Marketing

Channel Leadership

- Channel Captain: the dominant leader of a marketing channel or a supply chain; may be a producer, wholesaler, or retailer. - Channel power: the ability of one channel member to influence other channel member's goal achievements -The member that becomes the channel captain will accept the responsibilities and exercise the power associated with this role. Retailers may also be channel captains. Walmart, for example, dominates the supply chain for its retail stores by virtue of the magnitude of its resources (especially information management) and a strong, nationwide customer base. Wholesaler leaders may form voluntary chains with several retailers, which they supply with bulk buying or management services, and which may also market their own brands. In return, the retailers shift most of their purchasing to the wholesaler leader. The Independent Grocers Alliance (IGA) is one of the best-known wholesaler leaders

Pricing for Business Markets

- Establishing prices for business markets sometimes differs from setting prices for consumers - Differences in the size of purchases, geographic factors and transportation considerations require sellers to adjust prices several issues unique to the pricing of business products, including discounts, geographic pricing, and transfer pricing.

Push and Pull Channel policies

- Push policy: Promoting a product only to the next institution down the marketing channel -A push policy normally stresses personal selling. Flow of communications and product--> producer-> wholesaler-> retailer-> consumer - Pull policy: Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel Flow of product-> producer-> wholesaler-> retailer-> consumer Flow of info -> Producer--> Consumer 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. This policy is intended to pull the goods down through the channel by creating demand at the consumer level. Push and Pull are NOT MUTUALLY EXCLUSIVE

Executing the Campaign

- Requires extensive planning and coordination - Requires detailed schedules to ensure the various phases of the work are finished on time - Management should be monitoring the quality of the work and taking corrective measures when necessary Production companies, research organizations, media firms, printers, and commercial artists are just a few of the people and firms contributing to a campaign.

Does promotion encourage materialism?

-If promotion works, it will persuade consumers to buy more and more things -Marketers assert that these values of materialism are derived from the home but children's reliance on brand name items contradicts this -In short, YES

Types of Wholesalers

-Merchant wholesalers -Brokers and agents -Manufacturers' and retailers' branches and offices

The importance of pricing

-Pricing decisions cause top-level marketing executives more concern than any other strategic marketing decision area. -Pricing is viewed as having a more direct link to the firm's bottom line Price- The value paid for a product in a marketing exchange * Doesn't always take the form of money (barter) *Many factors influence the assessment of value, including time constraints, price levels, perceived quality, and motivations to use available information about prices. Barter-The trading of products *Barter among businesses, because of the relatively large values of the exchanges, usually involves trade credit. Buyers' interest in price stems from their expectations about the usefulness of a product or the satisfaction they may derive from it. They must decide whether the utility gained in an exchange is worth the buying power sacrificed. Almost anything of value—ideas, services, rights, and goods—can be assessed by a price. Price is often the only thing a marketer can change quickly to respond to changes in demand, the actions of competitors, or the marketing environment. Under certain circumstances, however, the price variable may be relatively inflexible. Price is a key element in the marketing mix because it relates directly to the generation of total revenue. The following equation is an important one for the entire organization: Because price has a psychological influence on customers, marketers can use it symbolically. By pricing high, they can emphasize the quality of a product and try to increase the prestige associated with its ownership. By lowering a price, marketers can emphasize a bargain and attract customers who go out of their way to save a small amount of money.

Does promotion increase prices?

-Promotion is criticized for raising prices, but it can also lower them by stimulating demand. -It is when promotion fails to stimulate demand that prices increase because the cost of promotion must be added. -Promotion also keeps prices lower by fostering competition -Advertising is not only related to economic growth, but it can bring about it If it does, the business should be able to produce and market products in larger quantities and thus reduce per-unit production research and development, overhead, and marketing costs, which can result in lower prices. In addition, results of an analysis for the long-term economic growth for 64 countries indicated that there is a direct relationship between advertising and economic growth.

Is promotion deceptive?

-Some are, but not all promotion should be condemned -Laws, government regulation, and industry self-regulation have helped decrease deceptive promotion During the 19th and early 20th centuries, much promotion was blatantly deceptive. Although no longer widespread, some deceptive promotion still occurs. One industry that is seemingly constantly bombarded with truthfulness-related claims is the diet products and exercise equipment industry. Some promotions are unintentionally deceiving; for instance, when advertising to children, it is easy to mislead them because they are more naïve than adults and less able to separate fantasy from reality. A promotion may also mislead some receivers because words can have diverse meanings for different people.

Does promotion create needs?

-When referring to Maslow's hierarchy of needs, promotion does not create needs because humans would still have needs for food, water, sex, shelter, love, affection, and so on. physiological needs, such as hunger, thirst, and sex; safety needs; needs for love and affection; needs for self-esteem and respect from others; and self-actualization needs, or the need to realize one's potential. When needs are viewed in this context, it is difficult to demonstrate that promotion creates them. -Promotion does however, capatilize on needs and many marketers associate their products with needs ie: Mouthwash and toothpaste appeal to the need for love

Growth and Benefits of Digital Marketing

-allow marketers to share information with consumers, reach new markets, and target markets more precisely -can be an essential part of gaining a competitive advantage -Internet service -the digital world is evolving quickly and is still an early stage of integration into marketing strategy As the internet and digital communication technologies have advanced, they have made it possible to target markets more precisely and reach markets that were previously inaccessible. One of the biggest mistakes a marketer can make when engaging in digital marketing is to treat it like a traditional marketing channel.

Evaluating Public Relations Effectiveness

-counting the number of media exposures is one way to evaluate effectiveness -Environmental monitoring identifies changes in public opinion affecting an organization -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 -A 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

Motivating Salespeople

-effort beyond compensation -achieved through an organized set of activities -Identify needs and goals and strive to create a positive organizational climate Enjoyable working conditions, power and authority, job security, and opportunity to excel are effective motivators, as are company efforts to make sales jobs more productive and efficient. Sales contests and other incentive programs can also be effective motivators. These can motivate salespeople to increase sales or add new accounts, promote special items, achieve greater volume per sales call, and cover territories more thoroughly. Salesperson turnover is one of the most critical concerns of organizations. Lower organizational commitment has been found to relate directly to job turnover. Identifying with the organization and performance are tied directly to organizational commitment that reduces turnover. Recognition programs that acknowledge outstanding performance with symbolic awards, such as plaques, can be very effective when carried out in a peer setting. The most common incentive offered by companies is cash, followed by gift cards and travel. Travel reward programs can confer a high-profile honor, provide a unique experience that makes recipients feel special, and build camaraderie among award-winning salespeople.

Determining Sales Force Size

-influences the company's ability to generate sales and profits -size of the sales force affects the compensation methods used, salespeople's morale, and overall sales force management -must be adjusted periodically, because a firm's marketing plans change along with markets and forces in the marketing environment -One danger in cutting back the size of the sales force to increase profits is that the sales organization may lose strength and resiliency Analytical Methods -One method involves determining how many sales calls per year are necessary for the organization to serve customers effectively and then dividing this total by the average number of sales calls a salesperson makes annually -A second method is based on marginal analysis, in which additional salespeople are added to the sales force until the cost of an additional salesperson equals the additional sales generated by that person.

Costs and Availability of Promotional Methods

-large expenditures / large audience (cheap per person) -small, local efforts -availability of advertising media, particularly in foreign countries -availability of qualified sales personnel Costs of promotional methods are major factors to analyze when developing a promotion mix. Another consideration that marketers explore when formulating a promotion mix is the availability of promotional techniques. --> especially in foreign countries

Defining the Advertising Objectives

-objectives guide campaign development -objectives should be stated clearly, precise, and in measurable terms -objectives in advertising are stated in terms of sales and communication -benchmarks help the advertiser evaluate progress and success Advertising objectives should be stated clearly, precisely, and in measurable terms. Quantifiable metrics allow advertisers to evaluate advertising success at the end of the campaign in terms of whether objectives have been met. If the goal is to increase sales, the advertiser should state the current sales level (the benchmark) and the amount of sales increase sought through advertising. An advertising objective should also specify a time frame so that advertisers know exactly how long they have to accomplish the objective. Even though an advertiser's long-run goal is to increase sales, not all campaigns are designed to produce immediate sales. Some campaigns aim to increase product or brand awareness, make consumers' attitudes more favorable, heighten consumers' knowledge of product features, or create awareness of positive, healthy consumer behavior, such as a healthy lifestyle and diet. If the goal is to increase product awareness, the objectives are stated in terms of communication.

Channels for Business Products

1. Direct Channel (Producer--> org buyer) *business products, especially expensive equipment, are most likely to be sold through direct channels. 2. Industrial Distributor (Producer--> industrial dust--> org Buyer) *An independent business organization that takes title to industrial products and carries inventories *Industrial distributors usually sell standardized items, such as maintenance supplies, production tools, and small operating equipment. *advantages. They can perform the needed selling activities in local markets at a relatively low cost to a manufacturer and reduce a producer's financial burden by providing customers with credit services. Also, because industrial distributors usually maintain close relationships with their customers, they are aware of local needs and can pass on market information to producers. *disadvantages. They may be difficult to manage because they are independent firms. They often stock competing brands, so a producer cannot depend on them to sell its brand aggressively. Furthermore, industrial distributors incur expenses from maintaining inventories and are less likely to handle bulky or slow-selling items, or items that need specialized facilities or extraordinary selling efforts. 3. manufacturers' agent *an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions. * Unlike an industrial distributor, a manufacturers' agent does not acquire title to the products and usually does not take possession. *Using manufacturers' agents can benefit an organizational marketer. They usually possess considerable technical and market information and have an established set of customers. A manufacturers' agent can be an asset for an organization with seasonal demand 4. manufacturers' agent and an industrial distributor. *This channel may be appropriate when the producer wishes to cover a large geographic area, but maintains no sales force due to highly seasonal demand or because it cannot afford one.

Factors that affect pricing decisions

1. Organizational and Marketing Objectives 2. Costs 3. Other Marketing Mix Variables 4. Channel Member Expectations 5. Customer's Interpretation and Response 6. Reference Prices 7. Competition 8. Legal and Regulatory Issues

Steps in the Personal Selling Process

1. Prospecting 2. Preapproach 3. Approach 4. Making the presentation 5. Overcoming objections 6. Closing the sale 7. Following up The specific activities involved in the selling process vary among salespeople, selling situations, and cultures. No two salespeople use exactly the same selling methods.

Product Quality

A company may have the objective of leading its industry in product quality. A high price may signal to customers that the product is of a high quality. Attaining a high level of product quality is generally more expensive for the firm, as the costs of materials, research, and development may be greater. The products and brands that customers perceive to be of high quality are more likely to survive in a competitive marketplace because they trust these products more, even if the prices are higher.

Trading companies

A company that links buyers and sellers in different countries *not involved in manufacturing and does not own assets related to manufacturing. *Trading companies buy products in one country at the lowest price consistent with quality and sell them to buyers in another country. *World Trade System (WTSC) A trading company acts like a wholesaler, taking on much of the responsibility of finding markets while facilitating all marketing aspects of a transaction. An important function of trading companies is taking title to products and performing all the activities necessary to move the products to the targeted foreign country. Trading companies reduce risk for firms that want to get involved in international marketing. A trading company provides producers with information about products that meet quality and price expectations in domestic and international markets.

Costs

A firm may temporarily sell products below cost to match competition, generate cash flow, or even increase market share, but in the long run, it cannot survive by selling its products below cost. To maintain market share and revenue in an increasingly price-sensitive market, many marketers have concentrated on reducing costs. Although many companies choose to cut costs by reducing their workforce, such a move should not be taken without careful consideration. Labor-saving technologies, a focus on quality, and efficient manufacturing processes have brought productivity gains that translate into reduced costs and lower prices for customers. Besides considering the costs associated with a particular product, marketers must take into account the costs the product shares with others in the product line. Products often share some costs, particularly the costs of research and development, production, and distribution. Most marketers view a product's cost as a minimum, or floor, below which the product cannot be priced.

The demand curve

A graph of the quantity of products a firm expects to sell at various prices if other factors remain constant For most products, the quantity buyers demand goes up as the price goes down, and the quantity demanded goes down as the price goes up. Thus, an inverse relationship exists between price and quantity demanded. As long as the marketing environment and buyers' needs, ability (purchasing power), willingness, and authority to buy remain stable, this fundamental inverse relationship holds. Downward sloping Prestige products, such as selected perfumes and jewelry, tend to sell better at higher prices than at lower ones. (backwards c graph)

Marketing Channel

A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain also called a channel of distribution or distribution channel The major role of marketing channels is to make products available at the right time, at the right place, in the right quantities. This is accomplished through achieving synergy among operations management, logistics management, and procurement. Some marketing channels are direct, but if they aren't they go through marketing intermediaries *Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products They also play key roles in customer relationship management, not only through their distribution activities but also by maintaining databases and information systems to help all members of the marketing channel maintain effective customer relationships. Wholesalers and retailers are examples of intermediaries.

Channel Member Expectations

A marketer must consider what members of the distribution channel expect such as discounts for large orders and prompt payment The amount of profit expected depends on what the intermediary could make if it were handling a competing product instead. Also, the amount of time and the resources required to carry the product influence intermediaries' expectations. Channel members often expect producers to give discounts for large orders and prompt payment. At times, resellers expect producers to provide several support activities, such as sales training, service training, repair advisory service, cooperative advertising, sales promotions, and perhaps a program for returning unsold merchandise to the producer.

Competition

A marketer needs to know competitors' prices so the company's prices can be adjusted accordingly. This does not mean a company will necessarily match competitors' prices; it may set its price above or below theirs. When adjusting prices, a marketer must assess how competitors will respond. Will competitors change their prices and, if so, will they raise or lower them? When an organization operates as a monopoly and is unregulated, it can set whatever prices the market will bear. However, the company may not price the product at the highest-possible level to avoid government regulation or penetrate a market by using a lower price. If the monopoly is regulated, it normally has less pricing flexibility; the regulatory body lets it set prices that generate a reasonable but not excessive return. A government-owned monopoly may price products below cost to make them accessible to people who otherwise could not afford them. However, government-owned monopolies sometimes charge higher prices to control demand. In some states with state-owned liquor stores, the price of liquor is higher than in states where liquor stores are not owned by a government body. The automotive and airline industries exemplify oligopolies, in which only a few sellers operate and barriers to competitive entry are high. Companies in such industries can raise their prices in the hope that competitors will do the same. When an organization cuts its price to gain a competitive edge, other companies are likely to follow suit. This happens frequently in the airline industry. A market structure characterized by monopolistic competition has numerous sellers with product offerings that are differentiated by physical characteristics, features, quality, and brand images. The distinguishing characteristics of its products may allow a company to set a different price from its competitors. *Firms in a monopolistic competitive market structure are likely to practice nonprice competition, discussed earlier in this chapter. Under conditions of perfect competition, many sellers exist. Buyers view all sellers' products as the same. All firms sell their products at the going market price, and buyers will not pay more than that. *This type of market structure, then, gives a marketer no flexibility in setting prices. Farming, as an industry, has some characteristics of perfect competition.

Assessing Price Elasticity of Demand

A measure of the sensitivity of demand to changes in price It is formally defined as the percentage change in quantity demanded relative to a given percentage change in price he percentage change in quantity demanded caused by a percentage change in price is much greater for products with elastic demand than for inelastic demand. If demand is elastic, a change 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. Price elasticity of demand= %change in quantity demanded/ %change in price The less elastic the demand, the more beneficial it is for the seller to raise the price. Products without readily available substitutes and for which consumers have strong needs (e.g., electricity or appendectomies) usually have inelastic demand. Inelastic--> more steep Elastic--> less steep

Joint Venture

A partnership between a domestic firm and a foreign firm or government *popular in industries that require large investments, such as natural resources extraction or automobile manufacturing. *Control of the joint venture may be split equally, or one party may control decision making. Joint ventures are often a political necessity because of nationalism and government restrictions on foreign ownership. *Joint ventures may also occur when acquisition or internal development is not feasible or when the risks and constraints leave no other alternative. *Joint ventures also provide legitimacy in the eyes of the host country's citizens. Local partners have firsthand knowledge of the economic and sociopolitical environment and the workings of available distribution networks, and they may have privileged access to local resources (raw materials, labor management, and so on). *However, joint venture relationships require trust throughout the relationship to provide a foreign partner with a ready means of implementing its own marketing strategy. Strategic alliances- Partnerships that are formed to create a competitive advantage on a worldwide basis *They are very similar to joint ventures, but while joint ventures are defined in scope, strategic alliances are typically represented by an agreement to work together (which can ultimately mean greater involvement than a joint venture).

Determining a specific price

A pricing strategy will yield a certain price or range of prices, which is the final step in the pricing process. However, marketers may need to refine this price in order to make it consistent with circumstances (such as a sluggish economy) and with pricing practices in a particular market or industry. Pricing strategies should help in setting a final price. If they are to do so, marketers must establish pricing objectives, have considerable knowledge about target market customers, and determine demand, price elasticity, costs, and competitive factors. In the absence of government price controls, pricing remains a flexible and convenient way to adjust the marketing mix. In many situations, marketers can adjust prices quickly—over a few days or even in minutes. Such flexibility is unique to this component of the marketing mix.

General Merchandise Retailers

A retail establishment that offers a variety of product lines that are stocked in considerable depth The types of product offerings, mixes of customer services, and operating styles of retailers in this category vary considerably. The primary types of general-merchandise retailers are department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms Department store- Large organization (at least 25 employees) offering a wide product mix and organized into separate departments-Macy's, Kohl's, JCPenney Discount store-Self-service, general-merchandise store offering brand-name and private-brand products at low prices-Walmart, Target, Dollar General *Extreme Value Stores- Retailers that are a fraction of the size of conventional discount stores and typically offer very low prices on smaller size name-brand nonperishable household items (99¢ Only Stores) Convenience store-Small, self-service store offering narrow product assortment in convenient locations-7-Eleven Supermarket-Self-service store offering complete line of food products and some non-food products-Kroger, Safeway, Publix Superstore-Giant outlet offering all food and non-food products found in supermarkets, as well as most routinely purchased products-Walmart Supercenters, SuperTarget Hypermarket-Combination supermarket and discount store; larger than a superstore-Carrefour Warehouse club-Large-scale, members-only establishments combining cash-and-carry wholesaling with discount retailing-Sam's Club, Costco Warehouse showroom-Facility in a large, low-cost building with large on-premises inventories and minimal service-IKEA

Category management

A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers It first developed in the food industry because supermarkets were concerned about competitive behavior among manufacturers. Category management is an important part of developing a collaborative supply chain, which enhances value for customers. Successful category management involves collecting and analyzing data on sales and consumers and sharing the information between the retailer and manufacturer. Collaborative supply chains should designate a single source to develop a system for collecting information on demand, consumer behavior, and optimal product allocations. The key is cooperative interaction between the manufacturers of category products and the retailer to create maximum success for all parties in the supply chain.

Sweepstakes

A sales promotion in which entrants 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.

Sales contest

A sales promotion method used to motivate distributors, retailers, and sales personnel through recognition of 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.

Communication

A sharing of meaning through the transmission of information Communication is essentially the transmission of information. For communication to take place, both the sender and receiver of information must share some common ground. They must have a common understanding of the symbols, words, and pictures used to transmit information.

exclusive dealing

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers Manufacturers receive considerable market protection in an exclusive-dealing arrangement and may cut off shipments to intermediaries that violate the agreement. The legality of an exclusive-dealing contract is determined by applying three tests. If the exclusive dealing blocks competitors from as much as 15 percent of the market, the sales volume is large, and the producer is considerably larger than the retailer, then the arrangement is considered anticompetitive. If dealers and customers in a given market have access to similar products or if the exclusive-dealing contract strengthens an otherwise weak competitor, the arrangement is allowed.

cost-based pricing

Adding a dollar amount or percentage to the cost of the product, which means marketers calculate and apply a desired level of profit to the cost of the product and apply it uniformly. 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. Cost plus pricing- 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. *The government also frequently expects cost-plus pricing from defense contractors. *In periods of rapid inflation, cost-plus pricing is popular, especially when the producer must use raw materials that frequently fluctuate in price. *In industries in which cost-plus pricing is common and sellers have similar costs, price competition will not be especially intense. Markup Pricing- Adding to the cost of the product a predetermined percentage of that cost *commonly used by retailers *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. *Using a rigid percentage markup for a specific product category reduces pricing to a routine task that can be performed quickly. * markup as a percentage of cost: markup/cost * Markup as a percentage of selling price: Markup/ selling price *Markups normally reflect expectations about operating costs, risks, and stock turnovers. Wholesalers and manufacturers often suggest standard retail markups that are considered profitable.

identifying and analyzing the target audience

Advertisers must research the target audience ☆ Location and geographic distribution of target group ☆ Distribution of age, income, race, sex, and education ☆ Consumer attitudes regarding the purchase and use of the advertiser's products and competing products Target Audience -The group of people at whom advertisements are aimed. The target audience may include everyone in the firm's target market. Marketers may, however, direct a campaign at only a portion of the target market. Information commonly needed includes location and geographic distribution of the target group; the distribution of demographic factors, such as age, income, race, gender, and education; lifestyle information; and consumer attitudes regarding purchase and use of both the advertiser's products and competing products

Advertising

Advertising is a paid nonpersonal 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. Advertising is changing as consumers' mass media consumption habits are changing. Companies are striving to maximize their presence and impact through digital media; ads are being designed that cater to smaller, more personalized audiences; and traditional media like newspapers are in a decline due to a drop in readership. Benefits *It is extremely cost-efficient when it reaches a vast number of people at a low cost per person. *lets the source repeat the message several times. *advertising a product a certain way can add to the product's value, and the visibility an organization gains from advertising can enhance its image. Disadvantages * 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. *advertising rarely provides rapid feedback. Measuring its effect on sales is often difficult, and it is generally less persuasive than personal selling.

product advertising

Advertising that promotes the uses, features, and benefits of products 2 types: Pioneer and competitive Pioneer-Advertising that tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product *Product advertising that focuses on products before they are available tends to cause people to think about the product more and evaluate it more positively. Pioneer advertising is also employed when the product is in the introductory stage of the product life cycle Competitive- Tries to stimulate demand for a specific brand by promoting its features, uses, and advantages relative to competing brands *Cable, satellite, and streaming internet television service providers use competitive advertising to position their brands *Advertising effects on sales must reflect competitors' advertising activities. The type and intensity of the competitive environment will determine the most effective approach. *Multiple Types: Comparative Advertising-Compares the sponsored brand with one or more identified brands on the basis of one or more product characteristics *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. Product categories that commonly use comparative advertising include soft drinks, toothpaste, pain relievers, foods, tires, automobiles, and detergents. *1988 Trademark Law Revision Act, marketers using comparative advertisements in the United States must not misrepresent the qualities or characteristics of competing products. Reminder Advertising-Advertising used to remind consumers about an established brand's uses, characteristics, and benefits Reinforcement Advertising- Advertising that assures users they chose the right brand and tells them how to get the most satisfaction from it Naive 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 than standard banner ads. *In a world inundated with advertisements, 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.

Agents and brokers

Agents and brokers negotiate purchases and expedite sales but do not take title to productsSometimes called functional middlemen,they perform a limited number of services in exchange for a commission, which generally is based on the product's selling price. Although agents and brokers perform even fewer functions than limited-service wholesalers, they are usually specialists in particular products or types of customers and can provide valuable sales expertise. Agent- Intermediaries that represent either buyers or sellers on a permanent basis Brokers- Intermediaries that bring buyers and sellers together temporarily Manufacturers' agents- Independent intermediaries that represent two or more sellers and usually offer customers complete product lines *Restricted to a particular territory, a manufacturer's agent handles noncompeting and complementary products. *The relationship between the agent and the manufacturer is governed by written contracts that outline territories, selling price, order handling, and terms of sale relating to delivery, service, and warranties. * Manufacturers' agents have little or no control over producers' pricing and marketing policies. *Apparel, machinery and equipment, steel, furniture, automotive products, electrical goods, and some food items. Selling Agent-Intermediaries that market a whole product line or a manufacturer's entire output *They perform every wholesaling activity except taking title to products. Selling agents usually assume the sales function for several producers simultaneously, and some firms may use them in place of a marketing department. *In contrast to manufacturers' agents, selling agents generally have no territorial limits and have complete authority over prices, promotion, and distribution. * To avoid conflicts of interest, selling agents represent noncompeting product lines Commissions merchants- Agents that receive goods on consignment from local sellers and negotiate sales in large, central markets *Sometimes called factor merchants *They specialize in obtaining the best price possible under market conditions. *Most often found in agricultural marketing, commission merchants take possession of truckloads of commodities, arrange for necessary grading or storage, and transport the commodities to auction or markets where they are sold. *When sales are completed, the agents deduct commissions and the expense of making the sale and turn over profits to the producer. A broker's primary purpose is to bring buyers and sellers together. Thus, brokers perform fewer functions than other intermediaries. They are not involved in financing or physical possession, have no authority to set prices, and assume almost no risks. Instead, they offer customers specialized knowledge of a particular commodity and a network of established contacts.

Supply chain

All the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer It may help to think of the firms involved in a total distribution system as existing along a conceptual line, the combined impact of which results in an effective supply chain. Firms that are "upstream" in the supply chain (e.g., suppliers) and "downstream" (e.g., wholesalers and retailers) work together to serve customers and generate competitive advantage.

retailing

All transactions in which the buyer intends to consume the product through personal, family, or household use retailer-An organization that purchases products for the purpose of reselling them to ultimate consumers There are more than 1 million retail establishments in the United States, and they employ nearly 16 million people. Retailers contribute $1.1 trillion, or 5.9 percent, directly to the U.S. gross domestic product. Retailers add value for customers by providing services and assisting in making product selections. Retailers can add significant value to the supply chain, representing a critical link between producers and ultimate consumers by providing the environment in which exchanges occur. Retailers play a major role in creating time, place, and possession and, in some cases, form utility. multichannel retailing-Employing multiple distribution channels that complement brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews, and make actual purchases Retailing is also increasingly international. In particular, many retailers see significant growth potential in international markets.

Profit

Although a business may claim that its objective is to maximize profits for its owners, the objective of profit maximization is rarely operational because its achievement is difficult to measure. Therefore, profit objectives tend to be set at levels that the owners and top-level decision makers view as satisfactory and attainable. Specific profit objectives may be stated in terms of either actual dollar amounts or a percentage of sales revenues.

sales promotion

An activity and/or material intended to induce resellers or salespeople to sell a product or consumers to buy it 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. In competitive markets, where products are very similar, sales promotion provides additional inducements that encourage product trial and purchase. Supermarkets such as Whole Foods provide food samples to encourage purchases. Marketers often use sales promotion to facilitate personal selling, advertising, or both. The most effective sales promotion efforts are highly interrelated with other promotional activities. When deciding which sales promotion methods to use, marketers must consider several factors, particularly product characteristics (price, size, weight, costs, durability, uses, features, and hazards) and target market characteristics (age, gender, income, location, density, usage rate, and shopping patterns).

Artwork

An advertisement's illustrations and layout Illustrations-Photos, drawings, graphs, charts, and tables used to spark audience interest in an advertisement *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. *consumers tend to recall the visual portions of advertisements better than the verbal portions. Layout-The physical arrangement of an advertisement's illustration and copy *These elements can be arranged in manyways. The final layout is the result of several stages of layout preparation. As it moves through these stages, the layout promotes an exchange of ideas among people developing the advertising campaign and provides instructions for production personnel.

tying agreement

An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well uppliers may institute tying agreements as a means of getting rid of slow-moving inventory, or a franchiser may tie the purchase of equipment and supplies to the sale of franchises, justifying the policy as necessary for quality control and protection of the franchiser's reputation. most considered legal A related practice is full-line forcing, in which a supplier requires that channel members purchase the supplier's entire line to obtain any of the supplier's products. Manufacturers sometimes use full-line forcing to ensure that intermediaries accept new products and that a suitable range of products is available to customers.

strategic alliance

An agreement whereby the products of one organization are distributed through the marketing channels of another The products of the two firms are often similar with respect to target markets or uses, but they are not direct competitors. A brand of bottled water might be distributed through a marketing channel for soft drinks

NAFTA

An alliance that merges Canada, Mexico, and the United States into a single market NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada; provides protection for intellectual property (of special interest to high-technology and entertainment industries); expands trade by requiring equal treatment of U.S. firms in both countries; andsimplifies country-of-origin rules, hindering Japan's use of Mexico as a staging ground for further penetration into U.S. markets. Canada is the single largest trading partner of the United States, which in turn supports 1.7 million U.S. jobs. NAFTA has also facilitated additional trade between Canada and Mexico. Mexico is Canada's fifth-largest export market and third-largest import market. Many U.S. companies, including GE, Hewlett-Packard, IBM, and General Motors, have taken advantage of Mexico's low labor costs and close proximity to the United States to set up production facilities, sometimes called maquiladoras. Production at the maquiladoras, especially in the automotive, electronics, and apparel industries, has grown rapidly as companies as diverse as Ford, John Deere, Motorola, Kimberly-Clark, and VF Corporation set up facilities in north-central Mexican states. A related trade agreement—the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR)—among Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States has also been ratified in all those countries except Costa Rica

Asia-Pacific Economic Cooperation (APEC)

An alliance that promotes open trade and economic and technical cooperation among member nations throughout the world initially included Australia, Brunei Darussalam, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and the United States. Since its introduction, the alliance has grown to include China, Hong Kong, Taiwan, Mexico, Papua New Guinea, Chile, Peru, Russia, and Vietnam. The 21-member alliance represents approximately 40 percent of the world's population, 54 percent of the world's GDP APEC differs from other international trade alliances in its commitment to facilitating business and its practice of allowing the business/private sector to participate in a wide range of APEC activities. In fact, the APEC region has consistently been one of the most economically dynamic parts of the world. The most important emerging economic power in APEC is China, which has become one of the most productive manufacturing nations. China, which is now the United States' second-largest trading partner, has initiated economic reforms to stimulate its economy by privatizing many industries, restructuring its banking system, and increasing public spending on infrastructure.

South common market (MERCOSUR)

An alliance that promotes the free circulation of goods, services, and production factors, and has a common external tariff and commercial policy among member nations in South America Treaty of Asunción to unite Argentina, Brazil, Paraguay, and Uruguay as a free trade alliance. Venezuela and Bolivia joined in 2006 and 2015, respectively. Currently, Chile, Colombia, Ecuador, and Peru are associate members. fourth-largest trading bloc behind NAFTA, the EU, and ASEAN. Like NAFTA, MERCOSUR promotes "the free circulation of goods, services, and production factors among the countries" and establishes a common external tariff and commercial policy. Another trend is that several of the countries, including some of the MERCOSUR alliance, are starting to experience more stable democracies. Even Cuba, one of the traditionally harshest critics of capitalism in Latin America, is accepting more privatization.

EU

An alliance that promotes trade among its member countries in Europe initially included Belgium, France, Italy, West Germany, Luxembourg, and the Netherlands. Today the Euro Zone (countries that have adopted the euro as their currency) consists of 19 separate countries with varying political landscapes by 2015, the EU included the United Kingdom, Spain, Denmark, Greece, Portugal, Ireland, Austria, Finland, Sweden, Cyprus, Poland, Hungary, the Czech Republic, Slovenia, Estonia, Latvia, Lithuania, Slovakia, Malta, Romania, Bulgaria, Belgium, France, Germany, Italy, Luxembourg, The Netherlands, and Croatia. economists are predicting that Brexit will slow growth in the U.K., create barriers to trade, and lead to conflict among the U.K. and other countries in the EU. its member states have common institutions to which they delegate some of their sovereignty to allow specific matters of joint interest to be decided at the European level. The primary goals of the EU are to establish European citizenship; ensure freedom, security, and justice; promote economic and social progress; and assert Europe's role in world trade. To facilitate free trade among members, the EU is working toward standardizing business regulations and requirements, import duties, and value-added taxes; eliminating customs checks; and creating a standardized currency for use by all members. Differences in tastes and preferences in these diverse markets are significant for international marketers. But there is evidence that such differences may be diminishing, especially within the younger population that includes teenagers and young professionals.

franchising

An arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration A franchisor such as KFC or Pizza Hut may receive a percentage of total sales in exchange for furnishing equipment, buildings, management know-how, and marketing assistance to the franchisee. The franchisee supplies labor and capital, operates the franchised business, and agrees to abide by the provisions of the franchise agreement. Because of changes in the international marketplace, shifting employment options in the United States, the large U.S. service economy, and corporate interest in more joint-venture activity, franchising is a very popular retail option. enables a franchisee to start a business with limited capital and benefit from the business experience of others. Generally speaking, franchises may be more successful than independent stores because they can build on the established reputation of a national brand. Through franchise arrangements, the franchisor gains fast and selective product distribution without incurring the high cost of constructing and operating its own outlets. The franchisor, therefore, has more available capital for expanding production and advertising. It can also ensure, through the franchise agreement, that outlets are maintained and operated according to its own standards The franchisor can dictate many aspects of the business: décor, menu, design of employees' uniforms, types of signs, hours of operation, and numerous details of business operations. In addition, franchisees must pay to use the franchisor's name, products, and assistance. Usually, there is a one-time franchise fee and continuing royalty and advertising fees, often collected as a percentage of sales the franchisor gives up a certain amount of control when entering into a franchise agreement with an entrepreneur. Consequently, individual establishments may not be operated exactly according to the franchisor's standards.

WTO

An entity that promotes free trade among member nations by eliminating trade barriers and educating individuals, companies, and governments about trade rules around the world, success to GATT General agreement on tariffs and trade (GATT)- An agreement among nations to reduce worldwide tariffs and increase international trade *Rounds of GATT negotiations reduced trade barriers for most products and established rules to guide international commerce, such as rules to prevent dumping, the selling of products at unfairly low prices. dumping- Selling products at unfairly low prices The WTO came into being in 1995 as a result of the Uruguay Round (1988-1994) of GATT negotiations. Broadly, WTO is the main worldwide organization that deals with the rules of trade between nations; its main function is to ensure that trade flows as smoothly, predictably, and freely as possible between nations.

online fraud

Any attempt to conduct fraudulent activities online, including deceiving consumers into releasing personal information Hacking attacks—in which criminals break into company computers to steal information—have almost become the norm. In one of the worst cybercrimes to date, three individuals were able to steal data on more than 100 million people from the computers of 11 companies, including J.P. Morgan, Dow Jones & Co., and E*Trade Financial Corp. The men used the stolen information to make more than $100 million. ransomware as the most challenging cybersecurity issue at this time. Cybercriminals gain access to consumer and business computers, encrypt files, and then demand a ransom payment for providing a key to unlock the files For instance, organizations known as brand-protection firms monitor social networks for fraudulent accounts. ForgeRock is an identity and access management software firm.

Trade allowances

Buying allowance- A temporary price reduction to resellers for purchasing specified quantities of a product *provide an incentive for resellers to handle new products, achieve temporary price reductions, or stimulate purchase of items in larger-than-normal quantities. *simple and straightforward. *One drawback of buying allowances is that customers may buy "forward"—that is, buy large amounts that keep them supplied for many months. *Another problem is that competitors may match (or beat) the reduced price, which can lower profits for all sellers. Buy-Back allowance- A sum of money given to a reseller for each unit bought 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. *If the retailer's inventory becomes low after the initial promotion, the buy-back allowance helps the retailer restock the inventory. *This is often offered for bread and other perishable products. *The main disadvantage of this method is expense. Scan-back allowance- 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 Merchandise allowance- A manufacturer's agreement to pay resellers certain amounts of money for providing special promotional efforts, such as setting up and maintaining a display *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.

Services provided by wholesalers

By initiating sales contacts with a producer and selling diverse products to retailers, wholesalers serve as an extension of the producer's sales force. Wholesalers also provide financial assistance. They often pay for transporting goods, reduce a producer's warehousing expenses and inventory investment by holding goods in inventory, extend credit and assume losses from buyers who turn out to be poor credit risks, and can be a source of working capital when they buy a producer's output. Wholesalers also serve as conduits for information within the marketing channel, keeping producers up to date on market developments and passing along the manufacturers' promotional plans to other intermediaries. Wholesalers support retailers by assisting with marketing strategy, especially the distribution component. Wholesalers also help retailers select inventory. They are often specialists on market conditions and experts at negotiating final purchases Wholesalers can also reduce a retailer's burden of looking for and coordinating supply sources. If the wholesaler purchases for several different buyers, expenses can be shared by all customers. Furthermore, whereas a manufacturer's salesperson offers retailers only a few products at a time, independent wholesalers always have a wide range of products available. However, when a wholesaler is eliminated from a marketing channel, wholesaling activities still have to be performed by a member of the supply chain, whether a producer, retailer, or facilitating agency.

Identify Prospects

Certain types of promotional efforts aim to identify customers who are interested in the firm's product and are likely potential buyers.

Horizontal channel Integration

Combining organizations at the same level of operation under one management An organization may integrate horizontally by merging with other organizations at the same level in the marketing channel. The owner of a dry cleaning firm, for example, might buy and combine several other existing dry-cleaning establishments. Although horizontal integration permits efficiencies and economies of scale in purchasing, marketing research, advertising, and specialized personnel, it is not always the most effective method of improving distribution. Problems that come with increased size often follow, resulting in decreased flexibility, difficulties coordinating among members, and the need for additional marketing research and large-scale planning.

vertical channel integration

Combining two or more stages of the marketing channel under one management This may occur when one member of a marketing channel purchases the operations of another member or simply performs the functions of another member, eliminating the need for that intermediary. Tesla, for example Vertical channel integration represents a more progressive approach to distribution, in which channel members become extensions of one another as they are combined under a single management. Vertically integrated channels can be more effective against competition because of increased bargaining power and the ease of sharing information and responsibilities. Vertical Marketing System- A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers VMSs account for a large share of retail sales in consumer goods. Most vertical marketing systems take one of three forms: corporate, administered, or contractual. Corporate- combines all stages of the marketing channel, from producers to consumers, under a single owner. Administered- channel members are independent, but informal coordination achieves a high level of inter organizational management. (adopt uniform accounting and ordering procedures and cooperate in promotional activities for the benefit of all partners.) Contractual- most popular type of vertical marketing system. Channel members are linked by legal agreements spelling out each member's rights and obligations. Franchise organizations, such as McDonald's and KFC, are contractual VMSs.

Public Relations

Communication efforts used to create and maintain favorable relations 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 Public relations can be used to promote people, places, ideas, activities, and even countries. It is often used by nonprofit organizations to achieve their goals. Public relations focuses on enhancing the image of the total organization.

Promotion

Communication to build and maintain relationships by informing and persuading one or more audiences To maximize promotional effectiveness, marketers strive for proper planning, implementation, coordination, and control of communications. How successfully marketers use promotion to maintain positive relationships depends to some extent on the quantity and quality of information the organization receives and listens to from customers. Social media, blogging, and customer feedback through websites has been a very effective way to listen to customers.

brick and morter retailers

Consider that most shoppers now research products online and then head to the nearest store to make the actual purchase—a practice sometimes called webrooming. Many types of brick-and-mortar retail stores exist. One way to classify them is by the breadth of products they offer. Two general categories include general-merchandise retailers and specialty retailers.

Does promotion help consumers without costing too much?

Consumers do benefit because promotion informs them about product uses, features, advantages, prices, and locations where they can buy the products. Thus, consumers gain more knowledge about available products and can make more intelligent buying decisions. Promotion also informs consumers about services—for instance, health care, educational programs, and day care—as well as about important social, political, and health-related issues.

Managing Sales Territories

Creating sales territories - measurable sales potential - geographic size Routing and scheduling salespeople - geographic size/ shape - number of customers -followed by sales call frequency and duration. Those in charge of routing and scheduling must consider the sequence in which customers are called on, specific roads or transportation schedules to be used, number of calls to be made in a given period, and time of day the calls will occur.

Criticisms of marketing channels

Critics accuse wholesalers of being inefficient and adding to costs. Buyers often think that making the distribution channel as short as possible will decrease the prices for products, but this is not the case. Critics who suggest that eliminating wholesalers will lower prices for customers fail to recognize that this would not eliminate the need for the services the wholesalers provide. Although wholesalers can be eliminated, their functions cannot.

Market channel selection factors

Customer characteristics, Characteristics of intermediaries, Product attributes, Marketing environmental forces, competition, Type of organization Customer characteristics *Business customers often prefer to deal directly with producers *Consumers, on the other hand, generally buy limited quantities of a product, purchase from retailers, and often do not mind limited customer service. *When customers are concentrated in a small geographic area, a direct channel may be best, but when many customers are spread across an entire state or nation, distribution through multiple intermediaries is likely to be more efficient. Product Attributes * Marketers of complex and expensive products (like automobiles) will likely employ short channels, as will marketers of perishable products (such as dairy and produce). *Less-expensive standardized products with long shelf lives, such as soft drinks and canned goods, can go through longer channels with many intermediaries. Types of organization *larger firms are in a better position to deal with vendors or other channel members. *A smaller company that uses regional or local channel members, on the other hand, might be in a strong position to cater its marketing mix to serve customers in that particular area, compared with a larger and less-flexible organization. Competition *The success or failure of a competitor's marketing channel may encourage or dissuade an organization from taking a similar approach. *In a highly competitive market, it is important for a company to maintain low costs Environmental factos *Adverse economic conditions might force an organization to use a low-cost channel, even though it reduces customer satisfaction. * In contrast, a growing economy may allow a company to choose a channel that previously had been too costly. *New technology *government regulations (labor laws) Characteristics of intermediaries * When an organization believes that an intermediary is not promoting its products adequately or does not offer the correct mix of services, it may reconsider its channel choices.

Assessment of the Target Market's Evaluation of Price

Despite the general assumption that price is a major issue for buyers, the importance of price varies depending on the type of product, the target market, and the purchase situation. For instance, buyers are probably more sensitive to gasoline prices than luggage prices. With respect to the type of target market, adults frequently must pay more than children for goods and services, including clothing, meals, and movie tickets, because they consume a larger quantity. The purchase situation also affects the buyer's view of price. Most moviegoers would never pay, in other situations, the prices charged for soft drinks, popcorn, and candy at concession stands. The markup for popcorn in movie theaters can be up to 1,275 percent. Nevertheless, consumers are willing to pay the markup to enhance their movie experience by enjoying buttery popcorn at the theater. Today, because some consumers seek less-expensive products and the internet allows consumers to shop more selectively than ever before, some manufacturers and retailers focus on the value of products in their communications with customers. Remember that value is more than just a product's price. It combines price with quality attributes, which customers use to differentiate among competing brands. Generally, consumers want to maximize the value they receive for their money. Consumers may also be willing to pay a higher price for products that offer convenience and save time. (sliced apples)

Inventory Management

Developing and maintaining adequate assortments of products to meet customers' needs When too few products are carried in inventory, the result is stockouts, or shortages of products. Stockouts can result in customer dissatisfaction that leads to lower sales, even loss of customers and brand switching. On the other hand, when a firm maintains too many products (especially too many low-turnover products) in inventory, costs increase, as do risks of product obsolescence, pilferage, and damage. To determine when to order, a marketer calculates the reorder point: the inventory level that signals the need to place a new order. reorder point: (order time x Usage rate) + safety stock The order lead time refers to the average time lapse between placing the order and receiving it. The usage rate is the rate at which a product's inventory is used or sold during a specific time period. Safety stock is the amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than-expected lead times. Just-in-time approach- An inventory management approach in which supplies arrive just when needed for production or resale (lean distribution) JIT inventory management requires a high level of coordination between producers and suppliers, but it eliminates waste and reduces inventory costs. This approach is popular among many well-known firms, including Toyota, Dell Computer, and Harley-Davidson.

International marketing

Developing and performing marketing activities across national boundaries Firms are finding that international markets provide strong prospects for growth. To encourage international growth, many countries offer practical assistance and valuable research to help their domestic firms become more competitive globally. Traditionally, most companies have entered the global marketplace gradually and incrementally as they gained knowledge and experience about various markets and opportunities. However, some firms—such as eBay, Google, and Twitter—were founded with the knowledge and resources to accelerate their participation and investment in the global marketplace. These "born globals"—typically small technology-based firms earning as much as 70 percent of their sales outside the domestic home market—export their products almost immediately after being established in market niches in which they compete with larger, more established firms.

Product considerations with E-marketing

Digital media provide an opportunity to add a service dimension to traditional products and create new products that could only be accessible on the internet. For example, the digital platform Steam provides gamers access to thousands of video games for PC and Mac. These represent products that can only be found in the digital realm. In managing a product, it is important to pay attention to consumer-generated brand stories that address quality and performance and impact image. Some companies now use online advertising campaigns and contests to help develop better products. For example, Volition, a skin care and cosmetics company, crowdsources its new product ideas from its customers.

nonprice competition

Emphasizing factors other than price to distinguish a product from competing brands like product features, service, product quality, promotion, packaging, or other factors to distinguish its product from competing brands. Thus, nonprice competition allows a company to increase its brand's unit sales through means other than changing the brand's price. A major advantage of nonprice competition is that a firm can build customer loyalty toward its brand. Nonprice competition is effective only under certain conditions. *A company must be able to distinguish its brand through unique product features, higher product quality, effective promotion, distinctive packaging, and/or excellent customer service. *Buyers must not only be able to perceive these distinguishing characteristics but also deem them important. *The distinguishing features that set a particular brand apart from competitors should be difficult, if not impossible, for competitors to imitate. * Finally, the firm must extensively promote the brand's distinguishing characteristics to establish its superiority and set it apart from competitors in the minds of buyers. Even a marketer that is competing on a nonprice basis cannot ignore competitors' prices. The organization must be aware of them and sometimes be prepared to price its brand near or slightly above competing brands. Therefore, price remains a crucial marketing-mix component even in environments that call for nonprice competition.

price competition

Emphasizing price as an issue and matching or beating competitors' prices To compete effectively on a price basis, a firm should be the low-cost seller of the product. If all firms producing the same product charge the same price for it, the firm with the lowest costs is the most profitable. Firms that stress low price as a key marketing-mix element tend to market standardized products. A seller competing on price may change prices frequently, or at least must be willing and able to do so. In a competitive pricing environment, whenever one firm changes its prices, its rivals usually respond quickly and aggressively. Gives marketers flexibility Price war- Involves two or more companies engaging in intense price competition, often in an effort to boost market share *A major drawback of price competition is that competitors have the flexibility to adjust prices, too. If they quickly match or beat a company's price cuts, a price war may ensue. Chronic price wars often benefit consumers in the form of lower prices in the short run, but the constant price cutting is seldom sustainable, so they can substantially weaken organizations by slashing profit margins for everyone.

channel cooperation

Enables retailers, wholesalers, suppliers and logistics providers to: Speed up inventory replenishment Improve customer service Cut the costs of bringing products to customers Without cooperation, neither overall channel goals nor individual member goals can be realized. If a marketing channel is viewed as a unified supply chain competing with other systems, individual members will be less likely to take actions that create disadvantages for other members. Channel members should agree to direct efforts toward common objectives, and their tasks should be defined precisely so that roles can be structured for maximum effectiveness in working toward achieving objectives.

Product Line Pricing

Establishing and adjusting prices of multiple products within a product line *goal is to maximize profits for an entire product line rather than to focus on the profitability of an individual product item. *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 and, therefore, selling more units. *marketers evaluate the relationship among the products in the line. When products in a line are complementary, sales increases in one item raise demand for other items. (printer's and ink) * when products in a line function as substitutes for one another, buyers of one product in the line are unlikely to purchase one of the other products in the same line. ( iPhones) Captive Pricing- when products in a line function as substitutes for one another, buyers of one product in the line are unlikely to purchase one of the other products in the same line. * Razors and razor heads Premium pricing- Pricing the highest-quality or most versatile products higher than other models in the product line * Marketers that use premium pricing often realize a significant portion of their profits from the premium-priced products. *Examples of product categories in which premium pricing is common are small kitchen appliances, beer, ice cream, and television cable service. Bait pricing- Pricing an item in a product line low with the intention of selling a higher-priced item in the line * a retailer may promote an inexpensive Chromebook in the expectation that consumers coming in to look at that product will wind up buying a more expensive one with more features than the advertised model. *As long as a retailer has sufficient quantities of the advertised low-priced model available for sale, this strategy is acceptable. However, it may generate customer resentment if customers go to the store looking for the low-priced model and find only the high-priced model in stock. this is called bait and switch if it is intentional, and is unethical and sometimes illegal Price lining- Setting a limited number of prices for selected groups or lines of merchandise * For instance, a shop may sell men's ties only at $22 and $37. This strategy is common 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.

Export departments

Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with an export department structure. Some firms develop an export department as a subunit of the marketing department, whereas others organize it as a separate department at an equal level with the other functional units. Some companies choose to hire outside export departments to handle their international operations. Lone Star Distribution, a distributor for sports and nutritional supplements, has an export department that helps its clients transport their goods internationally.

Competitive forces

Firms typically identify their competition when they establish target markets worldwide. Each country has unique competitive aspects—often founded in the other environmental forces (i.e., sociocultural, technological, political, legal, regulatory, and economic forces)—that are often independent of the competitors in that market. Most globally competitive- Switzerland, US, Singaporem Netherlands, germany Although competitors drive competition, nations establish the infrastructure and the rules for the types of competition that can take place. For example, the privacy laws in the European Union are stricter than those in the United States. A new breed of customer—the global customer—has changed the landscape of international competition drastically. *not only do customers who travel the globe expect to be able to buy the same product in most of the world's 200 countries, but they also expect that the product they buy in their local store in Miami will have the same features as similar products sold in London or even in Beijing. If either the quality of the product or the product's features are more advanced in an international market, customers will soon demand that their local markets offer the same product at the same or lower prices.

Create awareness

For an organization that is introducing a new product or a line extension, making customers aware of the product is crucial to initiating the product adoption process. Creating awareness is important for existing products, too. Promotional efforts may aim to increase awareness of brands, product features, image-related issues (such as ethical or socially responsive behavior), or operational characteristics (such as store hours, locations, and credit availability).

refusal to deal

For nearly a century, courts have held that producers have the right to choose or reject the channel members with which they will do business. Within existing distribution channels, however, suppliers may not legally refuse to deal with wholesalers or dealers merely because these wholesalers or dealers resist policies that are anticompetitive or in restraint of trade. Suppliers are further prohibited from organizing some channel members in refusal-to-deal actions against other members that choose not to comply with illegal policies.

Establishing Sales Force Objectives

Gives the sales force direction and purpose. Stated in precise, measurable terms Sales objectives are usually developed for both the total sales force and individual salespeople. specify the time period and geographic areas involved; and be achievable. Sales objectives, or quotas, for individual salespeople are commonly stated in terms of dollar or unit sales volume. Objectives for the entire force are normally stated in terms of sales volume, market share, or profit. Volume objectives refer to dollar or unit sales. When sales goals are stated in terms of market share, they usually call for an increase in the proportion of the firm's sales relative to the total number of products sold by all businesses in that industry. When sales objectives are based on profit, they are generally stated in terms of dollar amounts or return on investment.

Pricing objectives

Goals that describe what a firm wants to achieve through pricing pricing objectives must be stated explicitly and in measurable terms. Objectives should also include a time frame for accomplishing them. Marketers must ensure that pricing objectives are consistent with the firm's marketing and overall objectives because pricing objectives influence decisions in many functional areas, including finance, accounting, and production. A marketer can use both short- and long-term pricing objectives and can employ one or multiple pricing objectives. Survival- Adjust price levels so the firm can increase sales volume to match organizational expenses. Profit-Identify price and cost levels that allow the firm to maximize profit. Return on investment-Identify price levels that enable the firm to yield targeted ROI. Market share-Adjust price levels so the firm can maintain or increase sales relative to competitors' sales. Cash flow-Set price levels to encourage rapid sales. Status quo-Identify price levels that help stabilize demand and sales. Product quality-Set prices to recover research and development expenditures and establish a high-quality image.

Specialty Retailers

In contrast to general-merchandise retailers with their broad product mixes, specialty retailers emphasize narrow and deep assortments. Despite their name, specialty retailers do not sell specialty items (except when specialty goods complement the overall product mix). Instead, they offer substantial assortments in a few product lines. We examine three types of specialty retailers: traditional specialty retailers, category killers, and off-price retailers. Traditional specialty retailers- Stores that carry a narrow product mix with deep product lines *Sometimes called limited-line retailers, they may be referred to as single-line retailers if they carry unusual depth in one product category. *The limited, sunglasses hut, and footlocker *Because they are usually small, specialty stores may have high costs in proportion to sales, Category killers- A very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability *These stores are referred to as category killers because they expand rapidly and gain sizable market shares, taking business away from smaller, higher-cost retail outlets. *Home Depot and Lowe's (home improvement), Staples (office supply) off price retailers- Stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts *Unlike true discount stores, which pay regular wholesale prices for goods and usually carry second-line brand names, off-price retailers offer limited lines of national-brand and designer merchandise, usually clothing, shoes, or housewares. * TJ Maxx *To ensure a regular flow of merchandise into their stores, off-price retailers establish long-term relationships with suppliers that can provide large quantities of goods at reduced prices. *Off-price stores charge 20 to 50 percent less than department stores for comparable merchandise but offer few customer services. *do not take returns or allow exchanges. Off-price stores may or may not sell goods with the original labels intact. *They turn over their inventory up to a dozen times per year, three times as often as traditional specialty stores. *Manufacturers may approach retailers with samples, discontinued products, or items that have not sold well. Also, off-price retailers may seek out manufacturers, offering to pay cash for goods produced during the manufacturers' off-season.

Status quo

In some cases, an organization is in a favorable position and desires nothing more than to maintain the status quo. Status quo objectives can 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. A status quo pricing objective can reduce a firm's risks by helping to stabilize demand for its products. A firm that chooses status quo pricing objectives 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.

Following up

In the final step of the selling process—follow up—the salesperson must ensure: delivery schedules are met goods or services perform as promise buyers' employees are properly trained to use the products Following up also aids the salesperson in creating a solid relationship with the customer. a large number of customers who stop buying products do so not out of dissatisfaction but because the company neglected to contact them. Thus, the follow-up stage is vital to establishing a strong relationship and creating loyalty on the part of the buyer.

Merchant wholesalers

Independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers Full service and limited service Full service- Merchant wholesalers that perform the widest range of wholesaling functions *Customers rely on them for product availability, suitable product assortments, breaking large quantities into smaller ones, financial assistance, and technical advice and service. Full-service wholesalers handle either consumer or business products and provide numerous marketing services to their customers. *Full-service wholesalers are categorized as general-merchandise, limited-line, and specialty-line wholesalers. General merchandise wholesalers-Full-service wholesalers with a wide product mix but limited depth within product lines. *They deal in products such as drugs, nonperishable foods, cosmetics, detergents, and tobacco. Limited line wholesalers- Full-service wholesalers that carry only a few product lines but many products within those lines Specialty line wholesalers- Full-service wholesalers that carry only a single product line or a few items within a product line Rack Jobbers- Full-service, specialty-line wholesalers that own and maintain display racks in stores *Rack jobbers specialize in non-food items with high profit margins, such as health and beauty aids, books, magazines, hosiery, and greeting cards. Limited service wholesaler- Merchant wholesalers that provide some services and specialize in a few functions *Producers perform the remaining functions or pass them on to customers or other intermediaries. Limited-service wholesalers take title to merchandise but often do not deliver merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers' future needs. *Because they offer restricted services, limited-service wholesalers charge lower rates and have smaller profit margins than full-service wholesalers. *four typical limited-service wholesalers: cash-and-carry wholesalers, truck wholesalers, drop shippers, and mail-order wholesalers. Cash-and carry wholesalers- Limited-service wholesalers whose customers pay cash and furnish transportation *handle a limited line of products with a high turnover rate, such as groceries, building materials, and electrical or office supplies. Truck wholesalers- Limited-service wholesalers that transport products directly to customers for inspection and selection *They are often small operators who own and drive their own trucks. They usually have regular routes, calling on retailers and other institutions to determine their needs. *truck jobbers Drop shippers- Limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products *Desk jobbers *They forward orders from retailers, business buyers, or other wholesalers to manufacturers and arrange for carload shipments of items to be delivered directly from producers to these customers. *They assume responsibility for products during the entire transaction, including the costs of any unsold goods. Mail order wholesalers- Limited-service wholesalers that sell products through catalogs *Wholesale mail-order houses generally feature cosmetics, specialty foods, sporting goods, office supplies, and automotive parts. *This is a convenient and effective method of selling items to customers in remote areas that other wholesalers might find unprofitable to serve.

Digital marketing

Integrating and customizing marketing communications while protecting customer privacy has become a major challenge. This has made digital marketing a growing business. Marketers spend nearly 30 percent of their marketing budget on digital marketing. The biggest concern of marketers is from fake news, questionable metrics, ethics issues which social media platforms have created, creator-perceived risk, and scrutiny. Almost 50 percent of advertisers will not spend money on risky platforms.

Technological forces

Interactive websites, instant messaging, and podcast downloads (along with the traditional vehicles of voice mail, email, and smart phones) make international marketing activities more affordable and convenient. In many developing countries that lack the level of technological infrastructure found in the United States and Japan, marketers are beginning to capitalize on opportunities to leap-frog existing technology. For example, cellular and wireless phone technology is reaching many countries at a more affordable rate than traditional hard-wired telephone systems. Despite the enormous benefits of digital technology, however, the digital economy may actually be increasing the divide between skilled wealthy workers and the rest of the labor force. Instead of increasing wages overall, wages have remained relatively flat.

Operations management

Managing activities from production to final delivery through system-wide coordination We have the materials where they should be, but what do we do with them now? These activities can range anywhere from services to manufacturing, and even to the final delivery of a service or consumption of a product.

logistics management

Managing the efficient and effective flow of materials, products, and information from the point of origin to consumption There is sometimes a misconception that logistics are just about the physical transport of goods and materials. However, there is also an enormous burden on firms to quickly and accurately share information with their suppliers, customers, and even among themselves. Logistical concerns involve physical distribution and the selection of transportation modes.

Market share

Many firms establish pricing objectives to maintain or increase market share, which is a product's sales in relation to total industry sales. High relative market shares often translate into high profits for firms. Maintaining or increasing market share need not depend on growth in industry sales. An organization can increase its market share even if sales for the total industry are flat or decreasing. On the other hand, a firm's sales volume can increase while its market share decreases if the overall market grows.

marginal analysis

Marginal analysis examines what happens to a firm's costs and revenues when production (or sales volume) changes by a single unit. fixed cost- Costs that do not vary with changes in the number of units produced or sold Average fixed cost- The fixed cost per unit produced Variable cost- Costs that vary directly with changes in the number of units produced or sold Average variable cost- The variable cost per unit produced Total cost- The sum of average fixed and average variable costs times the quantity produced Average total cost- The sum of the average fixed cost and the average variable cost Marginal cost- The extra cost incurred by producing one more unit of a product average fixed cost declines as output increases. Average variable cost follows a U shape, as does average total cost. As quantity increases, these costs initially decline and then rise. Because average total cost continues to fall after average variable cost begins to rise, its lowest point is at a higher level of output than that of average variable cost. marginal cost equals average total cost at the latter's lowest level Average total cost decreases as long as marginal cost is less than average total cost and increases when marginal cost rises above average total cost. Marginal revenue- The change in total revenue resulting from the sale of an additional unit of a product depicts marginal revenue and a demand curve. Most firms in the United States face downward-sloping demand curves for their products; in other words, they must lower their prices to sell additional units. This situation means that each additional unit of product sold provides the firm with less revenue than the previous unit sold. MR then becomes less-than-average revenue. Eventually, MR reaches zero, and the sale of additional units actually hurts the firm. If MR is a unit's addition to revenue and MC is a unit's addition to cost, MR minus MC tells us whether the unit is profitable. Profit is the highest where MC = MR

Organizational and marketing objectives

Marketers should set prices that are consistent with the organization's goals and mission For example, a retailer trying to position itself as being value-oriented may wish to set prices that are quite reasonable relative to product quality. Pricing decisions should also be compatible with the firm's marketing objectives. For instance, suppose one of a producer's marketing objectives is a 12 percent increase in unit sales by the end of the following year. Assuming buyers are price sensitive, increasing the price or setting a price above the average market price would not be in line with this objective.

Evaluation of Competitors' Prices

Marketers should use competitors' prices to help them establish their own prices Competitors' prices may be closely guarded Pricing above competition creates an exclusive image Pricing below competition can increase market share Companies may also purchase price lists from syndicated marketing research services. Knowing the prices of competing brands is essential for a marketer. Regardless of its actual costs, a firm does not want to sell its product at a price that is significantly above competitors' prices because the products may not sell as well, or at a price that is significantly below because customers may believe the product is of low quality. Particularly in an industry in which price competition prevails, a marketer needs competitive price information to ensure that a firm's prices are the same as, or slightly lower than, competitors' prices.

Marketing channels creates utility

Marketing channels create four types of utility: time, place, possession, and form. Time utility is having products available when the customer wants them. Services like Netflix allow customers to watch a movie or TV show whenever they want. Place utility is making products available in locations where customers wish to purchase them. For example, Zappos allows customers to shop for shoes and accessories anywhere they have access to a mobile device and an internet connection. Possession utility means that the customer has access to the product to use or to store for future use. Possession utility can occur through ownership or through arrangements that give the customer the right to use the product, such as a lease or rental agreement. Channel members sometimes create form utility by assembling, preparing, or otherwise refining the product to suit individual customer needs.

Direct selling

Marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace Cutco knives The top five global direct selling companies are Amway, Avon, Herbalife, Vorwerk, and Mary Kay. Direct selling was once associated with door-to-door sales, but it has evolved into a highly professional industry where most contacts with buyers are prearranged through electronic communication or another means of prior communication. Today, companies identify customers through the mail, telephone, internet, social networks, or shopping-mall intercepts and then set up appointments with salespeople. Although the majority of direct selling takes place on an individual, or person-to-person, basis, it sometimes may be carried out in a group, or "party" plan, format. Benefits *It gives the marketer an opportunity to demonstrate the product in a comfortable environment where it most likely would be used. *The seller can give the customer personal attention, and the product can be presented to the customer at a convenient time and location. *Product categories that have been highly successful for direct selling include cosmetics and personal-care products, health products, jewelry, accessories, and household products. Personal attention to the customer is the foundation on which many direct sellers have built their businesses. Drawbacks *because commissions for salespeople are high, around 30 to 50 percent of the sales price, and great effort is required to identify promising prospects, overall costs of direct selling make it the most expensive form of retailing. *Furthermore, some customers view direct selling negatively, owing to unscrupulous and fraudulent practices used by some direct sellers.

Why IMC is increasingly effective

Mass media advertising, a very popular promotional method in the past, is used less frequently today because of its high cost and lower effectiveness in reaching some target markets. Marketers can now take advantage of more precisely targeted promotional tools, such as television, direct mail, the internet, special-interest magazines, smartphones, mobile applications, social media, sales calls, and outdoor advertising. Database marketing and marketing analytics are also allowing marketers to target individual customers more precisely. Today, a number of promotion-related companies provide one-stop shopping for the client seeking advertising, sales promotion, and public relations, thus reducing coordination problems for the sponsoring company.

Developing the Media Plan

Media Plan-A plan that specifies the media vehicles to be used and the schedule for running advertisements 1. Market analysis 2. Establishment of media objectives 3. Media strategy development and implementation 4. Evaluation and follow-up To formulate a media plan, the planners select the media for the campaign and prepare a time schedule for each medium. The media planner's primary goal is to reach the largest number of people in the advertising target that the budget will allow. A secondary goal is to achieve the appropriate message reach and frequency for the target audience while staying within budget. Reach refers to the percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period. Frequency is the number of times these targeted consumers are exposed to the advertisement. Media planners begin with broad decisions but eventually make very specific ones. They first decide which kinds of media to use: radio, television, newspapers, digital or online advertising, magazines, direct mail, outdoor displays, or signs on mass transit vehicles. They analyze location and demographic characteristics of consumers in the target audience, because people's tastes in media differ according to demographic groups and locations. Media planners also consider the sizes and types of audiences that specific media reach. The content of the message sometimes affects media choice. Print media can be used more effectively than broadcast media to present complex issues or numerous details in single advertisements. If an advertiser wants to promote beautiful colors, patterns, or textures, media offering high-quality color reproduction, such as magazines or television, should be used instead of newspapers. The cost of media is an important but troublesome consideration. Planners try to obtain the best coverage possible for each dollar spent. However, there is no accurate way to compare the cost and impact of a television commercial with the cost and impact of a newspaper advertisement. Cost comparison indicator- A means of comparing the costs of advertising vehicles in a specific medium in relation to the number of people reached The cost per thousand impressions (CPM) is the cost comparison indicator for magazines; it shows the cost of exposing 1,000 people to one advertisement.

trade sales promotion methods

Methods intended to persuade wholesalers and retailers to carry a producer's products and market them 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 counteract competitors. 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.

Licensing and franchising

One organization giving another organization the right to use its brand name, technology, or product in return for a lump sum payment or fee based on sales. Licensing- An alternative to direct investment that requires a licensee to pay commissions or royalties on sales or supplies used in manufacturing Licensing is an attractive alternative when resources are unavailable for direct investment or when the core competencies of the firm or organization are not related to the product being sold (such as in the case of Olympics merchandise). Licensing can also be a viable alternative when the political stability of a foreign country is in doubt. In addition, licensing is especially advantageous for small manufacturers wanting to launch a well-known brand internationally. Franchising is a form of licensing in which a company (the franchisor) grants a franchisee the right to market its product, using its name, logo, methods of operation, advertising, products, and other elements associated with the franchisor's business, in return for a financial commitment and an agreement to conduct business in accordance with the franchisor's standard of operations. This arrangement allows franchisors to minimize the risks of international marketing in four ways: 1. the franchisor does not have to put up a large capital investment, 2. the franchisor's revenue stream is fairly consistent because franchisees pay a fixed fee and royalties, 3. the franchisor retains control of its name and increases global penetration of its product, and 4. franchise agreements ensure a certain standard of behavior from franchisees, which protects the franchise name.

Promotion considerations with E-marketing

Online advertising includes many types of display advertising, including the use of text, logos, animation, video, photographs, or any other type of graphic display. Currently, internet advertising revenues surpass $72 billion and continue to grow. A major advantage of internet advertising is being able to track advertising statistics. High-impact digital advertisements featuring large and interactive formats drive higher response ratios. Google's AdWords is the dominant player in the online advertising market, and the company wants to take its success into the mobile realm as well. Digital media has also opened opportunities for business-to-business promotions. As more companies adopt digital marketing strategies, the need for better platforms and digital solutions have grown.

Shopper, Loyalty, and Frequent-User Incentives

Organizations such as supermarkets often provide users with loyalty or shopper cards that allow them to track customer purchases while providing periodic discounts to shoppers for continued purchases A key purpose of shopper and frequent-user cards is to encourage continued loyalty. They are favored by service businesses, such as airlines, auto rental agencies, hotels, and local coffee shops. requent-user programs not only reward loyal customers but also generate data that can contribute significant information about customers that helps marketers foster desirable customer relationships.

Point-of-purchase materials and Demonstrations

POP- Signs, window displays, display racks, and similar devices used to attract customers *Innovations in POP displays include sniff-teasers, which give off a product's aroma in the store as consumers walk within a radius of 4 feet, and computerized interactive displays. *interactive kiosks allowing shoppers to browse through products. * A retailer is likely to use point-of-purchase materials if they are attractive, informative, well-constructed, and in harmony with the store's image. Demonstrations- Sales promotion methods a manufacturer uses 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. *Even automobiles can be demonstrated, not only by a salesperson but also by the prospective buyer during a test drive.

Nature and goals of personal selling

Personal Selling-Paid personal communication that attempts to inform customers and persuade them to buy products in an exchange situation Personal selling gives marketers the greatest freedom to adjust a message to satisfy customers' information needs. It is the most precise of all promotion methods, enabling marketers to focus on the most promising sales prospects. Personal selling is also the most effective way to form relationships with customers. Personal selling is perhaps most important 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. Despite these benefits, personal selling is generally the most expensive element in the promotion mix. The average cost of a sales call for industrial products and business-to-business sales is anywhere from $215 to $400. Personal selling goals vary from one firm to another. However, they usually involve finding prospects, determining their needs, persuading prospects to buy, following up on the sale, and keeping customers satisfied. Salespeople must be aware of their competitors. They must monitor the development of new products and keep abreast of competitors' sales efforts in their sales territories, how often and when the competition calls on their accounts, and what the competition is saying about their product in relation to its own. Personal selling is changing today based on new technology, how customers gain information about products, and the way customers make purchase decisions "Social CRM" (customer relationship management) provides opportunities to manage data in discovering and engaging customers. Few businesses survive solely on profits from one-time customers. For long-run survival, most marketers depend on repeat sales and thus need to keep their customers satisfied. In addition, satisfied customers provide favorable word-of-mouth and other communications, thereby attracting new customers.

materials handling

Physical handling of tangible goods, supplies, and resources Systems for packaging, labeling, loading, and movement must be coordinated to minimize costs and maximize customer satisfaction. Radio Frequency Identification (RFID)- Using tags and readers that use radio waves to identify and track tagged materials The types of readers can include handheld readers, door portals, and overhead readers. RFID has greatly improved shipment tracking and reduced cycle times. It's also used in inventory control, equipment tracking, personnel tracking, asset tracking, and manufacturing. It can also be used in preventing distribution of counterfeit drugs and medical devices as well as diverted product. Product characteristics often determine handling. For example, the characteristics of bulk liquids and gases dictate how they can be moved and stored. Internal packaging is also animportant consideration in materials handling—goods must be packaged correctly to prevent damage or breakage during handling and transportation. Unit loading and containerization are two common methods used in materials handling. With unit loading, one or more boxes are placed on a pallet or skid. These units can then be loaded efficiently by mechanical means, such as forklifts, trucks, or conveyer systems. Containerization is the consolidation of many items into a single, large container that is sealed at its point of origin and opened at its destination. Containers are usually 8 feet wide, 8 feet high, and 10 to 40 feet long. Their uniform size means they can be stacked and shipped via train, barge, or ship

transfer pricing

Prices charged in sales between an organization's units The price is determined by one of the following methods: Actual full cost: calculated by dividing all fixed and variable expenses for a period into the number of units produced. Standard full cost: calculated based on what it would cost to produce the goods at full plant capacity. Cost plus investment: calculated as full cost plus the cost of a portion of the selling unit's assets used for internal needs. Market-based cost: calculated at the market price less a small discount to reflect the lack of sales effort and other expenses. The choice of transfer pricing method depends on the company's management strategy and the nature of the units' interaction. An organization must also ensure that transfer pricing is fair to all units involved in the transactions.

Demand Based Pricing

Pricing based on the level of demand for the product 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. The belief behind this pricing basis is that it is better to take a lower profit margin on a sale than no revenue at all. dynamic pricing *Many service industries, including the airline, hotel, bus, car rental, ride sharing, and entertainment venues, *Ticket prices are adjusted based on real-time market conditions that include seat location, the popularity of time and day, as well as whether there are special promotions like bobblehead giveaways. Yield management- a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. *Uber To use demand-based pricing, a marketer must be able to estimate the quantity of a product consumers will demand at different times and how demand will be affected by changes in the price. The marketer then chooses the price that generates the highest total revenue. Demand-based pricing is appropriate for industries in which companies have a fixed amount of available resources that are perishable, such as airline seats, hotel rooms, concert seats, and so on.

Pricing considerations with E-marketing

Pricing relates to perceptions of value and is the most flexible element of the marketing mix. Digital media marketing facilitates both price and nonprice competition, because internet marketing gives consumers access to more information about products and prices. As consumers become more informed about their options, the demand for low-priced products has grown, leading to the creation of daily deal sites. Digital connections can help the customer find the price of the product available from various competitors in an instant. Although this new access to price information benefits the consumer, it also places new pressures on the seller to be competitive and to differentiate products so that customers focus on attributes and benefits rather than price.

Psycological Pricing

Pricing that attempts to influence a customer's perception of price to make a product's price more attractive *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. 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 price (i.e., a comparison price). * Reference pricing is based on the "isolation effect," meaning an alternative is less attractive when viewed by itself than when compared with other alternatives. Bundle Pricing- Packaging together two or more complementary products and selling them at a single price *To be attractive to customers, the single price generally is markedly less than the sum of the prices of the individual products. *Bundle pricing is common for banking and travel services, computers, and automobiles with option packages. Bundle pricing is also common among products that are used in tandem Multiple Unit Pricing- Packaging together two or more identical products and selling them at a single price * Especially for frequently purchased products, this strategy can increase sales by encouraging consumers to purchase multiple units when they might otherwise have only purchased one at a time. * makeup wipes *Discount stores and especially warehouse clubs, such as Sam's Club and Costco, are major users of multiple-unit pricing. Everyday low pricing (EDLP) *Pricing products low on a consistent basis *Everyday low pricing, though not deeply discounted, is set low enough to make customers feel confident they are receiving a good deal. * EDLP is employed by retailers such as Walmart and by manufacturers such as Procter & Gamble. *A major issue with this approach is that customers can have mixed responses. In some instances, customers believe that everyday low pricing is a marketing gimmick and not truly the good deal that they proclaim. *doesn't always work: 20 percent off markdown and use coupons because it helps to reinforce the feeling that they are getting a good deal. Odd-even pricing- Ending the price with certain numbers to influence buyers' perceptions of the price or product *It aligns with the belief among many retailers that consumers respond more positively to odd-number prices, such as $4.99, than to whole-dollar prices, such as $5 *Odd 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. * consumers register the dollar amount, not the cents *Even prices, on the other hand, are often used to give a product an exclusive or upscale image Customary pricing- Pricing on the basis of tradition *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. Prestige pricing- Setting prices at an artificially high level to convey prestige or a quality image * Typical product categories that are subject to prestige pricing include perfumes, liquor, jewelry, cars, and some food items.

Return on Investment

Pricing to attain a specified rate of return on the company's investment is a profit-related pricing objective. A return on investment (ROI) pricing objective generally requires some trial and error, as it is unusual for all data and inputs required to determine the necessary ROI to be available when first setting prices. Many pharmaceutical companies use ROI pricing objectives because of the high level of investment in research and development required.

Should potentially harmful products be promoted?

Primary targets are products associated with violence and other possibly unhealthy activities, such as handguns, alcohol, and tobacco. Defenders argue that, as long as it is legal to sell a product, promoting it should also be allowed

Procurement

Processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information (supply management) synonymous with "buying" or "purchasing," but this is only a small part of what goes into the procurement activities within a supply chain. It is important to note that supply management doesn't just happen at the beginning—these are activities which can be found at all levels of the supply chain.

Price Discounting

Producers commonly provide intermediaries with discounts, or reductions, from list prices. Although many types of discounts exist, they usually fall into one of five categories: trade, quantity, cash, seasonal, and allowance. Trade-To attract and keep effective resellers by compensating them for performing certain functions, such as transportation, warehousing, selling, and providing credit *A reduction off the list price a producer gives to an intermediary for performing certain functions *A college bookstore pays about (functional) one-third less for a new textbook than the retail price a student pays. Quantity-To encourage customers to buy large quantities when making purchases and, in the case of cumulative discounts, to encourage customer loyalty *Deductions from the list price for purchasing in large quantities *Large department store chains purchase some women's apparel at lower prices than do individually owned specialty stores. *Cumulative disocunts-Quantity discounts aggregated over a stated time period *non cumulative discounts- One-time price reductions based on the number of units purchased, the dollar value of the order, or the product mix purchased Cash-To reduce expenses associated with accounts receivable and collection by encouraging prompt payment of accounts *A price reduction given to buyers for prompt payment or cash payment *Numerous companies serving business markets allow a 2 percent discount if an account is paid within 10 days. Seasonal-To allow a marketer to use resources more efficiently by stimulating sales during off-peak periods *A price reduction given to buyers for purchasing goods or services out of season *Florida hotels provide companies holding national and regional sales meetings with deeply discounted accommodations during the summer months. Allowance-In the case of a trade-in allowance, to assist the buyer in making the purchase and potentially earning a profit on the resale of used equipment; in the case of a promotional allowance, to ensure that dealers participate in advertising and sales support programs *A concession in price to achieve a desired goal *A farm equipment dealer takes a farmer's used tractor as a trade-in on a new one. Nabisco pays a promotional allowance to a supermarket for setting up and maintaining a large, end-of-aisle display for a 2-week period.

cents-off offers

Promotions that allow buyers to pay less than the regular price to encourage purchase Cents-off offers can stimulate product sales or multiple purchases, yield short-lived sales increases, and promote products during off-seasons. Cents-off offers are easy to control and are often used for specific purposes. If used on an ongoing basis, however, they reduce the price for customers who would buy at the regular price and may also cheapen a product's image.

geographic pricing

Reductions for transportation and other costs related to the physical distance between the buyer and the seller FOB factory- The price of merchandise at the factory before shipment, before it is loaded onto the carrier, and thus excludes transportation costs. The buyer must pay for shipping. *Prices may be quoted as F.O.B. (free-on-board) factory or destination. FOB destination- price means the producer absorbs the costs of shipping the merchandise to the customer. This policy may be used to attract distant customers. Although F.O.B. pricing is an easy way to price products, it is sometimes difficult to administer, especially when a firm has a wide product mix or when customers are widely dispersed. Uniform geographic distribution- Charging all customers the same price, regardless of geographic location *postage-stamp pricing *Paper products and office equipment are often priced on a uniform basis. Zone pricing- Pricing based on transportation costs within major geographic zones *a Florida manufacturer's prices may be higher for buyers on the Pacific coast and in Canada than for buyers in Georgia. Base-point pricing- Geographic pricing that combines factory price and freight charges from the base point nearest the buyer *This approach to pricing has virtually been abandoned because of its questionable legal status. *The policy resulted in all buyers paying freight charges from one location, such as Detroit or Pittsburgh, regardless of where the product was manufactured. Freight absorption pricing- Absorption of all or part of actual freight costs by the seller *The seller might choose this method because it wishes to do business with a particular customer or to get more business; more business will cause the average cost to fall and counterbalance the extra freight cost. *This strategy is used to improve market penetration and retain a hold in an increasingly competitive market.

Online retailing

Retailing that makes products available to buyers through computer connections Worldwide, online retailing has been growing at an average annual rate of 20 percent, and online sales are projected to grow from $2.3 trillion to $4.5 trillion by 2022. Online retailing satisfies an increasing expectation among consumers to have multiple channels available to obtain the goods and services they desire at their convenience. Consider that online grocery shopping is the fastest growing form of retail, especially among millennials. Some firms that were primarily catalog retailers are now primarily online retailers

Sales Promotion

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 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. Generally, when companies employ advertising or personal selling, they depend on these activities continuously or cyclically. However, a marketer's use of sales promotion tends to be less consistent. Many products are seasonal. Marketers frequently rely on sales promotion to improve the effectiveness of other promotion mix elements, especially advertising and personal selling.

Consumer Contests

Sales promotion methods in which 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. Oreo is well known for its contests such as the Oreo Dunk Challenge, where consumers submitted photos or videos dunking Oreos in milk on social media in the hopes of meeting Christina Aguilera, Shaquille O'Neal, or Neymar da Silva Santos Júnior and winning $2,000

Consumer games

Sales promotion methods in which 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. Although games may stimulate sales temporarily, there is no evidence to suggest that they affect a company's long-term sales. Marketers considering games should exercise care. Problems or errors may anger customers and could result in a lawsuit. McDonald's wildly popular Monopoly game promotion, in which customers collect Monopoly real estate pieces on drink and french fry packages, has been tarnished by past fraud after a crime ring, including employees of the promotional firm running the game, was convicted of stealing millions of dollars in winning game pieces.

Rebates

Sales promotion techniques in which a consumer receives 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. On larger items, such as cars, rebates are often given at the point of sale. Most rebates, however, especially on smaller items, are given after the sale, usually through a mail-in process. Researchers find that these mail-in rebates are most effective in situations where consumers require a reason to purchase an item. On the other hand, rebates for products that provide instant gratification are more effective if provided at the point of purchase. One problem with money refunds and rebates is that many people perceive the redemption process as being too complicated. *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. They may believe the products are untested or have not sold well.

consumer sales promotion methods

Sales promotion techniques that encourage consumers to patronize specific stores or try particular products Consumer sales promotion methods initiated by retailers often aim to attract customers to specific locations, whereas those used by manufacturers generally introduce new products or promote established brands. coupons, cents-off offers, money refunds and rebates, frequent-user incentives, point-of-purchase displays, demonstrations, free samples, premiums, consumer contests and games, and consumer sweepstakes.

Money refunds

Sales promotion techniques that offer consumers a specified amount of money when they mail in a proof of purchase, usually for multiple product purchases Money refunds, used primarily to promote trial use of a product, are relatively low in cost. However, they sometimes generate a low response rate and, thus, have limited impact on sales.

Free samples

Samples of a product given out to encourage trial and purchase 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. In one survey, 92 percent of respondents said they would purchase a product if they liked it after getting a free sample. Many consumers prefer to get their samples by mail.

Characteristics of the product

Seasonality, Product Price, Stage of life-cycle, Intensity of market coverage, and products use promotion mixes for business products concentrate on personal selling, whereas advertising plays a major role in promoting consumer goods. Personal selling is used extensively for consumer durables, such as home appliances, automobiles, and houses, whereas consumer convenience items are promoted mainly through advertising and sales promotion. Public relations appears in promotion mixes for both business and consumer products. Marketers of highly seasonal products often emphasize advertising—and sometimes sales promotion as well—because off-season sales generally will not support an extensive year-round sales force. A product's price also influences the composition of the promotion mix. High-priced products call for personal selling, because consumers associate greater risk with the purchase of such products and usually want specific and comparative information from a salesperson. For low-priced convenience items, such as paper towels and deli meats, marketers use advertising rather than personal selling. Another consideration in creating an effective promotion mix is the stage of the product's life cycle. During the introduction stage, advertising is used to create awareness for both business and consumer products. In the growth and maturity stages, consumer products require heavy emphasis on advertising, whereas business products often call for a concentration of personal selling and some sales promotion. In the decline stage, marketers usually decrease all promotional activities, especially advertising. Intensity of market coverage is still another factor affecting the composition of the promotion mix. When products are marketed through intensive distribution, firms depend strongly on advertising and sales promotion. Many convenience products like lotions, cereals, and coffee are promoted through samples, coupons, and refunds. When marketers choose selective distribution, promotion mixes vary considerably. A product's use also affects the combination of promotional methods. Manufacturers of highly personal products, such as laxatives, nonprescription contraceptives, and feminine hygiene products, depend on advertising because many customers do not want to talk with salespeople about these products. Service businesses often use tangible products to promote their intangible services.

Characteristics of Target market

Size, geographic distribution, and sociocultural and demographic characteristics of an organization's target market help dictate the methods to include in a product's promotion mix. To some degree, market size and diversity determine composition of the mix. If the size is limited, the promotion mix will probably use a more targeted form of marketing such as personal selling, which can be very effective for reaching small numbers of people With the low cost of social media, it is increasingly effective for small, niche markets. Organizations selling to industrial markets and firms marketing products through only a few wholesalers frequently make personal selling the major component of their promotion mixes. When a product's market consists of millions of customers, organizations rely on mass marketing through advertising and sales promotion, because these methods reach large groups of people at a low cost per person Geographic distribution of a firm's customers also affects the choice of promotional methods. Personal selling is more feasible if a company's customers are concentrated in a small area than if they are dispersed across a vast region. When the company's customers are numerous and dispersed, regional or national advertising may be more practical.

Cash Flow

Some companies set prices so they can recover cash as quickly as possible. Financial managers understandably want to recover quickly the 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. Although it may be acceptable in some situations, the use of cash flow and recovery as an objective oversimplifies the contribution of price to profits. If this pricing objective results in high prices, competitors with lower prices may gain a large share of the market.

Manufacturers' Sales Branches and Offices

Sometimes called manufacturers' wholesalers, manufacturers' sales branches and offices resemble merchant wholesalers' operations. Sales branches- Manufacturer-owned intermediaries that sell products and provide support services to the manufacturers' sales forces *Situated away from the manufacturing plant, they are usually located where large customers are concentrated and demand is high. They offer credit, deliver goods, give promotional assistance, and furnish other services. Sales offices- Manufacturer-owned operations that provide services normally associated with agents *Like sales branches, they are located away from manufacturing plants, but unlike sales branches, they carry no inventory. A manufacturer's sales office (or branch) may sell products that enhance the manufacturer's own product line. A manufacturer also might set up such a facility when specialized wholesaling services are not available through existing intermediaries. Performing wholesaling and physical distribution activities through a manufacturer's sales branch or office can strengthen supply chain efficiency.

Free Merchandise and Gifts

Sometimes offered as an incentive for purchasing a stated quantity of products Free merch- A manufacturer's reward given to resellers that purchase a stated quantity of products *Occasionally, free merchandise is used as payment for allowances provided through other sales promotion methods. (reduced invoice) Dealer loader- A gift, often part of a display, given to a retailer that purchases a specified quantity of merchandise *Marketers use dealer loaders to obtain new distributors and push larger quantities of goods.

Source and receiver

Source- is a person, group, or organization with a meaning it attempts to share with an audience. Receiver- is the individual, group, or organization that decodes a coded message, and an audience is two or more receivers.

Modes of Entry into International Markets

Stage 1: No regular export activities Stage 2: Export via independent representatives (agents) Stage 3: Establishment of one or more sales subsidiaries internationally Stage 4: Establishment of international production/manufacturing facilities companies' international involvement today covers a wide spectrum, from purely domestic marketing to global marketing. Many firms with an international presence start out as small companies serving local and regional domestic markets and expand to national markets before considering opportunities in foreign markets (the born global firm, described earlier, is one exception to this internationalization process). Limited exporting may occur even if a firm makes little or no effort to obtain foreign sales. Foreign buyers may seek out the company and/or its products, or a distributor may discover the firm's products and export them.

Facilitate Reseller Support

Strong relationships with resellers are important to an organization's ability to maintain a sustainable competitive advantage Reseller support is a two-way street: producers generally want to provide support to resellers to assist in selling their products, and in turn they expect resellers to support their products. In some instances, a producer agrees to pay a certain proportion of retailers' advertising expenses for promoting its products. To encourage wholesalers and retailers to increase their inventories of its products, a manufacturer may provide them with special offers and buying allowances.

survival

Survival is one of the most fundamental pricing objectives. Achieving this objective generally involves temporarily setting prices low, at times below costs, in order to attract more sales. Because price is a flexible ingredient in the marketing mix, survival strategy 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.

Determining the Advertising Appropriation

The advertising budget for a specific time period 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 L'Oréal, generally have large advertising expenditures relative to sales. Objectivists-and-task appropriation- Budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them * Most logical *This approach has one main problem: Marketers sometimes have trouble accurately estimating the level of effort needed to attain certain objectives. Percent-Of-Sales budgeting- Budgeting for an advertising campaign by multiplying the firm's past and expected sales by a standard percentage * more widely used * easy to implement *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. Competition Matching Approach- Determining an advertising budget by trying to match competitors' advertising outlays * this technique should not be used alone because the firm's competitors probably have different advertising objectives and different resources available for advertising. * Usually happens on a quarterly basis *Competitive tracking of this nature occurs at both the national and regional levels. Arbitrary Approach- Budgeting for an advertising campaign as specified by a high-level executive in the firm * The arbitrary approach often leads to underspending or overspending.

Supply Chain Management (SCM)

The coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer It integrates the functions of operations management, logistics management, procurement, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times. It includes activities such as manufacturing, research, sales, advertising, and shipping. SCM involves all entities that facilitate product distribution and benefit from cooperative efforts, including suppliers of raw materials and other components to make goods and services, logistics and transportation firms, communication firms, and other firms that indirectly take part in marketing exchanges.

intellectual property E-marketing

The internet has also created issues associated with intellectual property, the copyrighted or trademarked ideas and creative materials developed to solve problems, carry out applications, and educate and entertain others. Each year, intellectual property losses in the United States total billions of dollars stemming from the illegal copying of computer programs, movies, compact discs, and books. The software industry is particularly hard-hit when it comes to the pirating of materials and illegal file sharing.The Business Software Alliance estimates that the global computer software industry loses more than $400 billion a year to illegal theft. Consumers rationalize pirating software, video games, and music for a number of reasons. First, many consumers feel they just do not have the money to pay for what they want. Second, because their friends engage in piracy and swap digital content, they feel influenced to engage in this activity. Third, for some, the attraction is the thrill of getting away with it and the slim risk of consequences. Fourth, to some extent, there are people who think they are smarter than others; engaging in piracy allows them to show how technology-savvy they are.

Monitoring digital media behaviors of consumers

The internet is sometimes referred to as a pull medium because users determine which websites they are going to view; the marketer has only limited ability to control the content to which users are exposed, and in what sequence. While negative ratings and reviews are damaging to a company, positive customer feedback is free publicity that often helps the company more than corporate messages do.

Channel capacity

The limit on the volume of information a communication channel can handle effectively 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 much an individual receiver can take in through listening. To be effective, a 30-second advertising message should not exceed 75 words because most announcers cannot articulate words into understandable messages at a rate beyond 150 words per minute.

Communications channel

The medium of transmission that carries the coded message from the source to the receiver Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication (social media platforms such as Facebook and YouTube).

breakeven analysis

The point at which the costs of producing a product equal the revenue made from selling the product Breakeven point= (fixed cost)/(price-VC) Price-VC= contribution to FC per unit To use breakeven analysis effectively, a marketer should determine the breakeven point for each of several alternative prices. This determination allows the marketer to compare the effects on total revenue, total costs, and the breakeven point for each price under consideration. Although this comparative analysis may not tell the marketer exactly what price to charge, it will identify highly undesirable price alternatives that should definitely be avoided. Breakeven analysis is simple and straightforward. It does assume, however, that the quantity demanded is basically fixed (inelastic) and that the major task in setting prices is to recover costs.

Contract Maufacturing

The practice of hiring a foreign firm to produce a designated volume of the domestic firm's product, or a component of it, to specification; the final product carries the domestic firm's name *The Gap, for example, relies on contract manufacturing for some of its apparel; Nike uses contract manufacturers in Vietnam to produce many of its athletic shoes. *Three specific forms of contract manufacturing have become popular in the last decade: outsourcing, offshoring, and offshore outsourcing. Outsourcing- The practice of contracting noncore operations with an organization that specializes in that operation *outsourcing certain elements of a firm's operations to China and Mexico has become popular Offshoring- The practice of moving a business process that was done domestically at the local factory to a foreign country, regardless of whether the production accomplished in the foreign country is performed by the local company (e.g., in a wholly owned subsidiary) or a third party (e.g., subcontractor) *Typically, the production is moved to reap the advantages of lower cost of operations in the foreign location. Offshore outsourcing- The practice of contracting with an organization to perform some or all business functions in a country other than the country in which the product will be sold

Sourcing

The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity Are the materials safe? How are we gathering them, and what effect are we having on the environment? Should the materials be sourced locally or abroad? These questions are about more than price—in reality, they are largely concerned with marketing integrity, which leads to performance and profits.

feedback

The receiver's response to a decoded message 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, This is why face-to-face communication is the most adaptive and flexible, especially compared to digital, web-based, or other non-personal communications. When mass communication like advertising is used, feedback is often slow and difficult to recognize. Also, it may be several months or even years before the effects of this promotion will be known.

Distribution considerations with E-marketing

The role of distribution is to make products available at the right time, at the right place, and in the right quantities. Digital marketing can be viewed as a new distribution channel that helps businesses increase efficiency. Shipping times and costs have become an important consideration in attracting consumers, prompting many companies to offer consumers low shipping costs or next-day delivery. Omnichannel-Various marketing channels, including mobile, desktop, or traditional retail spaces, providing seamless customer experiences

Making the Presentation

The salesperson must attract and hold the prospect's attention, stimulate interest in and spark a desire for the product Salespeople should match their influencing tactics—such as information exchange, recommendations, deadlines, promises, ingratiation, and inspirational appeals—to their prospects. During the presentation, the salesperson must not only talk, but also listen. Listening is half of the communication process and is often the most important part for a salesperson. Nonverbal modes of communication are especially beneficial in building trust during the presentation. Research findings show that complimenting the buyer on his or her questions adds to incremental sales.

Promotional Resources, Objectives, and Policies

The size of an organization's promotional budget affects the number and intensity of promotional methods used If a company's promotional budget is extremely limited, the firm is likely to rely on personal selling because it is easier to measure a salesperson's contribution to sales than to measure the sales effectiveness of advertising. Businesses must have significant promotional budgets to use regional or national advertising. An organization's promotional objectives and policies also influence the types of promotion selected. If a company's objective is to create mass awareness of a new convenience good, such as a breakfast cereal, its promotion mix probably leans heavily toward advertising, sales promotion, and possibly public relations. If a company hopes to educate consumers about the features of a durable good, such as a home appliance, its promotion mix may combine a moderate amount of advertising, possibly some sales promotion designed to attract customers to retail stores, and a great deal of personal selling, because this method is an efficient way to inform customers about such products. If a firm's objective is to produce immediate sales of nondurable services, the promotion mix will probably stress advertising and sales promotion. For instance, dry cleaners and carpet-cleaning firms are more likely to use advertising with a coupon or discount rather than personal selling.

Product Placement as promotion

The strategic location of products or product promotions within entertainment media content to reach the product's target market Apple is considered to be an expert at product placement, and its products are often seen in popular television shows and movies. --> more important now because commercials are becoming less apparent w Netflix, Hulu, etc Global spending for product placements is now more than $10.5 billion and growing. Product placement is not limited to U.S. movies and television shows. The European Parliament approved limited use of product placement, albeit only during certain types of programs and only if consumers were informed at the beginning of the segment that companies had paid to have their products displayed.

Online monitoring and analytics

The strength of measurement relates to the ability to have online analytics and metrics. Social media monitoring involves activities to track, measure, and evaluate a firm's digital marketing initiatives. establishing an expected level of performance creates a benchmark against which performance can be compared. click-through rate (CTR) determines the percentage of consumers who clicked on a link on a site as a quantitative measure. In addition, a qualitative metric could relate how consumers feel about a product. Key Performance Indicators (KPIs) should be embedded at the onset of a social media strategy that can allow almost real-time measurement and evaluation. For example, PBS uses Google Analytics to monitor the web performance for multiple properties and track key events such as user registrations and video views.

Selection of a Basis for Pricing

The three major dimensions on which prices can be based are: Cost Demand Competition The fourth step in establishing prices involves selecting a basis for pricing: cost, demand, and/or competition. Marketers determine the appropriate pricing basis by analyzing the type of product, the market structure of the industry, the brand's market share position relative to competing brands, and customer characteristics. Although we discuss each basis separately in this section, an organization generally considers at least two, or perhaps all three, dimensions. Thus, if a company uses cost as a primary basis for setting prices, its marketers are still aware of, and concerned about, competitors' prices. If a company uses demand as a basis for pricing, marketers still must consider costs and competitors' prices. Indeed, cost is a factor in every pricing decision because it establishes a price minimum below which the firm will not be able to recoup its production and other costs. Demand, likewise, sets an effective price maximum above which customers are unlikely to buy the product.

Promotional Pricing

The two variables are sometimes so interrelated that the pricing policy is promotion-oriented. Examples of promotional pricing include price leaders, special-event pricing, and comparison discounting. Price Leaders- Products priced near or even below cost * This type of pricing is used most often in supermarkets and restaurants to attract customers by offering them especially low prices on a few items, with the expectation that they will purchase other items as well. Special event pricing- Advertised sales or price cutting linked to a holiday, a season, or an event * If the pricing objective is survival, then special sales events may be designed to generate the necessary operating capital. * Special-event pricing entails coordination of production, scheduling, storage, and physical distribution. * Can combat lags Comparison Discounting- Setting a price at a specific level and comparing 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 comparative discounting informative, and it can have a significant impact on their purchases. *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, the seller must have made the previous price available to customers for a reasonable time period.

multichannel distribution

The use of a variety of marketing channels to ensure maximum distribution consumers can purchase a Dell computer directly from the company by calling a toll-free number or going through its website as well as indirectly through select retailers such as Best Buy. The primary reason for using a multichannel strategy is to reach target customers wherever and whenever they may choose to interact with a company or its products. Some consumers may prefer to shop in a brick-and-mortar store where they can personally compare and sample products, while others prefer the instant gratification of shopping for an item on their smartphone as soon as they recognize a need for the product.

Privacy with E-marketing

The use of consumer data associated with marketing analytics sets the stage for hackers to steal or demand ransom for files. Determining what data is needed and how to protect it is the first step for protecting consumers. In our current environment, data breaches and piracy will continue to occur. All organizations need a contingency or crisis management plan to respond if a data breach occurs. One of the most significant privacy issues involves the use of personal information companies collect from website visitors in their efforts to foster long-term customer relationships. Some people fear that the collection of personal information from website users violates users' privacy, especially when it is done without their knowledge. Due to consumer concerns over privacy, the FTC is considering developing regulations that would protect consumer privacy by limiting the amount of consumer information that businesses can gather online. Marketers are also seeing opportunities to capitalize on users' discontent with having their data collected. Social networking site Ello markets the fact that they do not collect customer data. While consumers may welcome such added protections, web advertisers, who use consumer information to target advertisements to online consumers, see it as a threat. In response to impending legislation, many web advertisers are attempting self-regulation in order to stay ahead of the game.

Vending

The use of machines to dispense products It is one of the most impersonal forms of retailing, and it accounts for a very small minority of all retail sales. Small, standardized, routinely purchased products (e.g., snacks and drinks) are best suited for sale in vending machines because consumers buy them out of convenience. Because vending machines need only a small amount of space and no sales personnel, this retailing method has some advantages over stores. The advantages are partly offset, however, by the high costs of equipment and frequent servicing and repairs.

Direct Marketing

The use of the telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet Direct marketing is one type of nonstore retailing. Direct marketing can occur through online retailing, catalog marketing, direct-response marketing, telemarketing, and television home shopping. Catalog marketing- A type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet *The advantages of catalog retailing include efficiency and convenience for customers because they do not have to visit a store. The retailer benefits by being able to locate in remote, low-cost areas, save on expensive store fixtures, and reduce both personal selling and store operating expenses. *On the other hand, catalog retailing is inflexible, provides limited service, and is most effective for a select set of products. Direct response marketing- A type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders *Generally, customers use a credit card, but other forms of payment may be permitted. Examples of direct-response marketing include a television commercial offering exercise machines, cosmetics, or household cleaning products available through a toll-free numbe Telemarketing- The performance of marketing-related activities by telephone *Telemarketing can help to generate sales leads, improve customer service, speed up payments on past-due accounts, raise funds for nonprofit organizations, and gather marketing data. *However, increasingly restrictive telemarketing laws have made it a less appealing and less popular marketing method. In 2003, the U.S. Congress implemented a national do-not-callregistry, which has more than 229 million numbers on it Television home shopping- A form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card *The most popular products sold through television home shopping are jewelry, clothing, housewares, and electronics. *Products can be demonstrated easily, and an adequate amount of time can be spent showing the product so viewers are well-informed. The length of time a product is shown depends not only on the time required for performing demonstrations but also on whether the product is selling *This method is particularly popular among older consumers, who tend to be less comfortable with online shopping and are less mobile to physically go to a store.

copy

The verbal portion of advertisements *may include headlines, subheadlines, body copy, and a signature. Not all advertising contains all of these copy elements. *The headline is critical because often it is the only part of the copy that people read. Body Copy *identify a specific desire or problem, *recommend the product as the best way to satisfy that desire or solve that problem, *state product benefits and indicate why the product is best for the buyer's particular situation, *substantiate advertising claims, and *ask the buyer to take action. When substantiating claims, it is important to present the substantiation in a credible manner. A shortcut explanation of what much advertising is designed to accomplish is the AIDA model. Advertising should create awareness, produce interest, create desire, and ultimately result in a purchase (action). The signature identifies the advertisement's sponsor. It may contain several elements, including the firm's trademark, logo, name, and address. In television copy, the audio material must not overpower the visual material, and vice versa. However, a television message should make optimal use of its visual portion, which can be very effective for product use, applications, and demonstrations. Story Board-A blueprint that combines copy and visual material to show the sequence of major scenes in a commercial

Regional trade alliances

These include the North American Free Trade Agreement (NAFTA), European Union (EU), Southern Common Market (MERCOSUR), Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN), and World Trade Organization (WTO).

Global Organizational Structure

Three basic structures of international organizations exist: export departments, international divisions, and internationally integrated structures (e.g., product division structures, geographic area structures, and matrix structures).

Legal and regulatory issues

To curb inflation, the federal government can invoke price controls, freeze prices at certain levels, or determine the rates at which firms may increase prices. In some states and many other countries, regulatory agencies set prices on such products as insurance, dairy products, and liquor. Price fixing- An agreement among competing firms to raise, lower, or maintain prices for mutual benefit * illegal under the The Sherman Antitrust Act *To avoid the appearance of price fixing, marketers must develop independent pricing policies and set prices in ways that do not even hint at collusion. Deceptive pricing-Deceptive pricing is the use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is. * Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit deceptive pricing. *TJX Companies agreed to pay $8.5 million to settle a class-action lawsuit that claimed that its Marshalls, T.J. Maxx, and HomeGoods stores used misleading price tags to deceive shoppers into believing they were getting a better bargain. Price discrimination- Employing price differentials that injure competition by giving one or more buyers a competitive advantage *Robinson-Patman Act prevents this *A marketer may use price differentials if they result from differences in the costs of selling or transportation to various customers, arise because the firm has had to cut its price to a particular buyer to meet competitors' prices, or do not hinder competition. *Airlines, for example, may charge different customers different prices for the same flights based on the availability of seats at the time of purchase. Predatory pricing- Also called undercutting, involves the intent to set a product's price so low that rival firms cannot compete and, therefore, withdraw from the marketplace * illegal *Determining whether predatory pricing is occurring can be difficult in actual practice and thus actionable charges have been rare. * It is not unusual for a company to set a price that is below cost temporarily in order to sell off unsalable products or excess capacity; without the intent to drive out competitors, there is no predatory pricing. A global problem affecting business pricing strategies is the growing market for counterfeit goods *Such low prices should signal that the products are fake and of lower quality, but some bargain shoppers actually seek them out.

Restricted trade territories

To tighten control over product distribution, a manufacturer may try to prohibit intermediaries from selling outside of designated sales territories. Intermediaries themselves often favor this practice, because it provides them with exclusive territories where they can minimize competition.

Coding process

To transmit meaning, a source must convert the meaning into a series of signs or symbols representing ideas or concepts. When coding meaning into a message, the source must consider certain characteristics of the receiver or audience. This is especially true for advertising. It is important to encode messages to prevent consumers from avoiding a conscious reception. Costs to the consumer in attention, time, and emotional response can diminish the impact of the message. With the growth of the Hispanic market, marketers are increasingly using Spanish language media in their advertisements and messaging. Marketers try to avoid signs or symbols that may have several meanings for an audience. For instance, soda as a general term for soft drinks may not work well in national advertisements.

Training Sales Personnel

Training can be formal or informal and on-the-job Can concentrate on: -The company -Its products -Its selling methods Training can be: -Aimed at salespeople at all seniority and experience levels -Conducted in-house or by outside specialists A sales training program can concentrate on the company, its products, or its selling methods -coaching to foster trust and motivation has proven highly effective in training new hires -Training for experienced company salespeople usually emphasizes product information or the use of new technology, new selling techniques and changes in company plans, policies, and procedures For many companies, online training saves time and money and helps salespeople learn about new products quickly.

Wholesaling

Transactions in which products are bought for resale, for making other products, or for general business operations Wholesaler- An individual or an organization that sells products that are bought for resale, for making other products, or for general business operations In other words, wholesalers buy products and resell them to resellers, government, and institutional users. There are 413,437 wholesaling establishments in the United States, and more than half of all products sold in this country pass through these firms. Many wholesalers use information technology and the internet to share information among intermediaries, employees, customers, and suppliers and facilitating agencies, such as trucking companies and warehouse firms.

Who Develops the Advertising Campaign?

Varies between firms and depends on size. Smaller firms: one or two internal employees Larger Firms: may have an advertising department, which could consist of a couple generalists or many specialists; may use an advertising agency with skilled specialists; can be affordable Many firms employ an advertising agency to develop advertising campaigns. When an organization uses an advertising agency, the firm and the agency usually develop the advertising campaign jointly. Ordinarily, a firm relies on the agency for copywriting, artwork, technical production, and formulation of the media plan. An agency, especially a large one, can supply the services of highly skilled specialists—not only copywriters, artists, and production coordinators, but also media experts, researchers, and legal advisers. Agency personnel often have broad advertising experience and are usually more objective than a firm's employees about the organization's products. Because an agency traditionally receives most of its compensation from a 15 percent commission paid by the media from which it makes purchases, firms can obtain some agency services at low or moderate costs.

media sharing sites

Web sites that allow users to upload and distribute multimedia content like videos and photos Media-sharing sites allow marketers to share photos, videos, and podcasts but are more limited in scope in how companies interact with consumers. They tend to be more promotional-oriented. This means that while firms can promote their products through videos or photos, they usually do not interact with consumers through personal messages or responses. Photo-sharing sites allow users to upload and share their photos with the world. Well-known photo-sharing sites include Flickr, Shutterfly, Snapfish, and Instagram. Other sites are emerging that take photo sharing to a new level. Pinterest is a photo-sharing bulletin board that combines photo sharing with elements of bookmarking and social networking. A new trend in video marketing is the use of amateur filmmakers. Entrepreneurs have begun to realize that they can use consumer-generated content to their advantage. Video-sharing websites give businesses the chance to capitalize on consumer-generated content

Stimulate Demand

When an organization is the first to introduce an innovative product, it tries to stimulate primary demand--> Demand for a product category rather than for a specific brand through new introductory promotion--> New introductory promotion 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. To build 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.

Encourage Product trial

When attempting to move customers through the product adoption cycle, a marketer may successfully create awareness and interest, but customers may stall during the evaluation stage. In this case, certain types of promotion—such as free samples, coupons, test drives, or limited free-use offers, contests, and games—are employed to encourage product trial.

Location of Retail Stores

When choosing a location, a retailer evaluates the relative ease of movement to and from the site, including factors such as pedestrian and vehicular traffic, parking, and transportation. Retailers also evaluate the characteristics of the site itself. They research the types of stores in the area and size, shape, and visibility of the lot or building under consideration. Retailers consider various factors when evaluating potential locations, including position of the firm's target market within the trading area, kinds of products being sold, availability of public transportation, customer characteristics, and placement of competitors' stores. Neighborhood shopping centers- A type of shopping center usually consisting of several small convenience and specialty stores *strip malls *These retailers consider their target markets to be consumers who live within two to three miles of their stores, or 10 minutes' driving time. *Because most purchases are based on convenience or personal contact, stores within a neighborhood shopping center generally do not coordinate selling efforts. * Generally, product mixes consist of essential products, and depth of the product lines is limited. Community shopping centers-A type of shopping center with one or two department stores, some specialty stores, and convenience stores *Because these offer a wider variety of stores, they serve larger geographic areas and consumers are willing to drive longer distances to community shopping centers to shop. Regional shopping centers-A type of shopping center with the largest department stores, widest product mixes, and deepest product lines *Many shopping malls are regional shopping centers, although some are community shopping centers. *With 150,000 or more consumers in their target market, regional shopping centers must have well-coordinated management and marketing activities. *tenants are likely to be national chains. Superregional shopping centers-A type of shopping center with the widest and deepest product mixes that attracts customers from many miles away and often has special attractions (skating rinks, amusement centers, or upscale restaurants.) *Mall of America Lifestyle shopping center- A type of shopping center that is typically open air and features upscale specialty stores, dining, and entertainment *located near affluent neighborhoods and may have fountains, benches, and other amenities that encourage "casual browsing." *Some lifestyle shopping centers, like the Domain in Austin, Texas, include residences above the stores. Power shopping center- A type of shopping center that combines off-price stores with category killers *These centers may be anchored by popular stores, such as the Gap, T.J. Maxx, PetSmart, and Home Depot.

Customer's Interpretation and Response

When making pricing decisions, marketers should address a vital question: How will our customers interpret our prices and respond to them? Interpretation in this context refers to what the price means or what it communicates to customers. Does the price signal "high quality" or "low quality;" or "great deal," "fair price," or "rip-off"? Customer response refers to whether the price will move customers closer to purchase of the product and the degree to which the price enhances their satisfaction with the purchase experience and with the product after purchase. Internal reference price- A price developed in the buyer's mind through experience with the product *It reflects a belief that a product should cost approximately a certain amount. To arrive at an internal reference price, consumers may consider one or more values, including what they think the product "ought" to cost, the price usually charged for it, the last price they paid, the highest and lowest amounts they would be willing to pay, the price of the brand they usually buy, the average price of similar products, the expected future price, and the typical discounted price. less-confident consumers tend to have higher internal reference prices than consumers with greater confidence, and frequent buyers—perhaps because of their experience and confidence—are more likely to judge high prices unfairly. External price reference- A comparison price provided by others, such as retailers or manufacturers. This provides a reference point for consumers unfamiliar with the product category. Customers' perceptions of prices are also influenced by their expectations about future price increases, what they paid for the product recently, and what they would like to pay for the product. Buyers' perceptions of a product relative to competing products may allow the firm to set a price that differs significantly from rivals' prices. If the product is deemed superior to most of the competition, a premium price may be feasible. *However, even products with superior quality can be overpriced. Strong brand loyalty sometimes provides the opportunity to charge a premium price. Value conscious- Concerned about price and quality of a product *consumers may perceive value as quality per unit of price or as not only economic savings but also the additional gains expected from one product over a competitor's brand. *The first view is appropriate for commodities like bottled water, bananas, and gasoline. If a value-conscious consumer perceives the quality of gasoline to be the same for Exxon and Shell, he or she will go to the station with the lower price. *For consumers looking not just for economic value but additional gains they expect from one brand over another, a product differentiation value could be associated with benefits and features that are believed to be unique. Price conscious- Striving to pay low prices *They want the lowest prices, even if the products are not of the highest quality. Amazon.com has long been known for a willingness to sacrifice profit margins in favor of offering the lowest prices. *Price-conscious consumers might also shop at extreme-value stores such as Dollar General and 99 Cents Only Stores Prestige conscious- Drawn to products that signify prominence and status *The higher prices of prestige products convey a sense of exclusivity, creating demand among consumers who value the status associated with the product. Some consumers vary in their degree of value, price, and prestige consciousness. In some market segments, consumers "trade up" to higher-status products in categories such as automobiles, home appliances, restaurants, and even pet food, yet remain price conscious regarding cleaning and grocery products. This trend has benefited marketers like Starbucks, BMW, Whole Foods, and PETCO, which can charge premium prices for high-quality, prestige products.

Coupons

Written price reductions used to encourage consumers to buy a specific product increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. Savings are deducted from the purchase price. Coupons are the most widely used consumer sales promotion technique. It is estimated that more than 90 percent of coupons come from free-standing inserts in booklets. For best results, coupons should be easily recognized and state the offer clearly. The nature of the product (seasonal demand for it, life-cycle stage, and frequency of purchase) is the prime consideration in setting up a coupon promotion. 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.

Store image

a functional and psychological picture in the consumer's mind—that appeals to its target market. Store environment, merchandise quality, and service quality are key determinants of store image. Atmospherics-The physical elements in a store's design that appeal to consumers' emotions and encourage buying *music, color, and complexity of layout and merchandise presentation—to influence customer attention, mood, and shopping behavior. Exterior atmospheric elements include the appearance of the storefront, display windows, store entrances, and degree of traffic congestion. Exterior atmospherics are particularly important to new customers, who tend to base their judgment of an unfamiliar store on its outside appearance Interior atmospheric elements include aesthetic considerations, such as lighting, wall and floor coverings, dressing facilities, and store fixtures. Interior sensory elements contribute significantly to atmosphere. Color can attract shoppers to a retail display. Many fast-food restaurants use bright colors because these have been shown to make customers feel hungrier and eat faster, which increases turnover. Sound is another important sensory component of atmosphere. A low-end, family dining restaurant might play fast pop music to encourage customers to eat quickly and leave, increasing turnover and sales Online retailers are not exempt from concern over atmospherics. Studies have demonstrated that such elements as the layout of a site and the content of digital ads that appear on that site can affect consumer mood and shopping behavior

Personal Selling

a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. Personal selling is 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. Compare to advertising * 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. The predominant communication form is language, both spoken and written. Kinesic Communication- Communicating through the movement of head, eyes, arms, hands, legs, or torso. A good salesperson can often evaluate a prospect's interest in a product or presentation by noting eye contact and head nodding Proxemic communication- Communicating by varying the physical distance in face-to-face interactions. When a customer backs away from a salesperson, for example, he or she may be displaying a lack of interest Tactile communication- Communicating through touching. less popular in the United States than in many other countries.

direct ownership

a situation in which a company owns subsidiaries or other facilities overseas Most foreign investment covers only manufacturing equipment or personnel because the expenses of developing a separate foreign distribution system can be tremendous. Multinational enterprise- sometimes called multinational corporation (MNC), refers to a firm that has operations or subsidiaries in many countries. Often, the parent company is based in one country and carries on production, management, and marketing activities in other countries. One of the greatest advantages of a multinational enterprise is the ability to adopt a cross-cultural approach. A subsidiary usually operates under foreign management so it can develop a local identity. Whereas the most well-known multinational corporations come from developed countries, the world is seeing a rise in MNCs from emerging economies as well.

International divisions

centralizes all of the responsibility and communications related to international operations The typical international division concentrates human resources (with international expertise) into one unit and serves as the central point for all information flow related to international operations, such as international market opportunities or international research and development. At the same time, firms with an international division structure take advantage of economies of scale by keeping manufacturing and related functions within the domestic divisions. Firms may develop international divisions at any stage of their international development. However, an increasing number of firms are recognizing the importance of going global early on. As such, these firms use exporting, licensing and franchising, trading companies, contract manufacturing, and joint ventures as possible modes of international market entry. Some argue that to offset the natural "isolation" that may result between domestic and international operations in this structure, the international division structure should be used only when a company: 1. intends to market only a small assortment of goods or services internationally and 2. when foreign sales account for only a small portion of total sales.

Dealing with unfavorable public relations

companies may have to deal with unexpected and unfavorable publicity resulting from an unsafe product, an accident resulting from product use, controversial actions of employees, or some other negative event or situation. Product recalls or products that could harm consumers can create a crisis and damage a brand. Negative events that generate public relations can wipe out a company's favorable image and destroy positive customer attitudes established through years of expensive advertising campaigns and other promotional efforts. Reputation is often considered a valuable company asset. First and foremost, the organization should try to prevent negative incidents and events through safety programs, inspections, training, and effective quality control procedures. Firms need to establish policies and procedures for reducing the adverse impact of news coverage of a crisis or controversy.

Compensating Salespeople

compensation should be flexible, equitable and easy to administer The plan should give sales management the desired level of control and provide sales personnel with acceptable levels of income, freedom, and incentive. Straight Salary compensation- Paying salespeople a specific amount per time period, regardless of selling effort Straight commission compensation- Paying salespeople according to the amount of their sales in a given time period *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. Combination-Paying salespeople a fixed salary plus a commission based on sales volume *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.

Combat Competitive Promotional Efforts

counter competitors' offerings This reactive approach is to prevent a sales or market share loss. A combative promotional objective is used most often by firms in extremely competitive consumer markets, such as the fast-food, convenience store, and cable/internet/cell phone markets.

Possible objectives of promotion

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

Intensity of Market Coverage

intensive, selective, exclusive Intensive *Convenience products, like Coca Cola *available in many retailers *require almost no service, and are often bought based on price cues. *For these products, consumers want speed in obtaining Selective *Shopping products, such as TVs, iPhones, etc * Available in some retailers *Dealers can offer higher-quality customer service when products are distributed selectively. *desirable when a special effort, such as customer service from a channel member, is important to customers Exclusive *Specialty products such as haute couture, BMW, Montblac pens, and fend handbags * available in few retailers *uses only one outlet in a relatively large geographic area *expensive, high-quality products with high profit margins *when only a limited market is available for products.

competitor based pricing

involves setting prices based on competitors' strategies, prices, costs, and market offerings 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 set their prices below competitors' or at the same level.

order processing

is the series of steps from receipt of a sales order to the successful delivery of the product or service. the series of activities that occurs between the time an order comes into the organization and the time a product goes out the door Computerized order processing provides a platform for information management, allowing all supply chain members to increase their productivity Order processing entails three main tasks: order entry, order handling, and order delivery. Order entry begins when customers or salespeople place purchase orders via a customer-service counter, telephone, regular mail, email, or website. Order handling involves several tasks. Once an order is entered, it is transmitted to a warehouse to verify product availability and, if necessary, to the credit department to set terms and prices and to check the customer's credit rating. If the credit department approves the purchase, warehouse personnel assemble the order. When the order has been assembled and packed for shipment, the warehouse schedules delivery with an appropriate carrier. If the customer pays for rush service, overnight delivery by an overnight carrier is used. The customer is sent an invoice, inventory records are adjusted, and the order is delivered. Electronic data interchange- A computerized means of integrating order processing with production, inventory, accounting, and transportation

Types of consumer-generated marketing and digital media

it is essential to recognize that social media are more consumer-driven than traditional media. Consumer-generated material is having a profound effect on marketing. As the internet becomes more accessible worldwide, consumers are creating and reading consumer-generated content like never before. 2 Major trends 1. The increased tendency of consumers to publish their own thoughts, opinions, reviews, and product discussions through blogs or digital media. 2. Consumers' tendencies to trust other consumers over corporations. Consumers often rely on the recommendations of friends, family, and fellow consumers when making purchasing decisions.

mobile marketing

marketing messages, promotions, and other content delivered to on-the-go consumers through mobile phones, smartphones, tablets, and other mobile devices SMS messages: SMS messages are single text messages of 160 characters or less. SMS messages can be used to send coupons to prospective customers. Multimedia messages: Multimedia messaging (MMS) takes SMS messaging a step further by allowing companies to send video, audio, photos, and other types of media over mobile devices. The MMS market is estimated to be a $20 billion market. Approximately 98 percent of all U.S. cell phones can receive MMS. Mobile advertisements: Mobile advertisements are visual advertisements that appear on mobile devices. Companies might choose to advertise through search engines, websites, or games accessed on mobile devices. Mobile accounts for over half of digital advertising spending. Mobile websites: Mobile websites are websites designed for mobile devices. Over 50 percent of e-commerce website traffic now comes through mobile devices. Location-based networks: Location-based networks are built for mobile devices. One of the most popular location-based networks is Foursquare, which lets users check in and share their location with others. It introduced a new advertising network called Pinpoint specifically for marketers. Samsung Galaxy, Olive Garden, and Jaguar Land Rover are examples of companies that have used its new service. Mobile applications: Mobile applications, or "apps," are software programs that run on mobile devices and let users communicate, work, play games, or carry out tasks. Businesses release apps to help consumers access more information about their company or to provide incentives. These are discussed in further detail in the next section.

Public Relation Tools

new-product publicity, product placement, consumer education, sponsorship, experiential marketing, company websites Publicity- A news-story type of communication about an organization and/or its products transmitted through a mass medium at no charge * most common publicity tool is a news release- A short piece of copy publicizing an event or a product. which is usually a single page of type-written 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. Feature article- A manuscript of up to 3,000 words prepared for a specific publication Captioned photograph- A photograph with a brief description of its contents Press conference- A meeting used to announce major news events Publicity-based public relations tools offer several advantages, including credibility, news value, significant word-of-mouth communications, and a perception of media endorsement. Limitations *Media personnel must judge company messages to be newsworthy if the messages are to be published or broadcast at all. Consequently, 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. * Although public relations personnel usually encourage the media to air publicity releases at certain times, they control neither the content nor the timing of the communication. Media personnel alter length and content of publicity releases to fit publishers' or broadcasters' requirements and may even delete the parts of messages that company personnel view as most important. * Furthermore, media personnel use publicity releases in time slots or positions most convenient for them. Other outside public relations messages can be picked up during slow news times. Thus, messages sometimes appear in locations or at times that may not reach the firm's target audiences. Although these limitations can be frustrating, properly managed publicity-based public relations tools offer an organization substantial benefits.

closing the sale

obtaining a commitment from the customer to make a purchase 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. (financial terms, desired colors or sizes, or delivery arrangements) One questioning approach uses broad questions (what, how, why) to probe or gather information and focused questions (who, when, where) to clarify and close the sale. A salesperson should try to close at several points during the presentation because the prospect may be ready to buy. An attempt to close the sale may result in objections. Thus, closing can uncover hidden objections, which the salesperson can then address.

New Product Pricing

setting the price for new products is one of the most fundamental decisions in the marketing mix The base price can be set high to recover development costs quickly or provide a reference point for developing discount prices for different market segments. Research into the pricing of new digital cameras hints that marketers use a skimming strategy about 20 percent of the time, a penetration strategy about 20 percent of the time, and a straightforward competition- or market-based strategy most of the time, especially for later entrants to the market. Price Skimming- Charging the highest possible price that buyers who most desire the product will pay *Some consumers are willing to pay a high price for an innovative product, either because of its novelty or because of the prestige or status that ownership confers. *"skims the cream" off the market, which helps a firm to recover the high costs of R&D more quickly. *This approach provides the most flexible introductory base price. Demand tends to be inelastic in the introductory stage of the product life cycle. *A skimming policy can generate much-needed initial cash flows to help offset development costs. Price skimming protects the marketer from problems that arise when the price is set too low to cover costs. When a firm introduces a product, its production capacity may be limited. *price skimming strategies can be dangerous because they 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 higher price. Penetration pricing- Setting prices below those of competing brands to penetrate a market and gain a significant market share quickly * The main purpose of setting a low price is to build market share quickly to encourage product trial by the target market and discourage competitors from entering the market *This approach is less flexible for a marketer than price skimming, because it is more difficult to raise the price of a product from a penetration price than to lower or discount a skimming price *Penetration pricing can be especially beneficial when a marketer suspects that competitors could enter the market easily. *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. If penetration pricing allows the marketer to gain a large market share quickly, competitors may be discouraged from entering the market. *because the lower per-unit penetration price results in lower per-unit profit, the market may not appear to be especially lucrative to potential new entrants. *A disadvantage of penetration pricing is that it places a firm in a less-flexible pricing position. Again, it is more difficult to raise prices significantly than it is to lower them.

Ethical and Social Responsibility Forces

situational ethics, corruption, bribes, market entry Differences in national standards are illustrated by what the Mexicans call la mordida: "the bite." the Foreign Corrupt Practices Act (FCPA) of 1977, it is illegal for U.S. firms to attempt to make large payments or bribes to influence policy decisions of foreign governments. Differences in ethical standards can also affect marketing efforts. In China and Vietnam, for example, standards regarding intellectual property differ dramatically from those in the United States, creating potential conflicts for marketers of computer software, music, and books. In business, the idea that "we" differ from "them" is called the self-reference criterion (SRC). The SRC is the unconscious reference to one's own cultural values, experiences, and knowledge. When confronted with a situation, we react on the basis of knowledge we have accumulated over a lifetime, which is usually grounded in our culture of origin. Cultural relativism- The concept that morality varies from one culture to another and that business practices are, therefore, differentially defined as right or wrong by particular cultures These companies support a globally based resource system called Business for Social Responsibility (BSR). BSR tracks emerging issues and trends, provides information on corporate leadership and best practices, conducts educational workshops and training, and assists organizations in developing practical business ethics tools.

Public Relations

suppliers, employees, stockholders, the media, educators, potential investors, government officials, and society in general—are important to an organization as well. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. Public relations uses a variety of tools, including annual reports, brochures, event sponsorships, and sponsorship of socially responsible programs aimed at protecting the environment or helping disadvantaged individuals. The goal of public relations is to create and enhance a positive image of the organization. Publicity is nonpersonal communication in news story form about an organization or its products, or both, transmitted through a mass medium at no charge. A few examples of publicity-based public relations tools are news releases, press conferences, feature articles, and social media sites such as YouTube and Twitter. To generate publicity, companies sometimes give away products to celebrities in the hope that the celebrities will be seen and photographed with the product, and those photos will stimulate awareness and product trial among their fans. Unpleasant situations and negative events, such as product tampering or an environmental disaster, may generate unfavorable public relations for an organization. Public relations should not be viewed as a set of tools to be used only during crises. To get the most from public relations, an organization should have someone responsible for public relations either internally or externally and should have an ongoing public relations program.

Warehousing

the design and operation of facilities for storing and moving goods, is another important logistics function Warehousing provides time utility by enabling firms to compensate for dissimilar production and consumption rates. When mass production creates a greater stock of goods than can be sold immediately, companies warehouse the surplus until customers are ready to buy it. Warehousing also helps to stabilize prices and to facilitate the availability of seasonal items. Private Warehousing- Company-operated facilities for storing and shipping their own products *Private warehouses are also appropriate for firms that require special handling and storage and that want control of warehouse design and operation. *When sales volumes are fairly stable, ownership and control of a private warehouse may be most convenient and offer cost benefits. * Private warehouses, however, face fixed costs, such as insurance, taxes, maintenance, and debt expense Public Warehouses- Storage space and related logistics facilities that can be leased by companies *They sometimes provide distribution services, such as receiving, unloading, inspecting, filling orders, financing, displaying products, and coordinating shipments. *useful to firms that have seasonal production or demand, low-volume storage needs, and inventories that must be maintained in many locations. * They are also useful for firms that are testing or entering new markets or require additional storage space. Distribution centers-Large, centralized warehouses that focus on moving rather than storing goods They are specially designed for rapid flow of products and are usually one-story buildings with access to transportation networks, such as major highways and/or railway lines. Many distribution centers are automated, with computer-directed robots, forklifts, and hoists that collect and move products to loading docks.

approach

the sales step in which a salesperson meets the customer for the first time In more than 80 percent of initial sales calls, the purpose is to gather information about the buyer's needs and objectives. 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.

Prospecting

the sales step in which a salesperson or company identifies qualified potential customers 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, telephone directories, trade association directories, and many other sources. Most salespeople prefer to use referrals—recommendations from current customers—to find prospects. Obtaining referrals requires that the salesperson have a good relationship with the current customer and, therefore, must have performed well before asking the customer for help. Research findings show that one referral is as valuable as 12 cold calls.Also, 80 percent of clients are willing to give referrals, but only 20 percent are ever asked.

The Impact of Word-of-Mouth Communications on Promotion

word-of-mouth communication: Personal, informal exchanges of communication that customers share with one another about products, brands, and companies * A lot of rating/review websites-->credibility has been identified as the most important attribute of a ratings website Hundreds of blogs and online news sites (such as BuzzFeed, TMZ, TechCrunch, Perez Hilton, and Engadget) play an essential role in propagating electronic word-of-mouth communications about everything from gossip to politics to consumer goods. Effective marketers who understand the importance of word-of-mouth communication attempt to identify opinion leaders and encourage them to try their products in the hope that they will spread favorable publicity about them. The impact of consumer-generated communication—communication not made by companies—is powerful and is very effective compared to commercial messages. Interestingly, women—unlike men—are more likely to share negative word of mouth with those they have strong social ties with rather than those with which they have weak social ties. In general, consumers are much more likely to complain of a bad experience versus sharing praise for a good experience. Buzz marketing-->An attempt to incite publicity and public excitement surrounding a product through a creative event Buzz marketing works best as a part of an integrated marketing communication program that also uses advertising, personal selling, sales promotion, and publicity. However, marketers should also take care that buzz campaigns do not violate any laws or have the potential to be misconstrued and cause undue alarm. Viral marketing-->A strategy to get consumers to share a marketer's message, often through email or online videos, in a way that spreads dramatically and quickly Humor and the unexpected are key contributors to viral marketing success. Interestingly, viral marketing appears to be more effective for products that are less utilitarian (practical and functional) in nature. Promoting utilitarian products through social sharing mechanisms such as Facebook may actually be disadvantageous for practical no-frills products. Word of mouth, no matter how it is transmitted, is not effective in all product categories. It seems to be most effective for new-to-market and more expensive products.

E-Marketing Strategy

• Basic Internet literacy is rising all over the world, making it a good way to reach global consumers. Most businesses now find it necessary to use digital marketing to grab and maintain market share More than one-fourth of the world's population uses the internet Most businesses are finding it necessary to use digital marketing to gain or maintain market share. When Amazon.com first became popular as an online bookstore in the 1990s, the brick-and-mortar bookseller chain Barnes & Noble quickly made online shopping possible through its website, but did not abandon its physical stores. This "brick-and-clicks" model is now standard for businesses from neighborhood family-owned restaurants to national chain retailers.

Environmental forces in global markets

1. Sociocultural 2. Economic 3. Political, Legal, and Regulatory 4. Ethical and Social Responsibility 5. Competitive 6. Technological

steps in pricing process

1. developing pricing objectives 2. Assessment of the target markets evaluation of price 3. Evaluation competitors pricing 4. selecting a basis for pricing 5. Selection of pricing strategy

Channels for Consumer Products

1. direct channel (a haircut received at a barber shop) 2. retailer channel (Target/Walmart) 3. wholesaler channel (It is a practical option for producers that sell to hundreds of thousands of customers through thousands of retailers. KitchenAid) 4. agent/broker channel (frequently for products intended for mass distribution, such as processed foods.)

Reduce Sales Fluctuations

A business cannot operate at peak efficiency when sales fluctuate widely; holidays and seasonal products Promotional activities are often designed to stimulate sales during slumps Changes in sales volume translate into changes in production, inventory levels, personnel needs, and financial resources.

The nature and types of advertising

Advertising- Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media Can be institutional or product advertising

Association of Southeast Asian Nations (ASEAN)

An alliance that promotes trade and economic integration among member nations in Southeast Asia The trade pact includes Malaysia, the Philippines, Indonesia, Singapore, Thailand, Brunei Darussalam, Vietnam, Laos, Myanmar, and Cambodia. With its motto "One Vision, One Identity, One Community," member nations have expressed the goal of encouraging free trade, peace, and collaboration between member countries.ASEAN's three pillars are political-security, economic, and sociocultural. The ASEAN Economic Community (AEC) attempts to unite the regional economy. ASEAN faces many obstacles in becoming a unified trade bloc. There have been conflicts among members themselves and concerns over issues such as human rights and disputed territories. Therefore, there are great opportunities but also substantial risk. Although members hope to increase economic integration, they expressed that there will be no common currency or fully free labor flows between members.

Differential pricing

An important issue in pricing decisions is whether to use a single price or different prices for the same product. Using a single price has several benefits. A primary advantage is simplicity. A single price is easily understood by both employees and customers. Because many salespeople and customers dislike negotiating prices, having a single price reduces the risk of a marketer developing an adversarial relationship with customers. The use of a single price does create some challenges, however. If the single price is too high, some potential customers may be unable to afford the product. If it is too low, the organization loses revenue from those customers who would have paid more had the price been higher. Differential pricing-Charging different prices to different buyers for the same quality and quantity of product *For example, many movie 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 to obtain other perks. *Differential pricing can occur in several ways, including negotiated pricing, secondary-market pricing, periodic discounting, and random discounting. Negotiated pricing- Establishing a final price through bargaining between the seller and the customer *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. Consumers commonly negotiate prices for houses, cars, and used equipment. Secondary Market pricing- 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. *Examples of secondary markets include a geographically isolated domestic market, a market in a foreign country, and a segment willing to purchase a product during off-peak times (such as "early-bird" diners at restaurants and off-season vacation rentals). Periodic discounting- Temporary reduction of prices on a patterned or systematic basis *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 customers can predict when the reductions will occur and may delay their purchases until they can take advantage of the lower prices. Random discounting- Temporary reduction of prices on an unsystematic basis *To alleviate the problem of customers knowing when discounting will occur *When price reductions of a product 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. Random discounting can also be useful to draw attention to a relatively new product. Whether they use periodic discounting or random discounting, retailers often employ tensile pricing when putting products on sale. Tensile pricing involves making a broad statement about price reductions, as opposed to detailing specific price discounts. Examples of tensile pricing would be statements like "20 to 50 percent off," "up to 75 percent off," and "save 10 percent or more." Generally, the tensile price that mentions only the maximum reduction (such as "up to 50 percent off") generates the highest customer response.

Creating the Advertising Message

Basic content and form of advertising messages are a function of several factors product's features, uses and benefits, target audience characteristics, campaign objectives and advertising platform, and choice of media The intensity of the advertising can also have an impact. *push advertising on digital devices refers to advertising that is not requested by the user. Although push advertising might alienate some consumers, younger consumers are more accepting of push advertising if the source is trusted, permission has been given, and the messages are relevant or entertaining.However, research has shown that advertising that pushes too hard to the point that consumers feel uncomfortable may cause consumers to consider the product negatively. Additionally, characteristics of the people in the target audience—gender, age, education, race, income, occupation, lifestyle, life stage, and other attributes—influence both content and form. * For instance, gender affects how people respond to advertising claims that use hedging words like may and probably and pledging words, such as definitely and absolutely. *Researchers have found that women respond negatively to both types of claims, but pledging claims have little effect on men. Regional Issues-Versions of a magazine that differ across geographic regions

Creating the Advertising Platform

Basic issues or selling points to be included in advertising campaign -serves as base to build advertising message -based on research or opinion -select product issues that are important to customers An advertising platform should consist of issues important to customers. One of the best ways to determine those issues is to survey customers about what they consider most important in the selection and use of the product involved. Because the advertising platform is a base on which to build the advertising message, marketers should analyze this stage carefully. It has been found that, if the message is viewed as useful, it will create greater brand trust.

Sociocultural

Because marketing activities are primarily social in purpose, they are influenced by beliefs and values regarding family, religion, education, health, and recreation. Local preferences, tastes, and idioms can prove complicated for international marketers. For example, although football is a popular sport in the United States and a major opportunity for many television advertisers, soccer is the most popular televised sport in Europe and Latin America. It can be difficult to transfer marketing symbols, trademarks, logos, and even products to international markets, especially if these are associated with objects that have profound religious or cultural significance in a particular culture. Cultural differences may also affect marketing negotiations and decision-making behavior. Differences in the emphasis placed on personal relationships, status, and decision-making styles have been known to complicate dealings between Americans and businesspeople from other countries. In many parts of Asia, a gift may be considered a necessary introduction before negotiation, whereas in the United States or Canada, a gift may be misconstrued as an illegal bribe. Consumers who have a global orientation tend to have a positive attitude toward purchasing global brands. On the other hand, when consumers think local and are ethnocentric, they are more negative toward global brands. When products are introduced from one nation into another, acceptance is far more likely if similarities exist between the two cultures.

Recruiting and Selecting Salespeople

Careful selection and training increases sales performance. Poor selection increases recruiting and training costs, leads to lost sales, and disrupts customer relationships. recruiting-Developing a list of qualified applicants for sales positions To ensure that the recruiting process results in a pool of qualified applicants, a sales manager establishes a set of qualifications before beginning to recruit. Experts agree that good salespeople exhibit optimism, flexibility, self-motivation, good time management skills, empathy, and the ability to network and maintain long-term customer relationships. Two activities help establish this set of required attributes. First, the sales manager should prepare a job description listing specific tasks salespeople are to perform. Second, the manager should analyze characteristics of the firm's successful salespeople, as well as those of ineffective sales personnel. A sales manager generally recruits applicants from several sources: departments within the firm, other firms, employment agencies, educational institutions, respondents to advertisements, websites (like Monster.com), and individuals recommended by current employees. Recruitment should not be sporadic; it should be a continuous activity aimed at reaching the best applicants.

Demand Fluctuations

Changes in buyers' needs, variations in the effectiveness of other marketing-mix variables, the presence of substitutes, and dynamic environmental factors can influence demand. Restaurants and utility companies experience large fluctuations in demand daily. Toy manufacturers, fireworks suppliers, and air-conditioning and heating contractors also face demand fluctuations because of the seasonal nature of their products. In some cases, demand fluctuations are predictable. Not always though

Recycling

Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products

Cooperative advertising and Dealer listings

Cooperative advertising- 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 *retailer must show proof *Some retailers exploit cooperative-advertising agreements by crowding too many products into one advertisement. *large portion in newspaper ads Dealer listings *Advertisements that promote a product and identify the names of 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.

Integrated Marketing Communications

Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers requires a marketer to employ a broad perspective. major goal of integrated marketing communications is to send a consistent message to customers. also enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets.

Digital distribution

Delivering content through the internet to a computer or other device For example, when you watch a TV show on Netflix or Hulu or listen to music on Pandora or Spotify, those networks stream the content to your device so that you can consume them at the same time that they are streamed. In today's high-tech world, it is also possible to rent digital content, such as a textbook, or subscribe to software, such as Office 365,

Digital Marketing

Digital Media- Electronic media that function using digital codes—media available via computers, cellular phones, smartphones, and other digital devices that have been released in recent years Digital Marketing- The use of all digital media, including the internet and mobile and interactive channels, to develop communication and exchanges with customers Electronic Marketing/ e-Marketing- The strategic process of distributing, promoting, and pricing products, and discovering the desires of customers using digital media and digital marketing Although there are differences between the terms, many people use digital marketing and electronic marketing interchangeably.

Economic forces

Economic differences among nations—differences in standards of living, credit, buying power, income distribution, national resources, exchange rates, and the like—dictate many of the adjustments firms must make in marketing internationally. Country-specific factors such as economic wealth and national culture have a direct influence on the success of a new product in specific countries. An important economic factor in the global business environment is currency valuation. The value of the dollar, euro, and yen has a major impact on the prices of products in many countries. Many countries have a floating exchange rate, which means the currencies of those countries fluctuate, or float, according to the foreign exchange market. China has been criticized for devaluing its currency, or setting its currency's value below market value. This gives it an advantage in selling exports, as the Chinese yuan has a lower value than other nations' currencies. It also decreases demand for manufacturers and exporters from other countries. Devaluing currency worries investors because it suggests that China's economy is slowing down. GDP-The market value of a nation's total output of goods and services for a given period; an overall measure of economic standing

Overcoming Objections

Effective salespeople anticipate and counter objections before the prospect raises them However, this approach can be risky, because the salesperson may mention objections that the prospect would not have raised.

professional pricing

Fees set by people with great skill or experience in a particular field Although costs are considered when setting prices, professionals often believe their fees should not relate directly to the time and/or effort spent in specific cases. Rather, professionals may charge a standard fee regardless of the problems involved in performing the job. Some doctors' and lawyers' fees are prime examples, such as $75 for an office visit, $2,000 for an appendectomy, and $995 for a divorce. Other professionals set prices using different methods. Like other marketers, professionals have costs associated with facilities, labor, insurance, equipment, and supplies. Professionals have an ethical responsibility not to overcharge customers.

Marketing channels facilitate exchange efficiencies

Even if producers and buyers are located in the same city, there are costs associated with exchanges. Marketing intermediaries can reduce the costs of exchanges by performing certain services or functions efficiently. Buyer web photo

Promotion Mix Elements

advertising, sales promotion, personal selling, public relations For some products, firms use all four elements; for others, they use only two or three.

Internationally integrated structures

Firms with internationally integrated structures are most likely to engage in direct ownership internationally The product division structure, the geographic area structure, and the global matrix structure are three means of doing so. Firms with these varied structures have multiple choices for international market entry similar to international divisions (e.g., exporting, licensing and franchising, trading companies, contract manufacturing, and joint ventures). However, they are the most likely to engage in direct ownership activities internationally.

Retail positioning

Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment For instance, Japan-based Uniqlo is positioned as a retailer of stylish, well-designed, and technologically innovative clothing that is made for all people. This is in contrast to a number of discount and specialty store chains that have positioned themselves to appeal to time- and cash-strapped consumers with convenient locations and layouts as well as low prices.

Importing and exporting

Importing is the purchase of products from a foreign source. Exporting, the sale of products to foreign markets, enables firms of all sizes to participate in global business A firm may also find an exporting intermediary to take over most marketing functions associated with marketing to other countries. This approach entails minimal effort and cost. Export agents bring together buyers and sellers from different countries and collect a commission for arranging sales. Export houses and export merchants purchase products from different companies and then sell them abroad. Using exporting intermediaries involves limited risk because no foreign direct investment is required. Buyers from foreign companies and governments provide a direct method of exporting and eliminate the need for an intermediary. These buyers encourage international exchange by contacting overseas firms about their needs and the opportunities available in exporting to them.

Controlling and Evaluating Sales Force Performance

Information for managers - call reports - customer feedback - invoices Set sales objectives/performance indicators - calls per day and cost per call - average sales per customer and gross profit per customer - actual sales vs. sales potential - number of new customer orders

Sales structure

Inside salespeople support personnel or take orders, follow up on deliveries, and provide technical information. An outside sales force is also important. Usually sales calls outside the firm are more consultative and are built on developing long-term relationships. Using both inside and outside salespersons to manage accounts is very typical. This task is sometimes called creative selling. Current-customer sales-Sales personnel who concentrate on current customers call on people and organizations that have purchased products from the firm before. New business sales-Business organizations depend to some degree on sales to new customers. New-business sales personnel locate prospects and convert them into buyers. Salespeople help generate new business in many organizations, but even more so in organizations that sell real estate, insurance, appliances, automobiles, and business-to-business supplies and services.

Premiums

Items offered free or at a minimal cost as a bonus for purchasing a product Premiums are used to attract competitors' customers, introduce different sizes of established products, add variety to other promotional efforts, and stimulate consumer loyalty. Consumers appear to prefer premiums to discounts on products due to the perception that they are receiving something "free." reativity is essential when using premiums; to stand out and achieve a significant number of redemptions, the premium must match both the target audience and the brand's image. onsumers are more favorable toward a premium when the brand has high equity and there is a good fit between the product and the premium.

logistics and supply chain management

Logistics, involving physical distribution, relates to planning, implementing, and controlling the efficient flow and storage of products. Third-party logistics (3PL) firms- Firms that have special expertise in core logistics activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently When making distribution decisions, firms keep in mind that speed of delivery, flexibility, and quality of service are often as important to customers as price. Although logistics managers try to minimize the costs associated with order processing, inventory management, materials handling, warehousing, and transportation, decreasing the costs in one area often raises them in another Logistics managers must, therefore, be sensitive to the issue of cost trade-offs. Trade-offs cycle time-The time needed to complete a process

Ethical and legal issues in E-marketing

The U.S. Supreme Court ruled that a person could not be convicted based on threats unless there is evidence that a reasonable person would regard the communications as a threat, but protected speech is evaluated on a case-by-case basis. The Federal Trade Commission (FTC) regulates and makes rules for privacy, fraud, and misappropriation of copyrighted intellectual property, as well as other illicit internet activities. The FTC's rules for online marketing are the same as for any other form of communication or advertising. Some of the areas include testimonials and endorsements, warranties and guarantees, free products, and mail and telephone orders. Due to concerns about dishonest advertising, the FTC requires influencers to clearly disclose any connection they have with brands they promote. Neglecting to make a disclosure is viewed as deceptive advertising.

Purchasing

The act of negotiating and executing transactions to buy and sell goods, materials, and services

Relationship selling

The building of 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 differs from traditional personal selling due to its adoption of a long-term perspective. Instead of simply focusing on short-term repeat sales, relationship selling involves forming long-term connections that will result in sales throughout the relationship. Relationship selling has significant implications for the seller. Studies show that firms spend six times longer on finding new customers than in keeping current customers.

Choosing an inappropriate communication channel

The coded message may reach some receivers, but possibly the wrong receivers. Decoding and noise

Transportation

The movement of products from where they are made to intermediaries and end users most expensive logistics function. Transportation modes--> trucks, railway, waterway, pipes, planes Railroads such as Union Pacific and Canadian National carry heavy, bulky freight that must be shipped long distances over land. Railroads commonly haul minerals, sand, lumber, chemicals, and farm products, as well as automobiles and low-value manufactured goods. Railroads are especially efficient for transporting full carloads, which can be shipped at lower rates than smaller quantities, Trucks provide the most flexible schedules and routes of all major transportation modes in the United States, because they can go almost anywhere. Because trucks do not have to conform to a set schedule and can move goods from factory or warehouse to customer, wherever there are roads, they are often used in conjunction with other forms of transport that cannot provide door-to-door deliveries, such as waterways and railroads. Trucks are more expensive and somewhat more vulnerable to bad weather than trains. Waterways are the cheapest method of shipping heavy, low-value, nonperishable goods. Water carriers offer considerable capacity. Powered by tugboats and towboats, barges that travel along intra-coastal canals, inland rivers, and navigation systems can haul at least 10 times the weight of one rail car, and oceangoing vessels can haul thousands of containers. The vast majority of international cargo is transported by water at least part of the way. However, many markets are inaccessible by water transportation, and shipping must be supplemented by rail or truck.droughts, floods Air transportation is the fastest but most expensive form of shipping. It is used most often for perishable goods, for high-value and/or low-bulk items, and for products that require quick delivery over long distances. Some air carriers transport combinations of passengers, freight, and mail. Despite its expense, air transit can reduce warehousing and packaging costs and losses from theft and damage, thus helping the aggregate cost of the mode. Pipelines, the most automated transportation mode, usually belong to the shipper and carry the shipper's products. Most pipelines carry petroleum products or chemicals. Slurry pipelines carry pulverized coal, grain, or wood chips suspended in water. Pipelines move products slowly but continuously and at relatively low cost. They are dependable and minimize the problems of product damage and theft. However, contents are subject to as much as 1 percent shrinkage, usually from evaporation—which can result in profit losses. Pipelines also have been a concern to environmentalists, who fear that pipelines disrupt animals' migratory routes and that leaks can harm plants and animals and threaten water quality. intermodal transportation-Two or more transportation modes used in combination Containerization facilitates intermodal transportation by consolidating shipments into sealed containers for transport by piggyback (using truck trailers and railway flatcars), fishyback (using water carriers), and birdyback (using air carriers). freight forwarders-Organizations that consolidate shipments from several firms into efficient lot sizes Small loads (less than 500 pounds) are much more expensive to ship than full carloads or truckloads and may make shipping cost-prohibitive for smaller firms. Freight forwarders help such firms by consolidating small loads from various organizations to allow them to qualify collectively for lower rates. megacarriers-Freight transportation firms that provide several modes of shipment

Team selling

The use of a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal selling process 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. B2B

Criticisms and defense of promotion

There are two main reasons for such criticism: Promotion does have flaws, and it is a highly visible business activity that pervades our daily lives.

Multiple marketing channel

To reach diverse target markets, manufacturers may use more than one marketing channel simultaneously, with each channel involving a different group of intermediaries. A manufacturer often uses multiple channels when the same product is directed to both consumers and business customers. (Heinz)

Applications and Widgets

To remain competitive, companies are beginning to use mobile marketing to offer additional incentives to consumers. Starbucks allows its app users to skip the lines by ordering ahead. Widgets-Small bits of software on a website, desktop, or mobile device that perform a simple task, such as providing stock quotes or blog updates

Political, legal, and regulatory forces

Typically, legislation is enacted, legal decisions are interpreted, and regulatory agencies are operated by elected or appointed officials. A country's legal and regulatory infrastructure is a direct reflection of its political climate. State-backed companies do not have as many competitors because the government is supporting them. Unless state-owned firms work hard to remain competitive, costs for these companies will most likely increase. On the other hand, some countries have political climates that make it easier for international entrepreneurs to start their own businesses. Table 9.3 lists some of the best countries in which to start a business, according to Forbes. The United States is not in the top 10, possibly due to regulations, taxes, and fewer incentives. A nation's political system, laws, regulatory bodies, special-interest groups, and courts all have a great impact on international marketing. Laws regarding competition may serve as trade barriers. For example, the European Union has stronger antitrust laws than does the United States. Import tarrif- A duty levied by a nation on goods bought outside its borders and brought into the country Embargo- A government's suspension of trade in a particular product or with a given country *Embargoes are generally directed at specific goods or countries and are established for political, health, or religious reasons. An embargo may be used to suspend the purchase of a commodity like oil from a country that is involved in questionable conduct, such as human rights violations or terrorism. Quota- A limit on the amount of goods an importing country will accept for certain product categories in a specific period of time Exchange controls- Government restrictions on the amount of a particular currency that can be bought or sold *They can force businesspeople to buy and sell foreign products through a central agency, such as a central bank. Developing economies use exchange control to limit speculation against their currencies and to limit foreign investment. *On the other hand, to promote international trade, some countries have joined to form free trade zones, multinational economic communities that eliminate tariffs and other trade barriers. Balance of trade- The difference in value between a nation's exports and its imports *When a nation exports more products than it imports, a favorable balance of trade exists because money is flowing into the country. *The United States has a negative balance of trade for goods and services of more than $502 billion. A negative balance of trade is considered harmful because it means U.S. dollars are supporting foreign economies at the expense of U.S. companies and workers. Many nontariff barriers, such as quotas, minimum price levels set on imports, port-of-entry taxes, and stringent health and safety requirements, still make it difficult for U.S. companies to export their products

institutional advertising

a form of advertising designed to enhance a company's image rather than promote a particular product Advertising that promotes organizational images, ideas, and political issues Institutional advertisements may deal with broad image issues, such as organizational strengths or the friendliness of employees. Marketers may also aim to create a more favorable view of the organization in the eyes of noncustomer groups, such as shareholders, consumer advocacy groups, potential shareholders, or the general public. 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. Advocacy advertising-Advertising that promotes a company's position on a public issue i.e. tax increases, sustainability, etc.

premium money (push money)

additional compensation offered by the manufacturer to salespeople as an incentive to push a line of goods Extra compensation to salespeople for pushing 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. can be very expensive. must be in compliance with retailers' policies as well as state and local laws.

channel conflict

arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals The internet has increased the potential for conflict and resentment between manufacturers and intermediaries. When a manufacturer such as Apple or Dell makes its products available through the internet, it is employing a direct channel that competes with the retailers that also sell its products. Channel conflicts also arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries. If self-interest creates misunderstanding about role expectations, the end result is frustration and conflict for the whole channel. For individual organizations to function together, each channel member must clearly communicate and understand role expectations. Although there is no single method for resolving conflict, partnerships can be reestablished if two conditions are met. First, the role of each channel member must be clearly defined and followed. Channel members must have a clear understanding of goals and expectations as well as the metrics that different members will use to measure progress and determine incentive rates. To minimize misunderstanding, all members must be able to expect unambiguous performance levels from one another. Second, members of channel partnerships must agree on means of coordinating channels, which requires strong, but not polarizing, leadership. To prevent channel conflict, producers or other channel members may provide competing resellers with different brands, allocate markets among resellers, define policies for direct sales to avoid potential conflict over large accounts, negotiate territorial issues among regional distributors, and provide recognition to certain resellers for their importance in distributing to others.

Retain Loyal Customers

cheaper than acquiring new ones frequent-user programs Promotional efforts directed at customer retention can help an organization control its costs, because the costs of retaining customers are usually considerably lower than those of acquiring new ones. Frequent-user programs, such as those sponsored by airlines, car rental agencies, and hotels, aim to reward loyal customers and encourage them to remain loyal. also use reinforcement advertising, which assures current users that they have made the right brand choice and tells them how to get the most satisfaction from the product.

Decoding and noise

decoding- 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. 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. Noise also occurs when a source uses signs or symbols that are unfamiliar to the receiver or have a meaning different from the one intended. Noise may also originate in the receiver; a receiver may be unaware of a coded message when perceptual processes block it out through a lack of understanding.

sales force management

establishing sales force objectives, determining sales force size, recruiting and selecting salespeople, training sales personnel, compensating salespeople, motivating salespeople, managing sales territories, and controlling and evaluating sales force performance. Without adequate sales revenue, businesses cannot survive. In addition, a firm's reputation is often determined by the ethical conduct of its sales force. Indeed, a positive ethical climate, one component of corporate culture, has been linked with decreased role stress and turnover intention and improved job attitudes and job performance in sales.

preapproach stage

involves obtaining further information on the prospect and deciding on the best method of approach Before contacting acceptable prospects, a salesperson finds and analyzes information about each prospect's specific product needs, current use of brands, feelings about available brands, and personal characteristics. Must be thorough in this stage to be successful

Evaluating Advertising Effectiveness

measuring achievement of advertising objectives; assessing effectiveness of copy, illustrations, or layouts; and evaluating certain media Pretest-Evaluation of advertisements performed before a campaign begins *A pretest usually attempts to evaluate the effectiveness of one or more elements of the message * sometimes use a consumer jury- A panel of a product's existing or potential buyers who pretest ads *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, or website through which potential customers can request information. The advertiser records the number of inquiries or responses returned from each type of advertisement. Posttest-Evaluation of advertising effectiveness after the campaign *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. Because it is difficult to determine the direct effects of advertising on sales, many advertisers evaluate print advertisements according to how well consumers can remember them. Recognition test-A posttest in which respondents are shown the actual ad and are asked if they recognize it Recall- Unaided or raided Unaided- A posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues Aided- A posttest that asks respondents to identify recent ads and provides clues to jog their memories Many successful marketers have worked with advertising agencies to create catchy jingles to help consumers recall ads The major justification for using recognition and recall methods is that people are more likely to buy a product if they can remember an advertisement about it than if they cannot. However, recalling an advertisement does not necessarily lead to buying the product or brand advertised.

Marketing Mix Variables

product, place, promotion, price A product's price frequently affects the demand for that item, particularly for products with elastic demand. In such cases, a high price may result in lower unit sales, which in turn may lead to higher production costs per unit The price of a product is linked to several dimensions of its distribution. Premium-priced products are often marketed through selective or exclusive distribution. An increase in physical distribution costs, such as shipping, may have to be passed on to customers. Price may influence how a product is promoted. Bargain prices often appear in advertisements. Premium prices are less likely to be promoted, though they are sometimes included in advertisements for upscale items like luxury cars or fine jewelry. the price structure can affect a salesperson's relationship with customers. A complex pricing structure takes longer to explain to customers, is more likely to confuse potential buyers, and may cause misunderstandings that result in long-term customer dissatisfaction.

Types of Pricing Objectives

profit oriented, sales oriented, status quo

retail technology

provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers Retailers of all sizes can take advantage of technology to improve the store experience for a variety of customers. One way is through the use of beacons that can send real-time messages and offers to customers with Bluetooth-enabled smartphones. They are increasingly being used in airports, sports stadiums, hotels, fast-food restaurants, and bank branches

Blogs and Wikis

publish and rapidly access knowledge; discuss opinions and experiences Blogs-Short for "weblogs," these are web-based journals in which writers editorialize and interact with other internet users Blogs give consumers control, sometimes more control than companies would like. Whether or not the blog's content is factually accurate, bloggers can post whatever opinions they like about a company or its products. Wikis-Type of software that creates an interface that enables users to add to or edit the content of some types of websites One of the best known is Wikipedia,

Support personel

sales staff members who 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. 3types: Missionary salespeople- Support salespeople, usually employed by a manufacturer, who assist the producer's customers in selling to their own customers *Missionary salespeople may call on retailers to inform and persuade them to buy the manufacturer's products. When they succeed, retailers purchase products from wholesalers, which are the producer's customers. Manufacturers of medical supplies and pharmaceuticals often use missionary salespeople, called detail reps, to promote their products to physicians, hospitals, and pharmacists. Trade Salespeople- Salespeople involved mainly in helping a producer's customers promote a product *They are likely to restock shelves, obtain more shelf space, set up displays, provide in-store demonstrations, and distribute samples to store customers. Technical salespeople- Support salespeople who give technical assistance to a firm's current customers *advising them on product characteristics and applications, system designs, and installation procedures. When hiring sales personnel, marketers seldom restrict themselves to a single category, because most firms require different types of salespeople.

advertising campaign

the creation and execution of a series of advertisements to communicate with a particular target audience Steps: identifying and analyzing the target audience, defining the advertising objectives, creating the advertising platform, determining the advertising appropriation, developing the media plan, creating the advertising message, executing the campaign, and evaluating advertising effectiveness. The number of steps and the exact order in which they are carried out may vary according to the organization's resources, the nature of its product, and the type of target audience to be reached.

Selection of a pricing strategy

the fifth step in the price-setting process 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. Differential pricing, psychological pricing, new product pricing

Social Media Marketing

utilization of social media or social networks to market a product, company, or brand Social media marketing enables firms to promote a message and create online conversations through multiple platforms. User-generated content relates to consumers that create, converse, rate, collect, join, or simply read online materials. For example, when a consumer posts a selfie on Instagram with a Mountain Dew in hand, this is user-generated content. Marketers need to analyze their target markets and determine the best social media approach to support marketing objectives. Social media should be included in both the corporate and marketing strategy. Social Network- A website where users can create a profile and interact with other users, post information, and engage in other forms of web-based communication Additionally, social networking sites are useful for relationship marketing, or the creation of relationships that mutually benefit the marketing business and the customer.