MK323 Final

full-line, category, extreme, off-price, omnichannel

2.) Identifying types of retailers: Types of Retailers: For the project, you will want to understand all the types of retailers that YOUR product category can be sold through. As mentioned previously, you will want to research which of your retailers buy from wholesalers/distributors, as opposed to direct from the manufacturer. Food: Supermarket, Supercenter, Convenience, Warehouse Club. General Merchandise: Full-Line Discount, Speciality Category, Specialist, Drug, Extreme Value, Speciality, Department, Off-Price. Service: Auto Rental, Health Spa, Vision Center, Bank. Supercenters are large stores (185,000 square feet) that combine a supermarket with a full-line discount store. Warehouse clubs are large retailers (100,000 to 150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses. Convenience stores provide a limited variety and assortment of merchandise at a convenient location in 3,000- to 5,000-square-foot stores with speedy checkout. Department stores are retailers that carry a broad variety and deep assortment of merchandise, offer customer services, and organize their stores into distinct departments for displaying merchandise. _________________ discount stores are retailers that offer a broad variety of merchandise, limited service, and low prices. The largest full-line discount store chains are Walmart, Target, and Kmart (Sears Holding). Specialty stores concentrate on a limited number of complementary merchandise categories targeted toward very specific market segments by offering deep but Page 521narrow assortments and sales associate expertise. Drugstores are specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise. __________________ specialists are big-box retailers or category killers that offer a narrow but deep assortment of merchandise. Most category specialists use a predominantly self-service approach, but they offer assistance to customers in some areas of the stores. ________________-value retailers are small, full-line discount stores that offer a limited merchandise assortment at very low prices. The largest extreme-value retailers are Dollar General and Dollar Tree (which purchased the Family Stores chain). ________________ retailers offer an inconsistent assortment of brand-name merchandise at a significant discount from the manufacturer's suggested retail price Page 523(MSRP). The retail firms discussed in the previous sections sell products to consumers. Service retailers, or firms that primarily sell services rather than merchandise, are a large and growing part of the retail industry. 3.) Developing a retail strategy: Facilitating Retail Strategy: Like Lego blocks, marketing channels must be configured in logical, sturdy and creative ways. 4.) Managing an omnichannel strategy: Facilitating Retail Strategy - Store Atmospherics: Benefits of the Internet and Omnichannel Retailing? Deeper and Broader Selection, Personalization, Gain Insights into Consumer Shopping Behavior via Integrated CRM systems, Increase Customer Satisfaction and Loyalty. Many retailers and some manufacturers use an _________________________ or multichannel strategy, which involves selling in more than one channel (e.g., store, catalog, and Internet). Definition: Have multiple channels but treat them all as a single channel. Selling in more than one channel, stores, Internet, catalog. For instance, omnichannel retailers use consumer information collected from the customers' Internet browsing and buying behavior to send dedicated e-mails to customers promoting specific products or services.

compensating, salary, straight, evaluating, funnel, leads, preapproach, presentation, closing, follow

Compensation aligns incentives with firm goals: 4.) Motivating and ______________________ salespeople. Compensation structure motivates desired action: Level of Compensation, Method of Payment, Straight _____________: A compensation plan in which salespeople or managers receive a fixed amount of compensation for each hour or week they work. _______________ Commission: Paying salespeople according to the amount of their sales in a given time period. Combination Plan: The best way a salesperson would want to get paid, including both straight salary and straight commission. Craft assessments to reward desired behaviors: 5.) ______________________ salespeople. Assessments, rewards tied together: Evaluation measures can be either objective or subjective: Number, size of accounts. Customer service. Teamwork. Personal selling uses a "sales funnel": How do salespeople generate and qualify leads?: 1.) Generate and qualify leads, 2.) Preapproach, 3.) Sales presentation and overcoming reservations, 4.) closing the sale, 5.) follow-up. Step 1: Generate and Qualify _____________: The first step in the selling process is to generate a list of potential customers (leads) and assess their potential (qualify). Salespeople who already have an established relationship with a customer will skip this step, and it is not used extensively in retail settings. In B2B situations, however, it is important to work continually to find new and potentially profitable customers. Today, salespeople connect with potential customers through Twitter and LinkedIn. Salespeople curate blogs to draw in customers and generate leads, a process known as inbound marketing. Although these are all important tools, they are unlikely to replace cold calling anytime soon, as many customers still cannot be reached via social media. Trade shows also offer an excellent forum for finding leads. These major events are attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry. Cold calls are a method of prospecting in which salespeople telephone or go to see potential customers without appointments. Telemarketing is similar to a cold call, but it always occurs over the telephone. Sometimes professional telemarketing firms rather than the firm's salespeople make such calls. Step 2: ____________________ and the Use of CRM Systems: The preapproach occurs prior to meeting the customer for the first time and extends the qualification of leads procedure described in Step 1. Although the salesperson has learned about the customer during the qualification stage, in this step he or she must conduct additional research and develop plans for meeting with the customer. It is often a good idea to practice the presentation prior to the meeting, using a technique known as role playing, in which the salesperson acts out a simulated buying situation while a colleague or manager acts as the buyer. Afterward, the practice sales presentation can be critiqued and adjustments can be made. Step 3: Sales _______________________ and Overcoming Reservations: The Presentation: Once all the background information has been obtained and the objectives for the meeting are set, the salesperson is ready for a person-to-person meeting. Let's continue with our bank example. During the first part of the meeting, the salesperson needs to get to know the customer, get the customer's attention, and create interest in the presentation to follow. Handling Reservations: An integral part of the sales presentation is handling reservations or objections that the buyer might have about the product or service. Although reservations can arise during each stage of the selling process, they are very likely to occur during the sales presentation. Step 4: ________________ the Sale: Closing the sale means obtaining a commitment from the customer to make a purchase. Without a successful close, the salesperson goes away empty-handed, so many salespeople find this part of the sales process very stressful. Step 5: ______________‐Up: With relationship selling, it is never really over, even after the sale is closed. The attitudes customers develop after the sale become the basis for how they purchase in the future. The follow-up therefore offers a prime opportunity for a salesperson to solidify the customer relationship through great service quality.

independent, administered, contractual, corporate, intensive, exclusive, selective

How Do Channel Structures Work? Do you have examples for each of the channel structures? Independent Marketing Channel: Independent members maximizing their own profits (magic bean). In an independent (conventional) marketing channel, several independent members—a manufacturer, a wholesaler, and a retailer—attempt to satisfy their own objectives and maximize their profits, often at the expense of the other members. This scenario represents the first phase of a vertical marketing system, a marketing channel in which the members act as a unified system. Three types of vertical marketing systems—administered, contractual, and corporate—reflect increasing phases of formalization and control. The more formal the vertical marketing system, the less likely conflict is to ensue. Walmart's various marketing channel relationships offer examples of different forms of an administered vertical marketing system: There is no common ownership or contractual relationships, but the dominant channel member controls or holds the balance of power. Because of its size and relative power, Page 488 Walmart can easily impose controls on small manufacturers, such as Brown Betty Dessert Boutique, but with large, powerful suppliers such as P&G, the control is more balanced between parties. ____________________ Vertical Marketing System: Independent with dominant member (Trader Joes). ____________________ Vertical Marketing System: Independent with contracts to reduce conflict (Dunkin Donuts). Over time, members of the supply chain often formalize their relationship by entering into contracts that dictate various terms,15 such as how much Walmart will buy from P&G each month and at what price, as well as the penalties for late deliveries. In contractual vertical marketing systems like this, independent firms at different levels of the marketing channel join through contracts to obtain economies of scale and coordination and to reduce conflict. Franchising is the most common type of contractual vertical marketing system. Franchising is a contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor. ____________________ Vertical marketing System: Channel owned by one company (American Apparel). In a corporate vertical marketing system, the parent company has complete control and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel, such as manufacturing plants, warehouse facilities, and retail outlets. Therefore, firms frequently seek a strategic relationship, also called a partnering relationship, in which the marketing channel members are committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial. Choosing Retail Partners based on Distribution Intensity: __________________: An intensive distribution strategy is designed to place products in as many outlets as possible. Most consumer packaged-goods companies, such as Pepsi, Procter & Gamble, Kraft, and other nationally branded products found in grocery and discount stores, strive for and often achieve intensive distribution. ___________________: Manufacturers also might use an exclusive distribution policy by granting exclusive geographic territories to one or very few retail customers so that no other retailers in the territory can sell a particular brand. Exclusive distribution can benefit manufacturers by assuring them that the most appropriate retailers represent their products. ___________________: Between the intensive and exclusive distribution strategies lies selective distribution, which relies on a few selected retail customers in a territory to sell products. Like exclusive distribution, selective distribution helps a seller maintain a particular image and control the flow of merchandise into an area.

cash, vendor, uniform, zone, deceptive, loss, bait, switch

How do Brands Increase Price without Changing Price?: OJ - same box, less full, pay the same, you get less ounces. Canned tuna, instant teas. Business Pricing tactics and Discounts: What are these discounts: 1.) Seasonal discounts, 2.) cash discounts: Imagine that you need a new dress shirt because you have an important job interview. A __________ discount reduces the invoice cost if the buyer pays the invoice prior to the end of the discount period. Typically, it is expressed in the form of a percentage, such as "3/10, n/30," or "3%, 10 days, net 30," which means the buyer can take a 3 percent discount on the total amount of the invoice if the bill is paid within 10 days of the invoice date; otherwise the full, or net, amount is due within 30 days. 3.) _____________ allowances: Allowances Another pricing tactic that lowers the final cost to channel members is allowances, such as advertising or slotting allowances, offered in return for specific behaviors. An advertising allowance offers a price reduction to channel members if they agree to feature the manufacturer's product in their advertising and promotional efforts. Advertising allowances are legal as long they are available to all customers and not structured in such a way that they consistently and obviously favor one or a few buyers over others. Slotting allowances are fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products. Some argue that slotting allowances are unethical because they put small manufacturers that cannot readily afford allowances at a competitive disadvantage. 4.) quantity discounts, 5.) _________________ delivered: With a uniform delivered pricing tactic, the shipper charges one rate, no matter where the buyer is located, which makes things very simple for both the seller and the buyer. vs. 6.) ________ pricing: Zone pricing, however, sets different prices depending on a geographic division of the delivery areas. Legal Aspects and Ethics of Pricing: Deceptive or Illegal Price Advertising: 1.) ____________________ reference prices: fictitious higher "regular" prices make sale prices seem better. 2.) __________ leader pricing: the pricing policy of setting prices very low or even below cost to attract customers into a store and put competitors out of business. 3.) _________ and ________________: Another form of deceptive price advertising occurs when sellers advertise items for a very low price without the intent to really sell any. This bait-and-switch tactic is a deceptive practice because the store lures customers in with a very low price on an item (the bait), only to aggressively pressure these customers into purchasing a higher-priced model (the switch) by disparaging the low-priced item, comparing it unfavorably with the higher-priced model, or professing an inadequate supply of the lower-priced item. For the Project! Cost vs. Value-based Approaches: Cost-based Pricing: Product -> cost -> price -> customer value? -> Profit. Value-based pricing: Customer -> value -> price -> Meet target cost? -> profit. Pricing Problems #1 and #2!

signal, costs, objectives, profit, sales, competitor, customer

Identify 5Cs of pricing. Margins and Markups. Understanding margin and markups. Cost + Markup = Price. Need to know what kind of markup" Selling price (margin), Cost. Two choices we can use: If % of SP, then: Cost + MUSP (SP) = SP. If % of cost, then: Cost + MUC (Cost) = SP. Use tutorial on Tools! Price has many components, strategies, tactics: Is financing available? Is the price negotiable? What are the reasons or trade in allowances? The "base" price. Optional extras? Do bundles save me money? Who pays for the shipping to get it to me? These are all part of Price. Pricing may differ from seat to seat (dynamic pricing)! Balance the marketing mix with price: Revenue (Price), Value capture. and Expenses (Product promotion place, value creation). Target market is balanced between these two. Price is a ________________: Prices can be both too high and too low. Price set too low may signal (lower quality? Price set too, high might signal (premium pricing, low competition)? For example, setting a price very close to a competitor's price signals to consumers that the product is similar, whereas setting the price much higher signals greater features, better quality, or some other valued benefit. Value-based pricing methods are approaches to setting prices that focus on the overall value of the product offering as perceived by the consumer. What are the 5 C's of pricing?: Competition, Costs, Company objectives, customers, channel members, all part of value. A pricing strategy is a long-term approach to setting prices broadly in an integrative effort (across all the firm's products) based on the five Cs of pricing (company objectives, costs, customers, competition, and channel members). 1.)___________: Set price to assure break-even: Revenue and costs, Break-even quantity, variable costs, fixed costs. Above it is profit, below it is loss, fixed costs a straight line, revenue and costs are intersecting lines. Company: Price is function of objective: Each firm sets an objective which has pricing strategy implications. These objectives may change depending on where the product is in the product life cycle. 2.) Company ___________________: _________-oriented: Institute a company wide policy that all products must provide for at least an 18 percent profit margin to reach a particular profit goal for the firm. Even though all company methods and objectives may ultimately be oriented toward making a profit, firms implement a profit orientation specifically by focusing on target profit pricing, maximizing profits, or target return pricing. __________-oriented: Set prices very low to generate new sales and take sales away from competitors, even if profits suffer. Firms using a sales orientation to set prices believe that increasing sales will help the firm more than will increase profits. _____________________-oriented: To discourage more competitors from entering the market, set prices very low. When firms take a competitor orientation, they strategize according to the premise that they should measure themselves primarily against their competition. Some firms focus on competitive parity, which means they set prices that are similar to those of their major competitors. ____________________-oriented: Target a market segment of consumers who highly value a particular product benefit and set prices relatively high (referred to as premium pricing). A firm uses customer orientation when it sets its pricing strategy based on how it can add value to its products or services.

Mutual, common, interdependence, referent, expertise, information, legitimate

Managing Channels Through Strategic Relationships: 1.) _____________ trust: Mutual trust holds a strategic relationship together. Trust is the belief that a partner is honest (i.e., reliable, stands by its word, sincere, fulfills obligations) and benevolent (i.e., concerned about the other party's welfare). 2.) open communications. 3.) _________________ goals: Supply chain members must have common goals for a successful relationship to develop. Shared goals give both members of the relationship an incentive to pool their strengths and abilities and exploit potential opportunities together. When supply chain members view their goals and ultimate success as intricately linked, they develop deeper long-term relationships. 4.) _____________________________: Interdependence between supply chain members that is based on mutual benefits is key to developing and sustaining the relationship. 5.) Credible commitments: Successful relationships develop because both parties make credible commitments to, or tangible investments in, the relationship. (all towards strategic relationships). Understanding Power in Channel Management: What is Power? Power exists when one firm has the means or ability to dictate the actions of another member at a different level of distribution. Types of Power in Channels: What Do These Types of Power Mean? Examples? Power/Influence sources: Reward, Coercive, Referent, Expertise, Information, Legitimate. A retailer like Walmart exercises its power over suppliers in several ways. With its reward power, Walmart offers rewards, often a monetary incentive, if the wholesalers or manufacturers do what Walmart wants them to do. For example, it might promise to purchase larger quantities if a manufacturer will lower its wholesale price. Coercive power arises when Walmart threatens to punish or punishes the other channel member for not undertaking certain tasks, such as if it were to delay payment for a late delivery.Walmart may also have ________________ power if a supplier desperately wants to be associated with Walmart, because being known as an important Walmart supplier enables that supplier to attract other retailers' business. In this sense, P&G might be playing its retailer partners against one another to enhance its own performance. Referent power is respected/liked based. If Walmart exerts ________________ power, it relies on its vast experience and knowledge to decide how to market a particular supplier's products, without giving the supplier much of a say. It is skill and knowledge based. Because Walmart has vast information about the consumer goods market, it might exert ______________________ power over P&G by providing or withholding important market information. At the same time, P&G might have its own information power that it could exert over Walmart, depending on which company has the most or most updated data. _________________ power is based on getting a channel member to behave in a certain way because of a contractual agreement between the two firms (a deciding authority, the boss).

marketing channel, management, intermediaries, representative, wholesaler, agent

Marketing Channels and Retailing: What is a ___________ _____________? Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. What is marketing channel _______________________? The set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, wholesalers, retailers, etc. into a seamless operation in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels their customers require. Supply Chain Management: Suppliers -> Inbound flow of raw materials & parts -> Manufacturer (outbound flow of finished products -> Consumers (Today's Focus - Marketing Channels), Supplier Network, Marketing Channel. What are the Roles of ________________________? Increase efficiency. Adjust for assortment and quantity discrepancies. Facilitate searching process. Maintain relationships with individual customers. Provide market intelligence. Types of Intermediaries: Type manufacturer's _______________________, Description: Works for manufacturers as an external selling force. Does not typically take ownership of goods. Independent agents, also known as manufacturer's representatives, or reps, are salespeople who sell a manufacturer's products on an extended contract basis but are not employees of the manufacturer. They are compensated by commissions and do not take ownership or physical possession of the merchandise. ____________________/Distributor Description: Purchases goods and sells to retailers - common in food products. a person or company that sells goods in large quantities at low prices, typically to retailers. ____________ or broker: An intermediary with legal authority to act on behalf of the manufacturer - typically does not take ownership of goods. Retailer: Sells to the end consumer. Intermediaries - for Your Project: As part of becoming experts in your PRODUCT category, teams must determine if their channels will include wholesalers/distributors (in addition to manufacturers' reps). This can be done via secondary and primary research for your category and in talking to retailers. If any of your retailers buy through wholesalers, you must include them in that channel and understand the margin wholesalers will take. Typically, some independent stores will buy through wholesalers. For SERVICES this entails understanding if your vendors would sell directly to small firms like you or if there are intermediaries to reach you. Factors for Establishing a Relationship with Retailers: 1. Choosing retailing partners 2. Identifying types of retailers 3. Developing a retail strategy 4. Managing an omnichannel strategy.

reach, frequency, Cost per thousand, quick

Measure IMC effectiveness by assessing: _____________ - the percentage of the target population exposed to a specific marketing communication at least once within a certain time period (sometimes also expressed as a number). __________________ - # of times reached target consumers are exposed to an ad within a certain time. __________ ______ ________________ - CPMs, are important when comparing costs of several media. Typical CPMs fall between $15-$175. Media with CPMs higher than $175 may need to be re-evaluated. Always calculate a targeted CPM - to do this you must determine the % of readers/viewers in your target market. Cost per thousand= cost of one insertion/ rate base circulation *100=cost to reach 1000 audience members. Measuring IMC: Guide for 323 Project: Media should be selected based on target market reach, creative constraints, and CPM. An advertising schedule should address frequency and timing for each medium. As a rule of thumb, one target consumer is considered "aware" if he/she is exposed to a message 4 times in a year (4 impressions). The "IMC Awareness Tutorial" will provide detail for a number of IMC elements. Media & Awareness: Generally includes magazines, television, radio and billboards, banner and web advertising. Data on costs and impressions are available from sources (Media Mark, SRDS) or directly from the media (Pardee Core page). When computing the number of aware consumers, one needs to think about issues such as: readership vs. circulation, audience duplication across media, likelihood that one reader sees several issues of one publication, impact of a 60secs. vs. 30secs. vs. 15secs commercial, Impact of color vs. B&W, impact of full page vs. 1/2 page vs. 1/3 page ad etc. Your Own Website: Each team will develop a website for their firm. The web site should look like a site that a potential customer would want to visit and learn about your product or service. It should be consistent with all of your other IMC elements in terms of branding, color scheme, fonts, etc. It should look like it is enabled to take orders/reservations (but it does not need to be fully functional in that regard). For product teams, you will send potential customers to Amazon for purchase. Assume it will cost $10,000 to get your website set up with e-commerce ability. You can also assume it will cost $1,500 per year in upkeep and maintenance. To be conservative, we will assume we will generate no awareness from the website. Awareness and "Quick Tests": Awareness is the TOTAL of ALL the impressions from ALL your marketing vehicles. In reality, awareness cannot be calculated for just one ad. Teams should run an Awareness "____________ Test" on impressions generated from any individual vehicle (magazines, POP, events, etc) to see if it is within a realistic range. Use an awareness quick test to determine what % awareness "could occur" from only this vehicle. The awareness quick test formula is: # Impressions / 4 / Size of Target Market = % Awareness. Awareness Quick Test: If above the maximum allowable awareness, adjust down to the maximum given in table. If well below the allowable awareness you may want to spend more or reconsider the vehicle.

high, low, everyday, new product, Price, penetration, skimming

Pricing Strategies: 1.) ________/________ Pricing: An alternative to EDLP is a high/low pricing strategy, which relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. A high/low strategy is appealing because it attracts two distinct market segments: those who are not price sensitive and are willing to pay the "high" price and more price-sensitive customers who wait for the "low" sale price. High/low sellers can also create excitement and attract customers through the "get them while they last" atmosphere that occurs during a sale. Sellers using a high/low pricing strategy often communicate their strategy through the creative use of a reference price, which is the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process. 2.) ___________________ low pricing: With an everyday low pricing (EDLP) strategy, companies stress the continuity of their retail prices at a level somewhere between the regular, non sale price and the deep-discount sale prices their competitors may offer. By reducing consumers' search costs, EDLP adds value; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores. (EDLP), 3.) ________ ______________ Pricing: when a new product is really new to the world, determining consumers' perception of its value and pricing it accordingly becomes very difficult. Includes: Price Skimming and Penetration Pricing. Market penetration pricing - set initial price low to grow sales and profit quickly (e.g. software). Price skimming - for new and innovative products that cos can charge a premium for. Everyday Low Pricing vs. High/Low Pricing: Create value in different ways, EDLP saves search costs of finding lowest overall prices, High/low provides the thrill of the chase for the lowest price. Everyday low pricing (EDLP) vs. High/low pricing. The __________-Quality Relationship: Most inexperienced consumers use price as an indicator of quality. Price becomes crucial when consumers have little knowledge about certain products/brands. Wine ranges in price from $3 a bottle to over $100k a bottle. How do you know which to choose? New Product Pricing : 1.) Price skimming, 2.) Penetration Pricing. Firms using a penetration pricing strategy set the initial price low for the introduction of the new product or service. Their objective is to build sales, market share, and profits quickly and deter competition from entering the market. The low penetration price is an incentive to purchase the product immediately. Firms using a ______________________ pricing strategy expect the unit cost to drop significantly as the accumulated volume sold increases, an effect known as the experience curve effect. With this effect, as sales continue to grow, the costs continue to drop. set the initial price low for the introduction of a new product or service. Their objective is to build sales, market share, and profits quickly and deter future competition from entering the market. This strategy, known as price ____________________, appeals to these segments of consumers who are willing to pay the premium price to have the innovation first. However, after these high-produce market segments become saturated and sales begin to slow down, companies generally lower the price (or skim) to capture the next most price sensitive market segment, which is willing to pay a somewhat lower price. This tactic is particularly common in technology markets, where sellers know that customers of the hottest and coolest products will wait in line for hours, desperate to be the first to own the newest version.

markdowns, quantity, rebates, leasing, price, leader, lining

Pricing Tactics Aimed at Consumers: What are These?: 1.) ____________________: Markdowns are the reductions retailers take on the initial selling price of the product or service. An integral component of the high/low pricing strategy we described previously, markdowns enable retailers to get rid of slow-moving or obsolete merchandise, sell seasonal items after the appropriate season, and match competitors' prices on specific merchandise. 2.) ______________ discounts: Quantity Discounts for ConsumersThe most common implementation of a quantity discount at the consumer level is the size discount. Take, for example, three sizes of General Mills' popular cereal Cheerios: 10-, 14-, and 18-ounce boxes are priced at approximately $2.99, $3.99, and $4.49, respectively. The larger the quantity, the less the cost per ounce, which means the manufacturer is providing a quantity discount. 3.) seasonal discounts: Seasonal discounts that are offered to consumers are price reductions offered on products and services to stimulate demand during off-peak seasons. You can find hotel rooms, ski lift tickets, snowmobiles, lawn mowers, barbeque grills, vacation packages, flights to certain destinations, and Christmas cards at discounts during their "off" seasons. 4.) coupons: Coupons offer a discount on the price of specific items when they're purchased. Coupons are issued by manufacturers and retailers in newspapers, on products, on the shelf, at the cash register, over the Internet, and through the mail. Retailers use coupons because they can induce customers to try products for the first time, convert those first-time users to regular users, encourage large purchases, increase usage, and protect market share against competition. 5.) ________________: Rebates provide another form of discounts for consumers off the final selling price. In this case, however, the manufacturer, instead of the retailer, issues the refund as a portion of the purchase price returned to the buyer in the form of cash. A rebate promises savings, usually mailed to the consumer at some later date, only if the consumer carefully follows the rules. The "hassle factor" for rebates thus is higher than for coupons. 6.) _______________: Leasing/RentalsFor some products, discounts, coupons, and rebates may not be sufficient to bring the price within consumers' reach. With a lease or rental, consumers pay a fee to purchase the right to use a product for a specific amount of time. They never actually own the product. 7.) _________ bundling: This practice of selling more than one product for a single, lower price is called price bundling. Firms bundle products or services together to encourage customers to stock up so they won't purchase competing brands, to encourage trial of a new product, or to provide an incentive to purchase a less desirable product or service to obtain a more desirable one in the same bundle. 8.) ______________ pricing: Leader pricing is a tactic that attempts to build store traffic by aggressively pricing and advertising a regularly purchased item, often priced at or just above the store's cost. Leader pricing fuels happy hours at restaurants and bars all over the country. 9.) price _______________: When marketers establish a price floor and a price ceiling for an entire line of similar products and then set a few other price points in between to represent distinct differences in quality, the practice is called price lining.

Customers, demand, elasticity

3.) __________________: Demand linked to pricing: Knowing demand curve enables one to see the relationship between price and demand. What is more elastic steak or milk? Demand increases as price increases. A ____________ curve shows how many units of a product or service consumers will demand during a specific period of time at different prices. Although we call them "curves," demand curves can be either straight or curved, as Exhibit 14.3 shows. Price _________________ of demand measures how changes in a price affect the quantity of the product demanded. Specifically, it is the ratio of the percentage change in quantity demanded to the percentage change in price. In general, the market for a product or service is price sensitive, or elastic, when the price elasticity is less than −1. Thus, an elasticity of −5 would indicate that a 1 percent decrease in price produces a 5 percent increase in the quantity sold. In an elastic scenario, relatively small changes in price will generate fairly large changes in the quantity demanded, so if a firm is trying to increase its sales, it can do so by lowering prices. The market for a product is generally viewed as price insensitive, or inelastic, when its price elasticity is greater than −1. 4.) Channel: Partners take margins: manufacturers, wholesalers and retailers can have different perspectives on pricing strategies. Manufacturers must protect against gray market transactions. Find demand curve for project: Determine overall quantity demanded (purchase intent) at different price points (based on 80/30 adjusted survey results) for each segment (creating your demand curve). Based on your demand estimates and your marketing strategy objectives, decide on the optimal price point (use Solver in Excel to find revenue-maximizing price). Covered at TA Workshop. For Your Project: Margins: Margins often found for your industry from secondary data. If you cannot locate margins for your industry, use the 323-specified margins. If you find margins through secondary research, use these in your project and cite the source(s). When you are talking to someone in the field about mark-ups, you should be certain to determine whether they are referring to a mark-up on cost or mark up on selling price (also called margin). For MK323, set channel margins: Type of Channel Member: Agents, broke, or manufacturer's Rep (10%), Wholesalers(15%), Retailers: 50% Independent Store, 45% Chain Store, 40% Mass merchant, 40% Amazon. Example: Setting a list price: Mark-up on selling price (also called a margin). Margin and cost for manufacturing selling, Wholesaler selling, Retailer selling. Another way of looking at margins and markups: Mark ups are calculated from the base number; Margins are calculated from the total number. Markup = (Retailer price - Manufacturer Price)/Manufacturer Price. Margin = (Retailer price - Manufacturer Price)/Retail Price.

Digital, Traditional, exposures, objective, task, rule, thumb, parity

7.) Direct Marketing: Data improves targeting, direct marketing: Growing element of IMC. Includes e-mail and e-commerce. Good for niche markets. Leverages database mining. 1.) Online: Online empowers firms with small budgets: Websites, blogs, social media. How is mobile marketing different from online marketing?: Geolocation, screen size, platforms, app based. Internet overtakes traditional ad spending: Most digital advertising spent on Google, Facebook with Amazon on the rise. Traditional ad spending includes print, broadcast, outdoor, transit. 2019 marks the first year that digital spending exceeds traditional. Media characterized as paid, owned, earned: Paid media General Consumers: - traditional advertising, print, television, radio, display, direct mail, paid search, retail/channel. Owned Media: Customers: Corporate website, campaign microsite, blog, brand community, Facebook fan page, mobile, etc. Earned Media: Super Fans: Word of mouth, Facebook comments, Twitter, vines, blogs, forums, review sites. When customers become the channel. Shift in IMC: Digital vs. traditional: ______________: B2C, C2C communication. Owned media can be more widely leveraged to drive traffic: Search, Influencer, Bloggers, Video, Social Media. Online Behavior can be tracked, analyzed, leveraged. Small budget friendly. _____________________: Spray-and-pray approach means part of advertising spend is not relevant to the audience: Television ad, Magazine ad, Billboard. Big budget necessary. If you were in charge. Assess ad response by number of ___________________: Impact on y -axis, number of exposures on x-axis. Diminishing returns has a high impact initially but levels out. Linear increases at a steady rate. Learning curve with wear-out effects has a high impact in the beginning but eventually decreases exponentially. Threshold effect: What do each of the s patterns mean? Which one are we using in Core? Consider IMC objectives, metrics: Increasing awareness, Prompting trial, increase repeat, increase sales, customer loyalty, call to action. Set and allocate IMC budget: 1.) _______________-and-_________ method. 2.) __________-of-_____________ methods: The definition of a rule of thumb is a generally accepted guideline, policy or method of doing something based on practice rather than facts. What is objective-and-task? The objective-and-task method determines the budget required to undertake specific tasks to accomplish communication objectives. To use this method, marketers first establish a set of communication objectives, then determine which media best reach the target market and how much it will cost to run the number and types of communications necessary to achieve the objectives. This process—set objectives, choose media, and determine costs—must be repeated for each product or service.What are the rules of thumb? 1.) Competitive ____________: Some firms focus on competitive parity, which means they set prices that are similar to those of their major competitors. 2.) Percentage of sales, 3.) available budget.

pure, components, mixed, price, cost, value, ownership, competitor, cost

In-Class Pricing Assignment. Bundling: A bundle is a group of products or services sold as a package. This practice of selling more than one product for a single, lower price is called price bundling. Firms bundle products or services together to encourage customers to stock up so they won't purchase competing brands, to encourage trial of a new product, or to provide an incentive to purchase a less desirable product or service to obtain a more desirable one in the same bundle. The constituents, which can be sold separately, are called 'components'. Three commonly used terms: __________ bundling - Only the bundle is offered by the seller (at a bundle price). Pure _________________ - Only the components are offered (at their separate prices). ___________ bundling - The bundle as well as some or all components, or smaller bundles, are priced and offered for sale. __________ Bundling: Encourage sales of slow moving items, Encourages stock up, incentive to purchase, Encourage trial of new brand. Mixed Bundling: You can buy the bundle OR you can buy the parts individually. With the Hotel's pure bundle we're leaving money on the table with the other segments. Can the hotel use mixed bundling to make more money. Pricing Strategies: 1.) __________-based: As their name implies, cost-based pricing methods determine the final price to charge by starting with the cost. 2.) _________-based: Value-based pricing methods are approaches to setting prices that focus on the overall value of the product offering as perceived by the consumer. Consumers determine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make to acquire the product. With the first method, the manager must estimate the improvement value (VBP)of a new product or service. Using criteria and giving the criteria weight. This improvement value represents an estimate of how much more (or less) consumers are willing to pay for a product relative to other comparable products. For example, suppose a major telecommunications company has developed a new cell phone. Using any of a host of research methods—such as consumer surveys—the manager could get customers to assess the new product relative to an existing product and provide an estimate of how much better it is; that is, its improvement value. Another value-based method for setting prices determines the total cost of owning the product over its useful life. Most customer oriented improvement value method (incremental benefits) - cost of ownership (willingness to pay overtime). Using the cost-of-___________________ method, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually cost less to own than a cheaper alternative. 3.) ____________________-based: When firms take a competitor orientation, they strategize according to the premise that they should measure themselves primarily against their competition. Some firms focus on competitive parity, which means they set prices that are similar to those of their major competitors. Another competitor-oriented strategy, status quo pricing, changes prices only to meet those of the competition. __________-Based Methods: Cost-base pricing methods start with cost. All costs calculated on a per unit basis. Assumes costs don't vary for different levels of production. Most simplistic, assume costs don't vary, calculate on per unit basis. Competitor-Based Methods: Set prices to signal information of how a product compares with competitors. Signal info of how product compares to competitors (positioning). What type of value based method?: Consumers may be willing to spend more initially if, over the lifetime, the product will eventually cost less to own: Cost of Ownership. Improvement Value Method: What is the improvement value method?

target, advertising, budget, message, media, pulse, flighting, continuous

Media characterized as paid, owned, earned. Is advertising paid, owned or earned?: Online, Consumer, Direct marketing, Public relations, Sales promotion, Personal selling, Advertising. Step 1: Identify ____________ audience: Consider Strategy, budget, creative in ad campaign. Identify target market: Firms must keep in mind that their target audience may not be the same as current users of the product. Create segment grid including: Segment name, demographics, psychographics, segment size, other products, segment buys, determinant product attributes & benefits sought by segment, maximum price segment will pay, Segment's Information Sources & social Influences, Best Distribution Outlets to Reach Segment, Best Media to Reach Segment. Step 2: Set ____________________ objectives: Consider strategy in planning ad campaigns. Derived from overall objectives of the marketing program and clarify the specific goals that the ads are designed to accomplish. All ad campaigns aim to achieve certain objectives; inform, persuade, and remind customers. We first look at overall objectives, then we can look at objectives based on the focus of the ad. Set objectives to align with life cycle: Product Focused Ads: Inform, Persuade, Remind. Institutional ads: inform, persuade, or remind customers about issues related to places, politics, or an industry. Graph: Sales volume y -axis, time x-axis, development -> introduction -> growth -> maturity -> decline. Step 3: Determining the advertising _______________: Consider budget in planning ad campaigns. Determine advertising budget: Considerations - Role that advertising plays in the entire IMC mix. Expenditures vary over the course of the product life cycle. Nature of the market and the product influence the size of the budget (see IMC I for budgeting decisions). Step 4: Convey the _________________: Consider being creative in planning ad campaigns. 1. the firm determines the key message it wants to communicate to the target audience. 2. the firm decides what appeals would most effectively convey the message. The message: A logical starting point is to communicate the product/service's problem-solving ability or key benefits in a clear way. Another common strategy differentiates a product by establishing its unique benefits. This distinction forms the basis for the unique selling proposition (USP) or the value proposition. The appeal: advertising tends to combine the types of appeals into 2 categories; informational and emotional. Step 5: Evaluate and select ___________. Consider creative budgets in planning ad campaigns. The content of an advertisement is tied closely to the characteristics of the media that firms select to carry the message, and vice versa. Media planning refers to the process of evaluating and selecting the media mix—the combination of the media used and the frequency of advertising in each medium—that will deliver a clear, consistent, compelling message to the intended audience. Evaluate and select media: TV, Radio, Online, Direct, Outdoor, Print, Media vehicle. Television advertising is by far the most expensive. Mass and Niche Media: Mass media channels include outdoor/billboards, newspapers, magazines, radio, and television and are ideal for reaching large numbers of anonymous audience members. Mass media reach large anonymous audiences. Channels that are ideal for reaching large numbers of anonymous audience members; include national newspapers, magazines, radio, and tv. Niche media channels are more focused and generally used to reach narrower segments, often with unique demographic characteristics or interests. Choosing the right medium: For each class of media, each alternative has specific characteristics that make it suitable for meeting specific objectives: communicative media also vary in their ability to reach the desired audience. advertisers can determine how effective their media mix has been in reaching their target audience. Select advertising schedule: The specification of the timing and duration of advertising.Ad expenditures y-axis, x-axis months of the year. 1.) __________ (bursts): Always have advertising and in certain times you increase the advertising. an ad schedule that combines continuous and flighting schedules by maintaining a base level of ads but increasing ad intensity during certain periods. 2.) _________________ ("intermittent"): No advertising in certain points and a lot in other points of the year. an ad schedule implemented in spurts, with period of heavy advertising followed by periods of no ads. 3.) _____________________: an ad schedule that runs steadily throughout the year and is suited to products and services that are consumed continually and that require a steady level of persuasive or reminder advertising.

management, selling, structure, reps, sales, training

Sales function key to revenue growth: Strategy: Sales _____________________ involves planning, direction, and control of the personal activities, including recruiting, selecting, training, motivating, compensating and evaluating as they apply to the sales force. Tactics: Personal selling involves a two-way flow of communication between buyer and seller, designed to influence a person's or group's purchase decision. Personal ________________ can take place in various settings: face-to-face, video teleconferencing, on the telephone, or over the Internet. Sales Management built on 5 principles: Sales force structure, Recruiting and selecting salespeople, Sales training, Motivating and compensating salespeople, evaluating salespeople -> Managing the Sales Force. 1.) Sales force ________________: Firms weigh salesforce vs reps: Salesforce: Employees of the firm. Service providers. Established product lines. Manufacturers _________: Independent agents, Not employees, Common among smaller firms, Key to new markets. A company sales force comprises people who are employees of the selling company. Independent agents, also known as manufacturer's representatives, or reps, are salespeople who sell a manufacturer's products on an extended contract basis but are not employees of the manufacturer. They are compensated by commissions and do not take ownership or physical possession of the merchandise. In-house sales force is costly: What are costs of a dedicated company sales force?: Salaries, Incentives (commissions and bonuses), Benefits (health insurance, car, etc.), Transportation to make calls. Trips and operation of stands / booths at trade shows (flights, hotel accommodations, PR, etc.). Training. Prizes for sales contests. Firms organize sales by customer needs: Geographic Area: Salesforce -> Asia -> North America -> Europe -> Latin America. Product Line: Salesforce -> Mainframes -> Minicomputers -> Terminals -> Printers. Customer Type: Salesforce -> Large Account -> Inside Sales -> Small Accounts -> Government. Salespeople typically sell for half their time: The average salesperson spends over five hours a day on some form of selling, including sales calls. Many customers require 10 or more sales calls before they are convinced to carry your product. How salespeople spend their time: Selling over the phone, Selling face-to-face, Administrative tasks, Waiting/traveling, service calls. Firms have specialized recruiting profiles: 2.) Recruiting and selecting __________people. Selling starts with ability to connect: Who do you think would make a good salesperson on your team? Why? What are other traits of an effective salesperson?: Personality, Empathy, Optimism, Resilience, Self-motivation. When recruiting salespeople, it helps to possess certain personal traits. What are those personal traits? Managers and sales experts generally agree on the following: Personality. Good salespeople are friendly, sociable, and, in general, like being around people. Customers won't buy from someone they don't like. Optimism: Good salespeople tend to look at the bright side of things. Optimism also may help them be resilient—the third trait. Resilience: Good salespeople don't easily take no for an answer. They keep coming back until they get a yes. Self-motivation: As we have already mentioned, salespeople have lots of freedom to spend their days the way they believe will be most productive. But if the salespeople are not self-motivated to get the job done, it probably won't get done. Empathy. Financial Rewards: Salespeople's compensation usually has several components. Most salespeople receive at least part of their compensation as a salary, a fixed sum of money paid at regular intervals. Another common financial incentive is a commission, which is money paid as a percentage of the sales volume or profitability. Sales training facilitates consistency: 3.) Sales __________________. What training would salespeople receive?: Selling and negotiation techniques. Products and service knowledge. Technologies used in the selling process. Time and territory management. Company policies and procedures.

Create, impact, puffery, Excitement, Education, Experiences, Engagement

Step 6: Creative/____________ advertisements: Consider creative, budget in planning ad campaigns. Message and appeal are translated creatively into words, pictures, colors and/or music. Execution style for the ad will dictate the type of medium used to deliver the message. When using multiple media, they must maintain consistency across styles so that the different executions deliver a consistent and compelling message to the target audience. Create advertisements: Ads -> The type of medium determines the execution style. Creativity plays a major role in the execution stage. Creativity should not overshadow the message. The execution style must match the medium and objectives. Ads often leverage technique types: Typical Message Execution Styles: Comparative(Compare to competitors), Slice of Life (big monumental events in people's lives, or day-to-day), Lifestyle, Fantasy, Mood or Image, Musical, Personality Symbol, Scientific Evidence, Testimonial (by customers, endorsements by celebrities). Evaluate messaging by how it meets objective: Does this message: position the product simply and clearly?, bolt the brand to a clinching benefit? Contain a powerful idea? Design in the brand's personality? Exhibit novelty? Exhibit Single-mindedness? Reward the prospect? Grab attention? Firms pay for product placement in films: Top 10 brands in movies: Apple, Dell, Ford, Sony, Chevrolet, BMW, Shure, Toyota, Nike, AOC. Step 7: Asses _____________: Assess ads based on results. Assess ad "lift" to measure impact on sales: Unit sales y-axis, Weeks x-axis. Promotion, Seasonality, Natural demand. Pre-test to establish baseline. Track weekly or monthly sales. Assess impact using marketing metrics. The effectiveness of an ad campaign must be assessed before, during, and after the campaign has run. Measuring sales impact can be challenging because of the many influences other than ads on consumers' choices, purchase behavior, and attitudes. Lift: additional sales caused by advertising. Post-test to measure residual lift. Does Pom create deceptive advertising. Why is this _______________?: The legal exaggeration of praise, stopping short of deception, lavished on a product. Puffery is acceptable as long as consumers know that the firm is stretching the truth through exaggeration. The 4E Framework for Social Media: 1.) Social media -> 2.) ___________________: excite customers with relevant offers. Excitement: apps, games, & social networks. -> 3.) __________________: Educate them about the offering. Education: blogs and blogging tools, HubSpot, & Youtube. educating the customer about its value proposition and communicating the offered benefit. -> 4.) ____________________: Help them Experience products, whether directly or indirectly. Experience: YouTube. showing them how they work, how to use them, and where they can obtain it. For example like trying a software for the first month. -> 5.) ______________________: Connection: The final E of the 4E framework involves engagement; but it also might be called connection. A good website or blog engages customers and provides them with a call to action—whether to buy, post, review, comment, or share. Give them an opportunity to Engage with their social network. when attempting to engage the customer, a firm encourages the customer to interact with the company's products or brand. Explains why corporate blogs tolerate negative customer posts. Engagement: blogging and microblogging. For Project: Positioning Statement: For (target market) who (statement of need or opportunity) the (product name) is a (product category) which is (differentiating benefit #1 and #2) and is unlike (primary competitor). Add Brand Character: (3-5 words that specifically describe a person who would appeal to your primary target and differentiates your brand from the competition.). Recall Test and Portfolio Test.

Conflict, Bottom, ACV, acceptance, penetration

What is Channel Conflict: What is channel conflict and why do we care about it? Channel ________________ exists when one channel member believes another channel member is engaging in behavior that inhibits it from achieving its goals. Primary causes: Incompatibility of goals, aims, or values. Lack of agreement over relevant domains. Vertical Conflict between manufacturer and retailer, Horizontal Conflict between retailers. Channel Conflict? Same cake sold at three different retail outlets. What about prie? It changes based on the store. When supply chain members that buy and sell to one another are not in agreement about their goals, roles, or rewards, vertical channel conflict or discord results. Horizontal channel conflict can also occur when there is disagreement or discord among members at the same level in a marketing channel, such as two competing retailers or two competing manufacturers. _________________ Line: It makes no sense to have brilliant marketing programs to sell world=class products if the products aren't available: 1. at the right time, 2. at the right place, and in the 3. right form and condition that consumers want them. Poor customer service adds up to lost revenue and profit opportunities. How is ACV Measured? For your 323 project. What is _________? A measure of distribution reach. Based on sales of stores - NOT the number of stores. Expressed as ratio: Sales of product category in stores in which your product will be sold/Total product category sales. Understanding ACV: ACV can only be understood in the context of the Retail Environment. Before you can calculate ACV you must build a thorough Profile of the Retail Environment. Profile of the Retail Environment: Step 1: Identify your product's category. Step 2: Estimate category sales breakdown category sales by type of retailer groups. Step 3: Identify major players retailer groups and their category sales. Step 4: Determine which retailers you would target. Step 5: Estimate acceptance and store penetration at these retailers. Step 6: Calculate ACV. Step 7: Asses channel conflict. Step 8: Understand units sold for each store type. Retailer __________________ - how many retailers who you target will actually carry your product. Store ____________________ - of those retailers who elect to carry your product how many of their stores will they carry it in.

Integrated marketing communication, clarity, consistency, Awareness, action, offline, online, Passive, Passive, inbound,

What is IMC? _____________________ ___________________ ________________________ is the concept of designing marketing activities - advertising, personal selling, sales promotion, public relations, online and social media, - in combination to provide. A. ____________, b. _________________, c. and maximum persuasive impact. Instead of consisting of separated marketing communications channels with no unified control, IMC programs regard each of the firm's marketing communications channels as part of a whole, each of which offers a different means to connect with the target audience. This integration of channels provides the firm with the best means to reach the target audience with the desired message, and it enhances the value story by offering a clear and consistent message.There are three elements in any IMC strategy: the consumer, the channels through which the message is communicated, and the evaluation of the results of the communication. AIDA underlies the concept of "purchase funnel": Visitor -> 1.) orders ___________________, 2.) interest, 3.) desire, 4.) _____________. IMC strategy pinpoints particular goal with targeted message, medium. The most common is the AIDA model which suggests that Awareness leads to Interest, which leads to Desire, which leads to Action. We have tools - inbound, digital, tracing. Interactive, Offline, Passive, Online. Interactive __________________: Personal selling, sales promotions (contests). Direct marketing (telemarketing. Interactive ________________: Direct marketing (mobile marketing). Online marketing (blogs, social media). _______________ Online: Direct Marketing (email marketing). ________________ Offline: Advertising, Sales promotions (coupons). Public relations. Direct marketing (catalogs). Consumers should drive IMC tool selection: 1.) Online, 2.) Advertising, 3.) Consumer, 4.) Personal selling, 5.) sales promotion, 6.) public relations, 7.) direct marketing. Today, salespeople connect with potential customers through Twitter and LinkedIn. Salespeople curate blogs to draw in customers and generate leads, a process known as _________________ marketing. 2.) Advertising: Ads used to build awareness broadly: most visible element of IMC. Effective at creating widespread awareness and generating interest. Consider: who is target? What is USP? What is the goal?

Return on marketing investment, unique selling proposition, sales, call, action, bottom, funnel, public relations

What is ROMI?: _______________ ___ ________________ __________________: ROMI = (gross margin - marketing expenditure)/marketing expenditure. Convey the Message. The message provides the target audience with reasons to respond in the desired way. A logical starting point for deciding on the advertising message is to tout the key benefits of the product or service. The message should communicate its problem-solving ability clearly and in a compelling fashion. Another common strategy differentiates a product by establishing its unique benefits. This distinction forms the basis for the ____________ ______________ _____________________ (USP) or the value proposition (as discussed in Chapter 9), which is often the common theme or slogan in an advertising campaign. Advertisers use different appeals to portray their products or services and persuade consumers to purchase them, though advertising tends to combine the types of appeals into two categories: informational and emotional. Ads work best when benefit is clear, linked: Allbirds, Whos is target? What is USP? What is the goal? 4.) Personal Selling: Need ___________ force when complexity is high: Some products that are complex require the help of a salesperson. More expensive than other forms of promotion. Salespeople can add significant value, which makes the expense worth it. 5.) Sales Promotion: Offers create _______ to ____________: Can be aimed at both end-user consumers orchanlle members - can be used as part of push or pull strategies. Used in conjunction with other forms of IMC. A good website or blog engages customers and provides them with a call to action—whether to buy, post, review, comment, or share. Well designed marketing offers have a clear call to action to draw customers through tech or traditional retail stores. Can be used to stimulate short-term. _________________-of-the-________________ communication: The bottom of the funnel refers to a stage of the buying process leads reach when they're just about to close as new customers. They've identified a problem, have shopped around for possible solutions, and are very close to buying. Promotions can also trigger competitive response. Long-term effects make consumers more deal prone. PR requires ability, scale to attract attention: Goal is "free" media attention . Importance of PR has grown as the cost of other media has increased. As consumers are becoming more skeptical about marketing, PR is becoming more important. ____________ _________________ (PR) is the organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media.