MKT 350 - Exam 3
Provide some examples of trade sales promotions (B2B)
-Cooperative Advertising -Dealer Listings -Free Merchandise and Gifts -Sales Contest -Premium Money (Push Money)
Provide some examples of consumer sales promotions (B2C)
-Free samples -Games -Rebates -Sweepstakes -Contests -Premiums -Coupons (most widely used)
Why would a product need to be re-positioned?
-Need to increase market share and profitability -Requires changes in perception and usually changes in product features -Can be accomplished by changing the product, its price, or its distributors -May reposition by aiming it at a different target market
How do we select the right Promotional Mix?
-Promotion resources, objectives, and policies -Characteristics of the target market -Push and pull channel policies -Cost and availability of promotional methods -Characteristics of the product
Define each element in the Promotional Mix and provide an example.
1. Advertising - paid nonpersonal communication transmitted to a target audience through mass media 2. Personal Selling - paid, personal communication 3. Public Relations - unpaid, nonpersonal; broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders 4. Sales Promotion - an activity or material that acts as a direct inducement offering added value or incentive for the product to resellers, salespeople, or customers (paid, nonpersonal)
What are the three levels of brand loyalty?
1. Brand Recognition 2. Brand Preference 3. Brand Insistence
What are the four types of consumer products?
1. Convenience Products 2. Shopping Products 3. Specialty Products 4. Unsought Products
What are the three bases for pricing? Give an example for each.
1. Cost 2. Demand 3. Competition
What are the categories of price strategy?
1. Differential Pricing - using different prices for the same product; Ex. Secondary-Market Pricing 2. Product-Line Pricing - establishing and adjusting prices of multiple products within a product line; Ex. Captive Pricing (basic product low while related items higher) 3. Psychological Pricing - pricing that attempts to influence a customer's perception of price to make a product's price more attractive; Ex. Multiple-Unit Pricing 4. Promotional Pricing - offering prices based on some promotion; Ex. Special-Event Pricing
What are the 7 stages of New Product Development?
1. Idea Generation 2. Screening 3. Concept Testing 4. Business Analysis 5. Product Development 6. Test Marketing 7. Commercialization
What are the 6 Service Characteristics?
1. Intangibility 2. Inseparability of production and consumption 3. Perishability 4. Heterogeneity 5. Client-based relationships 6. Customer Contact
Describe the three levels of intensity of distribution and provide an example of each
1. Intensive - using all available outlets to distribute a product; products with high replacement rate, no service needed, and are bought on price cues 2. Selective - using only some available outlets in an area to distribute a product; shopping products, desirable when a special effort is important to customers, often used to motivate retailers to provide adequate service 3. Exclusive - using a single outlet in a fairly large geographic area to distribute a product; used for infrequent, expensive purchases that are consumed over a long time and require lots of information prepurchase
What are the three types of brands?
1. Manufacturer Brands 2. Private Distributor Brands 3. Generic Brands
Recognize the 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
List and describe the four ways Retailers add value
1. Providing an assortment of products and services 2. Breaking bulk 3. Holding inventory (time and place utility 4. Providing supplementary services
What are the Pricing Objectives?
1. Survival - adjust price levels to increase sales volume to match expenses 2. Profit - price and cost levels that allow maxing profit 3. Return on Investment - price levels enabling yielding targeted ROI 4. Market Share - adjust price levels to maintain or increase sales relative to competitors 5. Cash Flow - set price levels to encourage rapid sales 6. Status Quo - identify price levels that help stabilize demand and sales 7. Product Quality - set prices to recover research and development expenditures and establish a high-quality image
What are the 5 Dimensions of Service Quality
1. Tangibles - physical evidence of the service 2. Reliability - consistency and dependability in performing the service 3. Responsiveness - willingness or readiness of employees to provide the service 4. Assurance - knowledge/competence of employees and ability to convey trust and confidence 5. Empathy - caring and individual attention provided by employees
Describe the most critical pros and cons of each Promotional Mix element
Advertising -Pros: Cost efficient to reach a large group of people -Cons: Hard to measure effect, less persuasive, high upfront cost Personal Selling -Pros: More personal, immediate feedback -Cons: Expensive Public Relations -Pros: higher degree of trust, free (someone else spreads message), many tools -Cons: lose control of the message Sales Promotion -Pros: Customers like it -Cons: Can be expensive, can be difficult to measure ROM
Demand Curve
As prices fall, quantity demanded usually rises Demand also depends on other factors in the marketing mix. An improvement in any of these factors may cause a shift to demand curve D2 in which an increase quantity will be sold at the same price
What channel is most typical for B2C? For B2B? Why?
B2C - long channel may be the most efficient channel because it reduces the cost the most for the consumer versus one person doing it all (Producer > Wholesaller > Retailer > Consumer) B2B - Producer > Organizational Buyers; saves time and less concern on the overall cost of something, also allows for buying in bulk
What are the components of a Brand?
Brand Name and Brand Mark
Channel Captain
Channel Leader dominant leader of a marketing channel or a supply channel Ex. Nike, Wal-Mart
Channel capacity
Channel capacity - limit on the volume of information a communication channel can handle effectively
What is the difference between the core product and its supplemental features?
Core Product - Consists of fundamental utility or main benefit - Usually a fundamental need of the consumer Supplemental Features - Provide added value or attributes that are in addition to the product's core utility or benefit - Are not required to make the core product function effectively - Help differentiate the product brand from another*
Recognize the 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
Understand how marketing a service impacts the marketing mix
Distribution: -Marketing channels for services usually are short and direct Promotion: -Compared with goods marketers, service providers are more likely to promote: price, guarantees, performance documentation, availability, and training and certification of personnel. Pricing: -Pricing can be dependent on demand, time spent, bundled services, etc. Lots of flexibility here
What is the goal of supply chain management?
Focus on the customer's satisfaction since they are the ultimate consumer
What is the difference between a General Merchandise and Specialty Retailer
General-merchandise retailers - retail establishment that offers a variety of product lines that are stocked in considerable depth Specialty retailers - retail establishment that emphasizes narrow and deep assortment of items
Test Market
Introducing a product in limited fashion to an area that would give useful data about how the product does with the target market
Which elements of the marketing mix are the least and most flexible?
Least Flexible - Distribution/Place (hard to change channel once it is set) Most Flexible - Price
What is the difference between Product Line Extension and Product Modifications?
Line Extension - development of a product that is closely related to existing products in the line but is designed specifically to meet different consumer needs; Ex. Reese's different products Product Modifications - changes in one or more characteristics of a product Key difference -- Product modifications remove the original product from the product line with the new modified version while line extensions keep the original product with a new product that is similar but fulfilling a different need
How do intermediaries provide value in the supply chain? Wouldn't shorter be better?
No. Intermediaries provide valuable assistance because of their access to and control over important resources used in the proper functioning of marketing channels Basically, you would rather go to one store and have all the product choices there versus going to each manufacturer to find things from the same product class
Multichannel Retailing
Omni-retailing employing multiple distribution channels that complement their brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews, and make actual purchases
What is the difference between price and nonprice competition?
Price competition emphasizes price as an issue and works to match or beat competitor's prices while nonprice competition emphasizes factors other than price to distinguish their product from competitors (customer loyalty)
Describe the Price/Quality Association
Pricing high can emphasize the quality of a product and the prestige of owning it Pricing low can emphasize a bargain and attract customers who want to save money
What is the difference between Primary Demand and Selective Demand?
Primary Demand - demand for a product category rather than a specific brand; Ex. Got Milk? Selective Demand - demand for a specific brand; need aspects singling out a brand to attract buyers
Rollout
Product is introduced starting in one geographic area or set of areas and gradually expands into adjacent ones
What is the main goal of the Media Plan?
Reach the largest number of people in the advertising target that the budget will allow
Differentiate between Sales and Communication Objectives
Sales: -Increase absolute dollar sales or unit sales -Increase sales by a certain percentage -Increase the firm's market share Communication: -Increase product or brand awareness -Make consumers' attitudes more favorable -Heighten consumers' knowledge of product features -Create awareness of positive, healthy consumer behavior
Describe several Sales Promotion tools
Samples, Discounts, Contests, Coupons, Premium Offers
How do you flow through the Communication Process?
Source > Coded Message > Communications Channel > Decoded Message > Receiver or Audience > Feedback to Source (noise) Figure 16.1 Slide 5 Chapter 16
Explain the communication process.
Source sends an ecoded message (contains meaning in a series of signs or symbols) through a communication channel (medium of transmission from source to receiver). The receiver then decodes the message by converting signs and symbols into concepts and ideas. The receiver then provides feedback to the source which is their response to a decoded message (verbal or nonverbal). Throughout this entire process, noise can be present which reduces a communication's clarity and accuracy.
What is Co-branding?
Using two or more brands on one product Needs consumer trust from both brands Ex. Doritos Locos Taco at Taco Bell
Product
a good, service, or idea received in an exchange
Intangibility
a service is not physical and cannot be perceived by the sense (major characteristic distinguishing a service from a good)
Supply Chain
all the organizations and activities involved with the flow and transformation of products from raw materials through to the end consumer
Retailer
an organization that purchases products for the purpose of reselling them to ultimate consumers
Noise
anything that reduces a communication's clarity and accuracy
Product Mix Depth
average number of different products in each product line
Define the Advertising Platform
basic issues or selling points to be included in an advertising campaign generally want to communicate ONE strong, central message in a campaign that consists of issue(s) important to customers
Generic Brands
brand indicating only the product category
Private Distributor Brands
brand initiated and owned by a reseller AKA private brands, store brands, or dealer brands Ex. Best Choice, Great Value
Manufacturer Brands
brand initiated by producers to ensure that producers are identified with their products at the point of purchase Ex. Green Giant, Del Monte
Family Branding
branding all of a firm's products with the same name or part of a name Ex. FedEx Express, FedEx Freight, FedEx Ground
Individual Branding
branding strategy in which each product is given a different name Ex. General Motors has Buick, Cadillac, Chevy, GMC
Value Consciousness
buyers concerned about the price and quality of a product
Prestige Sensitivity
buyers drawn to products that signify prominence and status
Price Consciousness
buyers striving to pay low prices
Marketing Channel
channel of distribution or distribution channel a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
What is the promotion mix?
combination of promotional methods used to promote a specific product
Horizontal Channel Integration
combining organizations at the same level of operation under one management Ex. Heinz and Kraft Foods comes together
Vertical Channel Integration
combining two or more stages of the marketing channel under one management
Promotion
communication to build and maintain relationships by informing and persuading one or more audiences
Product Mix
composite, or total, group of products that an organization makes available to customers
Supply Chain Management (SCM)
coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer
Integrated Marketing Communications (IMC)
coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers; send a consistent message to customers
Brand Recognition
degree of brand loyalty in which a customer is aware that a brand exists and views the brand as an alternative purchase if their preferred brand is unavailable Ex. I've heard of Pepsi and Coke and RC Cola and Dr. Pepper
Brand Preference
degree of brand loyalty in which a customer prefers one brand over competitive offerings Ex. I prefer Pepsi, but I'll drink a Coke if there isn't any Pepsi here.
Brand Insistence
degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute Ex. I refuse to drink your Coke swill. Pepsi is the only drink for me!!!
Product Development
determining if producing a product is technically feasible and cost-effective by creating a prototype or beta version of the product
Business Analysis
evaluating the potential impact of a product idea on the firm's sales, costs, and profits
Product Line
group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations
Time Utility
having products available when the consumer wants them Ex. Rain jackets towards the end of winter to prepare for Spring
Service
intangible product that involves a deed, a performance, or an effort that cannot be physically performed it is not the same thing as customer service which adds value to goods or services
Client-Based Relationships
interactions that result in satisfied customers who use a service repeatedly over time Word of mouth is key here
What are shopping products?
items for which buyers are willing to expand considerable effort in planning and making purchases Ex. appliances, bicycles, furniture, stereos, cameras, shoes
What are specialty products?
items with unique characteristics that buyers are willing to expend considerable effort to obtain Ex. fine jewelry, limited-edition collector's items
Customer Contact
level of interaction between provider and customer needed to deliver the service Ex. Physical appearance of facility, Employee Satisfaction* Low: Taxes, Dry Cleaning High: Health Care, Legal Services
Test Marketing
limited introduction of a product in geographic areas chose to represent the intended market
Place Utility
making products available in locations where customers wish to purchase them Ex. Warm clothes in cold areas
Marketing Intermediaries
middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products
Brand
name, term, design, symbol, or other feature that identifies one seller's product as distinct from those of other sellers
Product Mix Width
number of product lines a company offers
What is atmospherics and give an example
physical elements in a store's design that appeal to consumer's emotions and encourage buying Ex. music, color, smells, layout
What are unsought products?
products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying Ex. emergency medical services, automobile repairs
Inseparability of Production and Consumption
quality of being produced and consumed at the same time shared responsibility between the customer and service provider
Commercialization
refining and finalizing plans and budgets for full-scale manufacturing and marketing of a product
What are convenience products?
relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort Ex. bread, soda, gum, gas, newspapers
Concept Testing
seeking a sample of potential buyers' responses to a product idea through low cost, risk free method
Idea Generation
seeking product ideas to achieve organizational objectives through internal or external sources
Screening
selecting the ideas with the greatest potential for further review
How do wholesalers add value?
selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, management services and advice
Hedonic Shopping
shopping for fun (walking around Bass Pro)
Utilitarian Shopping
shopping with intention or purpose (weekly grocery list)
Product Item
specific version of a product that can be designated as a distinct offering among a firm's products
Supplementary Service
supports the core service used to differentiate the service bundle from those of competitors
Core Service
the basic service experience or commodity that a customer expects to receive
Product Positioning
the decisions and activities intended to create and maintain a certain concept of the firm's product, relative to competitive brands, in customers' minds ANYWHERE is better than NOWHERE
Perishability
the inability of unused service capacity to be stored for future use
Describe the concept of dual distribution and provide an example.
the use of a variety of marketing channels to ensure maximum distribution Ex. Pop-up shop selling makeup in HyVee
Direct Marketing
use of telephone, Internet, and non personal media to introduce products to customers who can then purchase them via mail, telephone, or the Internet Ex. Online retailing, catalogs, telemarketing, home TV shopping
Price
value paid for a product in a marketing exchange Does not always mean money. Bartering is an example of price. Credit is an example of price.
Heterogeneity
variation in quality nature of human behavior makes it very difficult for service providers to maintain a consistent quality of service delivery
Give an example of a Category Killer
very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability Ex. Barnes and Noble, Best Buy, Staples
