Principles of Marketing Exam 4

What is the difference between amplified WOM and organic WOM? (apply examples)

"Amplified WOM": buzz resulting from a marketer-related campaign "Organic WOM": buzz that occurs naturally from consumers

CPM

"cost per thousand"; compares the relative cost-effectiveness of different media vehicles that have different rates; the cost of reaching 1000 people with the media vehicle

What is a Central Business District (CBD)?

Traditional downtown area; major hub of business in a city; oldest retail setting

Public Relations

communication activities that create/maintain a positive image of a firm and its products

What is "groundswell" in marketing?

-A social trend in which people use technology to get the things they need from each other, rather than from traditional institutions such as corporations -The many-to-many communication model relies on consumers talking to one another

What is a category killer? Be able to identify examples.

-A very large speciality store that carries a vast selection of products in its category Bath & Body Works: lotion and perfume Home Depot: DIY supplies

What is scrambled merchandising? Be able to identify examples of this.

-Adding an unrelated product line to an existing product mix -Facilitates one-stop shopping -Increases store traffic Ex. Flowers to a grocery store

Direct Response Advertising

-Allows consumer to respond by immediately contacting the provider with questions or an order -Includes short commercials of less than 2 minutes -Infomercials are typically half-hour or hour-long commercials resemble a talk show, often with heavy product demonstration elements

What is Freestanding Retailers?

-An isolated store -Best for large stores and big box stores -typically a "Destination Store"

What are touchpoints in IMC? Be able to identify examples of touchpoints.

-Any point of direct interface between customers and a company (online, by phone, in person, etc.) Ex. company web sites, phone messages, Facebook page, coupons, ads, direct mail

Approach

-Approach, or contact, the prospect Several key events occur within first minutes: -Salesperson tries to learn more about customer -Create a positive first impression Build rapport

Bloggers vs Vloggers

-Blogging: an online log where the "blogger" writes about their experiences, opinions, and information about products. -Vlogging: a video format of a blog

Be familiar with the major types of retailers. Be able to identify examples of each.

-Convenience stores: such as 7-11 carry a limited number of convenience goods and target customers who are willing to pay a premium in order to pick-up the item easily and quickly. Many are open 24/7 and thus can meet the needs of those who shop at irregular hours. -Supermarkets: food stores that carry a wide selection of edible and nonedible items. While popular in the US, the supermarket is not typically found in other countries. -Box stores: food stores that have a limited selection of items, few refrigerated goods, and few brands per product type. These stores earn their name from the fact that goods are displayed in open boxes. Customers bag their own purchases, but benefit from lower prices -Specialty stores: do not carry many product lines, but offer a strong selection of brands within the lines that they do carry. Ex. "Big and Tall" -Leased departments: such as hair styling salons, in-store banks and the like, often exist within larger retail stores.

Personal Selling

-Direct interaction between a company representative and a customer -one-on-one communication -Far more intimate form of promotion compared to mass-media material -Salespeople are the eyes and ears of firm

Telemarketing

-Direct marketing conducted by telephone -Profitable way for B2B marketers to keep in touch with small clients -FTC established the National Do Not Call Registry to allow consumers to limit number of telemarketing calls they receive

What is a Neighborhood Business District (NBD)?

-Focus on convenience shopping to serve people who live nearby Ex. Dry cleaners, laundromats, gas stations, car washes, liquor stores, video stores

What is User-generated content (UGC) in advertising?

-Includes the millions of product-related comments, reviews, photos, images, and videos posted online by consumers Ex. Starbucks white cup contest

What is meant by "Content Marketing"? Be able to identify an example. Also, what demographic consumer group finds Content Marketing most effective and appealing?

-Involves marketing products through the creation of valuable and relevant content to appeal to a specific target market. In essence, the product becomes part of the story (content) instead of an advertiser that sponsors the story. -Powerful in reaching the generational market segment of Milennials. Content Marketing is "brand storytelling"

Sales Presentation

-Many sales calls involve a formal presentation -Lays out benefits of product and advantages over alternatives, including rivals -Focus should be on ways salesperson and their company can add value to the customer -Value proposition must be presented clearly and in a way that invites customer dialogue

Why should marketers run influencer campaigns?

-More memorable messages -More influential -Higher ROI: Currently, there is a massive supply of bloggers, but few marketers are utilizing them, meaning that the cost of buying an influencer promotion is below its real value -Helps to improve a brand's search engine ranking (SEO)

What is the difference between an organic/natural listing and a sponsored link on a search engine?

-Organic/Natural Listing - listings on search engine results pages that appear because of their relevance to the search terms, as opposed to their being advertisements -Sponsored Link - pay to have an ad show because it's relevant to what was searched for

What is a planogram? What store introduced this concept? How are planograms used in retail planning?

-Planograms were first introduced in 1974 by Target. -a diagram or drawing that provides in detail where every detail in a retail store should be placed. -may include a flow chart for the location of merchandise departments within a store -may also include aisle and shelf location for each item in the store -Planograms bring uniformity to store layouts, particularly chain stores

What is the difference between Product Advertising, Institutional Advertising, and Retail/Local Advertising?

-Product Advertising: The purpose of this type of advertising is to induce consumers to purchase the product. -Institutional advertising: promotes the activities, personality, or point of view of an organization or company and includes three subtypes. Ex. Advocacy ad, PSA -Retail and local advertising: encourages customers to shop at a specific store or use a local service

What is meant by "M-Commerce"?

-Promotional and other e-commerce activities transmitted over mobile phones and other mobile devices -Has same "dark side" potential as other forms of direct marketing in terms of unwanted "junk mail"

Handle Objections

-Rarely does a prospect accept everything put forth by the salesperson without question -Objections are reasons why a prospect is reluctant to make a commitment -Effective salespeople anticipate objections and even welcome them as an opportunity to provide more information. -Skillful handling of objections can move prospect to the decision stage

What is the best store location for a retailer that sells shopping goods? Convenience goods? Specialty goods?

-Shopping Goods: locate near competitors to facilitate "comparison shopping" Ex. looking at different car dealerships before buying a car -Convenience Goods: locate near customers in "saturated trade areas" Ex. fast food restaurants, gas stations, convenience stores -Specialty Goods: because consumers are brand loyal, location is less important

Know how the communication model works as it relates to promotion.

-Source (company, individual) -Encoding -Message (advertising, PR, sales promotion, salesperson pitch, communication from other consumers) -Medium (magazines, newspapers, television, radio, billboards, direct mail, word of mouth) -Decoding -Receiver (consumer) -Feedback (purchase data, product awareness, brand loyalty) -Noise (competing messages during Message and Medium stages)

Prospect and Qualify

-The first step of the selling process involves prospecting for potential customers, and qualifying whether these sales leads are truly worth visiting. -process by which salespeople identify and develop prospect lists

What are the marketer benefits of B2C E-Commerce?

-The world is your marketplace. -Decreases costs of doing business. -Very specialized businesses can be successful. -Real-time pricing

What is meant by the term "Retailtainment"?

-all about marketing strategies that enhance the shopping experience -Many consumers are seeking fun -Retail experiences that incorporate elements of surprise, excitement, and novelty lead to increased purchase likelihood Ex. Hard Rock Cafe, Rainforest Cafe, Apple, Dave & Busters, Bass Pro Shop

What is a Pop-Up Shop? Be able to explain why these types of stores became more popular during recessionary times.

-are temporary stores that appear and exit very quickly. -Many (but not all!) pop-up shops sell seasonal merchandise. -The recession led to an increase in the number of pop-up shops. These temporary stores often appeared in the spaces of a major chain that did not survive the recession. Pop-up shops cannot make the commitment to sign long-term leases, but will fill these vacant sites for a short time.

How does the evolution of retailing continue today? (and apply examples)

1. Convenience 2. Technology 3. Globalization 4. Multichannel Retailers 5. Importance of Brands

What is meant by the Many-to-Many Communication model?

-recognizes the need to update communication methods to account for changes in our now "wired" world -Social network marketing, word-of-mouth communication, both face-to-face and online, viral marketing, evangelical marketing, and product review sites all play a role

Pre-approach

-salespeople try to Learn as much as possible about the prospect Customer website can provide rich information about a prospects likely needs -Paid sources include D&B's Million -Dollar Directory -Informal sources may include non-competing salespeople and the company's service employees

What is noise in the communication channel? (apply examples)

-simply anything that interferes with the transmission or decoding of the message. -can actually occur at ANY stage in the communication process -Marketers try to minimize noise when they place messages in media where there is less likely to be distractions or alternative messages from the competition Ex. hungry infant screams for her bottle, the satellite feed breaks down due to heavy cloud cover, or take the form of clutter

Retailing

-the process by which goods and services are sold to customers for their personal use -Provide time, place, and ownership utility

What is Search Engine Optimization (SEO)?

-the process of improving the visibility of a web site on the search results page of a search engine Order of search engine links are based on a complex algorithm that quantifies site popularity Google: 70% market share Bing: 11% market share Yahoo: 7.7% market share

What is "atmospherics"? Be able to identify examples.

-the use of color, lighting, scents, furnishings, sounds, and other design elements to create a desired setting Ex. Shoe shop has referee shirts and Twin Peaks has nice scenic views

Know the 3 major types of non-store retailing.

1. Automatic Vending Machine 2. Direct Selling: an interactive sales process in which a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise 3. B2C E-Commerce: (Business-to-Consumer Electronic Commerce) online exchange between companies and individual consumers

Know the 3 major types of store locations.

1. Business districts 2. Freestanding retailers 3. Shopping centers

What are the 4 goals of promotion?

1. Informs 2. Persuades 3. Reminds 4. Builds relationships

What are the 4 key forms of Direct Marketing? Be able to identify examples of each.

1. Mail order 2. Telemarketing 3. Direct response advertising 4. M-commerce

Be able to identify and distinguish between the 3 major classifications of Internet Media.

1. Owned media: websites, blogs, Facebook, and Twitter accounts. Controlled by company, effective for relationship building 2. Paid media: display ads, sponsorships, and paid key word searches. Most similar to traditional advertising, less trusted by consumers. Want to place an ad on someones website 3. Earned media: word of mouth or buzz on social media. Most credible to consumers, no company control.

Know the 7 steps to the Creative Selling Process in proper sequence.

1. Prospect and Qualify 2. Pre-approach 3. Approach 4. Sales Presentation 5. Handle Objections 6. Close the sale 7. Follow up

What are the 2 approaches to Personal Selling? How are they different?

1. Transactional Selling: approach that focuses on making an immediate sale with little concern for developing a long-term relationship with the customer. 2. Relationship Selling: process by which a salesperson secures, develops, and maintains long-term, profitable customer relationships

What are the 3 goals of Product Advertising? At which stage of the product life cycle do you commonly see each one? Be able to identify examples of each.

1. inform: common for products in the introduction stageof the Product Life Cycle Ex. mostly words 2. persuade: common for products in the Growth stage of the Product Life Cycle Ex. comparing 2 of the same product 3. Remind: common for products in the Maturity Stage of the Product Life Cycle Ex. Pepsi

What are the 5 elements of the Promotion Mix? (define and apply them to examples)

1.)Advertising 2.)Sales Promotion 3.)Public Relations 4.)Personal Selling 5.)Direct Marketing

What is meant by the term "cord cutters" and what percent of U.S. households are considered cord cutters? Consider how this trend would impact promotional strategies of companies?

15%

Retail Revolution

1970's: Discount stores become widespread. Target introduced "planograms". 1980's: Competition between discounters intensify. "Superstores" are introduced in late 1980's. 1990's: Walmart becomes #1 retailer by sales. (Kmart is 2nd, Sears is 3rd) 2000's: Power shift from "merchants" to "marketers". Branding becomes more important. 2012 - present: Big Box concept winds down. Smaller formats are being introduced.

Know the reach statistics of newspaper (printed version & online version)

45% daily reach for printed version on a weekday; weekly reach is 70% 57% daily reach for online version on a weekday

What percent of U.S. households have broadband internet access?

67%

What percent of Americans own a smartphone?

68%

Know the daily & weekly reach of radio

75% daily reach 90% weekly reach

Know the trends of broadcast TV viewership, cable TV viewership, & "time-shifted" TV viewing

99% of U.S. households own at least one TV with the average being 2.24 TVs per household Broadcast TV viewership is decreasing Cable TV viewership is increasing Largest increase is in time-shifted viewing (DVRs or video on demand Advantages: visual & audio impact, low CPM; cable TV allows for "narrowcasting", while broadcast TV allows for wide market coverage; geographic flexibility Disadvantages: total expenditures are high, short life

What is a power center? (apply examples)

A large shopping strip or unenclosed shopping center with multiple anchor stores or "big box" type stores, with a few smaller retailers and restaurants that may share the parking lot Ex. Olathe Pointe, Joplin Share the same block/area

Big Box Retailer

A large store (usually a chain) with a physical structure that may resemble a "big box" from an aerial view. The store is offers a wide array of products, usually at low prices, In early 1960's, Walmart (Arkansas), Target (Minnesota), Kmart (Wisconsin), and Kohl's (Michigan) opened their first stores.

What is meant by crowdsourcing? Be able to identify examples of this concept in marketing.

A practice in which firms outsource marketing activities (such as creating and selecting an ad) to a community of users Ex. People can suggest a flavor for Lays potato chips then judges pick the best one

What is a "destination store"?

A store where consumers will make a special trip to shop Ex. Best Buy

What demographic group is the most avid listener of AM/FM radio? Of Online radio?

AM/FM radio listener: age 45-54 Online radio listener: millennials

What is Non-store Retailing?

Any method a firm uses to complete an exchange that does not require a customer to visit a store

What is Buzz Marketing?

using high-profile entertainment or news to get people to talk about a product

Be able to identify types of internet ads: banner, button, skyscraper

Banner: horizontal ad on the top Button: smaller Skyscraper: up the page, vertical

What is "intertype competition"? How has scrambled merchandising led to more intertype competition?

Between organizations involved in different type of businesses, but selling the same product. Ex. Nordstrom's vs Walmart

Mail Order

Catalog: a collection of products offered in book form, usually consisting of product descriptions and accompanied by photos of the item Direct mail: A brochure/pamphlet offering a specific good or service at one point in time

Brand ambassadors or brand evangelists?

Consumers that can be the best salespeople a company can ever find—and they often work for free. They are heavy users, take a product seriously, care a great deal about it, and want it to succeed.

Steps of the Wheel of Retailing

Entry phrase: new types of retailers enter the market by offering lower-priced goods with little focus on additional services or the facility itself Trading-up phrase: these retailers gradually improve their facilities, quality and assortment of merchandise, and amenities and also increase prices. Finally, retailers move up to a high-end strategy with superior facilities, desirable amenities (free gift wrapping), higher operating costs, and of course higher prices

Be able to describe and apply the Wheel of Retailing as it pertains to the evolution of retailing. (And apply examples.)

Explains how retail firms evolve over time. Many retailers typically begin as a low-end retailer and then gradually evolves into a higher-end retailer, becoming more upscale as it evolves and changes over time Ex. Pier 1, Target

"narrow and shallow" retailer

Few product lines, with few products in them (Airport bookstores)

"wide and shallow" retailer

General merchandisers. Ex. Walmart

What is the difference between a grid layout and a free-flow layout? When is each layout normally used in retail atmospherics?

Grid: the counters and fixtures are placed in long rows or runs., usually at right angles, throughout the stores Free-Flow: fixtures and merchandise are grouped into free flowing pattern on the sales floor

"wide and deep" retailer

Have many product lines with a lot of products in them (Amazon)

Closing the sale and Follow up

If salesperson has done earlier steps well, closing the sale is a natural conclusion to the dialogue Follow-up after the sale includes arranging for delivery, payment, and purchase terms

What is Integrated Marketing Communication? (IMC)

Involves the planning, execution, and evaluation of coordinated, brand communication programs over time to targeted audiences -Making sure that all elements of your promotion mix work together

What is meant by "SMS" marketing?

M-commerce through text messages is known as short messaging system (SMS) marketing

Which elements of the Promotion mix fall under the Mass (One-to-Many) Communication model and which fall under the Personal (One-to-One) Communication model?

One-to-Many (Mass Communication): advertising, sales promotion, and public relations One-to-One (Personal): personal selling and direct marketing

What is the difference between opt-in and opt-out permission E-mail advertising on the internet?

Opt-In Permission Email - opt-in policy requires a potential customer to self-select the services they wish to subscribe to, and how any information they provide may be used Opt-Out Permission Email - creating forms where services such as email newsletter subscriptions are unchecked by default

What are the characteristics of paid media internet advertising? (users, advantages, disadvantages)

Over 70% of Americans use internet everyday More likely to reach a younger, more educated, and higher-income audience Advantages: ability to reach well-defined audiences; "cookies" allow for ability to track user preferences, online behavior, purchase history, etc.; interactive capabilities, video & audio impact Disadvantages: doesn't reach older consumers or lower-income consumers as well; Internet Ad blockers are becoming more prevalent

Advertising

Paid form of mass communication by an identified sponsored used to inform, persuade, or remind an audience Ex. Billboard, radio, tv, direct mail, magazines

Consumer Sales Promotion

Price-Based: coupons, price deals, rebates & refunds, frequency (loyalty/continuity) programs, special/bonus packs Attention-Getting: contests & sweepstakes, premiums, sampling

Reach

Reach: number of different people exposed to a media vehicle during a given time period; usually reported as a percentage

What is a Secondary Business District (SBD)?

Smaller assortment & trading area than a CBD

What is meant by the Many-to-Many Communication model? (Know how this model directly relates to social media marketing.)

Social network marketing, word-of-mouth communication, both face-to-face and online, viral marketing, evangelical marketing, and product review sites all play a role.

"narrow and deep" retailer

Specialty merchandisers Ex.Legendary Hero: sells merchandise for a few gaming/comic/book series

What are the hours of media content for each type of media?

Television: 35.1 hours AM/FM Radio: 14 hours Internet: 5.1 hours Video on the Internet: 1.5 hours Game Consoles: 1.5 hours Video on Mobile Devices: 1.3 hours DVD/Blue-Ray: 1.3 hours

What is encoding vs. decoding in the communication channel?

The encoding of a message is the production of the message. It is a system of coded meanings, and in order to create that, the sender needs to understand how the world is comprehensible to the members of the audience. The decoding of a message is how an audience member is able to understand, and interpret the message. -Effective communication takes place when ENCODING = DECODING

What are the consumer benefits B2C E-commerce?

Time, place, and assortment utility

What is meant by "branded entertainment"? (2 types: Product Placements & Advergaming)

a form of advertising in which marketers integrate products into entertainment venues -Product placements : TV shows, movies Ex. Reese's Pieces in ET, Wilson volleyball in Castaway -Advergaming: brand placement in video games Ex. Nike logo in a video game

What is meant by multichannel promotional strategy? (Identify examples)

a marketing communication strategy where they combine traditional advertising, sales promotion, and public relations activities with online buzz-building activities

What is Direct Marketing?

direct communication to a customer designed to generate a response

Direct Marketing

efforts to gain a direct response from individual consumers; examples include face-to-face selling, direct mail, catalogs, telemarketing, onling marketing; one of the fastest growing elements of promotion

"Bricks and Clicks"

jargon term for a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips (physical catalogs).

Sales Promotion

non-recurrent, short-term inducements or selling efforts such as contests, coupons, etc.; incentives designed to build interest or encourage product purchase during a specified period.

Clutter

number of competitive ads in a medium

What demographic group is the typical newspaper reader?

over 80% are college-educated adults with household income over $100k

What is meant by a comparative advertisement?

particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it.

What is selective binding in magazines?

publishers customize editions for local advertisers Ex. Sport Illustrated released a picture of the Royals in Kansas, Missouri and Nebraska but then the Cardinals were released in far Missouri, etc.

What is Viral Marketing?

refers to marketing activities that aim to increase brand awareness or sales by consumers passing a message along to other

Lead Time

the amount of time the advertiser must have the ad in its completed form before it runs or goes to print

What is an anchor store? (apply examples)

the major draw of the shopping mall Ex. Mall in Pittsburg major draw is JcPenney's - your bigger store of the mall

Waste

the part of the audience that is reached by an ad that is not part of its target market Life: how long the ad message lingers