Marketing 300 Exam 3
Q: Which of the following statements indicates a reasonable approach to management of inventory and storage?
"Have enough inventory on hand to meet the expected level of costumer service but don't carry too much"
2. Explain the assortment/service/convenience and margin strategies for each retail of the 4 major retail categories and how does the strategy link to customer needs?
-4 stores: conventional (specialty-a bike store; high markup) mass merch (fulfill many needs, low margin); convenience (in between grocery trips, limited, high margin); online (high volume, low price b/c its easy to compare prices)
direct vs. indirect distribution
-Direct: as a manufacturer or service provider, you are going directly to the consumer without using a wholesaler/retailer to aid in distribution -e-commerce, opening own stores -advantages: direct costumer contact (understand why/when they buy (gather behavior data)), more control over your message & marketing mix b/c there's no middle man, may think you can do it at a lower cost, accounting services/hair stylists -may be hard for a new product to get on shelves in retailer if not proven it'll sell -Indirect: more common, uses intermediaries like wholesalers and retailers to sell -advantages: allows manufacturer to offload tasks related to moving product on to third parties, you can highly train people to provide F2F contact for certain types of products, they can anticipate demand more accurately, lowering inventory costs -solves discrepancies of quantity (ex- wholesaler breaks down a truck load of toothpaste into 1 tube the consumer will buy) -solves discrepancies of assortment (by selling lots of things in 1 place) b/c consumers want to buy products from diff producers at SAME time (not bread store, milk store) -disadvantages: you lose the in-person touch
advertising regulation
-Federal trade commission: controls unfair or deceptive advertising (paid, product, or brand advertising), can force brands to correct it -comparative advertising: if you degrade or say another brand is not as good you can be taken to court
California consumer privacy act
-GDPR (Europe's) vs. CCPA (California) -CCPA doesn't make consumers opt in by giving consent but they can opt out of the sale of their info to 3rd parties -differences in financial incentives to share data
3. Explain how you would use a push strategy vs. a pull strategy to integrate your promotion to the company, the channel and the consumer.
-Push: from production to retailer (place product in front of store) -Pull: get consumers to demand the product (discount code)
2. What are the components of the "old" communication model and why is it still relevant? Why is a common frame of reference important to effective communication? Give an example of when not having a common frame of message can lead to consumer misunderstanding. What can marketers do to combat the effects of 'noise'?
-Source, encoding, message, decoding, receiver -feedback & noise in between -Still relevant, b/c the goal is the same -No common frame of reference leads to a misunderstanding or decoding it in the wrong way -To combat noise, get to point quickly, short bits of info, great visuals, don't waste a platform if your audience isn't gonna be there
types of media and advantages
-TV: demos, image building, good attention, wide reach; ads compete for attention, expensive -Digital mobile: ads link to more website, "pay for results", traceable results, highly targeted, location based; hard to compare costs with other media -Digital desktop: same as above but not location based -Newspapers: flexible, timely, local market, covers a lot in geographic area
Every promotion requires...
-a consistent message -specific goals and measurements -not always for end consumer; can be for channel, sales force, stakeholders -internal and externally consistent
3PL (Third Party Logistic Firm)
-a manufacturer feels a third party could distributed their product in a more cost-efficient way -much of the movement of raw materials and finished goods go thru 3PL -KFC started using DHL as their delivery system but failed b/c not enough chicken got to their stores
3. Describe at least 4 activities provided by the channel members that enhance distribution.
-accumulating, bulk breaking (dividing large quants), assorting(put together large varieties of products), sorting(separating into diverse grades/qualitites) -adjust the quantities/assortment of products in each level to enhance distribution
Promotional methods
-advertising (paid, earned, owned) -publicity -sales promo -personal selling --Key is to select right method for right audience at right time
airplane vs. rail transport
-airplane: faster deliveries, costs more -rail: slow, high amount of breakage and spoilage, very cheap, but you'll have to store more at point of purchase which costs more -airplanes can lead to the cheapest OVERALL solution -water ships: slowest, low-cost -trucks: small quantities short distances, fast -an optimized plan for supply chain is better for the environment
retailing
-all the activities involved in selling to final consumers -the U.S. is "overstored" we have too much square foot of retail space per consumer -brick-in-mortar retail is shrinking because of this
paid media
-anywhere you're investing capital and time to have your brand featured -company is source of the message -most traditional, high message control, more precise targeting, potentially large audience; yet not trusted by consumers, can easily avoid it, declining effectiveness -can be digital or on a billboard -Types: institutional and product advertising -Product advertising: way of promoting a specific product (3 types: pioneering, competitive, reminder)
ethics in supply chain
-are you loyal to your bottom line and your stakeholders or are you obligated to do the right thing even when the wrong thing is legal -Ex: fast fashion - cheap stylish clothes fast mass-produced is bad for environment -Internet sellers may take orders when the product isn't actually available
channel conflict
-channel conflict: (2 types) - Vertical conflict-between firms at different levels in the channel -Ex: producer wants to maximize units sold(offers discount) but retailer wants to maximize profits(buys more but keeps at same price) -producer and retailer disagree about how much promotion effort the retailer should give to product -the fight over shelf space between Coke and Walmart's own brand, must negotiate to optimize shelf-space - Horizontal conflict- between two entities at the same channel level have a disagreement -ex: bike shop (w/ high inventory and salespeople) is mad an online bike shop (w/ little inventory and no salespeople) offers bikes at lower price -ex: Samsung offers BestBuy a unique color of their phone that only BestBuy can sell b/c they were mad that Verizon gets a better price on it
issues facing marketers
-consumer privacy: what data is gathered when a consumer buys something? how much should the consumer know about what data is being gathered/how it's used? how is that data being protected? How long is it being kept and by whom? What protections should the consumer have to guard their data? -legal vs. ethics of satisfying stakeholders: as long as you stay within the law does it have to be ethical? if it costs more? -social responsibility vs. profit: where your product is produced, labor standards, involvement in social issues (Heiniken ad, Kendall Jenner ad) -Do you risk profit for social commentary?
product classifications and Place
-convenience products: won't spend much time shopping for, widespread distribution is needed to make products available when the need strikes. -shopping products: customers want to compare, online sellers often carry a broad assortment of products to make this easier, and some physical stores offer similar . -Heterogeneous shopping goods: should have outlets that provide information— knowledgeable salespeople who can provide insights about different brands and models and online stores with videos or information. -Homogeneous shopping goods: favor low- cost retailers as customers focus mostly on low prices. -specialty goods: will search for, so the higher cost of widespread distribution may not be needed. -Unsought products: should be sold at locations where other, related products are available
Corporate chain, franchise, independent
-corporate: When Target owns all of its stores -franchise: ownership is licensed -independent: small Mom & Pop stores, locally owned
store classifications
-determined by mark-up strategy, inventory turn strategy, depth/breadth of product selection. level of service (employees, returns), hours of convenience -specialty shops & department stores: higher markup, low inventory turn, more high selection and service, less convenience (Kohl's, Nordstrom, Macy's), high end ones are doing well but mid-range ones aren't -specialty store: ex-Coach-one brand, broad selection in their store -Department store: offers lots of brands but narrow selection (only offers a few Coach bags) -Discount store (Marshall's) & Category killer (Home Depot, Staples) & Mass merchandiser (Target, Walmart) & Warehouse "club" (Costco): lower margin, low service, high inventory turn, low prices, growing! -convenience store: limited shelf space, crammed, close to you, convenient, hours are great, high margins
bulk-breaking
-dividing larger quantities into smaller quantities as products get closer to the final market -manufacturers want to produce more than consumers want- the semi truck of product goes to a wholesaler that delivers a case to a Walgreen's then they put out single tubes
encoding/decoding
-encoding: the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the reciever -decoding: when the receiver translates the message they have received -Ex: the message Pepsi thought it encoded in the Kendall Jenner ad was not the one decoded by target market
7. Explain the relationship between the PLC and the adoption curve and the implications for advertising.
-follows similar path
task method
-helps manager to set priorities so the money spent on promotion produces specific and desired results -product manager assesses each tactic; prices out each task; determine how much each will contribute to the objectives -very hard
retail evolution
-how physical stores will evolve -showrooms: coming into a store and touching a product, then looking it up and buying it for cheaper somewhere else -BestBuy comes out with a price match guarantee -Millennials desire experiences; STORY engages and entertains consumer while their in store (has Gillette come in and give free shave) -Rent the Runway tracks what you buy to suggest things, and put physical stores in Neiman Marcus's -digital Japanese grocery stores -Amazon partnering with Kohl's to get a "mix"-people can return orders & brings foot traffic -Poshmark selling and social media together
intensity of distribution
-is determined by the type of product (convenience, specialty, etc.) which is based off how much consumer thinks about product and effort put into finding it -Ex: if Coke is not on shelf, and consumer just buys Pepsi, Coke should have distributed better
retail trends
-less mid-range department stores -death of mid-range, mid-priced mall (macro trend of the shrinking middle class) -Black Friday/Cyber Monday expanding -data driven innovation -new direct-to-consumer -Amazon is affecting brick-and-mortar (they bought Whole Foods, they have physical book stores and Amazon supermarkets) -people are more time pressed (Amazon home delivery service, Dash button that automatically sends you product) -Millennials: more student debt, live at home longer, delay marriage, kids, buying home, rather travel than buy stuff, buy more online -rise of thrift stores -"blended" solutions -growth of DIRECT TO CONSUMER distribution (e-commerce systems and delivery (FedEx) give firms direct access)
wholesalers
-merchant: takes title to the products they sell, specialize by types of products -agent: they don't own the products they sell, they just help in buying/selling, few functions, low costs -truck: delivers products that they stock in their own trucks, perishables -rack jobbers: hard-to-handle assortments that retailer doesn't want to manage, displays it themselves -catalog: sells thru catalogs to industrial costumers/retailers w/o a local wholesaler, orders placed online/phone, hardware, jewelry, computers
Promotion
-must link to marketing objectives which link to company goals
6. Describe how native advertising differs from traditional paid advertising and what is driving its growth.
-native ads designed not to look like ads, it mirrors the platform on which it appears -deceptive b/c its disguised as another type of content -unethical when its promoting a brand and no SOURCE is identified -otherwise consumer would perceive it to be a neutral source
earned media
-no control over the content that's being shared about the brand -audience is sharing (reviews) -a post from a major news source; another brand blogging about your brand -can be very valuable because people can talk about your brand -buzz can be positive or negative -most trusted by costumers -difficult to measure if its creating sales -cheap/free
types of product advertising
-pioneering: when a new product category is being introduced (market introduction), building primary demand, getting innovators and early adopters to try the new solution, train salespeople -competitive: selective demand (select my brand)!, 3 groups: DIRECT (a call to action, incentive to buy it in a period of time) and INDIRECT (no call to action, no "buy it now", more imagery, for future) and COMPARATIVE (not legal in some places, may work if you are the "little guy" in the market, the mention of another brand to give them a point of reference/comparison, but try not to lead the ad w/ the OTHER brands name) -reminder: in last part of product life cycle (maturity/sales decline), reminds people to buy your product w/ your brand name, reinforce previous promotion -institutional: focuses on the name and prestige of an organization or industry, seeks to inform, persuade, or remind, & develop goodwill/overcome image problems -corrective: to correct deceptive ads; FTC can force a company to run these
marketers responsibilities (Legal vs. Ethical)
-place: do you chose production from the lowest bidder? how do you treat workforce? -price: should existing costumers get better deal than new costumers? price discriminate? -product: carbon footprint, what resources are being used, safety/function/reliability, exceed or meet standards? -promotion: privacy, ads vs. editorial content line is blurred
warehouses
-private: facilities owned or leased by companies for their own use -public: independent facilities, used if company doesn't regularly need it
retail strategy
-product: selection (width and depth of assortment, brands, quality), after-sale service, special services (gift wrap, free shipping) -place: physical stores, sales over internet, location, hours, shopping atmosphere, layout -promotion: advertising, store's image, training for salespeople, demonstration (displays, online videos) -price: store credit cards, discounts, sales, delivery charge, margin, turnover
interdependence of the 4 P's
-providing the right level of distribution for the level of customer service you wish to achieve -how to create a product that offers value that can be shipped and delivered at a great price
old media vs. new media
-radio, TV, print Vs. -online, social, webpages, digital -Which media should you chose to best reach your target? -each type of media has different costs, pros, cons
reach vs. frequency
-reach: how many people a given ad reaches -frequency: how many times will my target audience see or hear this over a period of time
5. Explain the difference between sales promotion and advertising.
-sales promo: simulate interest, trial, purchase by customer (1 month free trial) -used for ppl who are price sensitive b/c they need to try it with little financial risk -implemented quickly, short term action -traditional advertising used when you want to market an idea or a new product
traditional communication process
-source: the manufacturer/brand manager has a message about the product (that ends at a receiver) -encoding: brand manager must deicide how to best communicate that message, decides what to show, how to show it, what to say -message channel: the vehicle by which the message is carried (TV, internet, phone) -decoding: receiver controls; they see/hear the message and interpret it; how they determine it has to do with the effectiveness of it; source must put things in terms of images/words the receiver will understand; common frame of reference ***noise: anything that distracts/interferes with the message the manager is sending --new communication models have same issue but larger/more complex
owned media
-the website, blog, any owned social channel -company is source of the message -you're controlling the content -cheaper, but there is a cost (message development) -selling company is the source -creating an app to promote your services -it can be out there forever for free
social media
-there's little to no media placement costs -must develop content -different apps need different strategies -if an influencer is getting paid to post with a product it becomes PAID media -create synergy: it will take more than 1 time to get noticed, you want them to engage!
Purpose of promotion
-to inform, persuade, remind, motivate to action -can be to empower, demonstrate, and involve -you want your message to be consistent so consumer can understand -consumers may only pick up bits and pieces of what you're trying to say -What is it you want your target to do? Try for the first time? Buy again?
push/pull promotion
-to make sure the product is where it needs to be when the consumer decides to buy -Push: tactics to move the product thru distribution; push to wholesaler or retailer so its on their shelf for consumer to see -personal selling, advertising, and sales promotion --ex: a display, manufacturer may have offered to make it for the store to get more attention to it -Pull: advertising directly to consumer to get them to go to the store and ask for it; gets them to pull the product thru the channel themselves --ex: coupons that consumers will bring to store and demand that the product be there
public relations
-traditional marketing tool to help generate earned media -communication with non-costumers, press, labor, stockholders, etc. -cost effective -longevity -wider audience -has credibility, is perceived as coming from a neutral source -trying to get your stories picked up by the media or bloggers
scrambled merchandising
-trying to carry not only core products, but anything your costumer base might want -ex: Walgreens started as emergency and medicine, but now it has groceries, makeup, etc.
horizontal/vertical arrangements
-vertical arrangements: mostly legal, between the producer/wholesaler/retailer, ex: an exclusive territory that a manufacturer has, or a retailer has been given exclusivity and no one else can sell that brand; if the arrangement is beneficial to the CONSUMER (they get extra services) it will be deemed legal -horizontal arrangements: always illegal, between two or more entities at the same given level of the channel, ex: price fixing to make more profit, doesn't benefit consumer
CHAPTER 10 & 11- place, channel, and logistics
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CHAPTER 19
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CHAPTER 12: wholesalers, retailers, and strategy planning
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Challenges of Integrated Direct Marketing
1) maintaining consistent messages internally 2) maintaining consistent messages to the consumer across all media 3) stay focused on message and objectives
landing page
A customized web page that logically follows from clicking on an organic search result, online advertisement, or other link -goal is to move costumers along in the purchase process -page tries to directly address costumer's need -often makes an offer
advertising model
AIDA: get attention, hold interest, arose desire, obtain action
4. What is most common budgeting method and what is most preferred and why? How do companies resolve this difference?
Most common is percentage of sales, most preferred is task method b/c it is harder to come up with
1. Identify the characteristics of a well-defined advertising objective
Objectives should be specific, measurable, attainable, relevant, & include a time frame -consider who will be receiving the message and what your promo objectives are Ex: inform the market, inc demand, differentiate the product?
sales promotion
Promotion activities other than advertising, publicity, and personal selling, that stimulate interest/trial/purchase by final consumers/intermediaries. -Ex: contests and coupons, trade shows, calendars for channel members -can be implemented quickly and get results sooner compared to other promo methods -indirect distribution: going through retailers and wholesalers; not only advertising to consumer but also them (allowances,
1. Describe how proper supply chain management can be used to create a competitive advantage. How does the physical distribution concept contribute to that goal?
Proper SCM has the goal of getting the customer what they need at the lowest cost -gives more customer value when done correctly -coordination, transportation, storing, handling should be optimized and maximize profit by not over spending anywhere you don't need to
4. Explain how deception differs from puffery. How does this apply to political advertising?
Puffery is claims that are not expected to be believed b/c they're so excessive -Deception: causes large amt of consumers to have a false belief, is material, & they're likely to have chosen differently otherwise, & customer or brand is injured or likely to be -Political ads: must disclose who is paying for ad and must be truthful (can be negative but must be factual)
Q: Widget Inc evaluates alternative distribution options by combining order processing, transportation, inventory and storage. To achieve the total cost approach they should:
Select the option that meets the service requirement at the lowest cost
Adoption curve
Shows when different groups accept ideas -innovators, early adopters, early majority, late majority, laggards or non-adopters
1. What is the purpose of IMC? Define the different audiences for IMC. Why is the measurement of IMC tactics so important to long term success?
To ensure that your message is consistent -the audience is the customers the brand is trying to reach -important to know what groups respond better to which types of marketing so that you can be efficient with your budget -measure the tactics to figure out which mediums or forms of media are more effective to create long term success
3. Explain when comparative advertising should be used and when it should be avoided.
Used when you are the "little guy" to compare yourself to an established brand to get some of their benefits -backfires when you give too much attention to competitor -there is no advantage for Nike to do this to a smaller brand
corporate chain
a firm that owns and manages more than one store—often many -Nordstrom, Kroger, Chipotle -can buy larger quantities and earn lower prices -operational efficiencies
department store
a large retail store organized into departments offering a variety of merchandise -strong in costumer services (credit, returns, sales help)
supercenter
a large retailer that stocks and sells a wide variety of merchandise including groceries, clothing, household goods, and other general merchandise that costumers need routinely -Target, Walmart
channel captain
a person in the manufacturer part of the channel whose job is to manage the channel and any conflict -Boars Head is the producer of meats, negotiates with retailers so it dominates the deli department -retailer Walmart may dominate by suggesting new products suppliers should make; has a strong influence on prices -Harley-Davidson producer came up with plan to sell products on their website that worked for all channel members
communication process
a source trying to reach a receiver with a message -serves as a reminder of everything that must go right to get the message across
distribution center
a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs -sort products as they come in and move them to outgoing
vertical integration
acquiring firms at different levels of channel activity -IKEA bought forests in Romania to have more control over the raw material -stable source of supplies, control of distribution, faster flow of information -if discrepancies of quant/assort aren't too great -its hard to be good at all levels (manuf, wholes, retail)
deception
advertising is deceptive under law IF: -a representation or omission that can cause a substantial amount of potential costumers to have a false belief about the advertisers or competitors product -it's "material"- likely to influence the purchasers decision (they may have chosen differently) -someone can be injured as a result (a business that has lost sales or lessened goodwill because of it)
puffery
advertising that reasonable costumers would not take literally; protects marketers whose claims are too excessive to be believed or too generic to have substantial meaning -"better, best, greatest"
physical distribution concept
all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the TOTAL cost of distribution for a given customer service level -only focusing on individual costs (like storing or transportation) may increase total costs -storing and transportation are inverse (if transportation costs are lower its b/c its gonna take longer to transport, and you will have to STORE the product for longer-higher storing costs... and opposite) -figure out whats most important to your costumer -speed vs. cost vs. quality tradeoff -faster delivery=more expensive -will they wait a few days to get it at lower cost? -Select the option that meets customer service requirement at lowest total cost
advertising
any PAID form of non-personal presentation of ideas, goods, or services by an identified sponsor -use of traditional and new media
publicity
any UNPAID form of non-personal presentation of ideas, goods, or services -includes Owned media and Earned media -Publicists are paid but they try to attract attention to the firm without having to pay media costs -Ex: company's website, posts, press coverage, reviews
user-generated content
any communication created by customers for other costumers -word of mouth, demonstration, Tweet, review
noise
any distraction that reduces the effectiveness of the communication process -conversations during TV ads, reading a text during a presentation
brand lovemark
brand navigator must be attentive to their consumer and be current with all media tools
Q: Parties R Us is a large warehouse store containing only party supplies. It carries a huge low priced selection. They are a:
category killer
vertical marketing systems
channel systems in which the whole channel focuses on the same target market at the end of the channel -takes a higher level of coordination and cooperation -corporate (firms handles all 3 channels-Sherwin Williams), administered (channel members informally agree to cooperate-1 powerful member), contractual (members agree by contract to cooperate-all McDonald's owned locally but contracted to operate in same way)
accumulating
collecting products from many small producers -restaurant wants veggies but farmer must go to all his people to get 3 bushels -accumulate the small crops into larger quantities to get the lowest transporting price for the Colombian coffee -hospitals accumulate the services of a number of healthcare specialists
Integrated Direct Marketing/ Integrated Marketing Communications
combining several media channels under one big idea to produce a consistent and complete message -integrated through sales force, channel, and end-user
promotion
communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior -telling target costumers that the right Product is available at the right Place at the right Price
mass selling
communicating with large numbers of potential costumers at the same time -2 branches: advertising and publicity -less expensive when the target market is large and scattered
AIDA model
consists of 4 promotion jobs: 1) to get Attention 2) to hold Interest 3) to arouse Desire 4) to obtain Action -relates to the adoption process: awareness interest, evaluation trial, decision confirmation
selective demand
demand for a company's own brand, during market growth stage when more competitors enter the market, persuade them to buy & keep buying
discrepancies of assortment
difference between the lines a typical producer makes and the assortment final consumers or users want -retailers focus on solving this by carrying the assortment of products costumers might need all together -instead of a soup store, a toothpaste store, etc. -Sorting: an intermediary sorts the product so they are in groups based on same size
discrepancies of quantity
difference between the quantity of products it is economical to produce and the quantity costumers want -golf ball manufacturers produce 100,000 balls but golfers want a few at a time
Q: Costumers order pastries online at Andrea's web based catering business. Items are shipped overnight. This is part of a
direct channel
direct marketing
direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling -concerned with Promotion not Place -can be used with direct or indirect distribution -sending emails directly to consumer
primary demand
during market introduction, the objective is to build demand for the general product idea not just for the company's own brand -personal selling to the first "innovator" costumers -persuade channel members to carry the product
percentage of sales
either based on last years sales or what we project for next year is what the product manager will get a % of as their budget to plan around -flawed; its a random # that doesn't consider what it will actually take to motivate a consumer -very popular
lifetime value of costumers
equals the relationships that develop satisfied costumers plus those who purchase more over time -to develop a relationship with the customer so they come back -purchase more from you and they promote your products to their friends
total cost approach
evaluating each possible PD system and identifying all of the costs of each alternative -compare costs of airfreight vs. trucks/ships -yet costs of spoilage can be higher on ships
Q: Walgreen's and CVS have become scaled-down versions of mass merchandisers by adding items outside of their traditional lines. This scrambled merchandising meets the shoppers need:
for convenience
containerization
grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination
brokers
have temporary relationship with buyer and seller while a deal is negotiated -brings buyers and sellers together who don't come into the market very often
costumer service level
how rapidly and dependably a firm can deliver what the costumers want -cars are there and ready to rent -shirt ordered comes in right color -chips in bag are not crushed --optimum level of service occurs where total cost is minimized
electronic data interchange (EDI)
information is put in a standardized format so it can be shared easily -differences in computer systems in firms used to hamper flow of information -between supplier and transporter
native advertising
is paid advertising but is designed to not look like an ad; consumers don't know its an ad -its not always unethical, the articles can still have value to consumer -unethical if it doesn't say where the source is; if the consumer can't tell its sponsored -looks like a news story
ideal market exposure
makes a product available widely enough to satisfy target customers' needs but not exceed them -too much exposure only increases costs
Search Engine Optimization (SEO)
managers use SEO to appear higher in the search results -designing the website so that it ranks high in the UNPAID results
brand navigator
must be attentive to their consumer, be current with all media tools
objectives
must be: -specific -measurable -attainable -relevant to the target -timely -link to marketing strategy -link to promotion Ex: objective: achieve 30% trial and 70% awareness among a new target segment... you must determine what's important for your target; how and when goals will be measured
"wheel of retailing"
new retailers enter the market as low-status, low-margin, low-price stores evolve into higher ones -may start as a low-margin, high-turnover store but as costumers evolve they offer more services, increase margins, and becomes higher-end -a new low-priced retailer will take its place
multichannel distribution
occurs when a producer uses several competing channels to reach the same target market - perhaps using several intermediaries in addition to selling directly -1 target market can buy Apple iPad on Apple website, Apple store, online retailer, physical store like Target -more sales b/c ppl have more options -may upset members that feel they help to make the sale but get no profits of it--"showrooming"
pass-along
occurs when one customer makes a recommendation for (or against) a specific brand to another customer; passes along information, videos, articles, coupons
selective distribution
only selling in intermediaries who will give the product special attention -for shopping products -new unsought goods -product isn't everywhere, its in a few stores in a given market because people ARE going to make an effort to find you -avoids having to sell to bad wholes/retails -doesn't need to be sold everywhere when ppl can buy online -wholes/retail more willing to promote aggressively
budgeting
promotional tactics cost money and you must figure out how much before you do it
assorting
putting together a variety of products to give a target market what it wants -usually done my member closest to final consumer -supply wide variety of products for convenience of consumer -wholesaler selling tractors might also carry grass seed and fertilizer
Q: The best transportation for shipping chickens from farms in West Virginia to plants in Maryland would be:
rail
Q: Aspire manufactures expensive, high-quality, perfumes that are sold thru fine department stores and boutiques. Ideal market exposure for them is:
selective
intensive distribution
selling product through all suitable retailers that will stock/sell it -for convenience products -very little thought to find -ex: batteries must be in many stores b/c they're impulse purchases
licensing
selling the right to use some process, trademark, patent, or other right for a fee or royalty -effective way to enter a market
exclusive distribution
selling through only 1 intermediary in a geographic area -when a retailer/wholesaler has to put lots of investment in your product (training, inventory) so they ask for exclusive territory to sell your product in -they don't want to make these high investments just for other stores to sell your brand -Ex: jaguar retailer-ship
manufacturers agent
sells similar products for several noncompeting producers for a commission on what is actually sold -used if company's sales potential is low or volume too small -can do the job at a low cost
sorting
separating products into grades and qualities desired by different target markets -a wholesaler that specializes in serving convenience stores may focus on smaller packages of frequently used products
Q: Holly Inc makes holiday decorations. for production efficiency Holly produces the entire quantity of a single decoration at one time-months ahead of need. Holly's wholesaler must
store and bulk break
selling agents
take over the whole marketing job of producers - not just the selling function -almost complete control over pricing,selling,advertising -when producer has financial troubles
big data
the act of collecting large data sets from traditional and digital sources to identify trends -used by companies to find out about costumers wants & needs -ppl hand over personal data in return for products/services that make their life easier -ex: you tweet about a store, they mine that data about their store, decides to open a store on that side of the city where demand is high -there is so much data it needs to be organized -variety, volume, velocity
inventory costs
the amount of goods being stored -when deciding transportation, you must look at inventory costs -inventory is used when production doesn't match consumption -helps keep prices steady and achieves economies of scale -there are risks of leaving inventory in a warehouse (fire, theft, becoming obsolete) -need it to be able to provide the distribution level costumers expect
supply chain
the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers -figure out how to get right Product, Place, Quantity, Price, & Time -sourcing, manufacturing, warehousing, distribution, and return -each link works together to meet needs of costumer at end of chain
franchise operation
the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units -Hamptons hotels, Anytime fitness, Subway, Supercuts
mass-merchandising concept/ mass merchandisers
the idea that retailers should offer low prices to get faster turnover and greater sales volume by appealing to larger numbers -evolved from supermarkets to Walmart's
storing
the marketing function of holding goods so they're available when they're needed -when production doesn't match consumption
transporting
the marketing function of moving goods -helps facilitate economies of scale (producing larger quantities in one location offsets cost of transporting them to costumers) -produce large quantities where it is inexpensive to produce, and then ship products to customers when ready -use optimal mix to lower total costs but satisfy customer needs -the more flexible/fast the higher cost; the more load it can take the cheaper but slower
message channel
the message comes from the source (brand) and goes through a message channel that carries it -TV, Internet, voice
logistics
the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix -a subset of Supply Chain
pioneering advertising
tries to develop primary demand for a product category rather than demand for a specific brand -early stages of PLC -educating costumers
competitive advertising
tries to develop selective demand for a specific brand -forced to do this as product moves along PLC to hold against competitors
weasel word
used to make a claim seem legitimate to the casual listener, but on closer examination, it is meaningless -medication that "helps control acne" doesn't actually claim to stop it
reverse channel
used to retrieve products the costumers no longer want -how the manufacturer will reverse the channel if they have to recall the product or if costumer wants to return it -used to retrieve products costumers no longer want
experiential retail/ retail-tainment
using all the sense to create an experience in brick-in-mortar retail stores to get consumers to come in -Ex: try on coats in freezing rooms to see how warm you'll be -ex: let golfers test clubs in golf simulators -ex: let people try tennis shoes by running on treadmills
branded services
valued services a brand provides that are not directly connected to a core product offering -designed to share the message that the brand cares about its costumers -develops positive attitude
