Chapter 11 MARKETING MANAGEMENT

conflict occur

can occur in which channel members experience disagreements and their relationship can become strained or even fall apart.

rational appeal

centers on benefits an offering can provide to a customer.

Vertical Marketing system

consists of vertically aligned networks behaving and performing as a unified system.

pull strategy

focuses much of its promotional investment on the end-user consumer

promotional campaign

for a particular product or product line tracks the effectiveness and efficiency of promotional strategies as it allocates expenditures to a specific creative execution over a given time period.

all-you-can-afford method

a firm simply sets its promotion budget as whatever funds are left over after everything else that's considered a necessity is paid for.

promotion

advertising, sales promotion, public relations (PR) personal selling, direct marketing and interactive marketing

market research

intermediaries are closer to end-user consumers and business users than manufacturers, they are in an ideal position to gather information about the market and consumer trends

selling

intermediaries provide a sales force to represent a manufacturer's product line.

coercive power

involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it does not comply with the leader's request or expectations

Interactive marketing

is an Internet-driven relationship between companies, their brands, and customers

value network

is an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space.

internal marketing

is the application of marketing concepts and strategies inside an organization

Channel power

is the degree to which any member of a marketing channel can exercise influence over the other members of the channel.

Physical distribution or logistics

is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution.

percentage-of-sales method

is the most popular approach to promotion budgeting but it is a very constraining model for a firm.

communication

is the process of exchanging information and conveying meaning from one party to another

Integrated marketing communications (IMC)

is the strategic approach companies use to communicate to their target customers

objective-and-task method

it takes an investment approach in that goals are set for the upcoming year and then promotional dollars are budgeted to support the achievement of those goals.

push strategy

means that much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution.

expert power

might take the form of sharing important product knowledge

Reward power

occurs when a firm cannot bypass a channel even though there may be conflict. Most manufacturers want to have their products in Walmart even though it is very rigid in the vendor requirements.

emotional appeal

plays on human nature using humor, drama, joy, adventure, sorrow, love, surprise, guilt, shame, fear—the whole gamut of human emotions and aspirations—in developing promotional messages

value chain

portrays a synthesis of primary and support activities utilized by an organization to design, produce, market, deliver, and support its products.

degree of puffery

relatively minor embellishments of product claims to bolster the persuasive message, generally is legal.

supply chain

represents all organizations involved in supplying a firm, the members of its channels of distribution, and its end-user consumers and business users.

Legitimate power

results from contracts such as franchise agreements or other formal agreements.

promotion mix strategies

simply promotional strategies, involves decisions about which combination of elements in the promotion mix is likely to best communicate the offering to the marketplace.

AIDA

so named because the effects (or steps) build in this order: Attention (or Awareness), Interest, Desire, and Action.

breaking bulk

such as consumer health products, when finished goods come off a firm's production line, the manufacturer packages the individual pieces into large cartons for shipping into the channel of distribution

disintermediation

the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, is common in the electronic channel.

risk-taking

A big part of how an intermediary can add value is by reducing the risk of others in the channel.

channel of distribution

A channel of distribution consists of interdependent entities that are aligned for the purpose of transferring possession of a product from producer to consumer or business user.

moral appeal

A moral appeal in promotional messaging is used to strike a chord with a target customer's sense of right and wrong

manufacturers agent

Agent that usually operates on an extended contract, often sells within an exclusive territory, handles noncompeting but related lines of goods, and has limited authority to price and create terms of sale.

financing

Alternatively, credit may be facilitated by outside sources such as banks and credit card providers.

buying

Both wholesalers and retailers perform an important function by evaluating products and ultimately simplifying purchase decisions by creating assortments.

agent

Business entity that negotiates purchases, sales, or both but does not take title to the goods involved.

Accumulating Bulk and Sorting

Eggs, for example, might come into a processing house from individual farm operators for sorting by grade and size, then to be packaged and sent on their way to retailers

wholesaler

Entity primarily engaged in buying, taking title to, storing (usually), and physically handling goods in large quantities. Wholesalers resell the goods (usually in smaller quantities) to retailers or to organizational buyers.

retailer

Entity primarily engaged in selling to end-user consumers

facilitating agent

Entity that assists in the performance of distribution tasks other than buying, selling, and transferring title (examples include trucking companies, warehouses, importers, etc.).

Transportation and Storage

Relatively few producers operate their own transportation networks or provide warehousing facilities

other services

Services performed by intermediaries run a gamut of activities such as training others in the channel on how to display or sell the products, repair and maintenance of products after a sale, and providing customized software for inventory management, accounting and billing, and other opera- tional processes.

middleman

Independent business entity that links producers and end-user consumers or organizational buyers.

creating assortment

Intermediaries engage in creating assortments when they accumulate products from several sources and then make those products available down the channel as a convenient assortment for consumers.

marketing communication

Intermediaries frequently receive incentives from manufacturers to participate in helping promote products in the channel.

comparative-parity method of promotion budgeting

Ithe marketing manager focuses on the competitive marketplace and specifically on comparing promotion expenditures across all key competitors in the market to find a budget number that matches.

jobber

Middleman that buys from manufacturers and sells to retailers. This intermediary is sometimes called a "rack jobber" to connote the service of stocking racks or shelves with merchandise.

merchant middleman

Middleman that buys goods outright, taking title to them.

promotional appeal

Much of the message design process requires strong creative energy to come up with a that is appropriate for the offering and market, connects well with the brand, and has a high likelihood of ultimately taking the target through the AIDA steps toward purchase.

noise

The distortion or interference that can occur at any stage of a communication process

supply chain management

The goal is coordination of these value-adding flows among the entities in a way that maximizes overall value delivered and profit realized.

Referent power

When a channel member is respected, admired, or revered based on one or more attributes, that member enjoys referent power within the channel. Only the best of the best brands can rely on this power source.

distributor

Wholesale middleman, found especially when selective or exclusive distribution is common and strong promotional support is needed. Sometimes used synonymously for a wholesaler.