. Such a situation isn't fair, and it can lead to high turnover and much dissatis-faction. A sales manager can take such dif-ferences into consideration when setting asalesperson's sales quota—the specific salesor profit objective a salesperson is expectedto achieve. Often a salesperson receives abonus for meeting the sales quota.

prepared sales presentation

The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. This approach says that a customer faced with a particular stimulus will give the desired response—in this case, a yes answer to the salesperson's prepared statement, which includes a close, the salesperson's request for an order.

selling formula approach

The selling formula approach starts with a pre- pared presentation outline—much like the prepared approach—and leads the customer through some logical steps to a final close. The prepared steps are logical because we assume that we know something about the target customer's needs and attitudes.

Manufacturing and producers of services

The service side of the U.S. economy is large and has been growing fast. Service opera- tions are also growing in some other countries. There are many good opportunities to provide these service companies with the products they need to support their opera- tions. But there are also challenges. The United States has almost 6 million service firms—more than 17 times as many as it has manufacturers. Some of these are big companies with international operations. Examples include AT&T, Hilton Hotels, Prudential Insurance, PwC, Wells Fargo, and Accenture. These firms have purchasing departments that are like those in large manu- facturing organizations.

trade promotion

Trade promotion refers to sales promotion aimed at intermediaries. A range of tools may be used depending on the promotion objective. Sometimes a producer uses trade promotion to get the intermediary's sales force to pay more attention to the producer's products. Sales contests can help achieve that goal, encouraging intermediary sales- people to earn prizes by exceeding sales targets. Another approach is to train intermedi- ary salespeople on the product, perhaps at a producer-sponsored sales meeting in a desirable location (so that attendance has its own rewards, in addition to professional growth).

Major account sales force

Very large customers often require special sales efforts—and relationships with them are treated differently. Moen, a maker of plumbing fixtures, has a regular sales force to call on building material wholesalers and an elite major accounts sales force that sells directly to large accounts—such as Lowe's, Home Depot, Ferguson, or other major retail chains that carry plumbing fixtures.

channel of distribution

We'll show why specialists are often involved and how they come together to form a channel of distribution—any series of firms or individuals who par- ticipate in the flow of products from producer to final user or consumer. We'll also consider how to manage relations among channel members to reduce conflict and improve cooperation. This chapter concludes by considering the desired level of market exposure (and how many channel outlets are needed) as well as approaches for reach- ing customers in international markets.

Pushing

When a channel of distribution involves intermediaries, their cooperation can be crucial to the success of the overall marketing strategy. Pushing (a product through a channel) means using normal promotion effort—personal selling, advertising, and sales promotion— to help sell the whole marketing mix to possible channel members. See Exhibit 13-6. This approach emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user.

Persuading

When competitors offer similar products, the firm must not only inform customers that its product is available but also persuade them to buy it. A persuading objective means the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, its product. A persuading objective often tries to demonstrate how one brand is better than others. To convince consumers to buy Brawny paper towels, ads show Brawny as the towel that's best for tough cleanup jobs. A salesperson for Andersen Windows tries to convince home builders about the quality and affordability of Andersen Windows as compared to those of a competitor, so the builder will choose Andersen for future housing projects.