ICORE MARKETING FALL FINAL 2017 KITZ
Under a pull strategy, consumer demand does what
"pulls" the product through the channels
N Price elasticity formula
%change in quantity / % change in price
A push strategy involves what
-"pushing" the product through marketing channels to final consumers -the producer directs its marketing activities toward channel members to induce them to carry the product and promote it to final consumers -a promotion strategy in which the sales force and trade promotion are used to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers
What sort of promotion do companies use
--scattered and unplanned trade advertising, sales promotion, personal selling, public relations -they are behind the times in personal selling -wholesalers usually not promotion minded
Multichannel marketing sells indirectly to business segments how
-1. through distributors and dealers and to business segment 2. through its own sales force
Convenience store ex
-7-eleven -stop-n-go -circle K -Sheetz
N Reach/Frequency + Awareness
-75% of the target audience will see the advertisement at least x times over the next 6 weeks -campaign will generate a 5% life in sales one week after initiation and create a sustainable 3% lift -brand awareness will increase by X percent after the campaign
N Key trends in retail today
-AMAZONGO
N Ex of AI being used by companies
-Amazon for restaurant mobile order-ahead -Apple to bolster support for loyalty and rewards on mobile point of sale -Barclaycard US issuing a cobranded Uber credit card
How does the cultural exchange go both ways
-America gets as well as gives cultural influence -True Hollywood dominates global movie market but British TV has come into American programming like the Office, Harry Potter, American Idol
N Examples of Geographic pricing
-Apple prices their phones by region -Target takes markdowns based on performance of product by geographic cluster
N Consistent layouts include
-Apple's iPod ads with silhouetted dances people on bright backgrounds -Created by TBWA Chiat Day, iconic ads helped make the iPod the number one MP3 player in the world and helped Apple extend its brand from a computer company to a consumer electric company
Pull strategy ex book
-Consumer -> retailers and wholesales -> producer - ---> over the first arrow, it says demand - ---> over the second arrow, it says demand -producer marketing activities the entire time
N Major Pricing Strategies
-Customer Value Based Pricing -Cost Based Pricing -Competition Based Pricing
How does public relations use audiovisual materials
-DVD's, online videos -increasingly used as communication tools
N FDI
-Direct investment -buy or build -assembly facility -manufacturing -sales offices
5 types of geographical pricing
-FOB origin pricing -Uniform delivered pricing -Zone pricing -Based Point Pricing -Freight Absorption pricing
N Apps that dominate the media landscape in order
-Facebook -Whatsapp -messenger -wechat -instagram -etc
Economic factors indicators of market potential
-GDP size and growth -income distribution -industrial infrastructure -natural resources -financial and human resources
N Relatively inelastic demand Ex
-Gas is an example because most people need it, so even when prices go up, demand doesnt change greater -stronger brands tend to be more inelastic
N PR breaks into what
-General PR --> Public Affairs, Lobbying, Investor Relations, Development -Product Publicity -->Media Relations
Does using standard markups to set prices make sense
-Generally, NO -any pricing method that ignores customer demand and competitor prices is not likely to lead to the best price
N Examples of a repeatable theme include
-Got Milk ads created by Lowe Worldwize -York Peppermint Patty ads created by Cliff Freeman -Consumers know the punch line that is coming -They love to see the set up played out in different situations -It is satisfying to be in on the joke -Allstate Character Mayhem creates situations from which people need to be assisted
N Promotion Objectives
-Informative -Reminder -Persuasive -Building Relationships
Global value delivery network, whole channel concept for international marketing
-International seller -> channel b/w nations -> channels within nations-> final user or buyer
Can logistics system be both maximum customer service and minimum distribution costs
-NO
Is globalization a all or nothing proposition
-NO, its a matter of degree -most international marketers suggest that companies should think globally but act locally- that they should seek a balance b/w standardization and adaptation
Are all consumer generated advertising efforts successful
-No -many ads made by amateurs can be amateurish
N Persuasive
-Preference -Switching -value perception
N Ex of Pull Strategy
-Pringles sends coupons through the mail to your home -Silkience places coupons in the newspaper and in RedBook magazine
Push strategy ex book
-Producer --> retailers and wholesalers --> consumers - ---> over the first arrow, it says producer marketing activities - ----> over the second arrow, it says reseller marketing activities
Specialty store ex
-REI -radio shack -williams-sonoma
N Great Heroic character hooks include
-Ronald McDonald, a hero happiness created in 1963 -Ronald helped McDonalds to own family fast food -How effective was this character -Consider that 96% of school children in the US can identify Ronald McDonald -Only Santa Claus is more commonly recognized
N Ex of Push Strategy
-Silkience pays K-Mart to place the brand in the K-Mart circular and lower the price for a week
N Traditional media today
-TV -newspapers -magazines -radio -out of home (outdoor)
N Examples of word hook being used
-Verizons "Can you hear me now?" created by Boznell/New York to convince the world Verizon has the best network
Do retailer online sites and mobile apps influence a large amount of in store buying
-YES -80% of shoppers research products online before going to store to make purchase -62% of shoppers say that they search for deals online for at least half of their shopping trips -62% say they spend 30 minutes online every week to help them decide whether and what to buy
Do format elements make a difference in an ad's impact and cost
-YES because a small change in ad design can make a big difference in its effect -illustration, headline, and copy all work together to present customer value
Many retailing innovations are explained by the wheel of retailing concept which is what
-a concept that suggests new types of retailers usually begin as low margin, low price, low status operations but later evolve into higher priced, higher service operations, eventually becoming like the conventional retailers they replaced -they challenge established retailers that have become fat by letting their costs and margins increase -the new retailers' success leads them to upgrade their facilities and offer more services, increasing their costs, forcing them to increase their prices -eventually new retailers become like the conventional retailers they replaced -the cycle begins again when still newer types of retailers evolve with lower costs and prices
Creative concepts are usually created by who
-a copywriter and an art director will team up to generate many creative concepts, hoping that one of these concepts will turn out to be the big idea
What is the demand curve
-a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
Category killer is what
-a giant specialty store that carries very deep assortment of a particular line
Communication adaptation is what
-a global communication strategy of fully adapting advertising messages to local markets -fully adapting their advertising messages to local markets
N Advertising Strategy
-a long term document which extends and elaborates a brands marketing strategy into the area of ads -what are they gonna see, where see it, how see it, when see it
Indirect marketing channel
-a marketing channel containing one or more intermediary levels
Direct marketing channel
-a marketing channel that has no intermediary levels
Despite its potential strengths, PR is described as what
-a marketing stepchild because of its sometimes limited and scattered use
N Penetration Pricing is what
-a new product is introduced at a lower price -lower price encourages demand and sales in the early stages of the product life cycle -discourages competitors from entering the market -pioneering brand
Supermarket description
-a relatively large, low cost, low margin, high volume, self service operation designed to serve the customers total needs for grocery and household products -a large, low cost, low margin, high volume, self service store that carries a wide variety of grocery and household products
Convenience store description
-a relatively small store located near residential areas, open long hours seven days a week, and carrying a limited line of high turnover convenience products at slightly higher prices -a small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high turnover convenience goods
N What is a distribution channel
-a series of firms or individuals that facilitate the movement of a product from the producer to the final consumer- the downstream VDN
The new marketing communications model will consist of what
-a shifting mix of both traditional mass media and a wide array of exciting, new, more targeted, and more personalized media -the challenge is to bridge the media divide that too often separates traditional creative and media approaches from new interactive and digital ones -the key is to find the mix of media that best communicates the brand message and enhances the customers brand experience
Optimal product pricing, pricing these options is what
-a sticky problem -companies must decide which items to include in the base price and which to offer as options
Specialty store description
-a store that carries a narrow product line with a deep assortment, such as apparel stores, sporting good stories, furniture stores, florists, and bookstores -a retail store that carries a narrow product with a deep assortment within that line
Department store description
-a store that carries several product lines- typically clothing, home furnishings, and household goods- with each line operated as a separate department managed by specialist buyers or merchandisers
Discount store description
-a store that carries standard merchandise sold at lower prices with lower margins and higher volumes -a retail operation that sells standard merchandise at lower margins and selling at higher volume
Off Price retailer description
-a store that sells merchandise bought at less than regular wholesale prices and sold at less than retail -a retailer that buys at less than regular wholesaler prices and sells at less than retail
Producers of convenience products and common raw materials seek intensive distribution meaning
-a strategy in which they stock their products in as many outlets as possible -these products must be available where and when consumers want them
Madison and Vine is what
-a term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages
N A consistent layout uses what
-a unique, design look and repeats these elements at each touch point -this allows customers to easily identify your company in a blink -The more distinct these elements are from your competitors, the easier it is to stand out from the clutter
Superstore description
-a very large store that meets consumers' total needs for routinely purchased food and nonfood items -s store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services
Most companies now regard outlets as what
-a way of disposing of problem merchandise -additional way of gaining business for fresh merchandise
3 factors of how manufacturers have became so myopic about their brands
-abundance of real time sales data that make short term promotional effects more apparent, thus pushing manufacturers to overdiscount -corresponding dearth of usable information to help assess the effects of long term investments in brand equity, new products, and distribution -short tenure of brand managers
Three forces make companies short sighted about managing their brands. What are they
-abundant short term data -difficulty measuring long term marketing tactics -wall street pressures
Financing function of marketing channel members
-acquiring and using funds to cover the costs of the channel work
Public relations consists of what
-activities designed to build good relations with the companys various publics
Cost Plus Pricing is what
-adding a standard markup to the cost of the product -unit variable cost will remain constant regardless of the output, but average unit fixed costs will decrease as output increases
N Reintermediation
-addition of a business
Dynamic Pricing is what
-adjusting prices continually to meet the characteristics and needs of individual customers and situations -some companies are reversing fixed price trend and are using this
Todays retailers are greening up their stores and operating how
-adopting environmentally sustainable practices -promoting more environmentally responsible products -launching programs to help customers be more responsible -working with channel partners to reduce their environmental impact -sustainable building designs, construction, and operations -greening up their product assortments -launched programs that help consumers make more environmentally responsible decisions -joining forces with suppliers and distributors to create more sustainable products, packaging, distribution systems
Thanks to what, online retailing is thriving
-advanced technology -easier to use and enticing web sites -mobile apps -improve online services -increasing sophistication of search technologies
This merging of advertising and entertainment takes one of what 2 forms
-advertainment or branded entertainment
N Promotion mix consists of what
-advertising -PR -Personal Selling -Sales Promotion -Direct Marketing/ Digital Marketing
Measuring what has become a hot issue for most companies, especially in a tighter economic environment
-advertising effectiveness and return on advertising investment
N Public Sphere
-advertising in the public sphere typically engages consumers during moments of downtime when theyre moving b/w one point or activity and the next and have attention free for new inputs
N Social Sphere
-advertising in the social sphere helps people forge new connections or enrich ones -can turn social interactions themselves into carriers of ad messaging -like public sphere advertising, it must appear in the right place at the right time with the right messages -it must be relevant in context, align with social goals, address a social need, and facilitate interaction in innovative ways
Budget Decisions include
-affordable approach -percent of sales -competitive parity -objective and task
4 common methods of an advertising budget
-affordable method -percentage of sales method -competitive- parity method -objective and task method
Companys total promotion mix is what
-aka marketing communication mix -consists of the specific blend of advertising, public relations, personal selling, sales promotion, direct marketing tools that the company uses to persuasively communicate customer value and build customer relationships
IMC tied together what
-all of the companys messages and images -often different media plays unique roles in attracting, informing, and persuading consumers; these roles must be carefully coordinated under the overall marketing communications plan
Wholesaling includes what
-all the activities involved in selling goods and services to those buying them for resale or business use
Retailing includes what
-all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use
For most purchases, consumers do not have what
-all the skills or information they need to figure out whether they are paying a good price -the time, ability, or inclination to research different brands or stores, compare prices, get the best deal
How are cable and satellite tv's thriving
-allow narrow programming format -sports -news -nutrition -arts -home improvement and gardening -cooking -travel -history -finance
How can retail stores be classified by
-amount of service they offer -breadth and depth of their product lines -relative prices they charge -how they are organized
Joint venturing differs from direct investment how
-an association is formed with someone in the foreign countries
Because many factors affect advertising effectiveness, some controllable and others not, measuring the results of advertising spending remains what
-an inexact science -managers must often rely on large doses of judgment along with quantitative analysis when assessing advertising performance
Adapted global marketing is
-an international marketing approach that adjusts the marketing strategy and mix elements to each international target marker, which creates more costs but hopefully produces a larger market share and return
Standardized global marketing is
-an international marketing strategy that basically uses the same marketing strategy and mix in all of the companys international markets
N Which method of international market entry carries the least risk
-answer depends on the type of risk considered
Advertising is what
-any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor
To help implement integrated marketing communications, some companies have done what
-appointed a marketing communications director who has overall responsibility for the companys communication efforts
Creative concepts may emerge how
-as a visualization, a phrase, or a combination of the two
Direct investment can be what
-assembly facilities -manufacturing facilities
Values Based Pricing steps
-assess customer needs and value perceptions -set target price to match customer perceived value -determine costs that can be incurred -design product to deliver desired value at target price
Risk taking function of marketing channel members
-assuming the risks of carrying out the channel work
PR department is often located where
-at corporate headquarters or handled by a third party agency -its staff is so busy dealing with various publics that PR programs to support products marketing objectives may be ignored
What dose sales promotion do
-attract consumer attention, offer strong incentives to purchase, can be used to dramatize product offers and boost sagging sales -invite and reward quick response -advertising says "buy our product", sales promotion says "buy it now"
Limitations of radio
-audio only -fleeting exposure -low attention -fragmented audiences
Within the target group, wholesalers can propose what
-automatic reordering systems -establish management-training and advisory systems -sponsor a voluntary chain
Percentage of sales budget is based on what
-availability of funds rather than on opportunities -may prevent the increases spending sometimes needed to turn around falling sales
Understanding cultural traditions, preferences, and behaviors can help companies do what
-avoid embarassing mistakes -take advantage of cross cultural opportunities
In selecting media vehicles, media planners must do what
-balance media costs against several media effectiveness factors including 1. the planner should evaluate the media vehicles audience quality, 2. the media planner should consider audience engagement, 3. the planner should assess the vehicle's editorial quality
N Global marketing adaptation price
-based on market not cost -brand perception may be very different by market -exchange rate issues and offsets
Why do few companies pay attention to long term effects
-because they are harder to measure
N Ex of selective distribution
-best fit based on product
Companies need to decide on the best what to make sure that the products are available to the right customers, at the right time, in the right place
-best way to store, handle, and move their products and services
N Top reasons that firms are investing In AI
-better data insight -improved productivity -higher cost savings
Progressive retailers are using IT and software systems to produce what
-better forecasts -control inventory costs -interact electronically with suppliers -send information b/w stores -sell to customers within stores
What is a creative concept
-big idea -compelling big idea that will bring the advertising message strategy to life in a distinctive and memorable way
N Ex of disintermediation
-blockbuster replaced by netflix and redbox
Broker is what
-brings buyers and sellers together and assists in negotiation -a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
Advertising includes
-broadcast -print -internet -mobile -outdoor -etc
Companies use PR to do what
-build good relations with consumers, investors, the media, and their communities
N Product Publicity can do what
-build interest in a product -create awareness about an event related to a product
Public Affairs is what
-building and maintaining national or local community relationships
Lobbying is what
-building and maintaining relationships with legislators and government officials to influence legislation and regulation
Persuasive Advertising includes
-building brand preference -encouraging switching to a brand -changing customer perceptions of product value -persuading customers to purchase now -persuading customers to receive a sales call -convincing customers to tell others about the brand
Public relations is what
-building good relations with the companys various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events
Producing a product or service and making it available to buyers requires what
-building relationships not only with customers but with key suppliers and resellers in the companys supply chain
Mood or image execution style
-builds a mood or image around the product or service, such as beauty, love, intrigue, serenity -few claims are made about the product or service except through suggestion
Common business distribution channels
-business marketer can use its own sales force to sell directly to business customers -can sell to various types of intermediaries, who sell to these customers
Agent represents what
-buyers or sellers on a more permanent basis -a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods
Customer Values Based Pricing uses what
-buyers' perceptions of value as the key to pricing
For a fee or royalty payments, the licensee does what
-buys the right to use the companys manufacturing process, trademark, patent, trade secret, other item of value -thus the company gains entry into a foreign market at little risk, at the same time, the licensee gains production expertise or a well known product or name without having to start from scratch
Retailers are attempting to meet new customer expectation how
-by hiring online style technologies into their stores -many retailers routinely use technologies ranging from touch screen kiosks, mobile hand held shopping assistants, and customer loyalty apps to interactive dressing room mirrors and virtual sales associates
Wholesalers can choose a target group how
-by size of customer -type of customer -need for service -etc
Advertising objectives can be classified how
-by their primary purpose - to inform, persuade, or remind
Integrated Marketing Communications is what
-carefully integrating and coordinating the companys many communications channels to deliver a clear, consistent, and compelling message about the organization and its products
Direct Marketing includes what
-catalogs -direct response tv -kiosks -internet -mobile marketing -etc
Benefits of contract manufacturing
-chance to start faster, with less risk, and the later opportunity either to form a partnership with or buy out the local manufacturer
Monitor your brands long term health by tracking what
-change in baseline sales -consumers' responses to regular prices and price promotions
What is important in dynamic pricing
-change prices on the fly according to change in demand or costs -adjusting what they charge for specific items on a day to day or even hour to hour basis -adjust price based on inventories, cost, and demand
Consequences of short term sales approaches
-changes in consumer behavior -diluted brand equity -competitive response
N Global Marketing adaptation Product
-changing tastes, needs
Product adaptation involves
-changing the product to meet local requirements, conditions, or wants -adapting a product to meet local conditions or wants in a foreign market
2 links b/w the seller and final buyer
-channels b/w nations -channels within nations
The marketing decisions of wholesalers include
-choice of segmentation, targeting, differentiation, positioning, and the marketing mix- product and service assortments, price, promotion, and distribution
N Global Consumer Segments
-citizens -dreamers -anti-globals -agnostics
Geographic characteristics indicators of market potential
-climate -country size -population density- urban, rural -transportation structure and market accessibility
N Artificial Intelligence helps banks do what
-collect data, personalize product offers, create a tailored customer experience to more financial institutions across the country
Intermodal transportation is what
-combining two or more modes of transportation
Consumer expressions for a media placement are what
-comment -a like -uploading a photo or video -passing content onto their networks
Informative Advertising includes
-communicating customer value -building a brand and company image -telling the market about a new product -explaining how a product works -suggesting new uses for a product -informing the market of a price change -describing available services and support -correcting false impressions
N Global marketing adaptation promotion
-communication adaptation
Advertising evaluation include
-communication impact -sales and profit impact -return on advertising
Objectives setting
-communication objectives -sales objectives
Why are companies placing a greater emphasis on logistics
-companies can gain a powerful competitive advantage by using improved logistics to give customers better service or lower prices -improved logistics can yield tremendous cost savings to both a company and its customers -the explosion in product variety has created a need for improved logistics management
Extreme version of Dynamic pricing
-companies customize their offers and prices based on specific characteristics and behaviors of individual customers, mined from web browsing and purchasing history -online offers and prices might well be based on what specific customers search for and buy, how much they pay for other purchases, and whether they might be willing and able to spend more
Captive Product Pricing
-companies that make products that must be used along with the main product use this -setting a price for products that must be used along with a main product, such as blades for a razor, games for a video game console
Uniform Delivered Pricing is what
-company charges the same price plus freight to all customers, regardless of location -freight charge is average freight cost
How can using public relations be cheaper than advertising and have a strong impact on public awareness
-company does not pay for space or time in the media -its pays for a staff to develop ad circulate information and manage events -if the company develops an interesting story or event, it could be picked up by several different media and have the same effect as advertising that would cost millions of dollars
Internal Factors the company must consider include
-companys overall marketing strategy, objectives -marketing mix -other organizational considerations
One way to measure the sales and profit effects of advertising is to do what
-compare past sales and profits with past advertising expenditures -experiments
Advertiser develops what after after a message strategy
-compelling creative concept
N Why do we change price
-competition -liquidity -end of season -broken assortments -change in macro economic conditions
2 arguments that support this method
-competitors' budgets represent the collective wisdom of the industry -spending what competitors spend helps prevent promotion wars -neither argument is valid -there are no grounds for believing that the competition has a better idea of what a company should be spending on promotion that does the company itself -there is no evidence that budgets based on competitive parity prevent promotion wars
Competition and other external factors
-competitors' strategies and prices -marketing strategy, objectives, and mix -nature of the market and demand
Joint ownership is what
-consists of one company joining forces with foreign investors to create a local business in which they share possession and control -a cooperative venture in which a company creates a local business with investors in a foreign market, who share ownership and control - a company may buy an interest in a local firm, or the two parties may form a new business venture
N Ex intensive distribution
-consumer goods -kraft -p&g -coke
Sociocultural factors indicators of market potential
-consumer lifestyle, beliefs, and values -business norms and approaches -cultural and social norms -languages
3 major factors that are changing the face of todays marketing communication
-consumers are changing -marketing strategies are changing -advances in communication technology are causing remarkable changes in the ways in which companies and customer communicate with each other
Antiglobals
-consumers are skeptical that transnational companies deliver higher quality goods -dislike brands that preach american values and dont trust global companies to behave responsibly -their brands preferences indicate that they try to avoid doing business with transnational firms
Global agnostics
-consumers dont base purchase decisions on a brand global attributed -they evaluate a global product by the same criteria they use to judge local brands and dont regard its global nature as meriting special consideration
N Price Adjustments
-consumers interpret price in their own way -remember price sends quality signals -price reductions can lead consumers to believe quality is reduced -continuous discounting creates a tolerance on the part of consumers -competing on price is a slippery slope meaning people will expect lower prices
Shift toward a richer mix of media and communication approaches poses a problem for marketers how
-consumers today are bombarded by commercial messages from a broad range of sources -consumers dont distinguish b/w message sources the way marketers do -messages from different media and promotional approaches all become part of a single message about the company in the consumers mind -conflicting messages can result in confused company images, brand positions, and customer relationships
Global dreamers
-consumers who are less discerning about, but more ardent in their admiration of, transnational companies -see global brands as quality products and readily buy into the myths they author -arent nearly concerned with those companies' social responsibilities as are the global citizens
The increased use of computerized, automated, and internet based systems will help wholesalers do what
-contain the costs of ordering, shipping, and inventory holding , boosting their productivity
Today retail forms appear to be what
-converging, different types of retailers now sell the same product at the same price to the same consumers
In cost based pricing marketing must do what
-convince buyers that the products value at that price justifies its purchase -if the price turns out to be too high, the company must settle for lower markups or lower sales
Price Steps in product line pricing should take into account what
-cost differences b/w products in the line -should account for differences in customer perceptions of the value of different features
N Advantages of standardization
-cost reduction -improved planning and control -ability to portray a consistent image and build global brands
N Customer Lifecycle approach: Data base driven, easier to measure
-cost to acquire -estimate CLV with embedded ongoing marketing costs
Debate over price to set in global countries
-could set it too high a price in poor countries -not high of a price in rich ones -strategy of setting a uniform price ignored differences in the actual costs from country to country
In considering whether to do business in a given country, a company should consider what factors
-countrys attitudes toward international buying, government bureaucracy, political stability, monetary regulations
N Sales Promotion
-coupons -rebates -price discounts -display
Personality symbol execution style
-creates a character that represents the product -character might be animated or real
Fantasy execution style
-creates a fantasy around the product or its use
Advertising strategy consists of what 2 major elements
-creating advertising messages and selecting advertising media
Press relations or press agency is what
-creating and placing newsworthy information in the news media to attract attention to a person, product, or service
Product invention involves
-creating new products or services for foreign markets -consists of creating something new to meet the needs of consumers in a given country
Several different types of segmented pricing
-customer segment pricing -product form pricing -location based pricing -time based pricing
Pricing decisions must start with what
-customer value -when customers buy a product, they exchange something of value to get something of value
N Indirect consumer channel
-customers are familiar with buying from certain retailers -intermediary help by creating utility and transaction efficiencies
N What is a free customer worth
-customers who pay little or nothing are subsidized by another set of customers are essential to a vast array of businesses, including shopping malls, real estate brokerages, information technology providers, auction houses, print and online media, and employment and dating services -according to one estimate, this business model accounts for a majority of the revenues of 60 of the worlds 100 largest companies
Drawbacks of contract manufacturing
-decreased control over manufacturing process -loss of potential profits on manufacturing
Better term for supply chain is what
-demand chain because it suggests a sense and respond view of the market
What have increased consumer price sensitivity
-deregulation -instant price comparisons afforded by the Internet and other technologies
Cost Based pricing steps
-design a good product -determine product costs -set price based on cost -convince buyers of products value
Distribution center is what
-designed to move goods rather than just store them -a large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
Whole channel view
-designing international channels that take into account the entire global supply chain and marketing channel, forging an effective global value delivery network
Promotion function of marketing channel members
-developing and spreading persuasive communication about an offer
N Retail convergence
-different types of stores converge on each other for one purchase
How have sweeping advances in communications technology causing remarkable changes in the ways in which companies and customers communicate with each other
-digital age has spawned a host of new information and communication tools -have had a dramatic impact on marketing communications -new digital media have given birth to a new marketing communications model
Internet carries what
-digital products from producer to customer via satellite, cable, wireless signal, phone wire -lower distribution cost -technology moves info quickly
How are consumers changing
-digital, wireless age, they are better informed and more communications empowered -rather then relying on market supplied info, they can use the internet and other technologies to find info on their own -they can connect more easily with other consumers to exchange brand related info or even create their own marketing messages
N Manufacturer ----> Customer is what distribution channel
-direct channel
Direct Marketing is what
-direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships
N 3 types of global marketing from least loss of marketing control risk to most
-direct investment -joint venturing -export
Using a push strategy, the producer does what
-directs its marketing activities toward final consumers to induce them to buy the product -a promotion strategy in which a company spends a lot of money on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that pulls the product through the channel
Sales Promotion includes
-discounts -coupons -displays -demonstrations
7 price adjustment strategies
-discounts and allowance pricing -segmented pricing -psychological pricing -promotional pricing -geographical pricing -dynamic pricing -international pricing
Promotional pricing takes many forms including
-discounts from normal prices to increase sales and reduce inventory -special event pricing in certain seasons to draw more customers -limited time offers like flash sales, can create buying urgency and make buyers feel lucky to have gotten in on the deal -cash rebates to consumers who buy the product from dealers within a specified time frame -low interest financing, longer warranties, free maintenance to reduce the consumers price
N Psychological Sphere
-domain of language, cognition, emotion -ads optimized for this sphere are designed to insert words, phrases, or emotions into a consumers psychological processes, where they serve as shorthand for complex concepts, inspiring action or triggering positive feelings -provide new ways to articulate ideas, engender habit formation, guide reasoning, elicit emotion
N Inelastic and low price
-dont go here -inappropriate matching of price and market for the product
N Promotion adaptation ex
-drakkar noir
N Pull Strategy
-drives consumers into outlets by using both outlet knowledge and buyer behavior insights -the customer -geared to driving the consumer to visit specific locations to buy product' -custom led -marketer directs its marketing activities toward final consumers to induce them to buy the product -consumer -> brand
Adverse affects of promotional pricing
-during most holiday seasons, its an all out bargain war -marketers carpet bomb consumers with deals -buyer wear out and pricing confusion -create deal prone customers who wait until brands go on sale before buying them -can erode a brands value in the type of customers
N Looking at the global marketing environment
-economic -political legal -culture
Price that company should charge in a specific country depends on what factors
-economic conditions -competitive situations -law and regulation -nature of the wholesaling and retailing system -customer perception and preferences -different marketing objectives in various world markets
N Why must business marketing change b/w countries
-economic environment -political & legal differences -cultural environment
Demographic characteristics indicators of market potential
-education -population size and growth -population age composition
Media planners want to choose media that will do what
-effectively and efficiently present the advertising messages to target customers -they must consider each medium's impact, message effectiveness, cost
Shortcoming of sales promotion
-effects short lived -effects not as effective as advertising or personal selling in building long run brand preference and customer relationships
N E=-2 means
-either a 1% decrease in price and 2% increase in unit sales or 1% increase in price and 2% decrease in sales
N E=-.7 means
-either a 1% decrease in price leads to .7% increase in unit sales or 1% increase in price leads to a .7% decrease in unit sales
Companies can either do what when promotion in new countries
-either adopt the same communication strategy they use in home marketing or change it for each local market
Independent off price retailers are what
-either are independently owned and run or are divisions of larger retail corporation -many off price operations are run by smaller independents -most large off price retailer operations are owned by bigger retail chains -off price retailer that is either independently owned and run or is a division of a larger retail corporation
Information can be shared and managed in many ways including
-electronic data interchange
Advertising tool of promotion
-enables seller to repeat a message many times -large scale advertising says something about the seller's size, popularity, and success -consumers tend to view advertised products as more legitimate -very expressive -allows the company to dramatize its products through the artful use of visuals, print, sound, and color -useful for a long term image for a product -trigger quick sales
Exporting is what
-entering foreign markets by selling goods produced in the companys home country, often with little motivation
As consumers become more value minded, what do retailers have to do
-even upper end retailers are accelerating their factory outlet strategies, placing more emphasis on outlets
Important type of good value pricing at the retail level
-everyday low pricing which involves changing a constant, everyday low price with few or no temporary price discounts
Many convenience stores have tried to do what
-expand beyond their primary market of young, blue collar men by redesigning their stores to attract female shoppers -shedding the image of truck stop where men go buy gas, beer, cigs, etc and instead are offering freshly prepared foods and cleaner, safer more upscale environments
N How to enter the market
-export -joint -direct
N 3 types of global marketing from least financial capital risk to most
-export -joint venturing -direct investment
Least amount of commitment, risk, control, profit potential of 3 ways to enter market globally
-exporting -joint venturing -direct investment
Once a company has decided to sell in a foreign country, it must determine the best mode of entry, what are its choices
-exporting -joint venturing -direct investment
Exclusive distribution is what
-extreme of producers purposely limiting the number of intermediaries handling their products -the producer gives only a limited number of dealers the exclusive right to distribute its product it their territories
Wholesalers now face what on the part of large industrial, institutional, and retail buyers? What do they do as a result of this?
-face growing competitive pressures, more demanding customers, new technologies, more direct buying programs -as a result, they have taken a fresh look at their marketing strategies
Off Price retailers include
-factory outlets owned and operated by manufacturers -independent off price retailers owned and run by entrepreneurs or by divisions of large retail corporations -warehouse clubs selling a limited selection of goods at deep discounts to consumers who pay membership fees
Zone pricing is what
-falls b/w FOB origin pricing and uniform delivered pricing -company sets up two or more zones -all customers within a given zone pay a single total price -more distant the zone, higher the price
Emerging economies, what happens
-fast growth in manufacturing results in rapid overall economic growth -the country needs more important of raw textile materials, steel, heavy machinery, -fewer imports of finished textiles, paper products, and automobiles -industrialization creates a new rich class and a small but growing middle class
Testimonial evidence or endorsements execution style
-features a highly believable or likable source endorsing the product -could be ordinary people saying how much they like a given product or it might be a celebrity presenting the product
Contact function of marketing channel members
-finding and communicating with prospective buyers
Main disadvantage of direct investment
-firm faces many risks, such as restricted or devalued currencies, falling markets, government changes -in some cases the firm has no choice but to accept these risks if it wants to operate in the host country
Potential disadvantages of licensing
-firm has less control over licensee -if the licensee is very successful, the firm has given up these profits, and if when the contract ends, it may find it has created a competitor
Advantages of outdoor
-flexibility -high repeat exposure -low cost -low message competition -good positional selectivity
Advantage of newspaper
-flexibility -timeliness -good local market coverage -broad acceptability -high believably
N IMC Personal Selling- Transactional
-focus is on each sale -provides information -sells at this moment -old school -customer may regret
N IMC Personal Selling- Relationship
-focuses on the customer -listens to needs -each customer matters -confirms product fit and adjust -what we teach at kelley
N Adapted ex
-ford -nokia
Merchant wholesalers include what 2 broad types
-full service wholesalers -limited service wholesalers
Information function of marketing channel members
-gathering and distributing information about consumers, producers, and other actors and forces in the marketing environment needed for planning and aiding exchange
N Retail
-getting more detailed information while in store: instore communications/ signage staff, in store search with help of mobile devices -shopping
As global trade grows, what happens
-global competition is intensifying -foreign firms are expanding aggressively into new international markets, and home markets are no longer as rich in opportunity
N Global marketing today
-global firm -major international marketing decisions
N Our focus for global marketing
-global marketing environment- go global or not -how to enter markets- which markets to enter -global marketing program- global marketing organization
N Global marketing adaptation place
-go where the consumers shop for your product -meet new local challenges
N Inelastic and high price
-gold rush -build inelasticity -watch the market
Advantages of radio
-good local acceptance -high geographic and demographic selectivity -low cost
Selective distribution gives producers what
-good market coverage with more control and less cost than does intensive distribution -mutual services and duties need to be spelled out carefully, especially in franchise and exclusive distribution channels
Advantage of tv
-good mass marketing coverage -low cost per exposure -combines sight, sound, motion -appealing to the sense
2 types of value based pricing
-good value pricing -value added pricing
FOB origin pricing
-goods are placed free on board -at that point the title and responsibility pass to the customer, who pays the freight from the factory to the destination
N Things marketers tell us you should know about
-google 360 -google analytics- lets you analyze user behavior on websites to improve the user experience and ensure success of your business
Multichannel distribution system disadvantages
-harder to control -generate conflict as more channels compete for customers and sales
N Straight extenstion ex
-heineken -starbucks
N Standardized ex
-heineken -starbucks coffee
N A character hook uses a what
-hero, villain, or victim to embody a key attribute of a brand
Limitations of tv
-high absolute costs -high clutter -fleeting exposure -less audience selectivity
Advantage of direct mail
-high audience selectivity -flexibility -no ad competition within the same medium -allows personalization
Full service retailers ex
-high end specialty stores -tiffany -first class department stores -nordstrom
Advantages of magazines
-high geographic and demographic selectivity -credibility and prestige -high quality reproduction -long life and good pass along readership
Advantage of Internet
-high selectivity -low cost -immediacy -interactive capabilities
Carrying too much inventory results in what
-higher than necessary inventory carrying costs and stock obsolescence
Service retailer include what
-hotels and motels -banks -airlines -restaurants -colleges -hospitals -movie theatres -tennis clubs -bowling alleys -repair services -hair salons -dry cleaners
What questions should a company ask when assessing competitors' pricing strategies
-how does the companys market offering compare with competitors' offering in terms of customer value -if consumers perceive that the companys product or service provides greater value, the company can charge a higher price -if consumers perceive less value relative to competing products, the company must either charge a lower price or change customer perceptions to justify a higher price
A company needs to decide what in regards to warehousing
-how many and what types of warehouses it needs and where they will be located
Consumer impressions for a media placement are what
-how many people see, hear, or read an ad
When firms sell their wares over the internet, customers can see what
-how much products sell for in different countries, they can even order a given product directly from the company location or dealer offering the lowest price -this is forcing companies toward more standardized international pricing
Price Elasticity is what
-how responsive demand will be to a change in price -a measure of the sensitivity of demand to changes in price
An advertiser must also decide what
-how to schedule the advertising over the course of a year -the firm can vary its advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all year -must choose the pattern of the ads
Whether a company develops or acquires certain new products may depend on what
-how well those products fit the capabilities of its channel members
Ex of tones for an ad
-humor tone -positive tone
Developing an effective message strategy begins with what
-identifying customer benefits that can be used as advertising appeals
Downside of affordable method
-ignores affects of promotion on sales -tends to place promotion last among spending priorities -leads to uncertain annual promotion budget -makes long range market planning difficult -often results in underspending
Shortcomings of advertising tool of promotion
-impersonal -lacks direct persuasiveness of company salespeople -carry only one way communication with an audience -audience does not feel that it has to pay attention or respond -costly
N Global Myth
-important -an imagined global identity that they share with like minded people -symbols of cultural ideals -global brands make people feel like citizens of the world -Us has relatively few global citizens
A companys Web site is a what
-important PR vehicle -consumers and other publics often visit web sites for info or entertainment -can be ideal for handing crisis situations
Todays discounters have done what
-improved their store environments and increased their services, while at the same time keeping prices low through lean, efficient operations
Where can off price retailers be found
-in all areas, from food, clothing, and electronics to no frills banking and discount brokerages
Contract manufacturing is what
-in which the company makes agreements with manufacturers in the foreign market to produce its product or provide its services -a joint venture in which a company contracts with manufacturers in a foreign market to produce the product or provide its services
Marketing logistics involves not only outbound distribution (moving products from the factory to the resellers and customers), but also what
-inbound distribution, moving products and materials from suppliers to the factory -reverse distribution, (reusing, recycling, refurbishing, disposing of broken, unwanted, excess products returned by consumers to resellers)
If done well, user generated content can do what
-incorporate the voice of the customer into brand messages and generate greater consumer brand involvement
3 main types of off price retailers
-independent -factory outlets -warehouse clubs
Exporting can be what
-indirect -direct
N Factors that affect pricing
-industry -economy -demand -elasticity -influencers, government, social
Members of the marketing channel perform many key functions of what
-information -promotion -contact -matching -negotiation -physical distribution -financing -risk taking
3 strategies available for companies determining the number of channel members to use each level
-intensive distribution -exclusive distribution -selective distribution
N Main point of human experience
-interaction -experience -not interruption
In the normal case, demand and price are what
-inversely related meaning the higher the price, the lower the demand
Todays large and progressive wholesalers have reacted to rising costs by doing what
-investing in automated warehouses and IT systems -orders are fed from retailers information system directly into the wholesalers, and the items are picked up by mechanical devices and automatically taken to a shipping platform where they are assembled -the use it to carry out accounting, billing, inventory control, forecasting
Many brands hold contests that do what
-invite consumers to submit ad message ideas and videos -Doritos commercials
Exclusive distribution is often found where
-is found in the distribution of luxury brands
Companys channel decisions directly affect sales force and communication decisions how
-it depends on how much persuasion, training, motivation, and support its channel partner needs
Advantage of objective and task method
-it forces management to spell out is assumptions about the relationship b/w dollars spent and promotion results
Although some dynamic pricing practices seem legally questionable, they are not. Why
-it is legal as long as the companies do not discriminate based on age, sex, location, etc
Reminder Advertising is important why
-its important for mature products -helps to maintain customer relationships and keep consumers thinking about the product
Two economic factors reflect the countrys attractiveness as a market
-its industrial structure -income distribution
Before going abroad, the company should try to define what
-its international marketing objectives and policies -it should decide what volume of foreign sales it wants -needs to choose in how many countries to market -the types of countries to enter
Joint venturing is what
-joining with foreign companies to produce or market products or services
To remain successful, retailers must do what
-keep adapting -they cant sit back with a winning formula -of the top 10 discounters retailers in 1962, not one exists
Supermarket ex
-kroger -safeway -supervalu -publix
Even in highly standardized communications campaigns, some adjustments might be required for what when promoting in different countries
-language and cultural differences -global companies often have difficulty crossing the language barrier, with results ranging from mild embarassment to outright failure -seemingly innocuous brand names and advertising phrases can take on unintended or hidden meanings when translated into other languages
Ways that channel distribution within countries vary
-large differences in the number and types of intermediaries serving each country market and in the transportation infrastructure serving these intermediaries
Merchant wholesalers are what
-largest single group of wholesalers, accounting for nearly 50% of all wholesaling -an independently owned wholesaler business that takes title to the merchandise it handles
In many cases, good value pricing has involved what
-less expensive versions of established, brand name products -redesigning existing brands to offer more quality for a given price or the same quality for less
Indirect exporting involves what
-less investment because the firm does not require an overseas marketing organization or network -less risk
Within the target group, wholesales can discourage what
-less profitable customers by requiring larger orders or adding service charges to smaller ones
4 distinct characteristics of direct marketing
-less public -immediate and customized -interactive
Air carries transport what percent of cargo ton miles in the US
-less than 1% -rates much higher -ideal when speed needed or when distance needed
Pipelines account for what percent of total cargo ton miles in the US
-less than 1% -specialized means of shipping chemicals, natural gas, petroleum
N Joint Strategies include
-licensing -contract management -joint ownership -management contracts
4 types of joint venturing
-licensing -contract manufacturing -management contracting -joint ownership
Joint venturing can be what
-licensing -contract manufacturing -management contracting -joint ownership
Benefits of green retailing
-lift a retailers top line by attracting consumers looking to support environmentally friendly seller and products -help bottom line reduce cost
Limitations of outdoor
-little audience selectivity -creative limitations
Disadvantages of percentage of sales method
-little to justify it -wrongly views sales as the cause of promotion rather than as the result -turns out to be effect and cause, not cause and effect -long range planning is difficult -provides no basis for choosing a specific percentage, except what has been done in the past or what competitors are doing
Limitations of magazines
-long ad purchase lead time -high cost -no guarantee of position
Major International Marketing decisions
-looking at the global marketing environment -deciding whether to go global -deciding which markets to enter -deciding how to enter the market -deciding on the global marketing program -deciding on the global marketing organization
N Elastic and high price
-lost opportunity -overpriced go lower to produce demand
Warehouse clubs retailers appeal to who
-low income consumers seeking bargains on bare bones products -to all kinds of customers shopping for a wide range of goods, from necessities to extravagances
Benefits of management contracting
-low risk -yields income -its attractive if the contracting firm has an option to buy some share in the managed company later on
Industrialized countries may have what
-low, medium, high income households
If a company has gained experience in exporting and if foreign market is large enough, foreign production facilities offer what advantages
-lower costs in the form of cheaper labor or raw materials, foreign government investment incentives. freight savings -improve its image in the host country because it creates job -develops a deeper relationship with the government, customers, local suppliers, distributors, allowing it to adapt its products to the local market better -firm keeps full control over the investment and can develop manufacturing and marketing policies that serve its long term international objectives
What long term consequences do price cuts have
-lower price means lower margins -cheaper a brand in consumers' eyes -difficult to raise price again when economy recovers
Growing number of outlet malls feature what
-luxury brands
N Ex of exclusive distribution
-luxury products -products with high performance needs
Department stores ex
-macys -sears -neiman marcus
Value delivery network is what
-made up of a company, suppliers, distributors, and customers who partner with each other to improve the performance of the entire system to deliver better customer value
Reminder Advertising includes
-maintaining customer relationships -reminding consumers that the product may be needed in the near future -reminding consumers where to buy the product -keeping the brand in a customers mind during off seasons
Investor relations is what
-maintaining relationships with shareholders and others in the financial community
Industrial economies, what happens
-major exporters of manufactured goods, services, and investment funds -trade goods among themselves and export them to other types of economies for raw materials and semifinished goods -varied manufacturing activities of these industrial nations and their large middle class make them rich markets for all sorts of goods
N Export
-make here, market/sell it there
In product line pricing what happens
-management must determine the price steps to set b/w the various products in a line -setting the price steps b/w various products in a product line based on cost differences b/w the products, customer evaluations of different features, and competitors' prices
N Product Liability
-managing the message about products to make them newsworthy and gain positive placement and attention -focus on innovators and early adopters: Blogs
N Press Relations
-managing the message to media inquiries -investors
N Direct consumer channel
-manufacturer can serve customers better -lower prices than possible by using a retailer -control of pricing, service and delivery
Factory outlets are what
-manufacturer owned and operated stores by firm -an off price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturers surplus, discontinued, or irregular goods -dozens of outlet stores offer prices as much as 50% below retail on goods
Many institutions such as what do retailing
-manufacturers -wholesalers -retailers
When the manufacturer performs these functions for marketing channels, what happens? What happens when intermediaries do them
-manufacturers= costs go up, prices higher -intermediaries=producers cost goes up and price lower, but intermediaries have to charge more to cover the costs of their work
Ex of a new form of retailing that has emerged
-many retailers are now experimenting with limited time pop up stores that let them promote their brands to seasonal shoppers and create a buzz in busy areas
Possible global markets should be ranked on several factors including
-market growth -cost of doing business -competitive advantage -risk level -market size
What 2 product pricing strategies can people choose from
-market skimming pricing -market penetration pricing
How are marketing strategies changing
-marketers are shifting away from mass marketing -marketers are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarkets
Straight product extension means
-marketing a product in a foreign market without making any changes to the product
N Physical Distribution
-marketing logistics and supply chain management -supply chain management -goals of logistics- maximize customer service, minimize distribution costs -warehousing vs distribution centers
Variety of ways international division can be organized
-marketing, manufacturing, research, finance, planning, person specialists
Some experts predict that the old mass media communication model will eventually become obsolete, Why
-mass media costs are rising -audiences shrinking -viewers are gaining control of message exposure through technologies like streaming, DVR -this leads to marketers shifting ever larger portions of their marketing budgets away from old media mainstays and moving them to digital ad other new age media
N Adaptation advantages
-meet needs of customers more precisely -enjoy unique appeal -comply with government regulations -achieve greater success in combating customer resistance
3 major groups of wholesalers
-merchant wholesaler -brokers and agents -manufacturers' and retailers' branches and offices
N Types of Intermediaries- Independent Intermediaries do Business with many different manufacturers and customers 2 types
-merchant wholesalers take title to goods -merchandise agents or brokers never take title to goods - manufacturers' agents, selling agents, commission merchants, merchandise brokers
N Major Components of an AD strategy
-message -media
Message decisions include
-message strategy -message execution
Risks of companies going abroad
-might face highly unstable government and currencies -restrictive government policies and regulations -high trade barriers -corruption -giving business to the highest bidder
Off price retailers ex
-mikasa -tj Maxx -costco -sams club -BJ's
Since the global company sees the world as one market, it what
-minimizes the importance of national boundaries and develops global brands -raises capital, obtains materials and components, and manufactures and markets its goods wherever it can do the best job
New digital media types advertisers can market on
-mobile phones -digital devices
As a result of the decision about which media to use for an ad campaign now being more critical than the creative elements of the company, what happens
-more and more advertisers are orchestrating a closer harmony b/w their messages and the media that deliver them
Using many types of resellers in a channel drawback
-more difficult to manage and control -direct and indirect channels will compete with each other for many of the same customers, causing potential conflict
Within the target group, wholesalers can identify what
-more profitable customers -design stronger offers -build better relationships with them
What are advertisers supplementing the traditional mass media with
-more specialized and highly targeted media that cost less, target more effectively, and engage consumers more fully
Companies manage their international marketing activities in at least 3 different ways how
-most companies first organize an export department, then create an international division, and finally become a global organization
Disadvantage of objective and task method
-most difficult to use -hard to figure out which specific tasks will achieve stated objectives
N Quality signal
-most important -global brand are perceives as higher quality -viewed as expensive but reasonably priced for the value provided
N Elastic and medium price
-move toward a commodity -avoid downward price spiral
N Distribution Centers is what
-moving goods, not storing
Malls in general are now doing what
-moving upscale -dropping factory from their descriptions
N Intensive distribution
-multi channel on steroids
Companies might be careful not to do what when deciding which market to enter
-must be careful not to spread themselves too thin or expand beyond their capabilities by operating in too many countries too soon
Political and legal factors indicators of market potential
-national priorities -political stability -government attitudes toward global trade -government bureaucracy -monetary and trade regulations
External Factors the company must consider include
-nature of the market and demand -other environmental factors
Public relations include what
-new stories -features -sponsorships -events -believable
Major tools of public relations
-news -special events -written materials -audiovisual materials -corporate identify materials -public service activities
What principle should guide decisions about what price to charge relative to those of competitors
-no matter what price you charge- high, low, between- be certain to give customers superior value for that price
N Product adaptation ex
-nokia -BP
With too little stock, firm risks what
-not having products when customers want to buy, decreasing satisfaction, and to remedy this, the firm may need costly emergency shipments or production
Drawbacks of management contracting
-not sensible if the company can put its scarce management talent to better uses or if it can make greater profits by undertaking the whole venture -prevents the company from setting up its own operations for a period of time
Reference price might be formed how
-noting current prices, remembering past prices, assessing the buying situation -sellers can influence them
N Methods for advertising budget
-objective -competitive -percent of sales -affordable from largest circle to smallest circle
One major trend is disintermediation which is
-occurs when product or service producers cut out intermediaties and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones -cutting out the marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
N What causes jeans to be lower
-on sale/ clearance -price match -goodwill -off price retailers like TJ Maxx
A global firm is what
-one that, by operating in more than one country, gains marketing, production, r&d, and financial advantages that are not available to purely domestic competitors -a firm that, by operating in more than one country, gains r&d, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors
Exs of how all kinds of retailers now employ direct and online channels
-online sales of brick and mortar retailers are increasing rapidly -many large retailers have made it big on the web -hordes of niche marketers have used the internet to reach new markets and expand their sales
Why do not all companies need to venture into international markets to survive
-operating domestically is safer and easier -managers dont need to learn another countrys language or redesign their products to suit different customer expectations, -dont have to deal with unstable currencies, face political and legal uncertainties
N What becomes the key tasks in warehousing
-order processing and creating assortments
N How Hootsuite works
-organizes all social accounts into a single dashboard
What was branded entertainment originally created with in mind? What has it evolved to?
-originally created with TV in mind -has spread quickly into other sectors of the entertainment industry such as video games, comic books, broadway musicals, even pop music
Fixed costs are what
-overhead costs -costs that do not vary with production or sales level -ex - rent, interest, depreciation, clerical and management salaries -total fixed cost remains same but unit fixed costs change when add or reduce units
N What is advertising
-paid use of media
N Reminder
-pantry stocking
Drawbacks of joint ownership
-partners may disagree over investment, marketing ,or other policies -whereas many US firms like to reinvest in earning for growth, local firms often prefer to take out these earnings -whereas US firms emphasize the role of marketing, local investors may rely on selling
Advertising Objectives should be based on what
-past decisions about the target market, positioning, and the marketing mix, which define the job that advertising must do in the total marketing program -overall advertising objective is to help build customer relationships by communicating customer value
Ex of discounts and allowances
-paying bills early -volume purchases -off season buying -adjusting basic price to reward customers for certain responses
Personal Selling involves what
-personal interaction b/w two or more people, so each person can observe the other's needs and characteristics and make quick adjustments -allows all kinds of customer relationships to spring up, ranging from matter of fact selling relationships to personal friendships
Personal Selling is what
-personal presentation by the firms sales force for the purpose of making sales and building customer relationships
All institutions in the channel are connected by what flows
-physical flow of products -flow of ownership -payment flow -information flow -promotion flow
Message strategy statements tend to be what
-plain, straightfoward outlines of benefits and positioning points that the advertiser wants to stress
Marketing logistics aka physical distribution involves what
-planning, implementing, controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit -in short, it involves getting the right product to the right customer in the right place at the right time
Providing the fastest delivery, greatest assortment, and most services may not be what
-possible or practical -company and its channel members may not have the resources or skills needed to provide all the desired services -results in higher costs for the channel and higher prices for consumers
Limitations of Internet
-potentially low impact -audience controls exposure
PR departments may perform any of what functions
-press relations or press agency -product publicity -public affairs -lobbying -investor relations -development
Public relations includes
-press releases -sponsorships -events -web pages
What are also important wholesaler decisions
-price -promotion -distribution
Customer Perception of value
-price ceiling -no demand above this price
Product Costs
-price floor -no profits below this price
N Elastic and low price
-price is king -price is the reason -buyers will only increase in price sensitivity
N Product Line Pricing
-price jumps based on features -consider competition -requires review of product costs
Reference prices is what
-prices that buyers carry in their minds and refer to when looking at a given product
N Geographic Pricing
-pricing based on location
Companys channel decisions directly affect pricing how
-pricing depends on whether the company works with national discount chains, uses high quality specialty stores, or sells directly to consumers on the web
Multichannel marketing system ex
-producer sells to consumer segments 1. using catalogs, telemarketing, internet and reaches consumer segment 2. through retailers
A countrys attractiveness depends on what
-product -geographical factors -incomes and population -political climate
Wholesales add customer value through what
-product and services they offer -they are often under great pressure to carry a full line and stock enough for immediate delivery -this can damage profits
N Price Skimming
-product benefits that customers want at any cost -little chance that competitors can enter the market quickly -several customer segments with different levels of price sensitivity
Cost based pricing is often what
-product driven -company designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit
5 product mix pricing situations
-product line pricing -optimal product pricing -captive product pricing -by-product pricing -product bundle pricing
If done well, consumer generated advertising efforts can do what
-product new creative ideas and fresh perspectives on the brand from consumers who actually experience it -these can boost consumer involvement and get consumers talking and thinking about a brand and its value to them
Most common form of branded entertainment
-product placements- embedded brands as props within other programming
N Elements of the mix- create customer value
-product- what -price- how much -place- where -promotion IMC- how do you know
What types of things communicate something to buyers
-products design -price -shape and color of package -stores that sell it
The reallocation of spending away from long term brand building and toward temporary price reductions was predicated on a short term mindset. The lift over baseline effect takes place here which is what
-promotions yield in incontrovertible boost in sales, known as lift over baseline which is generally short lived
Limited service retailers do what
-provide more sales assistance because they carry more shopping goods about which customers need information
Customers rely on certain cues that signal whether a price is high or low. These price cues are what
-provided by sellers in the forms of sales signs, price matching guarantees, loss leader pricing, etc
N Push Strategy
-providing the retailer with the right 'tools' and incentives to sell products -happens in retail settings -the retailer -geared towards helping the retailer to sell more product (via merchandising, promotions, equipment, display, pricing, coverage) -brand led -marketer directs its marketing activities toward channel members to induce them to carry the product and promote it to the final consumers -marketer -> store -> consumer
N What should a business DO as a result of this reading- reading 8
-public -social -tribal -psychological
Where do companies get industry promotion spending estimates and monitor competitors' advertising
-publications or trade associates then set their budgets based on the industry average
Markets can choose from 2 basic promotion mix strategies that are what
-pull promotion -push promotion
N Psychological Pricing
-quality is associated with price -high price creates a quality signal
N 3 global brand dimensions
-quality signal -global myth -social responsibility
What is now blurring the line b/w ads and entertainment
-range of new brand messaging platforms -these days, it is not unusual to see an entertaining ad or other brand message on youtube before you see it on TV, and you might well seek it out at a friends suggestion rather than having it forced on you by the advertiser
How does public relations use special events
-ranging from news conferences and speeches, press tours, grand openings, fireworks displays to laser light shows, hot air balloon releases, multimedia presentations, educational programs, designed to reach and interest target publics
Maximum customer service implies what
-rapid delivery -large inventories -flexible assortments -liberal return policies -other services all of which raise distribution costs
Current media measures ex
-ratings -readership -listenership -click through rate
To select media, the advertiser must determine what
-reach and frequency needed to achieve the advertising objectives
PR can do what
-reach many prospects who avoid salespeople and advertisements -message gets to buyers as news rather than as a sales directed communication -well thought PR campaign used with other promotion mix elements can be very effective and economical
Media decisions include
-reach, frequency, impact -major media types -specific media vehicles -media timing
N Communication Goals- Measuring Effectiveness
-reach/frequency + awareness -customer lifecycle approaches, data base driven, easier to measure
Negotiation function of marketing channel members
-reaching an agreement on price and other terms so that ownership or possession can be transferred
Trade associated have used PR to do what
-rebuild interest in commodities
Integrated Marketing communications call for what
-recognizing all touch points where the customer may encounter the company and its brand -each brand contact will deliver a message
Is cutting price often the best answer for companies
-reducing prices unnecessarily can lead to lost profits and damaging price wars -can cheapen a brand by signaling to customers that price is more important than the customer value a brand delivers
Limitation of direct mail
-relatively high cost per exposure -junk mail image
Global citizens
-rely on global success of a company as a signal of quality and innovation -concerned whether companies behave responsibly on issues like consumer health, environment, worker rights
N Disintermediation
-removal of a business
Scientific evidence execution style
-represents survey or scientific evidence that the brand it better or better liked than one or more other brands
N Pretail
-researching and comparing alternatives by using online search, word of mouth,, social networks, ads, apps -searching
Price escalation might do what
-result from differences in selling strategies or market conditions -in most cases, it is simply a result of the higher costs of selling in another country- additional cost of operation, product modification, shipping, insurance, import tariffs and taxes, exchange rate fluctuations, physical distribution
How do companies fail to integrate their various communication channels
-result is a hodgepodge of communication to consumers -mass media advertisements say one thing, whereas an in store promotion sends a different signal, and company sales literature creates another image -companys web site, email, facebook, youtube videos say something altogether different -problem is that this communications often come from different parts of the company -while the company has separated these sources from each other, consumers dont resulting in a blurred brand perception by consumers
Types of services wholesalers provide to retailers
-retail pricing -cooperative advertising -marketing and management info services -accounting services -online transactions -etc
What have created a core of superpower megaretailers
-rise of huge mass merchandisers and superstores -formation of vertical marketing systems -rash of retail mergers and acquisitions
Personal Selling includes
-sales presentations -trade shows -incentive programs
Alternative media may seem a bit far fetched and might irritate consumers. But for marketers, these media can do what
-save money and provide a way to hit selected consumers where they live, shop, work, and play leaving you wonder if there are any commercial free havens remaining for ad weary consumers
Continuity means what
-scheduling ads evenly within a given period
Limited service retailers ex
-sears -jcpenny
To meet the varying services needs that different types of customers and products require, retailers offer 1 of what 3 service levels
-self service -limited service -full service
In good economic times and bad, companies should do what
-sell value, not price -that can mean selling lesser products at rock bottom prices -in most cases means persuading customers that paying a higher price for a companys brand is justified by greater value they gain
Freight Absorption Pricing is what
-seller who is anxious to do business with a certain customer or geographical area might use this -the seller absorbs all of part of the actual freight charges to get the desired business -seller might reason that if it can get more business, its average costs will decrease and more than compensate for its extra freight cost -used for market penetration and to hold on to increasingly competitive markets
Why does cost plus pricing remain popular
-sellers are more certain about costs than demand -when all firms in the industry use the pricing method, prices tend to be similar and price competition is minimized
Product Bundling pricing
-sellers often combine several products and offer the bundle at a reduced price
Manufacturers' Sales branches and offices
-sellers or buyers themselves rather than through independent wholesalers -wholesaling buy sellers and buyers themselves rather than through independent wholesalers
How should companies consider a countrys monetary regulations
-sellers want to take their profits in a currency of value to them -the buyer can pay in the sellers currency or in other world currencies -sellers might accept a blocked currency-one whose removal from the country is restricted by the buyers government- if they can buy other goods in that country that they need or can sell elsewhere for a needed currency -a changing exchange rate also creates high risks for the seller
Wholesalers add value by performing one or more what channel functions
-selling and promoting -buying and assortment building -bulk breaking -warehousing -transportation -financing -risk bearing -market information -management services and advice
N Price Bundling
-selling two or more products for single price -season tickets -monitor, mouse, keyboard, processor
Self service retailers do what
-service customers who are willing to perform their own locate-compare-select process to save time or money
Market Skimming Pricing is what
-setting a high price for a new product to skim max revenues layer by layer from the segments willing to pay the high price -company makes fewer but more profitable sales
Market Penetration Pricing is what
-setting a low price for a new product to attract a large number of buyers and a large market share -companies set a low initial price to penetrate the market quickly and deeply- to attract a large number of buyers quickly and win a large market share -high sales volume results in falling costs, allowing companies to cut their prices even further
Marketing management must make 4 important decisions when developing an advertising program, which is what
-setting advertising objectives -setting the advertising budget -developing advertising strategy -evaluating advertising campaigns
Fixed price policies are what
-setting one price for all buyers -relatively modern idea with the development of large scale retailing at the end of nineteenth century
Product line pricing description
-setting prices across an entire product line
Percentage of sales method is what
-setting their promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price
What is the competitive parity method
-setting their promotion budget to match competitors' outlays
In setting its price b/w the 2 extremes, company must consider what
-several external and internal factors -competitors' strategies and prices -overall marketing strategy and mix -nature of the market and demand
Matching function of marketing channel members
-shaping offers to meet the buyers needs, including activities such as manufacturing, grading, assembling, and packaging
N Post tail
-sharing experiences and conquests , word of mouth, social networks -sharing
Limitations of newspaper
-short life -poor reproduction quality -small pass along audience
Sales Promotion is what
-short term incentives to encourage the purchase or sale of a product or service
Lifestyle execution style
-shows how a product fits in with a particular lifestyle
N Reading Five, "If brands are built over years, why are they managed over quarters"
-shows how some brands are managed for promotions while a long term view allows a better pricing strategy -what is scanner data -what is the main point -what should companies do as a result -long term data = long view -focus on brand equity
Slice of life execution style is
-shows one or more typical people using the product in a normal setting
Musical execution style is what
-shows people or cartoon characters singing about the product
Technical expertise execution style
-shows the companys expertise in making product
N Standardization pursue when
-similar market segments exist across countries -customer seek similar features -products have universal specifications -business customers have converging expectations
What happens during the creative concept stage
-simple message ideas become great ad campaigns
Advantages of percentage of sales method
-simple to use -helps management think about the relationships b/w promotion spending, selling price, and profit per unit
Licensing is a what
-simple way for a manufacturer to enter international marketing -entering foreign markets through developing an agreement with a licensee in the foreign market
N Repeatable theme is a what
-situation that plays out again and again calling out the need for a company's product -they have a theme but its not always in the same place
Message can be presented in what execution styles
-slice of life -lifestyle -fantasy -mood or image -musical -personality symbol -technical expertise -scientific evidence -testimonial evidence or endorsement
Supermarkets are facing what
-slow sales growth because of slower population growth -increase in competition from discounters and specialty food stores -being hit hard by rapid growth of out of home eating
Minimum distribution costs imply
-slower delivery -smaller inventories -larger shipping lots- which represent a lower level of overall customer service
Most companies start how when they go abroad
-small -some plan to stat small, seeing international sales as a part of their business -other companies have bigger plans, seeing international business as equal to, or even more important than, their domestic business
Who often uses the affordable method
-small businesses, reasoning that a company cannot spend more on advertising than it has
What have promoted the importance of the media planning function
-soaring media costs -more focused target marketing strategies -blizzard of new digital and interactive media
Question of whether to adapt or standardize the marketing strategy and program has been much debated over the years
-some global marketers believe that technology is making the world a smaller place, and consumer needs around the world are becoming more similar. This paves the way for global brands and standardized global marketing. Global branding and standardization result in greater brand power and reduced costs from economies of scale -the marketing concept holds that marketing programs will be more effective if tailored to the unique needs of each targeted customer group. If this concept applies within a country, it should apply even more across international markets. Consumers in different countries have varied cultural backgrounds, needs and wants, spending power, product preferences, shopping patterns. Most marketers adapt their products, prices, channels ,promotion to fit consumer desired in each country
N Dual Adaptation ex
-some soft drinks -some clothing
In the battle for share of the stomach, what happens
-some supermarkets have moved upscale, providing improved store environments and high quality food offerings
N Social responsibility
-somewhat important -global companies... influence societys well being -global brand are expected to address social problems linked to what they sell -consumers dont demand that local companies tackle global issues or that ALL global brands tackle ALL global issues
What opportunities have improvements in information technology created
-sophisticated supply chain management software -internet based logistics systems -point of scale scanners -RFID tags -satellite tracking -electronic transfer of order and payment data -this technology lets them quickly and efficiently manage the flow of goods, info, and finances through the supply chain
Progressive retailers are using iT and software systems to adopt what
-sophisticated systems for checkout scanning, RDIF inventory tracking, merchandise handling, information sharing, customer interactions
N Global marketing decisions
-standardized -adapted -marketing mix
N Skimming
-start high, end lower -think technology
N Penetration
-start lower, maintain price -think foods
N Optimal Product Pricing
-start with on model and add options -ex car, can add leather seats, upgraded audio, custom wheels
Outdated materials handling methods are what
-steadily being replaced by newer, computer controlled systems requiring few employees -computers and scanners read orders, and direct lift trucks, electric hoists, or robots to gather goods, move them to loading docks, and issue invoices
N Ex of dynamic pricing
-stocks -airlines -hotels -football tickets
Company might use either what in warehousing
-storage warehousing -distribution centers
Category killers feature what
-stores the size of airplane hangers that carry a very deep assortment of a particular line
5 strategies used for adapting new product and marketing communication strategies
-straight product extension -product adaptation -product invention -communication adaptation -dual adaptation
4 types of industrial structures
-subsistence economies -raw material exporting economies -emerging economies -industrial economies
Walmart, Target, Meijer and other discount retailers offer what
-supercenters that are very large combination food and discount stores
Superstore includes
-supercenters, combined supermarket and discount stores -category killers, carry a deep assortment in a particular category
Self service retailers ex
-supermarkets -target -kohls
Taking advantage of todays interactive technologies, many companies are now doing what
-tapping consumers for message ideas or actual ads -searching existing video sites, setting up their own sites, and sponsoring ad creation contests and other promotions -sometimes results outstanding, sometimes forgettable
With promotional pricing, companies do what
-temporarily price their products below list price- and sometimes even below cost- to create buying excitement and urgency -temporarily price their products below the list price, and sometimes even below cost, to increase short run sales
Rapid move toward globalization means what
-that all companies will have to answer some basic questions that are -what market position should we try to establish in our country, in our economic region, and globally -who will our global competitors be and what are their strategies and resources -where should we product or source our products -what strategic alliances should we form with other firms around the world
Those who favor pulsing feel what
-that it can be used to achieve the same impact as a steady schedule but at a much lower cost
Supply chain suggests what
-that raw materials, productive inputs, and factory capacity should serve as the starting point for marketing planning
Megaretailers have shifted what
-the balance of power b/w retailers and producers - a small handful of retailers now control access to enormous numbers of consumers, giving them the upper hand in their dealings with manufacturers
The creative team in message execution must find what, aka the execution style
-the best approach, style, tone, words, and format for executing the message
Media planners must consider what
-the best media vehicles -the costs of producing ads for different media
Advertisers should evaluate two types of advertising results
-the communication effects and the sales and profits effects
What happens in values based pricing
-the company must first assess customer needs and value perceptions -it then sets target price based on customer perceptions of value -the targeted value and price drive decisions about what costs can be incurred and the resulting product design -pricing begins with analyzing customer needs and value perceptions, and the price is set to match perceived value
In segmented pricing what happens
-the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs
What is the objective and task method
-the company sets its promotion budget based on what it wants to accomplish with promotion -entails 1. defining specific promotion objectives, 2. determining the tasks needed to achieve these objectives 3. estimating the cost of performing these tasks, the sum of these costs is the proposed promotion budget
Target return pricing uses what
-the concept of a break even chart that shows the total cost and total revenue expected at different sales volume levels -a cost based pricing method that determines price based on a specified rate of return on investment
Price escalation problem is what
-the cost of transportation, tariffs, importer, margin, wholesaler margin, and retailer margin to its factory -depending on these added costs, the product may have to sell for two to five times as much in another country to make the same profit -cost to produce varies by country
Direct investment is what
-the development of foreign based assembly or manufacturing facilities -entering a foreign market by developing foreign based assembly or manufacturing facilities
What is the advertising budget
-the dollars and other resources allocated to a product or a company advertising program
Management contracting is what
-the domestic firm provides the management know how to a foreign company that supplies the capital -a joint venture in which the domestic firm supplies the management know how to a foreign company that supplies the capital -domestic firm exports management services rather than products
More than almost any other marketing function, logistics affects what
-the environment and a firms environmental sustainability efforts
Break-Even Pricing or a variation called Target Return Pricing involves what
-the firm tries to determine the price at which it will break even or make the target return it is seeking -setting price to break even on the costs of making and marketing a product, or setting price to make a target return -they are the price at which unit revenue equals unit cost and profit is zero
What is a message strategy
-the general message that will be communicated to consumers
How has the dramatic growth of digital shopping added a new dimension to shopper marketing
-the last mile or point of purchase no longer takes place only in stores -most consumers now make at least some of their purchases online, without even setting foot into a retail store -they may research a purchase on the internet before a store visit
Conditions that must be met for market penetration to work
-the market must be highly price sensitive so that a low price produces more market growth -production and distribution costs must decrease as sales volume increases -low price must help keep out the competition, and the penetration pricer must maintain its low price position
N Culture is what
-the most basic cause of a persons wants and behavior
What is return on advertising investment
-the net return on advertising investments divided by the costs of the advertising investment
N Inelastic and medium price
-the one that got away -underpricing -could have got more -tough to go up
What is an advertising strategy
-the plan by which the company accomplishes its advertising objectives
Choice of transportation carriers affects what
-the price of products, delivery performance, condition of goods when they arrive- all of which affect customer satisfaction
Market skimming only makes sense under what conditions
-the products quality and image must support its higher price, and enough buyers must want the product at that price -costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more -competitors should not be able to enter the market easily and undercut the high price
N What is digital marketing
-the promotion of products or brands via one or more forms of electric media, differs from traditional marketing in that it uses channels and methods that enable an organization to analyze marketing campaigns and understand what is working and what isnt- typically in real time
N Global culture
-the rise of global culture doesnt mean that consumers share the same tastes or values
Based Point Pricing is what
-the seller selects a given city as a basing point and charges all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped
Producer and intermediaries need to agree on what
-the terms and responsibilities of each channel member, price politics, conditions of sales, territory rights, specific services to be performed by each party -producer should establish a list price and a fair set of discounts for the intermediaries, it must define each channel members territory, and it should be careful about where it places new resellers
N Standardized versus adapted strategies
-the two strategies bound a continuum that ranges from a completely standardized marketing approach to entering new markets to one that completely customizes the entry
Selective distribution is what
-the use of more than one but fewer than all of the intermediaries who are willing to carry a companys products
The most startling advances in retail technology have come from what? How?
-the ways in which retailers are connecting with consumers -customers have gotten used to the speed and convenience of buying online and control the Internet gives them over the buying process -web lets them shop when they like and where they like, with instant access to gobs of info about competing products and prices
Advertisers have gotten pretty good at measuring the communication effects of what
-their ads and ad campaigns -sales and profits effects of advertising are often much harder to measure
How does the clutter cause huge headaches for advertisers
-there is a huge clutter of other commercials, announcements, network promotions, with 20 minutes of nonprogram material per prime time hour -such clutter in tv and other ad media has created an increasingly hostile advertising environment -digital technology has armed consumers with an arsenal of weapons for choosing what they watch or dont -can no longer force feed the same old cookie clutter ad message to captive consumers through traditional media -advertising messages must be better planned, more imaginative, more entertaining, and more emotionally engaging -simply interrupting or disrupting consumers no longer works -unless ads provide info that is interesting, useful or entertaining, many consumers will simply skip them
How is distribution important to wholesalers
-there was a time when wholesales could locate in low rent, low tax areas and invest little money in their buildings, equipment, and systems -today, however, as technology zooms forward, such behavior results in outdated systems for material handling, order processing, and delivery -they must choose their locations, facilities, web location carefully
In raw material exporting economies, what happens
-these economies are rich in one or more natural resource but poor in other ways -revenue comes from exporting -good markets for large equipment, tools, supplies, trucks -if there are many foreign residents and a wealthy upper class, there are also a market for luxury goods
N Perfectly Inelastic demand Ex
-these products are things consumers absolutely need and there are no other options from which to obtain them, where a firm has a monopoly on the demand
Brokers and agents differ from merchant wholesalers in what 2 ways
-they do not take title to goods -they perform only a few functions
How does public relations use news
-they find or create favorable news about the company and its products or people -some occur naturally -sometimes the PR person can suggest events or activities that create news
In recent years, department stores have been what? What did they do in response?
-they have been squeezed b/w more focused and flexible specialty stores on the one hand and more efficient, lower priced discounters on the other hand -in response, many have added promotional pricing to meet the discount threat and others have stepped up the use of store brands and single brands designer sops to compete with specialty stores and others are trying catalog, telephone, web selling
How can companies measure a products price
-they may ask consumers how much they would pay for a basic product and for each benefit added to the offer -company might conduct experiments to test the perceived value of different product offers
Warehouse clubs are what
-they operate in huge, drafty, warehouse like facilities and offer few frills but offer ultralow prices and surprise deals on selected branded merchandise -an off price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees
What is the affordable method
-they set the promotion budget at the level they think the company can afford -setting the promotion budget at the level management thinks the company can afford -they start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising
Advertising appeals should have what 3 characteristics
-they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers -must be believable, consumers must believe that the product or service will deliver the promised benefits -distinctive, they should tell how the product is better than competing brands
N Digital marketers monitor what
-things like what is being viewed, how often and for how long, sales conversions, what content works and doesnt work -while the internet is the channel most closely associated with digital marketing, others include wireless text messaging, mobile instant messaging, mobile apps, podcasts, electronic billboards, digital television and radio channels
New opportunities, new responsibilities
-think globalness -manage the dark side -build credible myths -treat antiglobals as customers -turn social responsibility into entrepreneurship
N Key issues in how global brands compete
-think in cultural terms -dimensions of global brands -global consumer segments -opportunities
What do intermediaries usually offer
-through their contacts, experience, specialization, scale of operation, they offer the firm more than it can achieve on its own
Idea behind pulsing is what
-to advertise heavily for a short period to build awareness that carries over to the next advertising period
Companies goal during Integrative Marketing communication should be
-to deliver a consistent and positive message to each contact
How does public relations use corporate identity materials
-to help create a corporate identity that the public immediately recognizes -logos -stationary -brochures -signs -business forms -business cards -buildings -uniforms -company cars and trucks -they all become marketing tools when they are attractive, distinctive, and memorable
Goal of marketing logistics should be what
-to provide a targeted level of customer service at the least cost -a company must first research the importance of various distribution services to customers and then set desired service levels for each segment -objective is to maximize profits, not sales, therefore the company must weigh the benefits of providing higher levels of service against the costs
How does public relations use written materials
-to reach and influence their target markets -annual reports, brochures, articles, company newsletters and magazines
The IMC leads to a what
-total marketing communications strategy aimed at building strong customer relationships by showing how the company and its products can help customers solve their problems
What are typically the biggest supply chain contributors
-transportation -warehousing -packaging -also provide one of the most fertile areas for cost savings
Physical distribution function of marketing channel members
-transporting and storing goods
In shipping goods to warehouses, dealer, and customers, the company can choose from what 5 main transportation modes
-truck -rail -water -pipeline -air -the internet
Many of todays global corporations have become what
-truly borderless, this does not mean every firm must operate in a dozen countries to succeed. -smaller firms can practice global niching
Message execution, the advertiser now must do what
-turn the big idea into an actual ad execution that will capture the target market's attention and interest
Major media types are
-tv -newspaper -internet -direct mail -magazines -radio -outdoor
N Captive Product Pricing
-two or more products that work only when used together -buy the 1st, need the 2nd -low entry price, margin on repeat purchase
What is included when companies design their promotion mix strategies
-type of product and market
N Why change marketing by country
-types of customers in each country
Shortcomings of PR
-underused -dramatize a company or product
N Publicity is what
-unpaid communication about an organization that appears in the mass media
Supply chain consists of what
-upstream and downstream partners -upstream from company is the set of firms that supply the raw materials, components, parts, info, finances, expertise needed to create product or service -downstream is the marketing channels that look toward the customer -downstream marketing channel partners, such as wholesailers and retailers, form a vital link b/w the firm and its customers
Many marketers are embracing shopper marketing, meaning
-using point of purchase promotions and advertising to extend brand equity to the last mile and encourage favorable point of purchase decisions -it involves focusing the entire marketing process- from product and brand development to logistics, promotion, merchandising, toward turning shoppers into buyers at the point of sale
N Informative
-value -image -new product -explain
Variable costs are what
-vary directly with the level of production and include costs related to the direct production of the product and many of the marketing costs associated with selling it -called variable because the total cost varies with the number of units produced
In a subsistence economy, what happens
-vast majority of people engage in simple agriculture -consume most of their output and barter the rest for simple goods and services -offer few market opportunities
N Digital media today
-video -news -information -music -out of home (outdoor)
Discount store ex
-walmart -target -kohls
Superstore ex
-walmart supercenter -supertarget -meijer -best buy -petsmart -staples -barnes and nobles
Major logistic functions are
-warehousing -inventory management -transportation -logistics information management
4 major questions concerning marketing channels
-what is the nature of the marketing channel and why are they important -how do channel firms interact and organize to do the work of the channel -what problems do companies face in designing and managing their channels -what role do physical distribution and supply chain management play in attracting and satisfying customers
N Adaptation pursue when
-when distinct national preferences -when distinct laws and regulations -when distinct living standards and economic conditions -when distinct national infrastructure
N When is Publicity important
-when the companys image is at risk due to product tampering or other mishap
N Unit Elastic is what
-where any change in price is matched by an equal change in quantity (where the number is equal to 1)
N Perfectly elastic is what
-where any very small change in price results in a vary large change in the quantity demanded -mostly pure commodities
N Relatively inelastic is what
-where large changes in price cause small changes in demand (number is less than 1)
N Relatively elastic is what
-where small changes in price cause large changes in quantity demanded (result of the formula is greater than 1)
N Perfectly inelastic is what
-where the quantity demanded does not change when the price changes
N Tribal Sphere
-whereas the social sphere emphasizes broad, diverse networks, the tribal sphere is the domain of more focused social engagement -marketers can use or help create consumers' identification with groups -advertising that leverages tribal affiliation must suit the character and values of those involved; address desires for identity, self expression, membership; provide a social signal or status market; empower the individual
Measuring the communication effects of an ad or ad campaign tells what
-whether the ads and media are communicating the ad message well -individual ads can be tested before of after they are run
N Distribution channel may include
-wholesalers -brokers or agents -retailers -etc
Wholesales act channel decision of risk bearing how
-wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
How can wholesalers adding value through product and service damage profits
-wholesalers are cutting down on the number of lines they carry, choosing to carry only the more profitable ones -they are rethinking which services count most in building strong customer relationships and which should be dropped or paid for by the customer
Wholesales act channel decision of transportation how
-wholesalers can provide quicker delivery to buyers because they are closer to buyers than are produced
Wholesales act channel decision of buying and assortment building how
-wholesalers can select items and build assortment needed bu their customers, thereby saving much work
Wholesales act channel decision of financing how
-wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time
Wholesales act channel decision of market information how
-wholesalers give information to suppliers and customers about competitors, new products, and price developments
Wholesales act channel decision of warehousing how
-wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers
Wholesales act channel decision of management services and advice how
-wholesalers often help retailers train their salesclerks, improve store layouts and displays, and set up accounting and inventory control systems
Wholesales act channel decision of selling and advertising how
-wholesalers sales forces help manufacturers reach many small customers at a low cost -wholesaler has more contacts and is often more trusted by the buyer than distant manufacturer
Wholesales act channel decision of bulk breaking how
-wholesalers save their customers money by buying in carload lots of breaking bulk
Sales Promotion includes what
-wide assortment of tools -coupons -discounts -contests -premiums
Multichannel distribution systems advantages offered to companies facing large and complex markets
-with each new channel, company expands its sales and market coverage and gains opportunity to tailor its products and services to the specific needs of diverse customer segments
N In the history of the world, there have only been 4 types of advertising campaigns that build brands and drive sales, they are what
-word hook -character hook -repeatable theme -consistent brand layout -without exception, the most popular and most successful advertising campaigns have used one of these techniques or combined several of these techniques
Development is what
-working with donors or members of nonprofit organizations to gain financial or volunteer support
N Internal Reference Point
-you likely know the current price of gasoline -you may not know the price of an oven
N Personal selling is what
1 to 1 or person to person marketing
Major steps in advertising media selection are
1. determine reach, frequency, and impact 2. choosing among major media types 3. selecting specific media vehicles 4. choosing media timing
What percent of total cargo ton miles are moved via multiple modes
12%
Railroads account for what percent of total cargo ton miles in the US
40%, most cost effective modes for shipping large amounts of bulk products over long distances, increased their customer services by designing new equipment to handle special categories of goods,
Trucks account for what percent of total cargo ton miles in the US
40%, they are efficient for short hauls of high value merchandise, they are highly flexible in their routing and time schedules, offer faster service than railroads
Water carriers account for what percent of total cargo ton miles in the US
5%, very low cost, slowest mode and may be affected by weather
N Key trend in retail today- financial
Artificial Intelligence- DATA
N CPM = what
Cost per Thousand
N Product adaptation, different promotion
Dual Adaptation
N R*F= what
Gross Rating Points
Is good value the same as low price
No
N Most logical method for advertising budget
Objective and task method
What is the most effective promotion tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and actions
Personal Selling
N Markup = what
Price - cost
N Pricing arrows
Price-> Elasticity and Demand -> New Product Pricing -> Product Mix Pricing
What is the number one problem facing many marketing executives, and many companies do not handle pricing well
Pricing
N Product adaptation, same promotion
Product adaptation
N A part of public relations includes what
Publicity
N All Commodity Volume (ACV)= what
Total $ Sales of stores carrying our brand / Total $ Sales of outlets available
N Product Category Volume= what
Total Category $ Sales of stores carrying our brand / Total $ category sales of outlets available
Can pre and postevaluations of communication effects be made for entire advertising campaigns
YES
Is finding the right balance b/w the main product and captive product tricky
YES
Can promotional pricing be an effective means of generating sales for some companies in certain circumstances
YES but it can be damaging for other companies if taken as a steady diet
Are network television, magazine, newspapers, and other traditional items important
YES but their dominance is declining
Do consumers often benefit from Internet and dynamic pricing
Yes
Most large companies use what type of promotion mix strategy
a combination of both
Location based pricing is
a company charges different prices for different locations, even though the cost of offering each location is the same
Good communication is a crucial element in what
a companys efforts to build profitable customer relationships
N If the repeatable theme is at the same place in each, it is what
a design
Multichannel distribution system
a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
Time based pricing is
a firm varies its price by the season, month, day and even the hour
Prices have a direct impact on what
a firms bottom line
Price of service is broken into what
a fixed fee plus a variable usage rate
Full service wholesalers provide what
a full set of services
With personal selling, the buyer usually feels what
a greater need to listen and respond, even if the response is a polite "no thank- you"
Channel Level is what
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
Supply chain takes a what view of the business
a make and sell view
Reach is what
a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time
Rather than the old media model rapidly collapsing, most industry insiders see what
a more gradual blending of new and traditional media
Seasonal discount is what
a price reduction to buyers who buy merchandise or services out of season
Cash discount is what
a price reduction to buyers who pay their bills promptly
Changes in technology and explosive growth of direct and online marketing are having what
a profound impact on the nature and design of marketing channels
Allowance is what
a reduction from the list price for buyer actions like trade ins or promotional and sales support
Companies that operate in global industries, where their strategic positions in specific markets are affected strongly by their overall global position, must compete on what
a regional or worldwide basis to succeed
Service retailer is what
a retailer whose product line is actually a service
Marketing or Distribution channel is what
a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
Customers are merging store and online outlets into what
a single shopping process
Discount is a what
a straight reduction in price on purchases made during a stated period of time or in larger quantities
Category killers are found in what
a wide range of categories, including electronic, home improvement products, books, baby gear, toys, linens and towels, party goods, sporting goods, pet supplier
Just in time systems require what
accurate forecasting along with fast, frequent, and flexible delivery so that new suppliers will be available when needed, and these systems result in substantial savings in inventory carrying and handling costs
In making products and services available to consumers, channel members do what
add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them
In the place of traditional marketing strategies, advertisers are now doing what
adding a broad selection of more specialized and highly targeted media to reach smaller customer segments with more personalized, interactive messages
N Dynamic Pricing is what
adjust price to demand
Segmented Pricing description
adjusting price to allow for differences in customers, products, or location
Dynamic pricing description
adjusting prices continually to meet the characteristics and needs of individual customers and situations
International Pricing description
adjusting prices for international markets
Psychological pricing description
adjusting prices for psychological effect
Geographical pricing description
adjusting prices to account for geographic location of customers
No matter how big the budget, advertising can succeed only if what
advertisements gain attention and communicate well
N Message ------- Media, what is in between
advertising
What is one of the easiest budget items to cut when economic times get tough
advertising
Airtruck describes what
air and truck
Self service is the basis of what
all discount operations and is typically used by retailers selling convenience goods and nationally branded, fast moving shopping goods
If its international sales expand, the company will establish what
an export department with a sales manager and a few assistants
When customers cannot judge the quality of a product because they lack information or skill, price becomes what
an important quality signal
In addition to finding the best product and vendor with the best price for that product, consumers are what
armed with price information that can often negotiate lower prices
Marketers use price promotion in difficult economic times to do what
as a quick fix instead of sweating through the difficult process of developing effective longer term strategies for building their brands
The world is becoming smaller, and every company operating in a global industry must do what
assess and establish its place in world markets
In dividing the work of the channel, the various functions of members channels should be what
assigned to the channel members who can add the most value for the cost
Full service retailers do what
assist customers in every phase of the shopping process
Management wants to charge a price that will do what
at least cover the total production costs at a given level of production
Value added pricing strategies are what
attaching value added features and services to differentiate a companys offers while charging higher prices
To help brand managers predict the level of sales in the absence of a discount, what types of models were developed
baseline sales models which are estimates that are estimated by extrapolating from periods when there are no price reduction
N Culture reflects what
basic values, perceptions, wants ,and behaviors
N What one message does IMC deliver
be clear
Straight extension is tempting why
because it involves no additional product development costs, manufacturing changes, or new promotion
N Ex of relatively elastic demand
beef
If companies delay taking steps toward internationalization, they risk what
being shut out of growing markets
Who now dominates the retail scene
big box discounters
Engaged consumers are more likely to act upon what
brand messages and even share them with others
The goal of madison and vine is for what
brand messages to become a part of the entertainment rather than interrupting it
Producers make narrow assortments of products in large quantities, but consumers want what
broad assortments of products in small quantities
Even government organizations use PR to do what
build awareness
Objective of informative advertising
build primary demand
Objective of Persuasive Advertising
build selective demand
Retailers are what
businesses whose sales come primarily from retailing
Ordinary discounters do what
buy at a regular wholesale price and accept lower margins to keep prices down
Off price retailers do what
buy at less than regular wholesale prices and charge consumers less than retail
Consumers with limited budgets probability will do what
buy less of something if its price is too high
Straight extension drawbacks
can be costly in the long run if product fails to satisfy consumers in specific global markets
Despite the shift toward new digital media, traditional mass media still do what
capture a lions share of the promotion budgets of most major marketing firms
One form of discount
cash discount
Most international trade involves what type of transactions
cash, yet many countries have too little hard currency to pay for their purchases from other countries and want to pay with other items instead of cash
In response to the great recession, many companies have done what
changed their pricing approaches to bring them in line with changing economic conditions and consumer price perceptions
If costs more than its competitors to produce and sell a similar product, the company will need to do what
charge a higher price or make less profit, putting it at a competitive disadvantage
If a company faces a host of smaller competitors charging higher prices relative to the value they deliver, it might do what
charge lower prices to drive weaker competitors from the market
High-low pricing involves what
charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
Where outlet malls consist of manufacturers outlets, value retail centers do what
combine manufacturers' outlets with off price retail stores and department store clearance outlets
N Convergence means what
coming together
N Promotion= what
communication
Communication adapts, product doesnt change means what
communication adaptation
If the company prices the product below its costs, what happens
companys profits will suffer
Persuasive Advertising becomes more important when
competition increases
Retailing does what
connect brands to consumers
If demand is elastic rather than inelastic, sellers will do what
consider lowering their prices, a lower price will produce more total revenue
When using breakeven, the company must do what
consider the impact of price on the sales volume needed to realize target profits and the likelihood that the needed volume will be achieved at each possible price
In using Psychological Pricing, sellers do what
consider the psychology of prices, not simply the economics, the price says something about the product
N Culture influences what
consumer behavior
Traditional intermediaries must do what
continue to innovate to avoid being swept aside
Simplest pricing method
cost plus pricing
What play an important role in setting international prices
cost. Travelers abroad are often surprised to find that goods that are relatively inexpensive at home may charge outrageously higher price tags in other countries
Geographical organizations are what
country managers who are responsible for salespeople, sales branches, distributors, licensees in respective countries
Madison and Vine threatens to do what
create even more of the very clutter that it was designed to break through and advertisers must be careful that the new intersection itself doesnt become too congested
Price plays a key role in what
creating customer value and building customer relationships
Beyond making their regular ads more entertaining, advertisers are also doing what
creating new advertisement forms that look less like ads and more like short films or shows
What set the ceiling for prices
customer perceptions of the products value
Most obvious response to new economic realities is what
cut prices and offer discounts because they make products more affordable and help spur short term sales
N If demand is inelastic, a price increase does what
decreases sales slightly and increases revenue
As the price increases, what happens to demand in breakeven
demand decreases and when this happens the market may not buy even the lower volume needed to break even at the higher price
If a pull strategy is effective, consumers will do what
demand the brand from retailers
Some media planners believe that although pulsing achieves minimal awareness, it sacrifices what
depth of advertising communications
Whole channel view recognizes that to compete well internationally, the company must effectively do what
design and mange an entire global value delivery network
Marketing channel design is what
designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives
Given a set of logistics objectives, the company does what
designs a logistics system that will minimize the cost of attaining these objectives
Customer segment pricing is
different customers pay different prices for the same product or service
Product form pricing is
different versions of the product are priced differently but not according to differences in their costs
N Retailers must learn to use what
digital assets to give customers an experience -from videos -AmazonGo -physical flow just go -in store experience
Electronic data interchange is what
digital exchange of data b/w organizations
N Firms must learn to use what
digital to give customers and experience
Fastest growing forms of marketing
direct and online marketing
Biggest involvement in a foreign market comes from what
direct investment
Ideally, the message strategy will follow what
directly from the companys broader positioning and customer value strategies
Some persuasive advertising has become comparative advertising in which a company does what
directly or indirectly compares its brand with one or more other brands
In their efforts the find less costly and more highly targeted ways to reach consumers, advertisers have done what
discovered a dazzling collection of alternative media
Markup percentage on cost formula
dollar markup / cost
Markup percentage on selling price formula
dollar markup / selling price
Warehousing has seen when in recent years
dramatic changes in technology
In many industries, traditional intermediaries are what
dropping by the wayside
Communication changes, product changes means
dual adaptation
World product groups are what
each group is responsible for worldwide sales of different product groups
International subsidiaries are what
each responsible for their own sales and profits
N Todays goal is what in warehousing
efficiency through information systems
Shopper marketing isnt just about in store buying these days, influencing consumers' buying decisions as they shop involves what
efforts aimed at in store, online, and mobile shopping
If demand changes greatly, we say demand is what
elastic
Advertiser wants to choose media that will what customers rather than simply reach them
engage them
Products developed in one country have found what in another
enthusiastic acceptance in other countries
Most companies try to measure their demand curves by doing what
estimating demand at different prices and the type of market makes a difference
Customers will use perceived values to do what
evaluate a products price so the company must work to measure them
After listing possible international markets, company must do what
evaluate each one carefully
N If price = or < Perceived Value, and Price > Price Floor, then what could happen
exchange could happen
N Standardization does what
exemplifies integration and is more appropriate in global industries
N Adaptation is what
exemplifies local responsiveness and is more appropriate in multidomestic industries
As sales increase, the export department can do what
expand to include various marketing services so that it can actively go after business, if the firm moves into joint ventures or direct investment, the export department will no longer be adequate
Simplest way to enter a foreign market is through what
exporting
Factory outlets sometimes grouped together in what
factory outlet malls and value retail centers
N Culture is learned from what
family, church, school, peers, colleagues
The world is shrinking rapidly because of what
fast communication, transportation, and financial flows
Limited service wholesalers offer what
fewer services to their suppliers and customers
Domestic companies that never thought about foreign competitors do what
find competitors in their own backyards
Because the mass media costs are rising, audiences shrinking, and new digital and interactive media emerging, many advertisers are doing what
finding new ways to reach consumers
Designing the marketing channel starts with what
finding out what target consumers want from the channel
Unit volume for determining break even for profit goals formula
fixed cost + profit goal / price - variable cost
Break even volume formula
fixed costs / price - unit variable cost
Break even sales formula
fixed costs / contribution margin
Price is also one of the most what marketing mix elements
flexible elements
From a logistics perspective, what are closely linked to channel performance
flows of information
In the not so distant future, handling inventory might even become what
fully automated
A small percentage improvement in price can do what
generate a large percentage increase in profitability
Today's empowered consumers often do what
generate more messages about a brand than a company can
What is important in todays costly and cluttered advertising environments
good advertising messages
Retail convergence means what for retailers
greater competition for retailers and greater difficulty in differentiating the product assortments of different types of retailers
The increasing use of marketing segmentation, market targeting, and product specialization has resulted in what
greater need for stores that focus on specific products and segments
The faster the delivery, the greater the assortment provided, and the more add on services supplied, the what
greater the channels service level
Customers usually perceive higher priced products as what
having higher quality
Advertising goal is to do what
help move consumers through the buying process, some advertising is designed to move people to immediate action
Limited service retailers increased operating costs result in what
higher prices
Regardless of how companies go about pricing their products, their foreign prices probably will be what
higher than their domestic prices for comparable products
In any medium, how relevant an ad is for its audience is often more important than what
how many people it reaches
Frequency is a measure of what
how many times the average person in the target market is exposed to the message
When the channel has defined its channel objectives, it should do what next
identify its major channel alternatives it terms of the types of intermediaries, number of intermediaries, responsibilities of each channel member
Under demand chain, planning starts by what
identifying the needs of target customers, to which the company responds by organizing a chain of resources and activities with the goal of creating customer value
N Value Delivery Network is what
improving the performance of the entire system
Joint venturing differs from exporting how
in that the company joins with a host country partner to sell or market abroad
N If demand is inelastic, a price decrease does what
increase sales slightly and decrease revenues
N Manufacturer---->Retailer----> Customer is what distribution channel
indirect channel
N Manufacturer---->Wholesaler---->Retailer----> Customer is what distribution channel
indirect channel
If demand hardly moves with a small change in price, demand is what
inelastic
Companies manage their supply chains through what
information
Sooner or later because of most companies getting involved in several international markets and ventures, and a company may export to one country, license to another, have a joint ownership venture in a third, and own a subsidiary in a fourth, it will create a what
international division or subsidiary to handle all its international activity
N Storing costs money in what
inventory carrying costs
Developing green supply chain is not only environmentally responsible but what
it can also be profitable
The higher the price, what will happen to break even for manufacturers
it will be lower
Countrys industrial structure shapes what
its products and service needs, income levels, employment levels
N A brands global dimensions have significant impact on what
its value in the eyes if consumers
Smart managers treat pricing as a what
key strategic tool for creating and capturing customer value
International marketing intermediaries bring what
know-how and services to the relationship, so the seller normally makes fewer mistakes
Number of intermediary levels indicates what
length of a channel
From a producers point of view, a greater number of levels means what
less control and greater channel complexity
In the new marketing communications world, rather than using old approaches that interrupt customers and force feed them mass messages, new media does what
let marketers reach smaller groups of consumers in more interactive, engaging ways
Channel patterns link what
link up to share information and make better joint logistics decisions
Distribution channel decisions often involve what with other firms
long term commitment
Storage warehousing is good for what
long term to moderate periods
A sales force requires what compared to advertising
longer term commitment and the size of the sales force is harder to change
Branded Entertainment involves what
making the brand an inseparable part of some other form of entertainment
Marketing logistics involves supply chain management which is
managing upstream and downstream value added flows of materials, final goods, and related information among suppliers, company, resellers, final consumers
Most common type of agent wholesaler
manufacturers' agents
To overcome price escalation problem when selling to less affluent consumers in developing countries
many companies make simpler or smaller versions of their products that can be sold at lower prices, others have introduced new, more affordable brands in emerging markets
Todays customer centered logistics starts with what
marketplace and woks backward to the factory or even to sources of supply
N Price = what
markup + cost
N Markup as a percent of cost
markup/cost
N Markup as percent of price
markup/price
After an ad is run, the advertiser can do what
measure how the ad affected consumer recall or product awareness, knowledge, and preference
Often firms form joint ownership ventures to do what
merge their complementary strengths in developing a global market opportunity
Why is slashing and spending do in the long run
might cause long term damage to a brands image and market share
N Distribution centers are what
modern facilities that use sophisticated information technology systems to acquire goods just as they are needed
N Storing goods costs what
money
N Culture is the what
most basic reason marketing factors must change by country
N Google analytics is what
most common way to measure web traffic, you can teach yourself from their tutorial and there is a free version for simplest use
Countries with a subsistence economy consist of what
mostly of households with very low family incomes
Channels within nations is what
moves products from their market entry points to the final consumers
N Manufacturer--->Wholesaler---->Distributor---->Retailer---->Customer is what distribution channel
multi channel
Much of the anticipated growth in online sales will go to who
multi-channel retailers
When designing global marketing strategies, companies must do what
must understand how culture affects consumer reactions in each of its world markets and must understand how they affect local cultures
Companies are doing less broadcasting and more what
narrowcasting
Product and service producers must develop what to remain competitive
new channel opportunities and this often brings them into direct competition with their established channels, resulting in conflict and to ease this, companies often look for ways to make going direct a plus for the entire channel
In recent decades, what have been gaining increasing importance regarding price
nonprice factors
If customers perceive that the products price is greater than its value, they will do what
not buy the product
Companies are paying attention too much to short term data and not what
not enough on long term health of the brand, they routinely overinvest in price promotion and underinvest in advertising, new product development, and new forms of distribution
N Frequency
number of times a person in the target is exposed to advertisement
Through their size and buying power, giant retailers can do what
offer better merchandise selections, good service, and strong price savings to consumers, growing even larger by squeezing out their smaller, weaker competitors
No matter what price they charge, companies need to do what
offer great value for the money
A wealth of price comparison sites do what
offer instant product and price comparisons from thousands of vendors
Functional discount is offered when
offered to trade channel members who perform certain functions like selling, storing, record keeping
Values Based Pricing is what
offering just the right combination of quality and good service at a fair price
Good value pricing strategies are what
offering the right combination of quality and good service at a fair price
Optimal product pricing is what
offering to sell optimal or accessory products along with the main product
Price that the company charges will fall somewhere b/w what
one that is too low to produce a profit and one that is too high to product any demand
Where is dynamic pricing especially prevalent
online
N Good or bad experiences are being used by who
other consumers to facilitate their own decision processes
N Advertising is what
paid use of media
Because both the producer and the final consumer performs some work, they are what
part of every channel
N Joint venturing is about what
partnerships
Promotional allowances are what
payments or price reductions that reward dealers for participating in advertising and sales support programs
N Reach
percentage of people in target exposed to ad
What is the most expensive promotion tool
personal selling
International division plans for what
plans for and provides services to various operating units, which can be organized in one of the 3 ways 1. geographical organizations 2. world product groups 3. international subsidiaries
Firms that stay at home, do what
play it safe and might lose their chance to enter other markets and risk losing their home markets
Although public relations captures only a small portion of the overall marketing budgets of most firms, PR can be a what
powerful branding tool, and the line b/w advertising and PR are becoming more and more blurred
Combination of highbrow brands and lowbrow prices found at outlets provide what
powerful shopper appeal
What has become a key element in the international marketing strategies of companies attempting to enter emerging markets
price
What remains one of the most important elements that determines a firms market share and profitability
price
Contribution Margin formula
price - variable cost / price
N Markup as a percentage of cost formula
price = cost + (cost x markup percent)
N Markup as a percentage of selling price formula
price = cost/ 1- markup percent
When customers can judge the quality of a product by examining it or by calling on past experience with it, they use what
price less to judge quality
Quantity discount is what
price reduction to buyers who buy large volumes
Trade is allowances are what
price reductions given for turning in an old item when buying a new one
N Cost= what
price- margin
What does breakeven analysis not take into account
price-demand relationship
Companies that market their products internationally must decide what
prices to charge in different countries, sometimes a company can charge a uniform worldwide price or not, most companies adjust their prices to reflect local market conditions and cost considerations
Product Bundling Pricing description
pricing bundles of products sold together
By Product Pricing description
pricing low value by products to get rid of or make money on them
Optimal product pricing description
pricing optimal or accessory products sold with the main product
Captive product pricing description
pricing products that must be used with the main product
Having a marketing communications director helps to do what
produce better communications consistency and greater sales impact because it places the responsibility in someones hands, whereas none existed before, to unify the companys image as it is shaped by thousands of company activities
Wholesalers buy mostly from who and sell to
producers and sell mostly to retailers, industrial consumers, and other wholesalers
Price is the only element in the marketing mix that does what
produces revenue, all other elements represent cost
Communication dont change, product adapts means
product adaptation
What set the floor for prices
product costs
Develop new product means what
product invention
If the seller charges less than the buyers perceived value, the companys sales will do what
product sell well, but they produce less revenue than they would if they were priced at the level of perceived value
In the past, physical distribution planners typically started with what
products at the plant and then tried to find low cost solutions to get them to customers
Public relations is used to do what
promote products ,people, places, ideas, activities, organizations ,even nations
N Same Product, Different promotion
promotion adaptation
Some companies state their logistics objectives as what
providing maximum customer service at the least cost
Companies can improve public goodwill by contributing money and time to what
public service activities
Product Publicity is what
publicizing specific problems
Some direct marketing companies only use what type of promotion mix strategy
pull
Thanks to the Internet, value driven retailers , todays more frugal customers are doing what
pursuing spend less strategies
Some industrial companies only use what type of promotion mix strategy
push
Using many types of resellers in a channel benefits
reach more and different kinds of buyers
Advancement of in store scanners gave managers what
real time sales data making it possible to attribute a spike in sales to a price promotion
Discount and Allowance Pricing description
reducing prices to reward customer responses
N Word hook is a what
repeatable catch phrase from ad to ad
Most retailing is done by who
retailers
Advertisers can take advantage of narrowcasting to do what
rifle in on special market segments rather than use the shotgun approach offered by network broadcasting
Pulsing means
scheduling ads unevenly over a given time period
N Financial services firms like banks or payments technology providers are more focused than ever on what
securing customer data
B/w intensive and exclusive distribution lies what
selective distribution
Mass marketing is what
selling highly standardized products to masses of customers, in the process, they developed effective mass media communication techniques ti support these strategies
Wholesalers cannot do what
serve everyone, they must segment and define their target markets and differentiation and position effectively
What is the key differentiating factor regarding major store retailer types
service and other high end department stores are doing well by emphasizing exclusive merchandise and high quality service
Companies with lower costs can do what
set lower prices that result in smaller margins but greater sales and profits
Competition based pricing involves what
setting prices based on competitors' strategies, costs, prices, and marketing offering
Cost based pricing involves
setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk
Companies bringing out a new product face the challenge of what
setting prices for the first time
Rather than cutting prices, many companies have done what
shifted their marketing focus to more affordable items in their product mixes
N Sales Promotion gives what
short term results
Before an ad is placed, the advertiser can do what
show it to consumers, ask how they like it, and measure message recall or attitude changes resulting from it
A firm normally gets into international marketing by what
simply shipping out its goods
Marketing channel members buy large quantities from many producers and break them down into what
smaller quantities and broader assortments desired by consumers
Wholesalers who do not find efficient ways to deliver value to their customers will what
soon drop by the wayside
An advertising objective is a what
specific communication task to be accomplished with a specific target audience during a specified period of time
Communication dont change, product dont change means what
straight extension
N Same product, same promotion
straight extension
If the seller charges more than the buyers' perceived value, the companys sales will do what
suffer
Past costs are usually what
sunk costs
N Traditional view of value delivery network
supply chain-marketing channel
Channel innovators who find new ways to add value in the channel can do what
sweep aside traditional resellers and reap the rewards
The company may passively export its surpluses from time to time, or it may do what
take an active commitment to expand exports to a particular market
If the market is dominated by larger, lower price competitors, the company may decide to do what
target unserved market niches with value added products at higher prices
Although scanner data showed brand managers the clear link b/w discounting and sales, the numbers dont do what
tell them about whether a given promotion was profitable
Promotional Pricing description
temporarily reducing prices to spur short run sales
Defenders of globalization argue what
that concerns of Americanization and potential damage to American brands are overblown and that US brands are doing well internationally
Success of discount retailing shows what
that consumers will often accept lower service levels in exchange for lower prices
Major problem with breakeven analysis
that it fails to consider customer value and the relationship b/w price and demand
Concept of IMC suggests what
that the company must blend the promotion tools carefully into a coordinated promotion mix
Value based pricing means what
that the marketer cannot design a product and marketing program and then set the price
Supporters of FOB pricing feel what
that this is the fairest way to assess freight charges
In the narrowest sense, price is what
the amount of money charged for a product or service
Unit Contribution is what
the amount that each unit contributes to covering fixed costs- the difference b/w price and variable costs
Most meaningful and believable benefits may not be what
the best ones to feature
Creative concept will guide what
the choice of specific appeals to be used in an advertising campaign
Multi-channel retailers are what
the click and brick marketers who can successfully merge the virtual and physical worlds
Disadvantage of FOB pricing
the company will be a high cost firm to distant customers
In managing inventory, the firm must balance what
the costs of carrying larger inventories against resulting sales and profits
N The price is established when
the currency for the exchange change hands
Vendor managed inventory means
the customer shares real time data on sales and current inventory levels with the supplier, the supplier then takes full responsibility for managing inventories and deliveries
The relationship b/w the price changed and the resulting demand level is known as what
the demand curve
A dollar markup is what
the difference b/w a company's selling price for a product and its cost to manufacture or purchase it
Barter involves what
the direct exchange of goods or services
Wheel of retailing concept seems to explain what
the initial success and later troubles of department stores, supermarkets, discount stores and recent success of dollar stores and off price retailers
Exporting involves what
the least change in the companys product lines, organization, investments, or mission
Historically, price has been what
the major factor affecting buyer choices
Price is considered along with all other marketing mix variables before what
the marketing program is set
What else needs to be adapted internationally
the media
Madison and vine is now what
the meeting place for the advertising and entertainment industries
Retail convergence is what
the merging of consumers, products, prices, and retailers
Marketing channels are part of what
the overall customer value delivery network, where each channel member and level adds value for the customer
N Elasticity captures what
the percentage change in unit demand resulting from a 1% change in price
Consumers will based their judgments of a products value on what
the pries that competitors charge for similar products
Media impact is what
the qualitative value of the message exposure through a given medium
An important trend affecting media selection is what
the rapid growth in the number of media multitaskers, people who absorb more than one medium at a time
Before setting prices, the marketer must understand what
the relationship b/w price and demand for the companys products
Markup chain is what
the sequence of markups used by firms at each level in a channel
What differentiates concept of shopper marketing is what
the suggestion that these efforts should be coordinated around the shopping process itself
More broadly, price is what
the sum of all the values that customers give up to gain the benefits of having or using a product or service
Total costs are what
the sum of the fixed and variable costs for any given level of production
In a monopoly, the demand curve shows what
the total market demand resulting from different prices and in the face of competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the companys own prices
N Digital- online moving over what
the traditional retail space
A firm should identify what
the types of channel members available to carry out its channel work, most companies face many channel member choices
Break Even Analysis determines
the unit volume and dollar sales needed to be profitable given a particular price and cost structure
A company will often find it hard to measure what
the value customers attach to its products
Advertising media is what
the vehicles through which advertising messages are delivered to their intended audiences
Sellers must understand what before planning a marketing program
the ways that consumers in different countries think about and use certain products
Some companies offer less service than what
their competitors and charge a lower price while other companies offer more service and charge higher prices to cover higher costs
Critics worry that McDomination countries around the globe are losing what
their individual cultural identities and can lead to a backlash against American globalization and can lead to boycotts and protests in some international markets
How do factors like boom or recession, inflation, and interest rates affect pricing decisions
they affect pricing decisions because they affect consumer spending, consumer perceptions of products price and value, companys costs of producing and selling a product
Producers use intermediaries because why
they create greater efficiency in making goods available to target markets
Even in tough economic times, consumers do not do what
they do not buy based on prices alone, they balance the price they pay against the value they receive
How are brokers and agents like merchant wholesalers
they generally specialize by product line or customer type
Sellers eventually move into direct exporting, which is what
they handle their own exports and the investment and risk are greater in this strategy but so is return
What have consumers done in the aftermath of the Great Recession
they have tightened their belts and become more value conscious and will likely continue to be more thrifty, resulting in markets having to increase their emphasis on value for the money pricing strategies
Channels b/w nations are what
they move company products from points of production to the borders of countries within which they are sold
Relevant costs are what
those costs that will occur in the future and that will vary across the alternatives being considered
Many companies have greatly reduced their inventories and related costs how
through just in time logistics systems, and with these, producers and retailers carry only small inventories of parts or merchandise, often enough for only a few days of operation and new stock arrives exactly when needed, rather than being stored in inventory until being used
Logistics managers task is what
to coordinate the activities of suppliers, purchasing agents, marketers, channel members, customers including activities like forecasting, information systems, purchasing, production planning, order processing, inventory, warehousing, transportation planning
Goal of deciding which markets to enter
to determine the potential of each market, then the marketer must decide which markets offer the greatest long run return on investment
First step in straight product extension should be
to find out whether foreign consumers use that product and what form they prefer
Purpose of advertising is what
to get consumers to think about or react to the product or company in a certain way because people will react only if they believe they will benefit from doing so
Direct marketing is well suited for what
to highly targeted marketing efforts and building one to one customer relationships
N The role of distribution centers today are what
to keep goods flowing, not to keep them in storage
Aim of advertainment is what
to make ads themselves so entertaining, or so useful, that people want to watch them
The key is cost based pricing is what
to manage the spread b/w costs and prices- how much the company makes for the customer value it delivers
First step in creative effective advertising messages is what
to plan a message strategy
Dynamic pricing makes sense in many contexts but marketers need to be careful not to use it how
to take advantage of certain customer groups, thereby damaging important customer relationships
Even a demand chain might be what
too limited because it takes a step by step, linear view of purchase production consumption activities
From an economic's point of view, the role of marketing intermediaries is to do what
transform the assortments of products made by producers into the assortments wanted by consumers
Many firms have passed beyond international division stage and are what
truly global organizations
Most firms want to avoid pricing that does what to their products
turns them into commodities
Ex of selective distribution
tv, furniture, home appliance brands
In the case of services, what is captive product pricing called
two part pricing
Globalization is a what
two way street
Effective, customer oriented pricing involves what
understanding how much value customers place on the benefits they receive from the product and setting a price that captures that value
Contribution margin is what
unit contribution divided by the selling price
Many of the nations largest and most important wholesalers are what
unknown to final consumers
N PR is what
unpaid use of media
Piggybacking describes what
use of rail and trucks
Full service stores do what
usually carry more specialty goods for which customers need or want assistance or advice, providing more service, which result in higher operating costs which are passed along to customers as higher prices
Instead, most companies are engaged in building and managing a complex, continuously evolving what
value delivery network
Different types of limited service wholesalers perform what
varied specialized functions in the distribution channel
Companies typically start with indirect exporting, which is what
walking through independent international marketing intermediaries
Trainship decribes what
water and rail
Fishback descirbes what
water and trucks
In designing marketing channels, manufacturers struggle b/w what
what is ideal and what is practical
Informative advertising is used heavily when
when introducing a new product category
N Inelastic demand is what formula
where the formula is <1
N Elastic demand is what formula
where the formula is >1
The question is not whether these functions of marketing channel members will be performed, its a question of what
who will perform them
Firms that engage primarily in wholesaling activities are called what
wholesalers
N If demand is elastic, a price increase does what
will decrease sales and decrease revenues
N If demand is elastic, a price decrease does what
will increase sales and increase revenue
Advertiser must use memorable and attention getting what in the ad
words
What is a way for a company to gain a competitive advantage in advertising
you maintain or even increase their advertising spending while competitors are decreasing theirs
