Marketing Final Review
HyperMarket/ supercenter:
A form of scrambled merchandising Are large stores based on a simple concept: Offer "everything under one roof", thus eliminating the need to stop at more than one location. These stores provide variety, quality, and low prices for general merchandise items.
Retail Pricing
In setting prices for merchandise, retailers must decide on markup, markdown, and timing for markdown.
Multichannel Marketing 2. Promotional Websites
Advertise and promote a company's products and services and provide information on how items can be used etc. They often engage the visitor in an interactive experience involving games, contests, quizzes with electronic coupons and other gifts as prizes.
Online Consumer; Why Consumers Shop Online 1. Control
Consumers want control over their online shopping behaviors as they 1. Seek information and Evaluate alternatives. 2. Make purchase decisions on their own time.
Cross-Channel Consumer Showroom
Consumers who shop offline but buy online The practice of examining products in the store and then buying them online for a cheaper price
Cross-Channel Consumer Webrooming
Consumers who shop online but buy offline The practice of examining products online and then buying it offline in the store.
Technology of Tomorrow
New Authentication technology is based on Facial and Fingerprint recognition.
Performance Measures Linked to Inputs or Costs
3 performance measures for social media 1. Cost Per Thousand = measure tied only to cost 2. Cost Per Click = measure of interest in a product
Demographics
-Describing a population according to selected characteristics such as age, gender, ethnicity, income and occupation -Several organizations such as the Population Reference Bureau and the United Nations monitor the World Population Profile -U.S. Census Bureau provide information about the American Population
What is Marketing?
1. Is the delivery of customer satisfaction at a profit 2. It Attracts news customers by promising superior Value. 3. It Keeps current customers by delivering satisfaction.
Retail Positioning Matrix 1. Depth of product line:
1. The range of products sold through each outlet, 2. Value added such as convenient location, consistent product reliability, prestige, or customer service *Means the store carries a large assortment of each item, such as a shoe store that offers running shoes, dress shoes, and children shoes. Stores that carry a considerable assortment (depth) of a related line of items are limited-line stores EX: Dicks Sporting Goods carries considerable depth in sport equipment ranging from weightlifting accessories to running shoes. Stores that carry tremendous depth in one primary merchandise line are single-line stores. EX: Victoria Secret, a nationwide chain that carries great depth in womens lingerie.
5. Regulatory Environmental Force - About Competition *3. Consumerism
1960s movement to increase the influence, power and rights of consumers in dealing with institutions Is reflected in the growing consumer demand for ecological safe products and ethical and socially responsible business practices. Other consumer protection laws have a broader scope; Fair Packaging and Labeling Act 1966, the Child Protection Act 1966, and the Consumer Product Safety Act 1972 These established the Consumer Product Safety Commission to monitor product safety and establish uniform product safety standards
Online Consumer What they Buy Online
22.9 % = Apparel and accessories 18.3% = Computer and accessories 12.2% = Automobile and auto parts 9.3% = Books, music and video 8.1% = Health and personal care
1. Social Environmental Force:
A current social force going on right now due to COVID. People are acting socially differently now than before. EX, people binge watch TV and Movies now, they are exercising differently now, what they buy food wise bc they aren't going out to eat as often. Economic changes with China Social Forces = Demographics = Study of U.S. Human Population: Size Density Location Age Gender Race Occupation Social Forces = Geographic Shifts in Population: 1. 16% of U.S. Residents Move Each Year 2. General Shift towards Sunbelt States, AKA Southwest states; TX, New Mexico, Arizona, etc. 3. City to Suburb migration continues 4. More people moving to "Micropolitan" areas 5. More People Telecommute
Digital MarketSpace
A digitally enabled environment characterized by Face-to-screen exchange relationship and electronic images and offerings Provision of direct, on-demand information is possible from marketers anywhere to customers anywhere any time.
Primary Demand:
Advertising and promotion expenditures in the introduction stage are often made to stimulate Primary Demand The desire for the product class rather than for a specific brand, since there are few competition with the same product. As more competitors launch their own products and the product progresses along its life cycle, company attention is focused on creating Selective Demand, the preference for a specific brand.
5. Regulatory Environmental Force - About Competition 2. Generic Terms (a Lost Trademark)
After a while, the term may be merely a descriptive word. When a trademark become so generally used in the English Language that not one company could claim it EX: Aspirin and Escalator are forms of trademarks that are now general. EX: Coca-cola, Burger King's Whopper, Xerox are registered trademarks (Competition cannot use these names and they spend a lot of $ to keep them from going generic)
5. Regulatory Environmental Force - About Competition Sherman Antitrust Act 1890
After the Civil War when they were trying to build railroads. Major railroad companies agreed to keep prices high and the same. This was bad Forbids contracts in Resistance of Trade Forbids Monopoly
Cross-Channel Consumer
Are online consumer who shop online but buy offline, or shop offline and buy online They differ from exclusive online or exclusive offline consumers
Coupons
Are sales promotions that offer a discounted price to consumers, which encourages trial. Objective = Stimulate demand Advantages = Encourage Retailer Support Disadvantages = Consumers delay purchases Companies that have increased their use of coupons include Procter & Gamble, Nestle and Kraft. The top retailers for coupon redemption is Walmart, Kroger and Target Manufacturers that currently use coupons are particularly interested in coupon programs directed at potential first-time buyers. One way is by electronic in-store coupon machines that match coupons to your most recent purchase.
Online Consumer
Are the subsequent of all Internet users who employ this technology to research products and services and make purchases 2. Make purchase decisions on their own time. Online consumers are generally equally men and women and tend to be better educated, younger, and more affluent than general U.S. Population.
Demographic Segmentation:
Based on some Objective physical (gender, race), measurable (age, income), or other classification attribute (birth, era, occupation) EX: HouseHold Size: More than half of all U.S. households are made up of only 1-2 people. So, Campbell Soup Company packages meals with only one or two servings. Demographic Bases = 53% 1. Age: A specific number or ranger 2. Gender 3. Household/ Family size: Number or range of people in a Family unit. - EX: More than Half of the U.S. Households have 1 or 2 people GE built a downsized M/W oven to hang under kitchen cabinets Campbell's Soup Co. makes meals with 1 or 2 servings 4. Race 5. Marital Status 6. Income 7. Education: High School Graduate, College Graduate, etc. EX: Online degrees 8. Occupation: In Flight Magazines advertise Men's Business clothes and some have stores in Airports
Communication Error
Can occur in a number of ways 1. The source may not adequately transform the abstract idea into an effective set of symbols 2. A properly encoded message may be sent through the wrong channel and never make it to the intended receiver 3. The receiver may not properly transform the set of symbols into the correct abstract idea 4. Or the feedback may be so delayed or distorted that it is of no use to the sender For the message to be communicated effectively, the sender and receiver must have a mutually share Field of Experience: A similar understanding and knowledge they apply to the message There are 2 circles representing the fields of experience of the sender and receiver, which overlap in the message. Some of the better-known message problems have occurred when U.S. companies have taken their message to cultures with different fields of experience. Many misinterprestions are merely the result of bad translation EX: KFC made a mistake when its "finger-linkin' good" slogan was translated into Mandarin Chinese as "eat your fingers off"
Possession Utility
CarMax is the nation's largest retailer of used cars, operating 145 superstores. It's "no-haggle" sales policies, test drives, financing, trade-ins, and electronic "walk-arounds" are all offered to encourage customers to purchase from CarMax Take possession of car quickly Allow several payment and credit options
Product Repositioning:
Changing the place a product occupies in a consumer's mind relative to competitive products Two Approaches: Head-to-Head positioning: Differentiation positioning
Head-to-Head positioning
Competing directly with competitors on similar product attributes in the same target market EX: Dollar Rent A Car competes directly with Avis and Hertz.
4. Competitive Forms Environmental Forces Barriers to Entry
Conditions that make it difficult for new firms to enter the Market. High Advertising dollars High Capital Expenditures Distribution Access Switching Cost -EX, cell phone service like Verizon or AT&T. Could go wrong if connection is not as good, roaming charges, not strong signal with many others are using signal Product identity
Feedback loop:
Consist of a response and reddback. A response is the impact the message had on the receiver's knowledge, attitudes, or behaviours. Feedback is the sender's interpretation of the response and indicates whether the message was decoded and understood as intended. Pretesting: --Ensure that message are decoded properly
Premium
Consists of merchandise offered free or at a significant savings over its retail price. This is called Self-Liquidating because the cost charged to the consumer covers the cost of the item. By offering a premium, companies encourage customers to return frequently or to use more of the product. Objectives = Build Goodwill Advantage = Consumers like Free or Reduced-price Merchandise Disadvantage = Consumers Buy for Premium, not for Product. EX: McDonald's used a free premium in a promotional partnership with Disney during the release of Avengers: Endgame. Collectible toys that portrayed one of the 7 Avengers characters were given away free with the purchase of a Happy Meal.
Contest
Contests encourage consumers to apply their skills or analytical or creative thinking to try to win a prize. This is growing as requests for Videos, photos and essays are a good match with the trend toward consumer-generated content. Objective = Increase Consumer Purchases; Build Business Inventory Advantages = Encourage Consumer Involvement with Product Disadvantage = Require Creative or Analytical Thinking EX: Kellogg's sponsored the Pringles Mystery Flavor Context, giving people the chance to guess the new flavor of Pringles chips. To enter the contest, consumers purchased a can of the chips, registered for the Kellogg's family rewards program, and uploaded a picture of their receipt along with their guess. Correct guesses moved to a final round where one finalist was selected to win $10,000
2. Economic Environmental Forces = Macro Conditions --Inflation
Cost to Produce and Buy products Escalates as Prices Increase If Prices rise faster than income, The amount people buy decreases.
The MarketSpace:
Digital version of MarketPlace An information- and communication-based electronic exchange environment occupied by computer, telecom technologies, and digital stuff.
Markdown
Discounting a product occurs when the product does not sell at the original price and an adjustment is necessary. Often new models or styles force the price of existing models to be marked down Discounts may also be used to increase store traffic or demand for complementary products EX: Retailers might markdown the price of cake mix to generate frosting purchases.
Online Consumer Why Consumers Shop Online
Emphasis consumer value-creation possibilities; the importance of interactivity, individuality and relationship building; and the ability to produce a compelling customer experience. There are 6 reason why consumer shop online
Twitter/ Brand Buzz
Enables users to send and receive tweets, messages up to 280 characters long. Based on the principle of "followers" Also offers live video feature by clicking on the camera icon Because of its short message length, the eas of posting, receiving, and forwarding ("retweeting") tweets, and its convenience on a smartphone, Twitter can be a good form of communication for consumers and brands. Generate brand buzz by developing an official Twitter profile, recruiting followers, and showing photos and videos of their products. Has over 300 million active users Posts 500 million tweets a day 66% Male 34% Female Okay Brand Exposure = offers unique opportunities for websites integration and to engage with customers Good Customer Communication = Use Twitter monitoring programs such as CoTweet or HootSuite to track what people are saying about your brand. Good Traffic to Website = Potential can be large; focus on sending out info relevant to your brand and audience interested in your tweets.
Multichannel Marketing 1. Transactional Websites
Essentially electronic storefronts. They focus on converting an online browser into an online, catalog, or in-store buyer Transactional websites are most common among store and catalog retailer and direct selling companies
Developing an IMC Program
Focuses on the 4 W's WHO is the target audience WHAT is the promotion objectivity? WHAT is the amount of money that can be budgeted for the promotion program? WHAT kinds of promotion to be used? WHERE should the promotion be run? WHEN should the promotion be run?
ch. 17 Possession Utility
Getting a Product to consumers so they can own or use it is accelerated in marketspace EX: Airline or car rental online reservations
Traditional MarketPlace
Here buyers and sellers engage in face-to-face exchange relationships in a material environment characterized by physical facilities (store or office) and mostly tangible objects.
Connection
How the Site is linked to other sites
Humorous Appeals
Imply that the product is more fun or exciting than competitors' offerings. EX: GEICO using a talking gecko
Channel Strategies Pull Strategy
In some instances, manufacturers face resistance from channel members who do not want to order a new product or increase inventory levels of an existing brand. Manufacturer may then elect to implement a Pull strategy by directing its promotional mix at ultimate consumers to encourage them to ask the retailer for a product. Seeing demand from the ultimate consumer, retailer order the product from wholesalers and thus the item is pulled through the intermediaries. Manufacturer goes and appeals to consumer FIRST and they buy it and bug the retailer to get that product and then the retailer demands from the Wholesaler of that product and it creates manufacturers demand EX: Pharmaceutical companies now spend $9.6 billion annually on direct-to-consumer prescription drug advertising, to complement traditional personal selling and free samples directed only at doctors. The strategy is designed to encourage consumers to ask their doctor for a specific drug by name - pulling it through the channel. "Ask your doctor about Otezla" can have dramatic effects on the sales of a product.
Noise
Includes extraneous factors that can work against effective communication by distorting a message or the feedback received. Noise can be a simple error, such as a printing mistake that affects the meaning of a newspaper advertisement or the use of words or pictures that fail to communicate the message clearly. Noise can also occur when a salesperson's message is misunderstood by a prospective buyer, such as when a salesperson's accent, use of slang terms, or communication style make sharing and understanding the message difficult.
5. Regulatory Environmental Force - About Competition 1. Trademarks
Intended to protect both the firm selling the trademarked product and the consumers buying it.
Descriptive Research:
Involves trying to find the extent of a relationship between two factors Research objectives are specific, measurable goals that decision maker seek to achieve in conducting the marketing research The other types of research are Exploratory and Casual
The Internet of Things (IoT)
IoT will become a reality as digital assistance (Alexa/ Amazon Echo) allow connectivity to all electronic devices. EX: ECHO FRAMES= eyeglasses that take alexa with you.
Publicity
Is a Nonpersonal, indirectly paid presentation of an Organization, Product or Service. It can take the form of news story, editorial, or product announcement The difference between publicity and both advertising and personal selling is the "indirectly paid" dimension. With publicity a company does not pay for space in a mass medium (such as radio or TV) With Publicity, a company does not pay for space in a mass medium like TV, Radio, Newspapers etc. It attempts to get the medium to run a favorable story on the company or the product. In this sense, there is an indirect payment for publicity in that a company must support a public relations staff. A public Relations Department's tools include... Annual reports, press conferences, social media, special events, lobbying efforts, image management and... PUBLICITY --Indirect form of payment for publicity (News Story, Editorial, Product Announcement) Show up in tangible elements such as news releases The advantage of publicity is credibility. When you read a favorable story about a company's product (such as a growing restaurant review), there is a tendency to believe it. Travelers throughout the world have relied on Lonely Planet's guides such as Italy. These books describe out-of-the-way, inexpensive restaurants and hotels, giving invaluable publicity to these establishments. Such businesses do not (nor can they) buy a mention in the guide. Publicity is particularly effective when consumers lack prior knowledge of the product or service. The disadvantage of publicity relates to the lack of the user's control over it. A company can invite media to cover an interesting event such as a store opening or a new-product release, but there is non guarantee that a story will result, that it will be positive, or that the target audience will receive the message. Social media such as Facebook, Twitter, and topic-specific blogs have grown dramatically now to focus on facilitating and responding to online discussions. McDonald's for ex, replies to tweets on its customer service Twitter account. Generally, publicity is an important element of most promotional campaigns, although the lack of control means that it is rarely the primary element. Research related to the sequence of IMC elements indicates that publicity followed by advertising with the same message increases the positive response to the message.
Public Relations
Is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or service. Many tools such as special events, lobbying efforts, annual reports, press conferences, social media (ex: Facebook and Twitter), and image management, may be used by a public relations department, although publicity often plays the most important role.
News Releases
Is a publicity tool and a nonpersonal presentation of an organization, product, or service without direct cost - are available to the public relations director. An announcement about changes in the firm or its product line. The objective is to Informs a newspaper, radio station, etc. an idea for a story.
Youtube
Is a video-sharing website, owned by Google, in which users can upload, view, and comment on videos. Uses streaming video technology to display user-generated video content that include movies and TV Clips, music videos, and original videos developed by amateurs. But Many companies offer material on the site through a YouTube channel. YouTube redesigned its home page to provide a more organized structure to steer users to "channels" rather than simply encouraging them to browse like in the past. YouTube channels serve as home pages for organizations and individuals and allow them to upload their own videos as well as post and share videos created by others. 63% Male 38% Female Has over 2 billion users who make 4 billion views per day Uploaded 300 hrs of video each minute Good Brand Exposure = Can be a powerful tool to build your channel, to explain a complex product, and to brand your videos. Okay Customer Communication = Whether you seek to entertain, inform, or both, video is a powerful tool for quickly engaging your customers Bad Traffic to Website = Traffic goes to the YouTube channel or website; to get traffic back to your site, then add a hyperlink in the video description
Multichannel Marketing
Is the blending of different communications and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and in the digital marketspace- the cross-channel consumer
Cost per Thousand CPM
Is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman Numeral for 1,000) CPM = ((Cost of Ad) / (Audience Size)) x 1,000
Maintained Markup
Is the difference between Final Selling Price and Retailer Cost. Maintained markup is also called Gross Margin. Cost the retailer paid + Markup = Final Selling Price
Reach
Is the number of different people or households exposed to an ad Newspaper reach = total circulation TV/ Radio reach = rating Advertisers try to maximize reach in their target market at the lowest cost.
Communication/ Fields of experience
Is the process of converting a message to others, and it requires six elements: A source, a message, a channel of communication, a receiver, and the processes of encoding and decoding The source may be a company or person who has information to convey The message is conveyed by means of a channel of communication such as a salesperson, advertising media, or public relations tools. Consumers who read, hear, or see the message are the receivers.
Encoding
Is the process of having the sender transform an idea into a set of symbols
Break Even Point
Is the quantity at which total revenue and total cost are equal. Profit then comes from all units sold beyond the BEP BEP = (Fixed Cost) / (Unit Price - Unit Variable Cost) EX: 1. Consumers are willing to pay $120 for each picture frame. 2. Your Unit Variable Cost (UVC) for a picture is $40. 3.Thus, your contribution margin is $80 ($120 - $40). Your Fixed Cost (FC) is $32,000 (taxes, rent, salaries, insurance) = ($32,000) / ($120 - $40) = 400 Pictures BEP Quantity.
Product Positioning
It refers to the place a product occupies in consumers' minds based on important attributes relative to competitive products When a company introduced a new product, a decision critical to its long-term success is how prospective buyers view it in relation to those products offered by its competitors. By understanding where consumers see a company's product or brand today, a marketing manager can seek to Change its Future Position in their minds. Define the product for consumers Help consumers remember the product Must communicate product attributes that are relevant to consumers and that DIFFERENTIATE it from competition. Positioning must be believable and sustainable. This Requires Product Repositioning: Marketing Manages often convert their product positioning ideas into a written positioning statement The statement 1. Identifies the Target Markets and Needs satisfied, 2. The Product (service) class or category in which the organization's offering competes, 3. And the Offering's Unique Benefits or attributes provided
5. Regulatory Environmental Force - About Competition Clayton Act 1914
Just before WW1 Forbids actions that will likely lessen competitions even if no harm has occurred yet.
Main purpose is professional networking and job searching Is a business-oriented website that lets users post their professional profiles to connect to a network of businesspeople. These businesspeople are also called Connections. Marketing managers can use LinkedIn to promote their brand in subtle ways. This is done mainly for business-to-business (B2B) image building and networking with other professionals. Using LinkedIn Groups, managers can join groups of professionals in the same industry or with similar interest to share ideas, content, and job information and to demonstrate the organization's capabilities in particular areas. Brand managers also use LinkedIn for business development to identify sales leads and locate vendors. Sale representatives use LinkedIn to see the profiles of purchasing personnel or managers with whom they are meeting. 57% male 43% Female Has over 500 million registered users Conducts about 6 billion professionally-orientated searches annually Has over 9 million companies with Pages to post news and job opening Has over 30 million students and recent college graduates Bas Brand Exposure = Effective to demonstrate an organization's professionalism; have employees maintain complete profiles to do this. Good Customer Communication = Not the primary focus, but small business find it valuable as a networking service to reach potential customers Okay Traffic to Website = Traffic may be small, but can be valuable from B2B and business development perspectives
Online Consumer; Why Consumers Shop Online 2. Communication
Marketer-to-Consumer e-mail notification Consumer-to-Marketer buying and service requests Consumer-to-Consumer chat rooms, instant messaging, social networking Viral Marketing: ---A promotional strategy that encourages forwarding Marketer-initiated messages to others via e-mail, social networking etc. Communication also promotes the development of company-hosted and independent Web communities: Websites that allow people to congregate online and exchange views on topics of common interest. EX: Coca-Cola host MyCoke.com Communication can also take the form of electronic junk mail or unsolicited emails, called spam
Environmental Scanning
Marketing Environment is always changing, which is why Environmental scanning is important to always do. Successful companies are always tracking..... 1. New Information 2. New Trends This is called Environmental Scanning
3. Cost per Action
Measure linked more closely to the sales revenues generated from the social media ad or action Measures ties loosely to actual sales EX: Paying $5 for every purchase that originates from an ad, says on the facebook site. By summing up the revenues from all these purchases, this CPA measure most closely ties the cost of the social media ad to the sales revenues generated by the ad.
Introduction Stage
Objective = To Inform Informing consumers in an effort to increase their level of awareness is the primary promotional objective In general, all the promotional mix elements are used at this time, although the use of specific mix elements during any stage depends on the product and situation. News releases about new dog food, for example, are sent to veterinary magazines, trial samples are sent to registered dog owners, advertisements are placed in Dogster magazine. And the salesforce begins to approach supermarkets and pet stores to get orders. Advertising is particularly important as a means of reaching as many people as possible to build awareness and interest. Activities = Publicity in Magazines Activities = Salesforce calls on Intermediaries Activities = Sales Promotions Activities = Free Samples
Decline Stage
Objective = To Phase Out Activities = Little Money Spent of Promotion The rate of decline can be rapid, as is the case when a product is replaced by an improved or lower-cost product
Retail Positioning Matrix 2.Breadth of Merchandise Line --Scrambled Merchandising
Offers several Unrelated Product line in a single store EX: Walgreens/ drug stores carry food, cosmetics, magazines, paper products, toys, small hardware items and pharmaceuticals
Consumer Purchase Decision 2.
Psychological Influences on consumer behavior
Everyday Low Pricing (EDLP)
Rather than planning a Markdown, some retailers use price discounts as their regular merchandising policy EX: Walmart and Home Depot emphasize constantly low prices and eliminates most markdowns with this strategy Walkmart also developed EDLP 2.0, Which enables consumers to reduce their price through product bundling, payment and shipping options.
Markup
Refers to how much should be added to the cost the retailer paid for a product to reach final selling price
Retail Positioning Matrix 2.Breadth of Merchandise Line
Refers to the variety of different items a store carries, such as appliances and books. EX: SMU bookstore. Referred to as general merchandise stores. EX: Large department stores such as Neimen Marcus, Dillards, Macy's carry a wide range of different products.
Consumer Purchase Decision 3.
Situational Influences on consumer behavior
User Generated Content
Refers to the various forms of online media content that are publicly available and created by consumers or end users. Also referred to as consumer-generated content Include video, blogs, discussion forum posts, digital images, audio files, and related content. Today 80% of content appearing on social media is user-generated. To qualify as UGC, content must satisfy 3 basic criteria: 1. It is published either on a publicly accessible website or on a social media site, so it is not simply an email. 2. It shows a significant degree of original or creative effort, so it is more than simply posting a newspaper article on a personal blog without editing or comments 3. It is consumer-generated by an individual outside of a professional or commercial organization.
Defining Social Media
Represent a unique blending of technology and social interaction to create a communal experience and personal value for users. Are online media where users submit comments, photos, and videos - often accompanied by a feedback process to identify "popular" topics. Referred to as Social Network The term social media can be used interchangeably with terms Web 2.0, Web 3.0, and user-generated content (foundation of today's social media)
Product Life Cycle: Introduction Stage:
Sales grow slowly Profit is minimal due to investment in Product Development Objective is to achieve TRIAL stimulate Primary Demand
Sweepstakes
Sales promotions that require participants to submit some kind of entry but are purely games of chance requiring no analytical or creative effort by the consumer. 2 Variations of Sweepstakes 1. Sweepstakes that offer products that consumers value as prizes. EX: Mars Chocolate created a sweepstake where consumers enter a UPC code from M&M's products for a chance to win 1 of 5 Toyota automobiles EX: "Pepsi Fire" used snapchat 2. Sweepstakes that offer an "experience" as the prize. EX: The Voice and Nissan sponsored a sweepstake for a chance to win a trip for two, to the season finale for The Vocie in Los Angeles Objective = Encourage present customers to buy more; minimize brand switching Advantages = Get Customer to Use Product and Store More Often Disadvantage = Sales drop after sweepstakes
Differentiation positioning
Seeking a less-competitives, smaller market niche in which to locate a brand. EX: Whole Foods differentiates itself from large supermarket chains
Consumer Purchase Decision 4.
Socio Cultural Influences on consumer behavior
Non-Store Retailing; 6. Direct Selling
Sometimes called door-to-door retailing, involved direct sales of products and services to consumers through personal interactions and demonstrations in their home or office. High customer involvement High retailer involvement Personal interactions in home/office Expanding outside the U.S. Can also be called network marketing like Avon, Shackley. Where someone on the side asks people to come to things. 35 billion in the US last year and 18 million salespeople Transactional websites are most common among store and catalog retailers and direct selling companies
Retail Positioning Matrix 1. Depth of product line: ---Category Killer or specialty outlets?
Stores that Dominate the Market Discount outlets that focus on one type of product at very competitive prices EX: Best Buy (electronics), Staples (office supplies), Barnes and Nobles Stores that Dominate the Market EX: Best Buy (electronics, Staples (office supplies), etc.
Fear Appeals
Suggest that consumers can avoid some negative experience through the purchase and use of a product or service, a change in behavior, or a reduction in the use of a product. EX: automobile safety ads that depict an accident or injury EX: Political candidate endorsement that warn against the rise of other, unpopular ideologues EX: Social cause ads warning off the serious consequences of drug and alcohol use. EX: Life insurance companies often try to show the negative effects on the relatives of those who die prematurely without carrying enough life or mortgage insurance. EX: Food producers encourage the purchase of Low-carb, low-fat, and high-fiber products as a means of reducing weight, lowering cholesterol levels, and preventing a heart attack. EX: Allstate had run a series of ads with a character called Mayhem who uses fear appeals to raise concerns about fires, auto theft, natural disasters, and crime and concludes that the Allstate customer will be "Better protected from mayhem... like me".
Sex Appeals
Suggest to the audience that the product will increase the attractiveness of the user There is growing interest in positive messages about female and male roles, and views on gender identity are changing.
3. Technological Environmental Force = Impact on Consumer Value
Technological Environment is the Most Dramatic Force Shaping our Destiny It changes rapidly It creates new markets and opportunities The challenge is to make it practical, affordable products. A Lot more Safety Regulations result in higher research costs in research and production AND Longer time between Ideas stage and Product Introduction stage bc rules they have to pass.
Consumer Purchase Decision 1. Marketing Mix Influences on consumer behavior
The 4 Ps: 1. Product 2. Price 3. Place 4. Promotion
Personalization
The consumer-initiated practice of generating content on a marketer's website that is custom tailored to an individuals specific needs and preferences
Original Markup
The difference between retailer cost and initial selling price
Sale Promotion
The fourth promotional element is regulated by the federal government. Short term Inducement of value offered to get a quick burst of sales (to arouse interest in buying a product or service) Used in conjunction with advertising or personal selling, sale promotions are offered to intermediaries as well as to ultimate consumers. Coupons, rebates, samples, Sweepstakes, and contests Is the specific details of the inducement Is Mass, meaning is broadcasted along large audiences Wide Range of Fees Paid, Depending on Promotion Selected Strengths = Effective at Changing Behavior in Short Run, Very Flexible, The advantage of sales promotion is that the short-term nature of these programs (such as coupon of sweepstakes with an expiration date often stimulates sales for their duration. Offering value to the consumer in terms of the cents-off coupon or rebate may increase store traffic from consumers who are not store-loyal. Sale promotional cannot be the sole basis for a campaign because gains are often temporary and sales drop off when the deal ends. Advertising support is needed to convert the customers who tried the product because of a sales promotion into a long-term buyer. If sales promotions are conducted continuously, they lose their effectiveness. Customers begin to delay purchase until a coupon is offered, or they question the product's value. Weaknesses = Easily abused, can lead to Promotion Wars, Easily Duplicated
Rating
The percentage of households in a market that are tuned to a particular TV show or radio station. % of total market
Growth Stage
The primary promotional objective of the growth stage is to persuade the consumer to buy the product rather than substitutes, so the marketing manager seeks to gain brand preferences and solidify distribution. Sales promotion assumes less importance in the stage, and publicity is not a factor because it depends on novelty of the product. The primary promotional element is Advertising, which stresses brand differences. Personal selling is used to solidify the channel of distribution. For consumer products such as dog food, the salesforce calls on the wholesaler and retailer in hopes of increasing inventory levels and gaining shelf space. For business products, the salesforce often tried to get contractual arrangements to be the sole source of supply for the buyer. Objective = To Persuade Activities = Personal Selling to Intermediaries Activities = Advertising to Differentiate
Direct Channel:
The producer and the Ultimate consumers deal directly with each other. Many insurance companies sell their service using a direct channel and branch sales offices No intermediaries with a direct channel, the producer performs all channel functions EX: The Schwan's Company of Marshall, Minnesota, the largest direct-to-home provider of foods in the U.S., uses route sales representatives who sell from refrigerated trucks. Producer sells directly to consumers.
Bargaining Power of Suppliers
The product is critical to the buyer and has built up the switching cost give suppliers a lot of power
Permission Marketing
The solicitation of consumer's consent (called opt-in) to receive e-mail and advertising based on personal data supplied by the consumer. An important aspect of personalization is a buyer's willingness to have tailored communications brought to his or her attention. A proven vehicle for building and maintaining customer relationships
When you look at an organization there are always a lot of threats.
Threat of New Entrants Threat of Substitute Offerings
2. Economic Environmental Forces = Macro Conditions --Recession:
Times of Declining Economic Activity Businesses decrease Production Unemployment Rises Consumers have Less money to spend.
Break Even Analysis:
To analyze the relationship between total revenue and total cost to determine profitability at various levels of output.
IMC Program
Today, the concept of designing marketing communications programs that coordinate all promotional activities - advertising, personal selling, sales promotion, public relations, and direct marketing - to provide a consistent message across all audiences is referred to as integrated marketing communications The promotional element consists of 5 communication tools; advertising, personal selling, sales promotion, public relations, and direct marketing.... The combination of one or more of these communication tools is called the promotional mix All of these tools can be used to (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product. This coordination is increasingly important as new media options, interactions between traditional and contemporary media, the need for client and advertising agency collaboration, and shifting consumer communication patterns all make optimal communication more challenging.
Personal Selling
Two-way (generally face-to-face) flow of communication between buyer and seller designed to influence a person's or group's purchase decision. Depends on the skills of the salesperson Is Customized (meaning between buyer and seller not broadcasted Payment = Fees paid to salespeople as either salaries or commissions Strengths = Immediate Feedback, Very Persuasive, Can Select Audiences, Can Give Complex Information, A salesperson can control Whom to presentation is made, reducing the amount of wasted coverage or communication with consumers who are not in the target audience. Sellers can hear or see the potential buyer's reaction to the message. Weaknesses = Extremely Expensive Per Exposure (High cost/ cost-per-contact basis) , Messages May Differ Between Salespeople, flexibility of personal selling can be a disadvantage bc different sales people can change the message so that no consistent communication is given to all customers. Customized interaction between seller and prospective buyer.
Contribution Margin:
Unit Price - Unit Variable cost
Frequency
When advertisers want to reach the same audience more than once, they are concerned with Frequency. Is the average times a person in the target audience is exposed to a message or advertisement Like reach, greater frequency is generally desirable. Studies indicate that with repeated exposure to advertisements consumers respond more favorably to brand extensions.
Gross Rating Points GRPs
When reach is multiplied by frequency, an advertiser will obtain a commonly used reference number called GRP To obtain the appropriate number of GRPs to achieve an advertising campaign's objectives, the media planner must balance reach and frequency. This balance will also be influenced by cost
Bargaining Power of Buyers
When there are few in number and in switching costs
Digital Ledger Advertising
Will connect advertisers directly with media platforms.
Decoding
is the reverse, or the process of having the receiver take a set of symbols, the message, and transform the symbols into an idea.
