Entrepreneurship: Ideas In Action Chapter 6

Retail Business Distribution

(1) Offer products conveniently in location and hours (2) Use of catalogs, fliers, and other advertisements to reach customers outside of the area. (3) Create a website.

Customer Decision Making Process

1. Define the problem 2. Gather Information 3. Identify Various Solutions 4. Evaluate Alternatives and select the best option 5. Take Action 6. Evaluate the action

Publicity

A nonpaid form of communication that calls attention to your business through media coverage.

Advertising

A paid form of communication sent out by a business about a product or service. Large companies generally use advertising agencies. Small businesses generally handle their own advertising.

Rebate

A refund offered to people who buy a product.

Determining Customer Needs and Wants

A salesperson must determine what need the customer is seeking to satisfy in order to sell a product/service to meet the need. *Lower-Level Needs - customers do not need assistance of a salesperson. *Higher-Level Needs - Need assistance of a salesperson, so selling skills are important for these needs

Infomercial

A special type of television advertisement that can last a half hour or more and go into great depth about the product being offered.

Press release

A written statement meant to inform the media of an event or product.

Product Storage and Handling

Allows channel members to balance supply and demand of products. However, this adds to the cost of the products and adds the risk that products may be damaged or stolen while stored.

Distribution

An important component of supply chain management that involves the locations and methods used to make products and services available to customers.

Mass Media

Any means of communication that reaches very large numbers of people, such as the internet, television, radio, and print publications.

Emotional Buying Decision

Based on the desire (not need) to have a specific product or service. People often spent little time on these types of purchases (impulsive).

Rational Buying Decision

Based on the logical reasoning of customers.

Paying for Online Advertising

Common types: *Cost per Mille (CPM) - Charged based on the exposure of the message to a specific audience. *Cost per Click (CPC) - Charged based on the number of user clicks on the advertisement. *Cost per Action (CPA) - Charged based on the user taking some form of action that will lead to a sale (such as completing a form or registering for a newsletter).

Display Advertising

Form of online advertising. Common types: *Banner ads (graphic images or animation shown in a rectangular box across the top or down the side of a web page.) *Pop-up ads (ads displayed in a new window that opens in front of the current window) *Floating ads (ads that move across the screen or float above the page content) *Interstitial ads (ads displayed before a user can access the content requested through a link)

Visual Marketing

Involves the use of visual media to promote, sell, and distribute a product or service to a targeted audience.

Manufacturing Business Distribution

Make products and then sell them to other businesses, such as retailers. Retailers then sell the products to the customer.

Service Business Distribution

Most often sell services directly to customer.

Direct Channel

Moves the product directly from the manufacturer to the consumer.

Newspaper Advertising

PROs *Reach - the number of people who read the newspaper within a given geographic area *Easy to change ads quickly *Good for mass marketing CONs *Steady drop in readers *Not good for a target market *Easily overlooked on the page

Magazine Advertising

PROs *Very powerful method for targeting specific markets. *May reach people outside of your geographic area *Using QR Codes allows users to scan the code and bring customers to a website CONs *Takes a long time to get an ad in a magazine (weeks to months) *Cost is high

Intermediaries

People or businesses such as agents and wholesalers that move products between the manufacturer and the consumer.

Public relations

The act of establishing, a favorable relationship with customers and the general public.

Sales Promotion

The act of offering an incentive to customers in order to increase sales. Examples include a contest, a free sample, and a coupon. An important part of a promotional plan is to evaluate the effectiveness of the promotional strategies being used.

Supply Chain Management

The coordination of manufacturers, suppliers, and retailers working together to meet a customer need for a product or service.

Intellectual Property

The original, creative work of an artist or inventor and may include such things as songs, novels, artistic designs, and inventions.

Channels of Distributions

The routes that product and services take from the time they are produced to the time they are consumed. There are 4 basic options. (1) manufacturer to consumer (the most cost effective option) (2) manufacturer to retailer to consumer (3) manufacturer to wholesaler to retailer to consumer, and (4) manufacturer to agent to wholesaler to retailer to consumer (Manufacturer is not involved in selling in this option).

Television Advertising

Type of advertising allowing businesses to appeal to multiple senses through its combination of text, images, sound, and motion. This type of advertising reaches too broad an audience to be cost-effective for most businesses.

Indirect Channel

Uses intermediaries - people or businesses that move products between the manufacturer and the consumer.

Telemarketing

Using the phone to market your product or service.

Personal Selling

Direct communication between a prospective buyer and a sales representative in which the sales representative attempts to influence the prospective buyer into a purchase situation.

Distributing Goods and Services

Distribution increases the value of goods and services by getting them to customers when and where they are needed (Timeliness is IMPORTANT) . Retail businesses, service businesses, and manufacturing businesses will choose different channels of distribution based on the needs of their business. Those needs can vary based on the size of the market, the type of product or service, and customer needs and wants.

Direct-Mail Advertising

Includes fliers, catalogs, letters, and other correspondence sent to target customers through the mail.

Physical Distribution

Includes not only transportation but also storage and handling of products and packaging within a channel of distribution.

Need Assessment of Selling

Interviewing a customer to determine specific needs/wants. *Need satisfying - The fulfillment of a customer's need/want when the customer knows what they want. *Problem resolution - The process of satisfying the need when the need is not identified. This requires salesperson to adopt the customer's point of view, ask questions, and act as consultant to assist customer in solving the problem.

Intellectual Property Distribution

Songs and artistic designs may be distributed through radio or art museums. May be purchased through retailers or downloaded.