MKTG Exam 4
Consumer demand is influenced by many more factors than just price:
Changes in buyers' needs variations in the effectiveness of other marketing-mix variables the presence of substitutes dynamic environmental factors can all influence demand.
prospecting:
Developing a database of potential customers. Salespeople seek names of prospects from company sales records, trade shows, commercial databases, newspaper announcements (of marriages, births, deaths, and so on), public records, trade association directories, and many other sources. Sales personnel also use responses to traditional and online advertisements that encourage interested persons to send in information request forms. Seminars and meetings targeted at particular types of clients, such as attorneys or accountants
what is tactile communication?
(Touching) is also a form of communication, although less popular in the United States than in many other countries. Handshaking is a common form of tactile communication both in the United States and elsewhere.
why do organizations use institutional advertising?
*The company uses institutional advertising to promote its image of being personal with face-to-face communication and personalized support. Institutional advertising can be proactive to create a favorable view of the organization or its industry or, in contrast, reactive, in response to something that may negatively impact an organization's reputation.
disadvantages of advertising?
- Even though the cost per person reached may be relatively low, the absolute dollar outlay can be extremely high, especially for commercials during popular television shows and those associated with popular websites. -little rapid feedback -High costs can limit, and sometimes preclude, use of advertising in a promotion mix. -measure it's effect is difficult - less persuasive than personal selling
what are the five types of pricing strategies?
- New-product Pricing - Differential Pricing - Psychological Pricing - Product-Line Pricing - Promotional Pricing
CASH FLOW pricing objectives?
- Some companies set prices so they can recover cash as quickly as possible. - recover capital spent to develop products - Choosing this pricing objective may have the support of a marketing manager if he or she anticipates a short product life cycle. - oversimplifies the contribution of price to profits.
What are Ten Objectives of Promotion?
- create awareness - stimulate demand - encourage product trial - identify prospects - stimulate word of mouth - retain loyal customers and make new ones - facilitate retail and wholesale support - challenge competitors' promotions - reduce sales fluctuations - generate positive social media posts
MARKET SHARE pricing objectives?
- is a product's sales in relation to total industry sales - high relative market shares often translate into high profits for firms. - marketers often use an increase in market share as a primary pricing objective. - a firm's sales volume can increase while its market share decreases if the overall market grows.
(Psychological) everyday low prices (EDLPs)
-To reduce or eliminate the use of frequent short-term price reductions. - a marketer sets a low price for its products on a consistent basis, rather than setting higher prices and frequently discounting them EDLPs - make customers feel confident that they are receiving a good deal - A company that uses EDLPs benefits from reduced promotional costs, reduced losses from frequent markdowns, and more stable sales. **they are more likely to choose a retail establishment with an EDLP strategy over a retailer that offers large discounts infrequently**
STATUS QUO pricing objectives?
-focus on several dimensions, such as maintaining a certain market share, meeting (but not beating) competitors' prices, achieving price stability, and maintaining a favorable public image - can reduce a firm's risks by helping to stabilize demand for products - risks minimizing pricing as a competitive tool, which could lead to a climate of nonprice competition. - Professionals such as accountants and attorneys often operate in such an environment.
why is price skimming dangerous?
A danger is that a price skimming strategy may make the product appear more lucrative than it actually is to potential competitors. A firm also risks misjudging demand and facing insufficient sales at the high price.
Overcoming Objectives:
An effective salesperson usually seeks out a prospect's objections in order to address them. If the objections are not apparent, the salesperson cannot deal with them, and the prospect may not buy.
Depending on what is being promoted, advertising can be classified as:
institutional or product advertising
advertising campaign?
involves designing a series of advertisements and placing them in various advertising media to reach a particular target audience.
what is the average total cost?
is the sum of the average fixed cost and the average variable cost.
(Psychological) Reference pricing
means pricing a product at a moderate level and physically positioning it next to a more expensive model or brand in the hope that the customer will use the higher price as a reference point (i.e., a comparison price).
Institutional advertising
promotes organizational images, ideas, and political issues. Institutional advertisements may deal with broad image issues, such as organizational strengths or the friendliness of employees. They may also aim to create a more favorable view of the organization in the eyes of non customer groups, such as shareholders, consumer advocacy groups, potential shareholders, or the general public.
Product advertising?
promotes the uses, features, and benefits of products.
To maximize promotional effectiveness, marketers strive for:
proper planning, implementation, coordination, and control of communications.
many salespeople move through a general selling process. This process consists of seven steps:
prospecting preapproach approach making the presentation overcoming objections closing the sale and following up
Differential pricing can occur in several ways, including:
negotiated pricing secondary-market pricing periodic discounting random discounting.
Negotiated pricing?
occurs when the final price is established through bargaining between the seller and the customer.Negotiated pricing occurs in a number of industries and at all levels of distribution. Even when there is a predetermined stated price or a price list, manufacturers, wholesalers, and retailers still may negotiate to establish the final sales price
Key Note: consumer games
Development and management of consumer games is often outsourced to an independent public relations firm, which can help marketers navigate federal and state laws that regulate games. Although games may stimulate sales temporarily, there is no evidence to suggest that they affect a company's long-term sales.
Omnichannel retailing provides seamless customer contact. It provides ___________ __________ ____________ to accomplish promotion and distribution objectives.
Integrated Marketing Communications
Key Note: Advertising Appropriation
Many factors affect a firm's decision about how much to appropriate for advertising. Geographic size of the market and the distribution of buyers within the market have a great bearing on this decision. Both the type of product advertised and the firm's sales volume relative to competitors' sales volumes also play roles in determining what proportion of revenue to spend on advertising. Advertising appropriations for business products are usually quite small relative to product sales, whereas consumer convenience items, such as the cosmetics sold by Maybelline, generally have large advertising expenditures relative to sales
KEY NOTE:
Many service industries, including the airline, hotel, bus, car rental, ride sharing, and entertainment venues, usedynamic pricing to balance supply and demand. For instance, ride-sharing services Uber and Lyft charge higher rates onSaturday nights and other local peak demand times. Likewise, in some industries, yield management is a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions.
Key Note: prospecting
Most salespeople prefer to use referrals—recommendations from current customers—to find prospects
when is pioneer advertising employed?
Pioneer advertising is also employed when the product is in the introductory stage of the product life cycle.
Key Note: establishing sales-force objectives
Sales objectives, or quotas, for individual salespeople are commonly stated in terms of dollar or unit sales volume. Other bases used for individual sales objectives include average order size, average number of calls per time period, and ratio of orders to calls. Today, sales objectives are often established by predictive analytics. CRM strategies developed through platforms such as Salesforce.com can help develop and achieve objectives. This is possible by acquiring the data necessary to determine achievable objectives.
random discounting?
That is, they reduce their prices temporarily on a nonsystematic basis. When price reductions occur randomly, current users of that brand are not able to predict when the reductions will occur. Therefore, they are less likely to delay their purchases in anticipation of buying the product at a lower price. Marketers also use random discounting to attract new customers.
advocacy advertising
When a company promotes its position on a public issue. Such advertising may be used to promote socially approved behavior, such as recycling or moderation in consuming alcoholic beverages.
what is a promotion mix?
When an organization combines specific methods to manage the integrated marketing communications for a particular product, that combination is the product promotion mix.
We define communication as?
a sharing of meaning. Implicit in this definition is the notion of transmission of information because sharing necessitates transmission.
The four possible elements of a promotion mix are:
advertising personal selling public relations, sales promotion
Trade-sales-promotion methods include,
These methods include buying allowances, buy-back allowances, scan-back allowances, merchandise allowances, cooperative advertising, dealer listings, free merchandise, dealer loaders, premium or push money, and sales contests.
compensating sales people,
To develop and maintain a highly productive sales force, an organization must formulate and administer a compensation plan that attracts, motivates, and retains the most effective individuals. The plan should give sales management the desired level of control and provide sales personnel with acceptable levels of income, freedom, and incentive. It should be flexible, equitable, easy to administer, and easy to understand.
Of the many techniques used to determine the advertising appropriation, one of the most logical is the objective-and-task approach.
Using this approach, marketers determine the objectives a campaign is to achieve and then attempt to list the tasks required to accomplish them. The costs of the tasks are calculated and added to arrive at the total appropriation. This approach has one main problem: marketers sometimes have trouble accurately estimating the level of effort needed to attain certain objectives
If demand is elastic a shift in price causes an opposite change in total revenue:
an increase in price will decrease total revenue, and a decrease in price will increase total revenue
Inelastic demand results in a change in the same direction as total revenue:
an increase in price will increase total revenue, and a decrease in price will decrease total revenue.
Demonstrations:
are excellent attention-getters. Manufacturers offer them temporarily to encourage trial use and purchase of a product or to show how a product works. Because labor costs can be extremely high, demonstrations are not used widely. They can be highly effective for promoting certain types of products, such as appliances, cosmetics, and cleaning supplies.
Consumer-sales-promotion methods: cents-off offers
buyers pay a certain amount less than the regular price shown on the label or package. Like coupons, this method can serve as a strong incentive for trying new or unfamiliar products and is commonly used in product introductions.
When marketers employ product-line pricing, they have several strategies from which to choose. These include:
captive pricing premium pricing price lining.
(Psychological) customary pricing
certain goods are priced on the basis of tradition. Examples of customary, or traditional, prices would be those set for candy bars and chewing gum. This is a less common pricing strategy now than it was in the past. An example would be the 25-cent gumballs sold in gumball machines—the price has remained at that level for probably as long as you can remember.
A pulsing schedule:
combines continuous and flighting schedules: during the entire campaign, a certain portion of advertising runs continuously, and during specific time periods of the campaign, additional advertising is used to intensify the level of communication with the target audience.
markup pricing is?
commonly used by retailers, a product's price is derived by adding a predetermined percentage of the cost, called markup, to the cost of the product. For instance, most liquor stores mark up prices by 25 to 45 percent, whereas warehouse club Costco has a lower average markup of 10 to 14 percent on beer, wine, and spirits.
advertising platform?
consists of the basic issues or selling points that an advertiser wishes to include in the advertising campaign. For example, McDonald's advertises all-day breakfasts as part of its advertising platform for its restaurants. **Selling features must not only be important to customers; they should also be strongly competitive features of the advertised brand.
There are many kinds of sales support personnel; the three most common are:
customer success managers trade salespeople technical salespeople.
what is demand-based pricing?
customers pay a higher price at times when demand for the product is strong and a lower price when demand is weak. Many entertainment venues have implemented demand-based pricing for ticket sales. The Walt Disney Company, for example, implemented demand-based pricing for Disney theme parks and resorts, offering cheaper tickets or extra perks on traditionally slow days and more expensive tickets or greater restrictions on traditionally crowded days, such as summer weekends.
Consumer-sales-promotion methods
encourage or stimulate consumers to patronize specific retail stores or try particular products. Online sales promotion can create a higher level of product and brand recall.
what does marginal analysis examine?
examines what happens to a firm's costs and revenues when production (or sales volume) changes bya single unit. Both production costs and revenues must be evaluated. To determine the costs of production, it is necessary to identify several types of potential costs.
Support personnel:
facilitate selling but usually are not involved solely with making sales. They engage primarily in marketing industrial products, locating prospects, educating customers, building goodwill, and providing service after the sale.
pricing objectives influence decisions in many functional areas of a business, including:
finance, accounting, and production.
what is pioneer advertising?
focuses on stimulating demand for a product category (rather than a specific brand) by informing potential customers about the product's features, uses, and benefits.
Drawbacks of coupon use include:
fraud and misredemption, which can be expensive for manufacturers. Coupon fraud—including counterfeit internet coupons as well as coupons cashed in under false retailer names—costs manufacturers hundreds of millions in losses each year. Another disadvantage, according to some experts, is that coupons are losing their value; because so many manufacturers offer them, consumers have learned not to buy without some incentive, whether that pertains to a coupon, a rebate, or a refund. Furthermore, brand loyalty among heavy coupon users has increased as many consumers redeem coupons only for products they normally buy.
The sales force is directly responsible for,
generating one of an organization's primary inputs: sales revenue. Without adequate sales revenue, businesses cannot survive. In addition, a firm's reputation is often determined by the ethical conduct of its sales force.
three types of pricing associated with business products:
geographic pricing transfer pricing discounting.
Technical salespeople:
give technical assistance to the organization's current customers, advising them on product characteristics and applications, system designs, and installation procedures. Because this job is often highly technical, the salesperson usually has formal training in one of the physical sciences, information technology, or in engineering.
Quantity discounts are?
given to customers who buy in large quantities. Quantity discounts are offered because the seller's per-unit selling cost is usually lower for larger purchases.
what are price objectives?
goals that describe what a firm wants to achieve through pricing. Specifying pricing objectives is an important task because these form the basis for decisions for other stages of the pricing process. Thus, pricing objectives must be stated explicitly and in measurable terms, and should include a time frame for accomplishing them.
evaluating PR effectiveness, Environmental monitoring:
identifies changes in public opinion affecting an organization.
combination compensation plan,
in which salespeople receive a fixed salary plus a commission based on sales volume. Some combination programs require that a salesperson exceed a certain sales level before earning a commission; others offer commissions for any level of sales.
Cash discounts are?
incentives offered for prompt payment. A seller may offer a discount of "2/10, net 30," meaning that the buyer may take a 2 percent discount if the bill is paid within 10 days and that the bill must be paid in full within 30 days.
Point-of-purchase (POP) materials
include outdoor signs, window displays, counter pieces, display racks, and self-service cartons. Innovations in POP displays include sniff-teasers, which give off a product's aroma in the store as consumers walk within a radius of four feet, and computerized interactive displays. These items, often supplied by producers, attract attention, inform customers, and encourage retailers to carry particular products.
straight salary compensation plan,
salespeople are paid a specified amount per time period, regardless of selling effort. This sum remains the same until they receive a pay increase or decrease. Although this method is easy to administer and affords salespeople financial security, it provides little incentive for them to boost selling efforts
straight commission compensation plan,
salespeople's compensation is determined solely by sales for a given period. A commission may be based on a single percentage of sales or on a sliding scale involving several sales levels and percentage rates. Although this method motivates sales personnel to escalate their selling efforts, it offers them little financial security, and it can be difficult for sales managers to maintain control over the sales force.
The most common publicity-based public relations tool is the news release,
sometimes called a press release, which is usually a single page of typewritten copy containing fewer than 300 words and describing a company event or product. A news release gives the firm's or agency's name, address, phone number, and contact person. Companies sometimes use news releases when introducing new products or making significant announcements.
The posttest, Recall can be measured through either:
unaided or aided recall methods.
when evaluating advertising effectiveness, A pretest:
usually attempts to evaluate the effectiveness of one or more elements of the message
two approaches marketers take to analyze demand, cost, and profit relationships:
marginal analysis and breakeven analysis.
However, because this pricing strategy on occasion has led to deceptive pricing practices, the Federal Trade Commission has established guidelines for comparison discounting.
- If the higher price against which the comparison is made is the price formerly charged for the product, sellers must have made the previous price available to customers for a reasonable period of time - If sellers present the higher price as the one charged by other retailers in the same tradearea, they must be able to demonstrate that this claim is true. - When they present the higher price as the manufacturer's suggested retail price, then the higher price must be close to the price at which a reasonable proportion of the product was sold
PROFIT pricing objectives??
- difficult to measure - set at levels that the owners and top-level decision makers view as satisfactory and attainable. - may be stated in terms of either actual dollar amounts or a percentage of sales revenues.
RETURN ON INVESTMENT pricing objectives?
- generally requires some trial and error, as it is unusual for all required data and inputs to be available when setting prices. - Many pharmaceutical companies also use ROI pricing objectives because of their great investment in research and development.
Target market's price evaluation:
-the importance of price varies depending on the type of product, the type of target market, and the purchase situation - help a marketer determine how far above the competition the firm can set its prices,if it should be done at all. - a marketer is in a better position to know how much emphasis to put on price in the overall marketing strategy. - Understanding the importance of a product to customers, as well as their expectations about quality andvalue, helps marketers assess correctly the target market's evaluation of price.
eight general areas of sales management:
1) establishing sales-force objectives, 2) determining sales-force size, 3) recruiting and selecting salespeople, 4) training sales personnel, 5) compensating salespeople, 6) motivating salespeople, 7) managing sales territories, 8) controlling and evaluating sales-force performance.
Some copywriters have adopted guidelines for developing body copy systematically:
1) identify a specific desire or problem, 2) recommend the product as the best way to satisfy that desire or solve that problem, 3) state product benefits and indicate why the product is best for the buyer's particular situation, 4) substantiate advertising claims, and 5) ask the buyer to take action.
KEY NOTE: sales promotion
Sales promotion should not be confused with promotion; sales promotion is just one part of the comprehensive area of promotion. Marketers spend more on sales promotion than on advertising, and sales promotion appears to be a faster-growing area than advertising.
encourage product trial ideas
free samples, coupons, test drives, or limited free-use offers, contests, and games—are employed to encourage product trial.
what are regional issues?
in which advertisements and editorial content of copies appearing in one geographic area differ from those appearing in other areas. A company may also choose to advertise in only one region. Such geographic selectivity lets a firm use the same message in different regions at different times.
F.O.B origin pricing stands for?
"free on board at the point of origin," which means that the price does NOT INCLUDE freight charges. It requires the buyer to pay the delivery costs, which include transportation from the seller's warehouse to the buyer's place of business.
To measure advertising effectiveness during a campaign, marketers usually rely on:
"inquiries" or responses. In a campaign's initial stages, an advertiser may use several advertisements simultaneously, each containing a coupon, form, toll-free phone number, QR code, social media site, or website through which potential customers can request information.
major steps to create advertising campaign?
1) identifying and analyzing the target audience, 2) defining the advertising objectives, 3) creating the advertising platform, 4) determining the advertising appropriation, 5) developing the media plan, 6) creating the advertising message, 7) executing the campaign, and 8) evaluating advertising effectiveness.
disadvantage of penetration pricing?
A disadvantage of penetration pricing is that it places a firm in a less-flexible pricing position. It is more difficult to raise prices significantly than it is to lower them.
what is the difference between advertising and personal selling?
Advertising is general communication aimed at a relatively large target audience, whereas personal selling involves more specific communication directed at one or several individuals. Reaching one person through personal selling costs considerably more than through advertising, but personal selling efforts often have greater impact on customers. Personal selling also provides immediate feedback, allowing marketers to adjust their messages to improve communication. Such interaction helps them determine and respond to customers' information needs.
Key Note:
Advertising should create awareness, produce interest, create desire, and ultimately result in a purchase (action).
Following Up:
After a successful closing, the salesperson must follow up the sale. In the follow-up stage, the salesperson determines whether the order was delivered on time and installed properly, if installation was required. If the product is a service, it is important to determine if there are any concerns or if improvements can be made in the experience.
Key Note: Artwork
Artwork consists of an advertisement's illustrations and layout. Illustrations are often photographs but can also be drawings, graphs, charts, and tables. Illustrations are used to draw attention, encourage audiences to read or listen to the copy, communicate an idea quickly, or convey ideas that are difficult to express. Illustrations can be more important in capturing attention than text or brand elements, independent of size. They are especially important, because consumers tend to recall the visual portions of advertisements better than the verbal portions.
benefits of advertising?
Benefits -flexible -cost efficient when it reaches a vast number of people at a low cost per person
Making the Presentation:
During the sales presentation, the salesperson must attract and hold the prospect's attention, stimulate interest, and spark a desire for the product. Salespeople who carefully monitor the selling situation and adapt their presentations to meet the needs of prospects are associated with effective sales performance. Salespeople should match their influencing tactics—such as information exchange, recommendations, deadlines, promises, ingratiation, and inspirational appeals—to their prospects.
what is channel capacity?
Each communication channel has a limit on the volume of information it can handle effectively. Channel capacity, is determined by the least efficient component of the communication process. Consider communications that depend on speech. An individual source can speak only so fast, and there is a limit to how muchan individual receiver can take in through listening.
KEY NOTE: price elasticity of demand
Elastic: non-essential items Inelastic: essential items like utilities -price does not matter
posttest are used?
Evaluation of advertising effectiveness after the campaign is called a posttest. Advertising objectives often determine what kind of posttest is appropriate. If the objectives' focus is on communication—to increase awareness of product features or brands or to create more favorable customer attitudes—the posttest should measure changes in these dimensions. Advertisers sometimes use consumer surveys or experiments to evaluate a campaign based on communication objectives.
The receiver's response to a decoded message is________ to the source.
Feedback The source usually expects and normally receives feedback, although perhaps not immediately. During feedback, the receiver or audience provides the original source with a response to the message. Feedback is coded, sent through a communications channel, and decoded by the receiver, the source of the original communication. Thus, communication is a circular process
creative selling?
It requires that salespeople recognize potential buyers' needs and give them necessary information. Increasingly, inside salespersons manage the digital approaches to sales and outside salespersons are more face-to-face and relationship-oriented. Digitalized sales information as well as AI technologies will help increase customer value. In fact, these things can change the sales value creative function. The sales function is shifting to service and consulting, creating long-term relationships with customers.
Another way to determine advertising appropriation is the competition-matching approach.
Marketers following this approach try to match their major competitors' appropriations in absolute dollars or to allocate the same percentage of sales for advertising that their competitors do. Although a marketer should be aware of what competitors spend on advertising, this technique should not be used alone because the firm's competitors probably have different advertising objectives and different resources available for advertising. Many companies and advertising agencies review competitive spending on a quarterly basis, comparing competitors' dollar expenditures on print, radio, and television with their own spending levels. Competitive tracking of this nature occurs at both the national and regional levels.
KEY NOTE:
Omnichannel retailing (discussed in Chapter 9) calls for a multidimensional approach to delivering value. Omnichannel is the concept of bringing together communication, products and services, supply chain management, payment options and terms, customer service, and more into a seamless experience for consumers. For example, to purchase a pair of pants, a shopper might browse online to find styles, search online for nearby retailers, shop in-store to try on clothes, and use a digital coupon from an app. This highlights the importance of communicating with customers with consistent messaging on many different platforms. The concept of the omnichannel includes traditional marketing channelactivities related to ownership, operations, transportation, and supply management as well as every touchpoint in thecustomer experience including email, apps, Facebook, Twitter, and any type of internet marketing in the delivery ofcustomer service.
negatives of refunds and rebates:
One problem with money refunds and rebates is that many people perceive the redemption process as too complicated. According to one estimate, at least 40 percent of consumers do not get their money back, because they fail to meet the requirements. To eliminate these complications, many marketers allow customers to apply for a rebate online, which eliminates the need for forms that may confuse customers and frustrate retailers. Consumers might also have negative perceptions of manufacturers' reasons for offering rebates
Key Note: Personal Selling
Personal selling is also the most effective way to form relationships with customers. It is perhaps most critical with business-to-business transactions involving the purchase of expensive products. Because of the high-risk factors involved, personal selling is often necessary to assure prospective customers about the quality of the product and answer any questions. MOST EXPENSIVE in promotion mix
Key Note: comparative advertising:
Product categories that commonly use comparative advertising include soft drinks, toothpaste, pain relievers, foods, tires, automobiles, and detergents. Under the provisions of the 1988 Trademark Law Revision Act, marketers using comparative advertisements in the United States must not misrepresent the qualities or characteristics of competing products.
are push and pull policies mutually exclusive??
Push and pull policies are NOT mutually exclusive. At times, an organization uses both simultaneously.
(promotional Pricing) price leaders?
Sometimes a firm prices a few products below the usual markup, near cost, or even below cost. This type of pricing is used most often in supermarkets and restaurants to attract customers by offering especially low prices on a few items, with the expectation that they will purchase other items as well.
Key Note: Market Share
The Profit Impact of Market Strategies (PIMS) studies,conducted over the past 50 years, have shown that both market share and product quality influence profitability.
what is a breakeven point?
The point at which the costs of producing a product equal the revenue made from selling the product
KEY NOTE: high quality
The products and brands that customers perceive to be of high quality are more likely to survive in a competitive market place because customers trust these products more, even if the prices are higher.
(Promotional Pricing) Special-event pricing?
To increase sales volume, many organizations coordinate price with advertising or sales promotions for seasonal or special situations. involves advertised sales or price cutting linked to a holiday, season, or event.If the pricing objective is survival, then special sales events may be designed to generate necessary operating capital.
what is a communication channel in the communication process?
To share a coded meaning with the receiver or audience, a source selects and uses a communications channel, the medium of transmission that carries the coded message from the source to the receiver or audience. Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication(social media platforms such as Facebook and YouTube).
what is the coding process (or encoding) in the communication process?
To transmit meaning, a source must convert the meaning into a series of signs or symbols representing ideas or concepts
what is transfer pricing?
When one unit in an organization sells a product to another unit. -A transfer price is determined by calculating the cost of the product, which can vary depending on the types of costs included in the calculations. The choice of the costs to include when calculating the transfer price depends on the company's management strategy and the nature of the units' interaction. An organization also must ensure that transfer pricing is fair to all units involved inthe purchase.
Researchers also use a sophisticated technique called single-source data to help evaluate advertisements.
With this technique, individuals' behaviors are tracked from television sets to checkout counters. Monitors are placed in preselected homes, and microcomputers record when the television set is on and which station is being viewed. At the supermarket checkout, the individual in the sample household presents an identification card. Checkers then record the purchases by scanner, and data are sent to the research facility.
what is cost-based pricing?
a flat dollar amount or percentage is added to the cost of the product, which means marketers apply a desired level of profit to the cost of the product. Cost-based pricing does not necessarily take into account the economic aspects of supply and demand, nor must it relate to just one pricing strategy or pricing objective. It is a straight forward and easy-to-implement method.
what is proxemic communication?
a less obvious form of communication used in personal selling situations, occurs when either person varies the physical distance separating them. When a customer backs away from a salesperson, for example, he or she may be displaying a lack of interest in the product or expressing dislike for the salesperson. Key: PROXIMITY
A feature article is:
a manuscript of up to 3,000 words prepared for a specific publication.
a press conference is:
a meeting called to announce major news events. Media personnel are invited to a press conference and are usually supplied with various written materials and photographs. Letters to the editor and editorials are sometimes prepared and sent to newspapers and magazines. Videos may be made available to broadcasters in the hope that they will be aired.
To pretest advertisements, marketers sometimes use a consumer jury which is:
a panel of existing or potential buyers of the advertised product. Jurors judge one or several dimensions of two or more advertisements. Such tests are based on the belief that consumers are more likely than advertising experts to know what influences them. Companies can also solicit the assistance of marketing research firms, such as Information Resources Inc. (IRI), to help assess ads.
what is a source in the communication process?
a person, group, or organization with a meaning it attempts to share with an audience. A source could be an electronics salesperson wishing to communicate the attributes of OLED and 4K television to a buyer in the store or a television manufacturer using television ads to inform thousands of consumers about its products.
A captioned photograph is:
a photograph with a brief description explaining its contents. Captioned photographs are effective for illustrating new or improved products with highly visible features.
An allowance is?
a reduction in price to achieve a desired goal. Trade-in allowances, for example, are price reductions granted for turning in used equipment, like aircraft, when purchasing new equipment.
Trade-sales-promotion method: buying allowance?
a temporary price reduction offered to resellers for purchasing specified quantities of a product. A paper supplier could offer an office supply store $3 off of every case of paper purchased. Such offers provide an incentive for resellers to handle new products, achieve temporary price reductions, or stimulate purchase of items in larger-than-normal quantities.
Premium money (push money) is?
additional compensation offered by the manufacturer to salespeople as an incentive to PUSH A LINE OF GOODS. This method is appropriate when personal selling is an important part of the marketing effort; it is not effective for promoting products sold through self-service. Premium money often helps a manufacturer obtain a commitment from the sales force, but it can be very expensive
With a flighting schedule:
advertisements run for set periods of time, alternating with periods in which no ads run. For example, an advertising campaign might have an ad run for two weeks, then suspend it for two weeks, and then run it again for two weeks
When a continuous schedule is used:
advertising runs at a constant level with little variation throughout the campaign period.
One type of approach is based on referrals, as discussed in the section on prospecting. The salesperson who uses the "cold canvass" approach,
calls on potential customers without prior consent. This approach is decreasing. Social media is becoming more typical in gaining the initial contact with a prospect.
What is competition-based pricing?
an organization considers costs to be secondary to competitors' prices. This is a common method among -producers of relatively homogeneous products, particularly when the target market considers price to be an important purchase consideration. A firm that uses competition-based pricing may choose to price below competitors' prices or at the same level.
Dealer listings?
are advertisements promoting a product and identifying participating retailers that sell the product. Dealer listings can influence retailers to carry the product, build traffic at the retail level, and encourage consumers to buy the product at participating dealers.
what are variable costs?
are directly related to changes in the number of units produced or sold. The wages for adding a second shift of workers and the cost of inputs to produce twice as much product are variable costs because they increase as production increases. Variable costs are usually held constant per unit.
Premiums?
are items offered free or at a minimal cost as a bonus for purchasing a product. Cracker Jack, introduced in 1896 as the first junk food, had a prize of trivial value inside. Now it has a QR code to download a baseball game to play on the customer's smartphone. Premiums are used to attract competitors' customers, introduce different sizes of established products, add variety to other promotional efforts, and stimulate consumer loyalty.
Trade salespeople:
are not strictly support personnel, because they usually take orders as well. However, they direct much effort toward helping customers—especially retail stores—promote the product. They are likely to restock shelves, obtain more shelf space, set up displays, provide in-store demonstrations, and distribute samples to store customers.
Reinforcement advertising?
assures current users that they have made the right brand choice and tells them how to get the most satisfaction from that brand. Insurance companies such as GEICO encourage potential new customers to spend 15 minutes on the phone getting an insurance quote and save 15 percent or more on their policy. Value propositions can provide reinforcement to consumers that they are making a good decision as a new or current customer.
Trade-sales-promotion methods:
attempt to persuade wholesalers and retailers to carry a producer's products and market them more aggressively. Marketers use trade sales methods for many reasons, including countering the effect of lower-priced store brands, passing along a discount to a price-sensitive market segment, boosting brand exposure among target consumers, or providing additional incentives to move excess inventory or to counteract competitors.
what is Competitive advertising?
attempts to stimulate demand for a specific brand by promoting the brand's features, uses, and advantages through indirect or direct comparisons with competing brands.
Consumer-sales-promotion methods: money refunds
consumers submit proof of purchase and are mailed a specific amount of money. Usually, manufacturers demand multiple product purchases before consumers qualify for money refunds. Marketers employ money refunds as an alternative to coupons to stimulate sales. Promotes Trial
There are three general types of media schedules:
continuous, flighting, and pulsing
Two common forms of cost-based pricing are:
cost-plus pricing and markup pricing.
Firms must weigh many different factors when setting prices, including:
costs, competition, customer buying behavior and price sensitivity, manufacturing capacity, and product lifecycles.
(stimulate demand) what does primary demand mean?
demand for a product category rather than for a specific brand of product—through new introductory promotion. The Almond Board of California focuses on a health- and fitness-oriented market with its advertisement. The ad stimulates primary demand for almonds grown in California.
(stimulate demand) what is selective demand?
demand for a specific brand, a marketer employs promotional efforts that point out the strengths and benefits of a specific brand. Building selective demand also requires singling out attributes important to potential buyers. Selective demand can be stimulated by differentiating the product from competing brands in the minds of potential buyers.
native advertising, or digital advertising?
digital advertising that matches the appearance and purpose of the content in which it is embedded. The word "native" refers to the fact that this form of advertising is meant to resemble the content itself. Native advertising has been associated more with improved brand perception, awareness, and engagement over standard banner ads. Native digital advertising accounts for nearly 65 percent of all digital display ad spending.
what are fixed costs?
do not vary with changes in the number of unitsproduced or sold. For example, a manufacturer's rent for a factory does not change because production increases, more employees are hired, or sales go up
In consumer contests,
individuals compete for prizes based on their analytical or creative skills. This method can be used to generate retail traffic and frequency of exposure to promotional messages. Contestants are usually more highly involved in consumer contests than in games or sweepstakes, even though total participation may be lower. Contests may also be used in conjunction with other sales-promotion methods, such as coupons.
In consumer games,
individuals compete for prizes based primarily on chance—often by collecting game pieces like bottle caps or a sticker on a carton of french fries. Because collecting multiple pieces may be necessary to win or increase an individual's chances of winning, the game stimulates repeated business.
(stimulate demand) what does New introductory promotion mean?
informs potential customers about the product: what it is, what it does, how it can be used, and where it can be purchased. Because this promotion is used in the introductory stage of the product life cycle, meaning there are no competing brands, it neither emphasizes brand names nor compares brands.
Relationship selling also known as consultative selling:
involves building mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time. Like team selling, it is especially used in business-to-business marketing. Relationship selling involves finding solutions to customers' needs by listening to them, gaining a detailed understanding of their organizations, understanding and caring about their needs and challenges, and providing support after the sale
Public relations?
is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. *An organization communicates with various stakeholders, both internal and external, and public relations efforts can be directed toward any and all of them. A firm's stakeholders can include customers, suppliers, employees, shareholders, the media, educators, potential investors, government officials, and society in general. Public relations is also used to respond to negative events
what is a pricing strategy?
is a course of action designed to achieve pricing objectives, which are set to help marketers solve the practical problems of setting prices. The extent to which a business uses any of the following strategies depends on its pricing and marketing objectives, the markets for its products, the degree of product differentiation, the product's life-cycle stage, and other factors.
what is a discount?
is a deduction off the price of an item. Producers and sellers offer a wide variety of discounts to their customers, including trade, quantity, cash, and seasonal discounts as well as allowances
what is product placement?
is a form of advertising that strategically locates products or product promotions within entertainment media to reach the product's target markets. The Lego Movie represented perhaps the ultimate brand placement. Warner Bros. paid a licensing fee to Lego to use its brand to create the lead roles of Lego characters. Not only was the movie successful, but Lego also went on to surpass Mattel as the world's largest toy maker.
A dealer loader is a ?
is a gift to a retailer that purchases a specified quantity of merchandise. Dealer loaders are often used to obtain special display efforts from retailers by offering essential display parts as premiums. For example, New Belgium Brewing can provide a Fat Tire bicycle to hang in a pub. Marketers use dealer loaders to obtain new distributors and push larger quantities of goods.
what is a demand curve
is a graphic representation of the quantity of products a firm expects to sell at different prices
Trade-sales-promotion method: A merchandise allowance?
is a manufacturer's agreement to pay resellers certain amounts of money for providing promotional efforts like advertising or point-of-purchase displays. This method is best suited to high-volume, high-profit, easily handled products. A drawback is that some retailers perform activities at a minimally acceptable level simply to obtain allowances. Before paying retailers, manufacturers usually verify their performance.
Trade-sales-promotion method: A scan-back allowance?
is a manufacturer's reward to retailers based on the number of pieces moved through the retailers' scanners during a specific time period. To participate in scan-back programs, retailers are usually expected to pass along savings to consumers through special pricing.
what is advertising?
is a paid non personal communication about an organization and its products transmitted to a target audience through mass media, including television, radio, the internet, newspapers, magazines, video games, direct mail, outdoor displays, and signs on mass transit vehicles.
what is personal selling?
is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. Most extensively used in the business-to-business market and also in the business-to-consumer market for high-end products such as homes, cars, electronics, and furniture.
what is viral marketing?
is a strategy to get consumers to share a marketer's message, often through email or online video suchas YouTube, in a way that spreads dramatically and quickly.
Trade-sales-promotion method: A buy-back allowance?
is a sum of money that a producer gives to a reseller for each unit the reseller buys after an initial promotional deal is over. This method is a secondary incentive in which the total amount of money resellers receive is proportional to their purchases during an initial consumer promotion, such as a coupon offer. Buy-back allowances foster cooperation during an initial sales-promotion effort and stimulate repurchase afterward. Disadvantage= expense Advantage= pays to restock
What is sales promotion?
is an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers. Examples include free samples, games, rebates, sweepstakes, contests, premiums, and coupons.
Sales promotion:
is an activity or material, or both, that acts as a direct inducement to buy or offers added value or incentive to use the product to resellers, salespeople, or consumers. It encompasses all promotional activities and materials other than personal selling, advertising, and public relations. Retailers often offer buy-one-get-one-free sales, a sales-promotion tactic known as a bonus or premium.
Cooperative advertising?
is an arrangement in which a manufacturer agrees to pay a certain amount of a retailer's media costs for advertising the manufacturer's products. The amount allowed is usually based on the quantities purchased. As with merchandise allowances, a retailer must show proof that advertisements did appear before the manufacturer pays the agreed-upon portion of the advertising costs.
what is buzz marketing?
is an attempt to incite publicity and public excitement surrounding a product through a creative event. Event attendance has a positive effect on brand equity. Some marketers are piggybacking off the events of other companies, using long lines for an event or product launch as marketing opportunities. Ex: Red Bull
what is noise?
is anything that reduces the clarity and accuracy of the communication; it has many sources and may affect any or all parts of the communication process. Noise sometimes arises within the communications channel itself. Radio or television transmission difficulties (satellite or cable) and poor or slow internet connections are sources of noise
Publicity
is communication in news-story form about the organization, its products, or both, transmitted through a mass medium at no charge. For instance, each time Apple CEO Tim Cook announces that the company will introduce a new model of the iPhone and iPad, the story is covered in newspapers and television news shows throughout the world for months afterward.
what is promotion?
is communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization positively and accept its products. Many organizations spend considerable resources on promotion to build and enhance relationships with current and potential customers as well as other stakeholders.
What is nonprice competition?
is competition based on factors other than price. It is used most effectively when a marketer like Disney can distinguish its product through distinctive product quality, excellent customer service, effective promotion, packaging, or other unique features.
A sales contest is?
is designed to motivate distributors, retailers, and sales personnel by recognizing outstanding achievements. To be effective, this method must be equitable for all individuals involved. One advantage is that it can achieve participation at all distribution levels. Positive effects may be temporary, however, and prizes are usually expensive.
Personal selling?
is paid personal communication that attempts to inform customers and persuade them to purchase products in an exchange situation. For example, an HP salesperson describing the benefits of the company's servers, PCs, and printers to a small-business customer is engaging in personal selling.
Word-of-mouth communication?
is personal, informal exchanges of communication that customers share with one another either verbally or through social media about products, brands, and companies.
what is marginal revenue?
is the change in total revenue that arises from the sale of an additional unit of a product.
what is the marginal cost?
is the extra cost a firm incurs when it produces one additional unit of a product.
what is average fixed cost?
is the fixed cost per unit produced and is calculated by dividing fixed costs by the number of units produced
target audience?
is the group of people at whom advertisements are aimed. Advertisements for the Dyson vacuum cleaner target more affluent home owners, whereas the Dirt Devil targets lower- to middle-income households.
what is a receiver in the communication process?
is the individual, group, or organization that decodes a coded message, and an audience is two or more receivers.
(Psychological) Bundle pricing
is the packaging together of two or more products, usually of a complementary nature, to be sold for a single price. To be attractive to customers, the single price usually is considerably less than the sum of the prices of the individual products.
customer success manager (CSM)
is the post-sales touch point that provides proactive support with a goal of increasing customer value realization over time. The CSM helps the customer understand and use existing and new features of changing products to get and maintain desired outcomes. This helps to prevent customer churn that can occur when a customer doesn't believe they received the value that was expected.
Closing the Sale:
is the stage in the personal selling process when the salesperson asks the prospect to buy the product. During the presentation, the salesperson may use a trial close by asking questions that assume the prospect will buy. The salesperson might ask the potential customer about financial terms, desired colors or sizes, or delivery arrangements. Reactions to such questions usually indicate how close the prospect is to buying.
what is price skimming?
is the strategy of charging the highest possible price for aproduct during the introduction stage of its life cycle. The seller essentially "skims the cream" off the market, which helps a firm to recover the high costs of research and development (R&D) more quickly. In addition, a skimming policymay hold down demand for the product in instances where the firm's production capacity is limited during theintroduction stage.
(product-line pricing) Price lining?
is the strategy of selling goods only at certain predetermined prices that reflect explicit price breaks. For example, a shop may sell men's ties only at $22 and $37. This strategy is used widely in clothing and accessory stores.It eliminates minor price differences from the buying decision—both for customers and for managers who buy merchandise to sell in these stores.
what is penetration pricing?
is the strategy of setting a low price for a new product. The main purposeof setting a low price is to build market share quickly in order to encourage product trial by the target market anddiscourage competitors from entering the market. If the low price stimulates sales, the firm may be able to order longer production runs, increasing economies of scale and resulting in decreased production costs per unit.
(Psychological)Odd-number pricing
is the strategy of setting prices using odd numbers that are slightly below whole-dollar amounts. Nine and five are the most popular ending figures for odd-number prices.
what is the total cost?
is the sum of the average fixed costs and the average variable costs, multiplied by the quantity produced.
Periodic discounting?
is the temporary reduction of prices on a patterned or systematic basis. For example, many retailers have annual holiday sales, and some apparel stores have regular seasonal sales. From the marketer's point of view, a major problem with periodic discounting is that customers can predict when the reductions will occur and may delay their purchases until they can take advantage of the lower prices.
advertising appropriation?
is the total amount of money a marketer allocates for advertising for a specific time period.
Copy?
is the verbal portion of an advertisement and may include headlines, subheadlines, body copy, and a signature. Not all advertising contains all of these copy elements. Even handwritten notes on direct-mail advertising that say "Try this. It works!" seem to increase requests for free samples. The headline is critical because often it is the only part of the copy that people read.
evaluating PR effectiveness, public relations audit:
is used to assess an organization's image among the public or to evaluate the effect of a specific public relations program
determine sales force size
it influences the company's ability to generate sales and profits. Moreover, size of the sales force affects the compensation methods used, salespeople's morale, and overall sales-force management. Sales-force size must be adjusted periodically because a firm's marketing plans change along with markets and forces in the marketing environmen
cost comparison indicator?
lets an advertiser compare the costs of several vehicles within a specific medium (such as two magazines) in relation to the number of people each vehicle reaches.
In the more widely used percent-of-sales approach.
marketers simply multiply the firm's past sales, plus a factor for planned sales growth or decline, by a standard percentage based on both what the firm traditionally spends on advertising and the industry average. This approach, too, has a major flaw: it is based on the incorrect assumption that sales create advertising rather than the reverse. A marketer using this approach during declining sales will reduce the amount spent on advertising, but such a reduction may further diminish sales. (Though illogical, this technique has been favored because it is easy to implement.)
Another significant factor in pricing decisions is demand. Marketers use ________ _________ and _______ ____________ to estimate sales potential and to determine the relationship between a product's price and the quantity demanded.
marketing research and forecasting techniques
evaluating PR effectiveness, communications audit:
may include a content analysis of messages, a readability study, or a readership survey. If an organization wants to measure the extent to which stakeholders view it as being socially responsible, it can conduct a social audit.
what is Differential Pricing?
means charging different prices to different buyers for the same quality and quantity of product. For example, many theaters offer discounted tickets for daytime matinee performances, and airlines have different pricing tiers for airline seats depending on whether customers paid extra to board early or other perks.
what is Product-line pricing?
means establishing and adjusting the prices of multiple products within a product line. Product-line pricing can provide marketers with flexibility in setting prices. For example, marketers can set prices so that one product is profitable, whereas another is less profitable but increases market share by virtue of having a low price.
Secondary-market pricing?
means setting one price for the primary target market and a different price for another market. Often the price charged in the secondary market is lower. However, when the costs of serving a secondary market are higher than normal, secondary-market customers may have to pay a higher price. Secondary markets give an organization an opportunity to use excess capacity and stabilize the allocation of resources.
Publicity-based public relations tools have some limitations:
messages must be timely, interesting, accurate, and in the public interest. It may take a great deal of time and effort to convince media personnel of the news value of publicity releases, and many communications fail to qualify
Key Note: Native Advertising
native advertising offers marketers the opportunity to reach consumers in new and innovative ways. It also increases advertising revenue for the sites that host them. On the other hand, native advertising is potentially misleading when consumers do not realize that a video or post is sponsored by an organization. One survey revealed that over 50 percent of consumers felt deceived upon realizing that an article or video was sponsored content. To avoid deception and possible legal repercussions, brands should clearly identify sponsored content on digital media sites.
Ch 12: what is price competition?
occurs when a seller emphasizes a product's low price and sets a price that equals or beats that ofcompetitors.
Among the newer philosophies for personal selling are:
team selling and relationship selling.
(product-line pricing) Premium pricing?
occurs when the highest-quality product or the most versatile and most desirable version of a product in a product line is assigned the highest price. Other products in the line are priced to appeal to price-sensitive shoppers or to those who seek product-specific features. Examples of product categories in which premium pricing is common are small kitchen appliances, beer, ice cream, and television cable service
what is kinesic communication?
or communication through the movement of head, eyes, arms, hands, legs, or torso. Winking, head nodding, hand gestures, and arm motions are forms of kinesic communication. A good salesperson can often evaluate a prospect's interest in a product or presentation by noting eye contact and head nodding. Key: Kinesiology
There are two types of product advertising:
pioneer and competitive
Total revenue is??
price multiplied by quantity.
A seasonal discount is?
price reduction to buyers who purchase out of season. It helps the seller to maintain steadier production during the year.
The two primary types of new-product pricing strategies are:
price skimming and penetration pricing.
Demand depends on other factors in the marketing mix, including:
product quality, promotion, and distribution
what is the pull policy?
promotes directly to consumers to develop strong consumer demand for its products. It does so primarily through advertising and sales promotion. Because consumers are persuaded to seek the products in retail stores, retailers in turn go to wholesalers or the producers to buy the products.
what is price elasticity of demand?
provides a measure of the sensitivity of consumer demand for a product or product category to changes in price. Elasticity is formally defined as the percentage change in quantity demanded relative to a given percentage change in price
Consumer-sales-promotion methods: Coupons
reduce a product's price and aim to prompt customers to try new or established products, increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. Savings are deducted from the purchase price.
Other forms of competitive advertising include:
reminder and reinforcement advertising
Manufacturers sometimes offer free merchandise to...
resellers that purchase a stated quantity of products. Occasionally, free merchandise is used as payment for allowances provided through other sales-promotion methods. To avoid handling and bookkeeping problems, the "free" merchandise usually takes the form of a reduced invoice.
aided recall test:
respondents are shown a list of products, brands, company names, or trademarks to jog their memories. Many successful marketers have worked with advertising agencies to create catchy jingles to help consumers recall ads.
The posttest method, a recognition test:
respondents are shown the actual advertisement and asked whether they recognize it. If they do, the interviewer asks additional questions to determine how much of the advertisement each respondent read. When recall is evaluated, respondents are not shown the actual advertisement but instead are asked about what they have seen or heard recently.
unaided recall test:
respondents identify advertisements they have seen recently but are not shown any clues to help them remember.
KEY NOTE: selective demand
selective demand can also be stimulated by increasing the number of product uses and promoting them through advertising campaigns, as well as through price discounts, free samples, coupons, consumer contests and games, and sweepstakes.
what is a media plan?
sets forth the exact media vehicles to be used (specific magazines, television stations, social media, newspapers, and so forth) and the dates and times the advertisements will appear. The plan determines how many people in the target audience will be exposed to the message. The method also determines, to some degree, the effects of the message on those specific target markets.
(Promotional Pricing) Comparison discounting?
sets the price of a product at a specific level and simultaneously compares it with a higher price. The higher price may be the product's previous price, the price of a competing brand, the product's price at another retail outlet, or a manufacturer's suggested retail price. Customers may find comparison discounting informative, and it can have a significant impact on them.
(Psychological) multiple-unit pricing
setting a single price for two or more units of a product, such as two cans for 99 cents rather than 50 cents per can. Especially for frequently purchased products, this strategy can increase sales through encouraging consumers to purchase multiple units when they might otherwise have only purchased one at a time.
in the decoding process...
signs or symbols are converted into concepts and ideas. Seldom does a receiver decode exactly the same meaning the source intended. When the result of decoding differs from what was coded, noise exists.
setting prices for business products can be quite different from setting prices for consumer products such as:
size of purchases, transportation considerations, and geographic issues.
Sales compensation programs usually reimburse salespeople for selling expenses, provide some fringe benefits, and deliver the required compensation level. To achieve this, a firm may use one or more of three basic compensation methods:
straight salary, straight commission, or a combination of the two.
what is geographic pricing?
strategies deal with delivery costs. Reductions for transportation and other costs may be made, related to the physical distance between the buyer and the seller.
what is Psychological pricing?
strategies encourage purchases based on consumers' emotional responses, rather than on economically rational ones. These strategies are used primarily for consumer products, rather than business products, because most business purchases follow a systematic and rational approach.
Entrants in a consumer sweepstakes,
submit their names for inclusion in a drawing for prizes. Sweepstakes are employed more often than consumer contests and tend to attract a greater number of participants. However, contestants are usually more involved in consumer contests and games than in sweepstakes, even though total participation may be lower. Contests, games, and sweepstakes may be used in conjunction with other sales-promotion methods like coupons.
Identifying whether companies are getting value from the products they buy is an increasingly important process in the SaaS (Software as a Service) industry because:
sustainability is highly dependent on retention rates. Gainsight, a customer success software company, helps companies easily track and monitor whether customers are getting true value out of the product experience.
Trade discounts are?
taken off the list prices and are offered to marketing intermediaries, or middlemen.
Reminder advertising?
tells customers that an established brand is still around and still offers certain characteristics, uses, and advantages.
SURVIVAL is one of the most fundamental pricing objectives. Achieving this objective generally means....
temporarily setting prices low, even at times below costs, in order to attract more sales. Because price is a flexible ingredient in the marketing mix, it can be useful in keeping a company afloat by increasing sales volume. Most organizations will tolerate setbacks, such as short-run losses and internal upheaval, if necessary for survival.
F.O.B. destination indicates?
that the product price INCLUDES freight charges, and therefore the seller is responsible for these charges.
(product-line pricing) captive pricing?
the basic product in a product line is priced low, but the price on the itemsrequired to operate or enhance it are higher. A common example of captive pricing is printer ink. The printer isgenerally priced quite low, but the printer ink replacement cartridges are usually very expensive.
Consumer-sales-promotion methods: rebates
the consumer is sent a specified amount of money for making a single product purchase. Rebates are generally given on more expensive products than money refunds and are used to encourage customers. Marketers also use rebates to reinforce brand loyalty and encourage product purchase
Ch 15: Integrated marketing communications refers to?
the coordination of promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers. Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective. A major goal of integrated marketing communications is to send a consistent message to customers.
The approach:
the manner in which a salesperson contacts a potential customer—is a critical step in the sales process. In more than 80 percent of initial sales calls, the purpose is to gather information about the buyer's needs and objectives. Creating a favorable impression and building rapport with prospective clients are important tasks in the approach because the prospect's first impressions of the salesperson are usually lasting ones.
The layout of an advertisement is:
the physical arrangement of the illustration and the copy (headline, subheadline, body copy, and signature). These elements can be arranged in many ways.
what is the push policy?
the producer promotes the product only to the next institution down the marketing channel. Normally stresses personal selling. Is used as a retailer promotes this feature of a product directly to the ultimate consumer. Sometimes sales promotion and advertising are used in conjunction with personal selling to push the products down through the channel.
In recruiting,
the sales manager develops a list of qualified applicants for sales positions. Effective recruiting efforts are a vital part of implementing the strategic sales-force plan and can help assure successful organizational performance. The costs of hiring and training a salesperson increase as product knowledge, service requirements, and technical skills are required. Thus, recruiting errors are expensive.
cost-plus pricing is?
the seller's costs are determined (usually during a project or after a project is completed), and then a specified dollar amount or percentage of the cost is added to the seller's cost to establish the price. When production costs are difficult to predict, cost-plus pricing is appropriate. Projects involving custom-made equipment and commercial construction are often priced using this technique.
what is a average variable cost?
the variable cost per unit produced, is calculated by dividing the variable costs by the number of units produced.
In interpersonal communication, feedback occurs....
through talking, touching, smiling, nodding, eye movements, and other body movements and postures.
Marketers use free samples to,
to stimulate trial of a product, increase sales volume in the early stages of a product's life cycle, and obtain desirable distribution. Sampling is the most expensive sales-promotion method because production and distribution—at local events, by mail or door-to-door delivery, online, in stores, and on packages—entail high costs. However, it can also be one of the most effective sales-promotion methods
Repeat contact is another common approach:
when making the contact, the salesperson mentions a previous meeting. The exact type of approach depends on the salesperson's knowledge and preferences, the product being sold, the firm's resources, and the prospect's characteristics.
comparative advertising?
which compares the sponsored brand with one or more identified competing brands on the basis of one or more product characteristics. Surveys show that top creative advertising practitioners view comparative advertising favorably when it clearly identifies the competition. Often, the brands that are promoted through comparative advertisements have low market shares and are compared with competitors that have the highest market shares in the product category.
When the parallel script is approved, the copywriter and artist combine copy with visual material by using a storyboard.
which depicts a series of miniature television screens showing the sequence of major scenes in the commercial. Beneath each screen is a description of the audio portion to be used with that video segment. Technical personnel use the storyboard as a blueprint when producing the commercial.
Pre approach:
which involves identifying key decision makers, reviewing account histories and problems, contacting other clients for information, assessing credit histories and problems, preparing sales presentations, identifying product needs, and obtaining relevant literature.
Team selling:
which involves the salesperson joining with people from the firm's financial, engineering, and other functional areas, is appropriate for such products. The salesperson takes the lead in the personal selling process, but other members of the team bring their unique skills, knowledge, and resources to the process to help customers find solutions to their own business challenges. (used for expensive high-tech business products) - short term situation, or they may be formal, ongoing teams.
Another common metric is cost per thousand impressions (CPM)?
which is the cost comparison indicator for magazines; it shows the cost of exposing 1,000 people to one advertisement. Media are selected by weighing the various advantages and disadvantages of each
At times, marketers use the arbitrary approach.
which usually means a high-level executive in the firm states how much to spend on advertising for a certain period. The arbitrary approach often leads to underspending or overspending. Although hardly a scientific budgeting technique, it is expedient. In general, the corporate culture will drive advertising budget decisions and is often not as profit-maximizing. However, budgeting is more complicated than relying on "rules of thumb." A study showed that there is a need for unified measurement of consumers' consumption of traditional media and digital media to allow marketers to properly allocate and optimize the effectiveness of their advertising spending. It is challenging to know how much to spend and how to measure advertising effectiveness.
