MKT Final Exam
External factors of Price
1. Demand of your product. 2. Competition: Competitor's prices. Strength of competition. 3. Economy: Cost of components (natural resources). Economic conditions. Notes: You can't control those things, you can't make customers appear out of nowhere. Competition, we don't control, these are market factors.
CRM: Recency- Frequency-Monetary Analysis
1. Identifies customers most likely to purchase again. 2. Identifies and ranks "best customers" 3. Identifies most profitable customers. Lifetime Value of a Customer. (Us to ASU) Frequency- how often do you come to us. Monetary Analysis- how much are you spending with me. Someone who is spending $75 might be more important than someone who is spending $100 because they might be spending all of their money with me.
Internal Factors of Price
1. Marketing objectives: To maximize price. To gain market share. To infer a level of quality. To survive. Notes: Market share and profit are not perfectly correlated. Just because market share goes up, profitability might go down. 2. Marketing Mix Strategy: Price needs to be consistent with other 3 p's (needs to reflect advertising, etc.) 3. Costs (your costs affect your profit, so set the optimal price) Notes: If you flew first class, you probably didn't fly SouthWest. You can't tell the difference between flights in coach. If we see it all the same the price becomes a deciding factor.
Cost Per Contact
= ((Cost of ad space/impressions))*1000 How much does it cost and how many people does it reach? 100 to reach 5000 people. It's cheaper to run an ad on the super bowl because more people are reached.
Marketing Orientation
A customer-centric focus on the market environment. Acquire Market Information --> Assess Information --> Respond (adjust 4 p's)
Unique Selling Proposition
A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. We are currently putting together our unique positioning statement.
The Marketing Mix
A group of marketing variables that a business controls with the intent of implementing a marketing strategy directed at a specific target market. (Promotion, place, price, product).
Creative Decisions in Advertising
A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. Got milk?
Customer Relationship Management
Activities that are used to establish, develop, and maintain customer sales. Customizing product and service offerings based on data generated through interactions between the customer and the company. Customer Relationships- Retention and Loyalty. Connecting!
Marketing Communication Tools
Advertising, Public Relations, Sales Promotions, Word of mouth, Personal Selling, Direct Marketing. Level of Control from low to high: Word of mouth, public relations, personal selling, sales promotion, advertising, direct marketing. Notes: I can't control the word of mouth, so companies minus will listen. Direct marketing- email, mail, telephone. Advertising- a lot of control. Public Relations- Loose control because the goal is to tune other people to talk about you. Personal selling- loose a little bit of control, because we don't know exactly what they are saying.
Generating Leads
Advertising, Publicity, Direct Mail/Telemarketing, Cold Calling, Internet Web Site, Referrals, Networking, Trade Shows/Conventions, Company Records. Spam emails, qualifying needs gets the job done. Our professor doesn't want to buy a Ferrari.
Attribution Theory
Affects our CS/D in terms of: Stability- happen often? Temporary? Focus- Internal/External Controllability- Could something have been done to prevent this? Notes: How angry is the customer when the service fails? Stability- how often does this happen? Was this a temporary screw up? Or is this a bigger problem? Happen once, not a big deal, but if every other time failed to show up it would make me angry. The more it fails the belief in the starts to erode. Focus- Did you do something to cause this to happen? Or did the service provider fail? External- when the service provider fails,more angry than internal when we cause it. Where is the anger directed? Controllability- If you are angry at the service provider when they forget to schedule a pilot for your flight, that could be controllable on southwest part, when it's uncontrollable you can't be as angry.
Branded Entertainment
Also known as Product Placement- The integration of brands or brand messages into entertainment media. 1927, "Wings" - Hershey's. 1982, E.T with reassess peanut butter cup. TV Shows, Video Games- 50 cent; sports games. We are doing everything we can to skip commercials. To get through that having products become part of the actual entertainment itself.
Steps in Media Selection
Audience Profile, Media plan, buy and place media, evaluate media plan.
Factors that affect Elasticity
Availability of substitutes. Price relative to purchasing power. Product durability. A product's other uses.
Break- Even Pricing
Break- Even Quantity= Total Fixed Costs/ Fixed Cost contribution Fixed Cost contribution= Price- Avg. Variable cost
Integrated Marketing Communications
Carefully coordinating all promotional messages to assure the consistency at every touch point between a company and the consumer. Consistent and Unified Message: Sales Promotion, personal selling, packaging, communication, customer focused, direct marketing, public relations, media advertising. It's challenging to keep a consistent message. You have a friend that is inconsistent, and a consistent one that is always late. If Southwest communicates that they are the cheapest, that they allow to find the cheapest price.
Price Adjustment Strategies- Discounts, Allowances, Rebates
Cash, pay cash upfront. Quantity- buy in bulk Seasonal- buy during non-peak times Promotional allowance- $ to dealer for promoting products.
Product Mix Pricing Strategies- Price bundling
Combine related goods, sell for one price, "package deals" Could be example of co-branding. Putting things together in one package deals. Happy meals or number 3. Things that go together for a lower price. Co-branding, scope with crest. Peanut butter and jelly in the same jar.
Long-Term Allocations of Promotions
Consumer promotions Media Advertising Trade Promotions- more money is spent here. Business to business.
Media Selection Considerations
Cost per Contact- The cost of reaching one member of the target market. (What does it cost to reach 1000 people?) Reach- The number of target consumers exposed to a commercial at least once during a time period. Frequency- The number of times an individual is exposed to a message during a time period. Audience Selectivity- The ability of an advertising medium to reach a precisely defined market. (How focused is the segment)
Advantages of Personal Selling
Detailed Explanation or demonstration. Variable sales message. Directed to qualified prospects. Controllable adjustable selling costs. More effective than other promotion in obtaining sale and gaining customer satisfaction.
Price Adjustment Strategies- Flexible (variable) pricing
Different segments pay different rates: Senior citizen movie rates. Kids rates at a restaurant. Off-peak daily rate charges: Movies, long-distance, electricity. Flex pricing trying to maximize revenue. Different segments pay different rates. Off peak- happy hour, if you go at a certain time, is priced differently than at midnight.
Media Types
Efficiency Clutter- something that stands out of the clutter. Impact- could have an impact with no words. Engagement
Elasticity of Demand
Elastic Demand- Consumers buy more or less of a product when the price changes. Inelastic Demand- An increase or decrease in price will not significantly affect demand. Down Up= Elastic Down Down= Inelastic Up Up= Inelastic Up Down= Elastic
Objective and Task Method
Establish Objectives- (Create awareness of new product among 20 percent of target market) Determine Specific tasks- (Advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks- (Create awareness of new product among 20 percent of target market) You have2 to do both advertising and personal selling.
Setting the price
Establish price goals --> estimate demand, costs, and profits --> choose a price strategy (skimming (high), status quo (middle), penetration (low)) --> Fine-tune base price --> Set price $x.yy. --> Evaluate results --> Fine-tune base price. Most of us will go for that average.
How to set a price on a product or service
Establish pricing goals Estimate demand, costs, and profits Choose a price strategy Fine tune with pricing tactics --> Results lead to the right price Apple watch sold over a million units, would you be able to buy an apple watch.
Alternative Advertising
Event Creation- Designing an event features sponsorship. Guerilla Marketing- Unconventional promotions on a very low budget. Generally thought of as for small business entrepreneurs. Zoo York. QR Codes, Social Networks. Rule of marketing is unconventional by doing something differently. Zoo York with cockroaches. Stealth Marketing- Undercover marketing or roach baiting. Sony. Viral Marketing- Creating content that encourages users/customers to do your marketing for you. Hotmail. Burger King. Blendtec. Notes: Allows consumers to market for you. Social media so others spread the message for you. Blendtec blending an iPhone vs. Samsung.
Ethical Issues in Advertising
False testimonials. Bait-and-Switch Advertising. Misleading demonstrations. Puffery. Misleading demonstrations- If they find that more than 25% are mislead to believe that the ad says something. Campbell's soup with marbles at the bottom. Puffery- lie so much that no one believes it. Tropicana with the slogan Morning without Tropicana Pure Premium. Not an Option.
Is advertising necessary?
Firms that did not cut back sold 50% more than those that did cut back during the recession and sold 60% more in the 2 years following the recession. so yes.
Setting the right price
Given: a certain level of demand Elasticity of demand and costs, marketers estimate revenues/profits that can be generated at various prices. Elasticity of demand. Market share is important.
Time Spent in Key steps of selling process
High amount: Generate leads: Traditional Qualify leads: Relationship Probe needs: Relationship needs Develop Solutions: Relationship Selling Handle Objections: Traditional Selling Close the sale: Traditional Selling Follow-up: Relationship Selling Traditional: you are not going to keep buying cars on a regular basis. I don't need someone to sell me toothpaste, I'll just walk in and buy it. Working on commission. Relationship- no commission. Using LinkedIn to qualify and identify.
The Competition
High prices may induce firms to enter the market. Competition can lead to price wars. Global competition may force firms to firms to lower prices.
New-product pricing strategies
Higher price, higher quality= Premium strategy (skimming) Higher price, lower quality= Overcharging strategy (skimming) Lower price, Higher quality= Good- Value Strategy (penetration) Lower price, lower quality= Economic strategy (penetration) 32,000 is more than 26,000 dollars so that's objective, subjective is our thoughts on all of this. Premium- Higher- Some people see a high price, and they like it because they like high quality. Overcharging- people run away from it, not willing to pay that amount of money. There's no quality. Good value- Price is reflective of value. The product that you bought that offered the most value to you. Economic strategy- When you can file taxes, economic price lowest price possible at the lowest quality, we just want functionality.
Experiential Marketing
How can we make something an experience? Connect with the consumer. Provide the consumer with a total product experience that considers all the elements in an offering that encourage or inhibit consumers' interaction with the product. Note: Experience with ASU, even when you're off campus you're still thinking about ASU. It's not a finite point where you start experiencing. The product is more than something I can hold in my hand.
Marginal Analysis
I want to maximize revenue, if hiring more sales people does that compensate what I had to pay those people?
Elastic Demand
If demand greatly changes with a price change, the demand is elastic. This describes products that are price-sensitive and have many substitutes. Note: The flatter the line the more elastic it is. A relatively small decrease in price results in a substantial increase in quantity demanded. E is greater than 1! Note: When the elasticity of a good is inelastic, a price decrease leads to this effect on total revenue= Decrease.
Inelastic Demand
If demand hardly changes with a price change, the demand is inelastic. This describes products that are less price-sensitive and have very few substitutes. Ex: Cigarettes, medicine, gasoline, tuition. Notes: If you lowered the price there is not a lot of change in quality. E is less than 1!
Basic Principle of Marginal Analysis
Increase spending if: the increased cost is less than the incremental (marginal) return. Decrease Spending if: The increased cost is more than the incremental (marginal) retun. Hold spending level if: The increased cost is equal to the incremental (marginal) return. If running one more ad will bring in more revenue why would you not do it? Where is that optimal point where to run ads and hire sales people?
Major Types of Advertising
Institutional- Enhances a company's image rather than promotes a particular product. Product Advertising- Touts the benefits of a specific good or service.
The Communication Mix
Involves the various elements companies can use to communicate with the target market including advertising, public relations, sales promotion, and personal selling. Elements that companies use to communicate. Communication mix-personal selling.
Media Optimization
Is the adjustment of media plans to maximize their performance.
Advertising
Is the paid, nonpersonal communication of a marketing message by an identified sponsor through mass media. It means warning.
Public Relations
Is two-way communication designed to improve mutual understanding and positively influence relationships between the marketer and its internal and external publics. Notes: I can say I have the best mattress, but when someone says that about me my credibility goes up. Us trying to market ourselves. 1. Gauge public opinion. 2. Establish dialogue. 3. Enhance company image. 4. Build/rebuild trust. 5. Build on marketing efforts. Notes: It helps to build or rebuild trust. New Product publicity. Crisis management. Consumer Education. Event/Issue sponsorship. Press relations. Internet Web Sites. Notes: Press Releases- people will comment on it. Credible because other people are reporting on it.
Marketing is all about..
Knowing and Connecting with your core customer and cultivating relationships. Developing your brand. Solving customer problems. Notes: It's all about solving problems, filling a need. How are you developing your brand in the time you graduate?
Factors Influencing Complaint Behavior
Level of dissatisfaction of the consumer. Attitude/personality of the consumer toward complaining. Amount of benefit to be gained. Attributions- the customer is not always right, it's a two way partnership. Customer is king? In 2007, Sprint fired 1,000 customers for being "problematic". These customers called an average of 90 times per month, often as much as 12 times per day, demanding credit to their account.
Product Mix Pricing Strategies- Portfolio pricing
Levels of price points. Pay more extras. Hotel rooms. Different levels of quality at different price points. There is 7 or 8 base models of Honda civics, these portfolios are array of different investments. The wide range of options that cover a large spectrum of choices.
Distribution Strategy
Manufacturers: Offer a larger profit margin or trade allowance. use exclusive distribution. Franchising. Avoid business with price-cutting discounters. Develop brand loyalty. Wholesalers/ Retailers: Sell against the brand. Buy gray-market goods. Selling against the brand- Stocking well-known branded items at high prices in order to sell store brands at discounted prices. Two tails- Inexpensive versions and high end can't afford versions. For every product there is some combination of this. Selling very cheaply against the brand- sell at very low prices. Example: Zunefed, then Walgreens brand. More people would buy Zunefed. For one to consider the Walgreens brand they have to lower the price. If we believe that they are identical we will buy Zunefed because it's cheaper. Retailers, everything we see in store sheld, range of prices goes from 30 to 60. Cheap end is 30, most people would buy around the middle. The average person would buy 45 to 50 range. A 100 item in the category, is there to change your window of acceptability of prices. Now 30 to 100, now 45 feels so much closer to 30 then 100. The average persons expenditures might creep up a little bit.
Profit Maximization
Marginal Cost= Marginal Revenue Notes: I will hire 6 people because it brings $1 profit, but hiring a 7th person we use more costs.
New-product pricing strategies
Market-skimming pricing: high initial price. Innovators and early developers. Demand is inelastic. The initial price for an IPhone was $600 at that time that was incredibly price skimming, no one was paying for that, high end in a way. Market-penetration pricing: Low initial price. Attract larger number of buyers quickly. You want to identify that there is a segment of the population that won't pay the high-end but they will pay the low-end. Demand is elastic.
How do you set your price?
Markup pricing Break-even pricing Profit maximization pricing
AIDA Concept
Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Awareness --> Interest --> Desire --> Action Advertising & Public Relations= Awareness, Interest. Personal Selling and Sales promotions- go from Interest to Desire to Action. Awareness- We don't know our significant other exists yet until we are aware of them. Advertising- Creates some level of awareness. Advertising, people say it does not work but when I say Nike you think Just Do It, so it does work. the goal of advertising is to create awareness. If you never consumed sprite, you are still aware of it. Sales promotions- It changes behavior, Black Friday. We can use advertising to create awareness of sales promotions.
Advertising and Market Share
New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share. Beyond a certain level of spending, diminishing returns set in. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. What is the competition doing? What is your goal?
Product Advertising
Pioneering- Stimulates primary demand for new product or category. Notes: At the beginning, new products. Competitive- Influences demand for brand in the growth phase of the PLC. Often uses emotional appeal. Notes: They are not new they've been in the market. Comparative- Compares two or more competing brands' product attributes. Used if growth is sluggish, or if competition is strong. Notes: Compare myself to other brands.
When the pricing objective for an inelastic product is to attract new customers based on high quality, THIS strategy should be used
Premium
Pricing Objectives
Profit See picture! Notes: Oriented- Per product. Higher priced item relative to the competition. High end SUV's higher than 31,000. Status Quo- around the average. Most SUV's are on average 31,000. Sales-Oriented- Incredibly cheap product. Cheaper than 31,000 SUV's. You have to understand the market size.
Methods of Cost- based Pricing
Profit= Revenue (Price x units sold) - Costs (Fixed Costs + Variable Costs) Methods for determining an initial price for the product or service: 1. Markup pricing (keystoning (double the cost)) 2. Break-even pricing. 3. Profit maximization pricing. Notes: Exams are independent grades. Markup pricing- you should keystone the amount of your COGS.
Pricing objectives
Profitability: Setting price to meet a specific target. If we let people buy the new products, and sell the old ones, trade offs does that increase our profitability? Volume Meeting Competition Prestige
Pros and Cons of Advertising
Pros- Cost- Effective, creative, educate, build dialogue. Cons- Unnoticed, Misinterpret, Intrusive, Offend. We use it to generate awareness. There is so much advertisement that sometimes it goes unnoticed.
Personal Selling best when...
Push Strategy Complex Product Expensive Negotiate Custom Product Infrequent purchase
TV Audience Measures
Rating= HH tuned to show/ Total U.S. HH Share= HH tuned to show/ U.S. HH using TV Share come into play because at night not as many people are watching T.V. compared against compared to others in the same time slot. Share numbers has to always be higher because you are dividing by a smaller number.
Product Mix Pricing Strategies- Captive-product pricing
Razor and blades mentality. If I can get you to buy the main product then you're trapped. If I get you to buy the X-box you have to buy the x-box games for it. IPod and ITunes.
Consumer Sales Promotions
Rebates Coupons Loyalty Programs Contest and Sweepstakes Premiums- free gift for doing something at a certain level.
Market Response
Redemption rate- % responding to incentive. (Acting on promotion offering) Displacement rate: % of those who would buy anyway. (get you in the door to buy higher margin items. Kids eat free, parents get in the door.) Acquisition rate- % of purchases by non-regular buyers Conversion rate- number of future purchases by new customers Product line effects- the impact the promotions have on related products. Notes: In an hour I have 10 people that come to buy. 10/an hour + kids eat free a promotion that changes behavior. 20 people I've acquired 10 new customers. The sales promotion changes behavior, the promotion ends but now there is 15 people per hour. The baseline for 10 per hour, but we had a bunch of people try my product and converted customers to try my restaurant. Conversion rate is most successful indicator of performance. Their goal is for them to come for the rest of the year. Conversion rate is the most important factor.
Media Selection
Refers to the process of choosing which media types to use, when, where, and for what duration in order to execute a media plan.
Personal Selling
Representatives of a company interacts directly with a consumer to provide information to help the consumer make a buying decision about a product or a service. One-to-one interaction: Address Specific Customer needs. Alter message. Provide additional information. Personal selling, used car sells person probably not the most exciting image. Having a different perspective on selling price.
Markup Chain Pricing
Retailer's selling price= 30 Wholesaler's markup on selling price= 20% Retailer's markup on selling price= 33.33% Manufacturer's cost= 12 What is the producer's dollar markup? 25%
Qualifying Leads
See Image Attached!
Media Scheduling
See Image attached! Continuous- Same number every time. Flighted- Doing it in blocks, sometimes yes, sometimes no, sometimes run ads, sometimes no. Pulsing- Continuous +Flight together. Always something but it does fluctuate. If the pulse rate is 0 is not good.
Relationship Selling vs. Traditional Selling
See Image attached! Traditional- Generating leads is the old school model that is not optimal for most industries. Marketing textbook always trying to sell you most updated book. Relationship Selling- Help me solve my problem. Marketing win.
The AIDA Concept
See Image attached! You've heard of new products coming out and you are aware of them. Thinking, feeling, doing.
Cost Per Thousand (CPM)
See Image! An advertisement costs $4,000 and generates 120,000 impressions. What is the CPM? 33.33
The Sales Promotion Dilemma
See Image! If we cut back promotions, then competitors have sales then they'll go to the competitors. If we cut back and others maintain promotions, you might loose a little market share.
Goals and Tasks of Promotion
See image attached! Notes: At first when you are getting to know someone you tell them about yourself, later on it's just reminders of who you are. Informative Promotion- Increase awareness, Explain how product works, suggest new uses, build company image. Notes: We don't know what an apple watch can do. In 10 years I bet everyone will know what they do. Persuasive Promotion- Encourage brand switching. Change customers' perceptions of product attributes. Influence immediate buying decision. Persuade customers to call. Notes: Advertising, siri. Change your beliefs. My subway is bigger than your subway. Reminder Promotion- Remind customers that product may be needed. Remind customers where to buy product. Maintain customer awareness. Notes: Look at me. Comparative advertising- refer another brand in my advertising.
Media Scheduling Methods
See image attached! Pulsing is not at a steady rate. Seasonal not the right answer on the test!
Marketing Communication Process
See image attached! The way in which a sender encodes a marketing idea and conveys it through message and medium so receivers can decode and understand it, and then respond with feedback. How do you choose which type of social media? The seller puts together a message, and shares the message. Email, on-line version of the class, and we decode the message.
Executing the Message
See image for Common Executional Styles! Scientific- Third party idea, using government data, it gives some credibility to it. Slice-of-life- Trying to be inclusive for everyone. Lifestyle- Trying to target a select group of the population. Fantasy- Do not attempt type of advertising.
Identify Product Benefits
See image! Attribute- Facts Benefit- Fact that gives me benefit. 5 hour energy- No crash I don't care about the ingredients.
Advertising Sales/ Response Functions
See image! When I run 1 or 2 ads it does not really move that much. 43 ads for one product is probably too many. You have to find that middle spot.
Price Elasticity
See picture! Tell us how much the demand for a product will change with a change in price. Notes: If you change the price and there is a big change in the percentage, it is elastic. If there is no big change, it is not elastic.
Break- Even Analysis
Setting price to cover fixed costs
Markup Pricing
Setting price where price = markup +cost Markup on selling price = ((selling price- cost)/(selling price)) Cost= (1- markup on selling price) (selling price) Selling price= ((cost)/(1-markup on selling price) Notes: If cost is 50, selling price is 100, what's the markup on selling price? =50%. Everything ranges from 0 to 100%, he will only ask about the markup on the selling price.
Price Adjustment Strategies- Other pricing tactics
Single-price tactic (Everything $1) Bait pricing- attracts you to the situation, it's illegal. Two-part pricing- country club- There is a fixed cost tuition, and variable costs like organizations, gym membership. Loss Leaders (leader pricing)- selling pretty close to price, but I am taking a loss but it's a magnet that pulls people onto the store. Best buy in the 90's selling the CD's for much cheaper whole making no revenue to get more people into their stores.
Other Determinants of Price
Staged of the Product Life Cycle- affects price Competition Distribution Strategy Promotion Strategy Perceived Quality
Consumer Promotions Objectives
Stimulate Inquiries Generating Product Trial Encourage Repurchase Traffic Building Increasing Rate of Purchase Selling more, building more level of inquiries. It's interesting, to get people into the store.
When a decrease in price on one product results in a decrease in sales of a second product, the two products are said to be this
Substitutes
How do you adjust your price?
Tactics
Measuring TV Audiences
Television Households- Number of HH that own a TV. Program rating- Percentage of TV HH tuned to a show. Rating Point = 1 percent of TV HH. Households using TV (HUT)- Percentage of homes in an area watching TV at a given time. Share of Audience- Percentage of HUT tuned to a show. Households using television is different than households with a television. If we divide a pot of gold we would all get the same amount of money. If there were some people missing we would have a longer share.
Beyond the 4P's
The 7 P's Model: Product, price, place, promotion. People, physical, process. 4 C's Model: Customer value, cost, convenience, communication. Notes: It will always be the 4 p's. We need them as a starting point as a basis. Price will always affect our judgment. The 4 C's allows us to take it to the next level.
Price Adjustment Strategies- Psychological (odd-even) pricing
The 99 principle Reference pricing- What you expect to pay for a product in that category (SUV=?) Unit pricing- states in a recognized unit of measurement. Whatever you paid this morning for breakfast you are willing to pay 1 more cent. 100 is a barrier, If you pay 99 is less. Reference price- what you expect to pay for. Unit pricing- compare things easily when they reduce apples to apples, per ounce pricing.
Budget Approaches
The Affordable Method- What we have to spare. What's left to spend. Arbitrary Allocation Method- No system. Seemed like a good idea at the time. Percentage of Sales Method- Set percentage of sales or amount per unit. Competitive Parity Method- Match competitor or industry average spending. Return on Investment Method- Spending is treated as a capital investment. Affordable- The budget approaches to figure out your advertising. Arbitrary- Seemed like a good idea.
Importance of Customer Satisfaction
The average business loses 10% of its customers each year. Acquisition of customers can cost 5 times more than retaining current customers. Improving customer retention by 2 percent can decrease costs by as much as 10 percent. The customer profit rate increases over the life of a retained customer. Notes: It's expensive to have new customers, because you have to educate a new customer, it takes time to get familiar, it's like starting a new relationship every time. The average business does not hear from 96% of its unhappy customers. Complainers are more likely to do business with you again than non-complainers. 54-70% if the complaint is resolved at all. 95% if the complaint is resolved quickly. Notes: Most customers don't tell them if there is something wrong, you never fix it. Complainers are most likely to continue to do business with you if you fix the problem.
In summary, what affects price?
The competition Distribution strategy- Where is our competition. Promotion strategy The relationship of price to quality Substitutes- If there are no substitutes set your price. Complements- things go together if I buy A I buy B.
Personal Selling Process
The is the practice used by salespeople to identify, research, and approach potential customers to sell products and services. Sales is one of the fastest growing careers. Prospect --> Research --> Approach --> Sales Presentation --> Overcome Objections --> Close the Sale --> Follow-up Researching and understanding, qualify versus generate. Follow-up.
Advertising
Top 200 brands account for 37 percent of media spending. The advertising industry is small- only 12,000 employed in advertising agencies. Ad budgets of some exceed over $4 billion per year- over $10 million per day! Large pressure to return some investment on all the resources they have.
Trade Sales Promotions
Trade Shows Trade Allowances Training Sales Contests Co-Op Advertising
Message Recall and Presentation Order
We recall things more at the beginning and at the end. Primacy Effect- Things in the beginning. Recency Effect- Things at the end. The back page of a magazine is probably more expensive than a page in 133. Super bowl ads the ones at the beginning and the ones at the end are more expensive.
What is Price?
What you pay for something or... The value that you exchange for the benefits of having or using the product/service (i.e. time, psychological costs, other resources) Value= Benefits- Costs Example: I may have to pay someone to drive a car around the UA camus that says **** U of A, you would not do it because of the psychological costs. It comes down to the notion of utility.
Sales Promotion
is marketer-controlled communication to stimulate immediate audience response by enhancing the value of an offering for a limited time. Ability to change behavior. Price will always mean something. Advertising- Reason to buy (impacting attitudes, awareness) Sales promotion- Incentive to buy (Impacting behavior, Action) Sales promotion impact behavior, not attitudes. Consumer and trade. Consumer (black Friday)
