mkt 3 study guide
The primary sources of value that retailers can offer
- Add value for customers by providing services and assisting in selections - Enhances customers' perceptions of the value of products by making shopping experiences more convenient - Facilitate comparison shopping - Sales personnel - Add value to supply chain - Major role in creating time, place, and possession and, in some cases, form utility - Perform marketing functions
Trends (what is changing) in the world of personal selling
- Increased professionalism - Driven by data and buyer insights - AI and predictive analytics - More focus on alignment between Sales and Marketing
Brokers and agents both:
- Negotiate purchases and expedite sales in exchange but do not take title to products - Perform a limited number of services in exchange for a commission, which generally is based on the product's selling price - Know their markets well and often form long-lasting associations with customers - Enable manufacturers to expand sales when resources are limited, benefit from the services of a trained sales force, and hold down selling costs
Many organizations use an advertising agency to help develop the advertising campaign
- Ordinarily, a firm relies on the agency for copywriting, artwork, technical production, and formulation of the media plan - Agency personnel often have broad advertising experience and are usually more objective than a firm's own employees - Traditionally, paid as a percentage (commission) of the money spent on media - the standard has been 15% but that rate has generally declined over time
wholesalers may engage in supply-chain management activities:
- Primary responsibility for physical distribution of products from manufacturers to retailers - May establish information systems that help producers and retailers manage the supply chain - Use information technology and the internet to share information among intermediaries, employees, customers, suppliers, and facilitating agencies - Make databases and marketing information systems available to their supply-chain partners to facilitate order processing, shipping, and product development and to share information about changing market conditions and customer desires
part of the sales effort, usually with responsibility for customer retention, upsells, and cross-sales. They also are the first contact from customers who have a specific question or problem
Account Manager
a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media
Advertising
represent wither buyers or sellers on a permanent basis
Agents
a posttest that asks respondents to identify recent ads and provides clues to jog their memories
Aided recall test
bring buyers and sellers together temporarily
Brokers
packaging together two or more complementary products and selling them for a single price (the single price is generally markedly less than the sum of the prices of the individual products)
Bundle Pricing
a temporary price reduction to resellers buying specific quantities of a product
Buying allowance
a retail strategy of managing groups of similar, often substitute products produced by different manufactures
Category Management
the limit on the volume of information a communication channel can handle
Channel capacity
converting meaning into a series of signs or symbols
Coding process
the medium of transmission that carries the coded message
Communications channel
Common sources of prospects
Company sales records, trade shows, databases, public records, responses to ads, seminars and meetings, referrals
trying to match competitors' advertising outlays (often with the goal of preserving market share)
Competition-matching approach
For products and services consumed on a consistent basis throughout the year
Continuous
an arrangement in which a manufacturer agrees to pay a certain amount of retailer's media costs for advertising the manufacturer's products
Cooperative advertising- - A retailer must show proof that advertisements did appear before the manufacturer pays the agreed-upon portion of the advertising costs
has the responsibility to make sure that a product helps customers achieve whatever goals they have
Customer success
converting signs or symbols into concepts and ideas
Decoding process
charging different prices to different buyers for the same quality and quantity of pricing (market must consist of multiple segments with different price sensitivities, risk of confusing or antagonizing customers)
Differential Pricing
The decisions and activities that make products available to consumers when and where they want to purchase them
Distribution
Typical criteria for qualifying prospects and turning them into leads
Does the prospect represent a good fit (in our target market)? Has the prospect indicated interest? Do they have the ability and authority to buy?
(desk jobbers) limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products
Drop shipper
__________________ is one in which a slight decrease in price results in a relatively large increase in demand, or units sold; inelastic demand is the opposite
Elastic demand
using a single outlet in a fairly large geographic area to distribute a product (Suitable for products purchased infrequently, consumed over a long period of time, or that require a high level of customer service or information; used for expensive, high-quality products with high profit margins, not appropriate for convenience products and many shopping products, used as an incentive to sellers when a limited market is available for products
Exclusive distributions
the receiver's response to a decoded message
Feedback
For products with distinct seasonal patterns
Fighting
an arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
Franchising
How many times, on average, were they exposed to ads
Frequency
perform the widest range of wholesaling functions
Full-service wholesaler
have a wide product mix but limited depth within product lines
General-merchandise wholesalers
What is the total communication impact of the campaign, across media channels or over a particular channel
Gross Rating Points
using all available outlets to distribute a product (appropriate for products that have a high replacement rate, require almost no service, or are bought based on price cues; must be available at a store nearby and be obtained with minimal search time)
Intensive distribution
developing and maintaining adequate assortments of products to meet customers' needs
Inventory Management
provide some services and specialize in a few functions
Limited-service wholesaler
___________ involving physical distribution, relates to planning, implementing, and controlling the efficiency products and includes order processing, inventory management, materials handling, warehousing, transportation
Logistics
planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption in order to meet customers' needs and wants
Logistics management
a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Marketing Channel
middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products; play key role in customer relationship through distribution activities by maintaining databases and information systems to help all members of the marketing channel maintain effective customer relationships
Marketing Intermediaries
the difference between the cost of a good and its selling price; Grocery store markup average is -10 % ; ?
Markup
budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them
Objective-and-task approach
stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts
Off-price retailers
Reorder points are a function of:
Order lead time (The average time lapse between placing the order and receiving it), Usage rate (The rate at which a product's inventory is used or sold during a specific time period), Safety stock (The amount of extra inventory a firm keeps guarding against stockouts resulting from above-average usage rates and/or longer-than-expected lead times)
set a relatively low price to drive market share/value perceptions (designed for high market share (hence penetration), volume over margin, discourages competition, good for elastic products)
Penetration Pricing
multiplying the firm's past and expected sales by a standard percentage (often an industry average)
Percentage-of-sales approach
a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
Personal Selling
Evaluation of advertising effectiveness after the campaign
Posttest
extra compensation to salespeople for pushing a line of goods
Premium money (also "push money" or "spiff")
Evaluation of advertisements performed before a campaign begins
Pretest
set a relatively high price at first and then lower it over time (popular in electronics, allows for sunk costs, good for inelastic demand, encourages competition)
Price Skimming
emphasizing price as an issue and matching or beating competitors' prices; need to be the low-cost seller of the product, have ability to change prices rapidly and aggressively
Price competition
company operated facilities for storing and shipping their own products
Private warehouses
processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information
Procurement
"the paid inclusion of branded products or brand identifiers through audio and/or visual means, within mass media programming" ; Sometimes it is a minor part of an IMC campaign - but at other times it is central
Product Placement
strategies that encourage purchases based on consumers' emotional responses, rather than on economically rational ones
Psychological Pricing
communication efforts used to create and maintain favorable relations between an organization and its stakeholders
Public relations - Can be directed at either internal and/or external stakeholders - Can be used to promote people, places, ideas, activities, and even countries - Is often used by nonprofit organizations as well as corporations Focuses on enhancing the image of the total organization
storage space and related logistics facilities that can be leased by companies
Public warehouses
For some products consumed year-round but with some seasonality (ect. Swimwear)
Pulsing
To determine whether or not someone who is interested in your services is a good fit as a customer. If yes, they are worthy of your time and effort to turn them into a customer
Qualifying a prospect
full-service, specialty-line wholesalers that own and maintain display racks in stores
Rack Jobbers
How many people (raw number) or what percentage of the target audience were exposed to ads
Reach
sales-promotion techniques in which a consumer receives a specified amount of money for making a single project purchase
Rebates
the individual, group, or organization that decodes a coded message
Receiver
a posttest in which respondents are shown the actual ad are asked if they remember seeing or hearing it
Recognition test
sales-promotion techniques that offer consumers a specified amount of money when they mail in a proof of purchase, usually for multiple product purchases
Refunds
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
Safety stock (reorder point)
a sales promotion method used to motivate distributors, retailers, and sales personnel through recognition of outstanding achievements
Sales contests - Advantages: can achieve participation at all distribution levels - Disadvantages: positive effects may be temporary, and prizes are usually expensive
provides salespeople with what they need to engage their target buyers including: - Content that sales will provide to the buyer - Best practices, research and tools that Sales will consume internally
Sales enablement
__________ is the most expensive sales-promotion method because production and distribution entail high costs; 92% of respondents said they would purchase a product if they liked it after getting
Sampling
using only some available outlets in an area to distribute a product (appropriate for shopping products, desirable when a special effort, such as customer service from a channel member, is important to customers; often used to motivate retailers to provide adequate service
Selective distributions
a person, group, or organization with a meaning it tries to share with a receiver or an audience
Source
all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer
Supply chain
the group of people at whom advertisements are aimed
Target Audience
the use of a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal selling process
Team selling it is increasingly important because: - Team buying, more people are involved in the prospect's buying process - Long time periods involved - Products and solutions are increasingly complex
(truck jobbers) limited-service wholesalers that transport products directly to customers for inspection and selection
Truck wholesalers
a posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues
Unaided recall test
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations
Wholesaler
transactions in which products are bought for resale, for making other products, or for general business operations
Wholesaling
Personal, informal exchanges of communication that customers share with one another about products, brands, and companies
Word-of-mouth communication
When it comes to using consumer premiums, marketers need to make sure there is a good fit between the product sold and the accompanying product offered as a bonus. Which of the following represents the best "fit"? a) A free bottle of face and body lotion with the purchase of a razor b) A food coupon with the purchase of sunglasses c) A free hat with the purchase of swim goggles d) An entry into a sweepstakes for a space trip with the purchase of a ticket to Disney World
a) A free bottle of face and body lotion with the purchase of a razor
Imagine that you ran an advertising campaign targeted to young women in the Southeast US who purchase jewelry. Research tells you that 40 percent of that audience saw or heard your ad at least once. In the language of media planning, your campaign generated a(n) ___ of 40: a) Frequency b) Gross rating c) Accumulation d) Reach e) Expansion
a) Frequency
Which of the following is an advantage for public relations, compared to other options in the promotional mix? a) Marketers have direct control over the message and how it appears b) Messages delivered as a result of PR have higher credibility with target audiences c) Public relations is essentially free d) Marketers can predict the timing of when PR-generated messages will ultimately appear
b) Messages delivered as a result of PR have higher credibility with target audiences
Considering all the costs involved, the most expensive part of the promotional mix is usually: a) Public relations b) Personal selling c) Sales promotion d) Advertising
b) Personal selling
This advertising medium has several advantages including low cost, the opportunity for geographic targeting, and availability 24/7. However, there is no way to be selective in who sees your message and audiences have only a very limited amount of time to notice your message: a) Radio b) TV c) Outdoor d) Direct mail e) Newspapers
c) Outdoor
When companies find themselves with too much inventory they suffer from "carrying costs." Which of the following is NOT an example of a carrying cost? a) Products become outdated or obsolescent b) Products are more at risk of being stolen c) The company misses out on opportunities to sell the inventory d) The company spends extra money on freight and storagee) More products get damaged or broken in transport
c) The company misses out on opportunities to sell the inventory
Many times retailers, such as grocery stores, sell products which actually have a negative markup (meaning, they lose money on the sale of that particular product). What is the most common business reason for this? a) The retailer chose a push strategy based on volume b) There aren't enough profitable products for retailers to sell c) Retailers lack the systems and data necessary to track the profitability of individual products d) A loyal customer's lifetime value is more important to retailers than an individual product
d) A loyal customer's lifetime value is more important to retailers than an individual product
Let's say you wanted to own and operate a Firehouse Subs location, and you successfully made that agreement. In that scenario you would be considered the _____ and Firehouse Subs would be the _____. a) franchisor; franchisee b) provider; distributor c) broker; agent d) franchisee; franchisor e) promoter; distributor
d) franchisee; franchisor
Most companies have an _____________ force to take orders, follow up on deliveries, and provide technical information
inside sales
anything that reduces a communication's clarity and accuracy
noise
Redemption rates have been changing over time:
o Typical redemption rates of printed coupons range from 0.5% to 2% o Average coupon redemption rates from email coupons via desktop channels are at 2.7% o Coupons received via smartphone applications have higher redemption rates of between 8% to 16% o Retailers who offer both email and SMS coupons see even higher redemption rates of between 15% and 25%
ending prices in odd or non-round numbers limited processing capacity, specific price makes consumers think it is lowest possible price, record keeping)
odd-even pricing
generally the most expensive element in the promotion mix
personal selling
items offered free or at a minimal cost as a bonus for purchasing a product
premiums
The inventory level that signals the need to place a new order
reorder point
Not enough inventory means
stockout costs