MAR3023 Exam 4

Profits

(price x quantity sold) - total costs

Types of Comparative Ads

- Comparative: compares two or more brands on one or more characteristics - Reminder: reminds customers of an established brand's characteristics and benefits - Reinforcement: assures current users they have made the right choice

Scheduling Advertisements

- Continuous = runs steadily throughout the year (good for continuously used products) - Flighting = runs in spurts (heavy or none) (good for seasonal products) - Pulsing = combination of both (runs steadily but with bursts at certain times)

Rewards of Sales Careers

- Income - Independence - Impact - Achievement

Retail Pricing (1861-Present)

- John Wanamaker, who owned a shop in the Quaker district, put up this sign: "If everyone was equal before God, then everyone would be equal before price" (this was the beginning of price tags/fixed pricing) - Before then, shopkeepers haggled with customers and customers who entered stores who were expected to buy something

Types of Influencers

- Nano Influencer: 1k-10k - Micro Influencer: 10k-100k - Macro Influencer: 100k-1mil - Celebrities

First Ads

- Radio -> Hawthorne Court Apts, Queens, NY (1922) - Television -> 1941 - Banner Ad -> Wired.com (1994) - Facebook -> small contracts with companies that sold moving services, t-shirts, and other products to college students

Motivation

- Straight salary: predictable but needs monitoring - Straight commission: incentivizing but service varies - Combination: security and incentive (less predictable and more difficult) - Rewards and recognition

Other Q Scores

- TVQ: rates broadcast television programs - Cable Q: rates cable television programs - Dead Q: rates the current popularity of dead celebrities - Sports Q: rates sports figures - Cartoon Q: rates cartoon characters, video games, toys, and similar products - Brand Attachment Q: rates brand and company name - Kids Products Q: rates children's responses to brand and company name - Performer Q: rates living celebrities

Determinants of Elasticity

- availability of substitutes (electricity vs. Coca-Cola) - percentage of income (gum vs. car) - necessity - time (eventually find a substitute/die/quit smoking) - brand loyalty

Goals of Integrated Marketing Communications (IMC)

- consistent: consistent message to customers - coordinated: manage promotional efforts to be logically connected - complementary: synchronization to create a greater overall campaign - continuity: use more precisely targeted promotional tools over time

Advertising Clutter

- recall of a typical ad = 10% - recall of a "branded entertainment" episode = 24%

Stages of Response Models

1.) Cognitive Stage ("thinking" stage"): where the receiver becomes aware of the message 2.) Affective Stage ("feeling" stage"): where the receiver forms a liking or preference for the ad object 3.) Behavioral Stage ("doing" stage"): where the receiver acts on the preference

Publicity vs. Public Relations

1.) Publicity is more short term whereas PR extends over a period of time 2.) Publicity is largely out of the control of the firm - Control: Ads...PR...Publicity 3.) PR is designed to be positive whereas publicity may not be positive - Tylenol (1982): cleared the shelves after potassium cyanide poisonings - Perrier (1980s): Benzene cover-up 4.) Publicity is considered to be more powerful than PR

Q-Score Factors

1.) consumers' level of familiarity with a name - % of people who have heard of him/her 2.) the number of respondents who indicated that a person, program, or character is a favorite = score calculated by dividing the two numbers e.g., if 50% are familiar + 10% list as a favorite -> than score is 20 (average Q-score = 18)

Krugman (1972)

Exposure #1 is: "What is it?" Exposure #2: "What of it?" Exposure #3: "What is it's purpose?" (Curiosity, Recognition, Decision)

Highest Positive Q-Score

Morgan Freeman (44) Tom Hanks (43)

Print Media Circulation

Primary Circulation: subscribers Pass Along Readership: the number of people who read the magazine after the primary subscriber

Elements of Communication Process

Source (has information) -> Encoding Information (coding process) -> Message Development -> Communications Channel (medium) -> Decoding the Message -> Receiver -> Feedback

Public Relations

a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders

Viral Marketing

a form of promotion that uses social networks to generate and disseminate the message - uses a non-personal channel, typically social media - the key is organic spread (like a virus) - message is considered "viral" when it reaches the point where it's being shared by the public

Price Elasticity of Demand

a measure of the sensitivity of demand to changes in price

Advertising

a paid, non-personal communication about an organization and its products transmitted to a target audience through mass media - effective advertising can influence customers' purchasing behavior throughout their lifetimes - most organizations (even nonprofits) engage in advertising

Personal Selling

a paid, personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation (satisfying customers, building relationships, being of service)

Buzz Marketing

a subset of viral marketing wherein companies use unusual content and a sense of scarcity to create contagion - content spreads fast, and at the brand level e.g., Apple has been using the strategy for years via "Launch Events"

Mobile Ads

advertisements sent to mobile phones or other wireless devices - first mobile ad sent out in 2000 - GPS and mobile ads create targeting opportunities and privacy concerns that never existed before

Aim of Marketing

aim of marketing is to know and understand customers so well the product or service fits them and sells itself - 85% of marketing majors will go into sales as their first job out of college - 65% of all College of Business majors will go into sales early on in their business career

Sales Promotion

an activity or material that acts as a direct inducement offering added value or incentive for the product to resellers, salespeople, or customers e.g., free samples, games, rebates, sweepstakes, contests , premiums of coupons

Nielsen Ratings

an audience measurement system designed to assess the size and composition of TV audiences since there are an estimated 120,000,000 television households: - one ratings point represents 1% of that number (1.2 million households) Nielsen traditionally relied on a combination of data from the "audimeter" and consumer diaries (concerns over the accuracy of the diaries Nielsen now uses a "people meter" that has the capability to measure each household member's viewing habits: - each family member has a separate button that is pushed - data is based on a nationwide sample of 10,000 "Nielsen families" - Nielsen uses a sample of families in 55 markets to produce the overnight ratings Nielsen also produces commercial ratings that measure commercial viewership, adjusted for DVR recordings (they measure zipping + zapping)

Push Money (Spiffs)

an extra commission paid to retail employees to push products

Noise

anything that interferes with or distorts the message

Advancing the Sale

ask for a commitment,, watch for clues, summarize key benefits, propose action plan

Presentation/Prescription

attention, understanding, remember, value, influence

Compensation Objectives (Sales Force Management)

attract, motivate, and retain effective salespeople - provide acceptable levels of income and incentives - encourage proper treatment of customers

Preapproach

before contacting prospects... - ID decision makers - Review account/information - Assess credit history - Identify product needs - Social Network - Use the Internet (learn)

Break-Even Point Formula

breakeven point = fixed costs/per-unit contribution to fixed costs fixed cost = price - variable costs

Evaluation and Performance (Sales Force Management)

call reports, customer feedback, sales profit, actual vs. potential, new customers

Approach

cold calling, referrals, repeat contact - first impressions important (be early, nice appearance, introduction and handshake, gain their attention)

Publicity

communication about the organization and/or its products transmitted through mass media at no charge (news release, feature article, captioned photograph, press conference) - worst publicity disaster last year was Peloton -> gave permission to Sex and the City to use the product but was featured in a scene in which a character has heart attack after riding one - result: stock dropped 11%

Public Relations

communication efforts used to create and maintain favorable relations between an organization and its stakeholders - Starbucks, Palm, Botox, and Segway were successfully launched this way

Improving Performance (Sales Force Management)

conversation and observation, strengths and weaknesses, role-plays and practice

Advocacy Advertising

conveys a firm's position on a public issue

Integrated Marketing Communications (IMC)

coordination of promotion and marketing efforts for maximum impact

Newspaper, Direct Mail, Magazines (Advertising Mediums)

coupons, flyers, classified ads

Need Discovery/Diagnosis

current situation vs. ideal situation

Response Models

describe the process that receivers must go through before a desired behavior occurs

Relationship Selling

developing a relationship with customer

Prospecting

developing lists of potential customers (advertising can generate leads) - sources for prospects: sales records, public records, commercial databases, trade association directories, trade shows, social media, referrals - qualifying prospects: need to purchase, ability to purchase, and authority to purchase

Non-Price Competition

emphasizing factors other than price to distinguish a product from competing brands

Price Competition

emphasizing price as an issue and matching/beating competitor's prices

Post Test

evaluation of advertising effectiveness after the campaign (recognition aided/unaided recall)

Pre Test

evaluation performed before a campaign begins (consumer jury test)

Overcoming Objections

expect them, have a plan, anticipate and forestall - CRC Method: clarify, respond, confirm

Newspaper

first ad placement = 1704 - P & G Ivory Soap = 1882 - Coca-Cola = 1886 - Automobile = 1898

Pioneer Advertising

focuses on a product category e.g., "Got Milk?", "Beef?"

Price ->

good control for demand

Strategic Selling

having a plan when selling for best approach

Channel

how the communication travels from the source to the receiver two types: 1.) Personal Channels: involves direct contact (direct selling, salespeople, word of mouth) 2.) Non-personal Channels: no personal contact with consumer (print, broadcast, social media)

Segway

introduced with no advertising, but still generated 758 million impressions through publicity (valued at $70-$80 million)

Influencer Marketing

involves endorsements from "influencers" (people known to affect perceptions and buying habits) - brands hire influencers who have established credibility on social media platforms - similar to celebrity endorsements

Rockport

launched the idea of "fitness walking" as a PR initiative and doubled its sales

Inelastic Goods

life-saving medication, gas, electricity, cigarettes, post-secondary education

Competitive Advertising

points out a brand's advantages relative to competing brands

Recruiting Salespeople (Sales Force Management)

prepare job description, search for particular qualities, evaluate candidates

Movies, TV, and Video Games (Advertising Mediums)

product placement, mentions, interactivity

Following Up

progress of action plan, ask for complaints, referrals and thanks

Overall U.S. Spending on Media Advertising...

projected to be $348 billion in 2023 was less than $40 billion in 1980

Product Advertising

promotes the use, features, and benefits of specific products

Pull Policy (B2C)

promoting a product directly to consumers to develop a strong demand that pulls products through marketing channel (children's toys) e.g., Ford Australia only produces a car when one is ordered by a customer (Dell did something similar)

Push Policy (B2B)

promoting a product to the next institution down the marketing channel - the producer promotes the product to wholesalers, the wholesalers promote it to retailers, the retailers promote it to consumers (trade shows/personal selling)

Rating

rating = (HH tuned to show/total U.S. HH) x 100 ex. rating = 3,000,000 watched show/120,000,000 HH) x 100 = 2.5 program rating

AIDA Model

represents the stages a salesperson must take a customer through to induce purchase (developed for personal selling) -attention - interest - desire - action

Recognition/Recall

respondents shown a portion of an ad (or sometimes a memorable image and asked: 1.) Do you recognize this ad? (recognition) 2.) Please choose the sponsor of this ad from the following list (aided recall) 3.) Please type in the sponsor of this ad (unaided recall)

Size and Territory (Sales Force Management)

sales calls needed/sales calls per rep - add until the cost of adding one more salesperson equals the additional sales that would be generated by that person (by region, product, function, industry, client)

Consultive Selling

salesperson becomes consultant, offering advice, and suggestions (complex)

Average Americans...

see around 3,000 ads a day

Share of Audience

share = (HH tuned to show/U.S. HH using TV) x 100 ex. share = (3,000,000 watched show/15,000,000 used TV) x 100

Customers are avoiding ads...

so companies are going to great lenghts to reach customers: - embedded messages in programs - viral events (Red Bull Skydiver) - games - big data for better direct targeting "the idea is to not look and feel like advertising"

Sports (Advertising Mediums)

soccer, NASCAR, and volleyball

Elastic Goods

soft drinks, cereal, clothing, electronics, ears

Indoor Sales

stay in one location (office setting)

Training (Sales Force Management)

teach company, product, methods - frequency, sequencing, and duration of periodic training

Objectives (Sales Force Management)

tell salespeople what they are to accomplish (volume, share, profit, quotas)

Markup

the difference between the cost of a good and its selling price - grocery store markup average = 12% - gas tends to be 21 cents (5 cents in profit) - pre-cut vegetables = 40% - coffee shop coffee = 2900% - movie popcorn = 900%

Magazines

the number of magazine readers in the U.S. has stabilized around 220 million - AARP: most popular magazine in circulation (23 million in circulation and free to members) - People: 6th at 3.4 million

Frequency

the number of times these targeted consumers are exposed to the advertisement

Reach

the percentage of consumers in the target audience exposed to a particular advertisement in a stated period

Source

the person or organization that has information to share (company/salesperson) - celebrities have Q-scores (measure of familiarity and liking) - also negative Q score that measures who is disliked

Encoding

the process of putting words, thoughts, and messages into symbolic form in such a way that they'll be understood by the receiver/consumer (symbols particularly good for this)

Decoding

the process of transforming the message back into thought - the key is for the decoded message to resemble the encoded message - problems can occur if there is too much

Communication Process

the process that describes the exchange of information between two or more people - messages are sent through channels (letters, email, in-person)

Inflation

the rate of increase in prices over a given period of time caused by lots of factors: consumer demand, supply chain issues, monetary policy, labor shortages, wages, etc. (not just impacting the U.S.)

Feedback

the receiver's response to the message - can be difficult to assess - one way to get feedback from objective sources - Ad age rates the top 100 campaigns (#1 = Volkswagen's "Think Small" 1959 campaign)

Barter

the trading of products

Revenue

the value paid for a product in a marketing exchange

Price

the value paid for a product in a marketing exchange (not always money) - tuition, premium, fine, fee, fare, toll, rent, tips , deposit, dues, interest, taxes

Profit

total revenue - costs

Transactional Selling

transaction just needs assistance (simple)

Outdoor Sales

travel to multiple locations (different regions/countries)

Break-Even Point

where the costs of producing a product equal the revenue made from selling the product