Chapter13

What is a push strategy of promotion?

A company using a push strategy markets its product to wholesalers and retailers. They, in turn, persuade customers to buy the products. A push strategy is one of two prominent types of promotional strategies. It involves marketing to intermediaries, while a pull strategy appeals directly to consumers, so they will demand the product from retailers

Explain the difference between an electronic storefront and a cybermall.

An electronic storefront is a seller's Web site from which consumers collect information about products and buying opportunities, place orders, and pay for purchases. Search engines serve as cybermalls and are a collection of virtual storefronts representing diverse products and offering speed, convenience, 24-hour access, and efficient searching. After entering a cybermall, shoppers can navigate to electronic storefronts by choosing from a list of stores, product listings, or departments.

While the ultimate objective of any promotion is to increase sales, marketers may have other objectives. In particular, why would adding value to a product be seen as an important objective for a promotion team?

By adding perceived value to a given product, promotion can distinguish that product in a positive light from a very large set of competitors, thus increasing reputation and consumer regard for both the product and the firm. Promotional mixes are often designed to communicate a product's value-added benefits to distinguish it from the competition. For example, Mercedes automobiles and Ritz-Carlton Hotels promote their products as upscale goods and services featuring high quality, style, and performance, all at a higher price.

What is the difference between coupons and premiums?

Coupons use certificates entitling buyers to discounts in order to encourage customers to try new products, lure them away from competitors, or induce them to buy more of a product. Premiums are free or reduced-price items, such as pencils, coffee mugs, and six month low-interest credit cards, given to consumers in return for buying a specified product. Coupons and premiums are types of sales promotions, short-term promotional activities designed to encourage consumer buying, industrial sales, or cooperation from distributors. They can increase the likelihood that buyers will try products, enhance product recognition, and increase purchase size and sales revenues.

Why would one expect a product sold at a specialty store to cost more than the same product at a department store?

Department stores provide a variety of products, divided by type into various departments, whereas specialty stores will specialize on one particular product. As a result, consumers would expect a better choice in product and more knowledgeable staff at the specialty store than at the department store. This attention to consumer needs would entail a higher price on the same product at the specialty store than at the department store. Department stores are usually large and handle a wide range of goods, whereas specialty stores are small and serve specific market segments with full product lines in narrow product fields.

Describe the services provided by e-intermediaries.

E-intermediaries are Internet-based channel members that collect information about sellers and present it to consumers, help deliver products sold online to buyers, or both. Syndicated sellers are Web sites that receive commissions from another Web site for referring customers. Shopping agents help online consumers by gathering and sorting information. Business-to-business brokers provide the value-adding services of wholesalers to business customers buying and selling online.

Explain direct-response retailing.

Firms contact customers directly to inform them about products and to receive sales orders. Among the types of direct-response retailing are mail order (or catalog marketing), telemarketing, and direct selling door-to-door or through home-selling parties.

Describe the services provided by merchant wholesalers

Merchant wholesalers buy products from manufacturers and sell them to other businesses. They usually provide storage and delivery. Full service merchant wholesalers provide value-adding services such as credit, marketing advice, and merchandising services. Limited-function merchant wholesalers and drop shippers provide fewer of these services. Merchant wholesalers are the largest group of wholesalers. About 80 percent of them are full-service merchant wholesalers who provide the widest variety of services.

Why is water the least expensive mode of transportation?

Networks of waterways, oceans, rivers, and lakes let water carriers reach many areas throughout the world. Boats and barges are used mostly for moving bulky products. Unfortunately, water is one of the slowest modes of transportation. Speed of delivery is a major factor when considering the cost of transporting physical goods-air is the fastest and most expensive, whereas water is the slowest and least expensive.

Discuss the differences in the three types of product-line retailers.

Product-line retailers feature broad product lines and include department stores, which are organized into specialized departments: shoes, furniture, women's petite sizes, and so on. Stores are usually large, handle a wide range of goods, and offer a variety of services, such as credit plans and delivery. Similarly, supermarkets are divided into departments of related products: food products, household products, and so forth. They stress low prices, self-service, and wide selection. In contrast, specialty stores, serve specific market segments with full product lines in narrow product fields, and often feature knowledgeable sales personnel.

What is the difference between retail and industrial selling?

Retail selling is selling a consumer product for the buyer's personal or household use. Industrial selling is selling products to other businesses, either for the purpose of manufacturing or for resale. Levi's, for instance, sells jeans to Walmart (industrial selling). In turn, consumers purchase Levi's jeans at Walmart stores (retail selling).

Explain the primary difference between a wholesaler and a sales agent.

The primary difference is the role that each intermediary plays within the distribution mix. The wholesaler's role is generally to distribute the product to any retailers that will buy it and resell it. In particular, wholesalers are only indirectly concerned with who the consumers of the product actually are. Sales agents, on the other hand, seek out the consumers for the product directly and negotiate the sales of the product as part of their commission. Thus, they have a more active role in finding and securing consumers for the product. Wholesale distribution and distribution by agents or brokers are two of the four popular distribution channels, along with direct distribution and retail distribution.

Explain the primary difference between a retailer and a wholesaler.

The primary difference is to whom the intermediary sells the product. A retailer sells the product to the consumer, i.e., the person or company that will actually use the product as it was created to be used, whereas the wholesaler sells the product to another seller, i.e., a person or company that wants to buy the product only to resell it. Wholesalers are intermediaries helping to distribute goods, either by moving them or by providing information that stimulates their movement from sellers, such as retailers to customers.

List and describe the three personal selling tasks.

The three personal selling tasks are order processing, creative selling, and missionary selling. In order processing, a salesperson receives an order and sees to its handling and delivery. Creative selling can help to persuade buyers when the benefits of a product are not entirely clear. A company may use missionary selling when its purpose is to promote itself and its products rather than simply to close a sale. Personal selling is the oldest and most expensive form of sales. A salesperson communicates one-on-one with potential customers to identify their needs and align them with the product. Salespeople gain credibility by investing a lot of time getting acquainted with potential customers and answering their questions.

Summarize the steps in the personal selling process for creative selling.

prospecting and qualifying, approaching, presenting and demonstrating, handling objections, closing, and following up.