MKTG Exam 4

Influences on Content & Form of an advertising message:

*characteristics of the people in the target audience: gender, age, education, race, income, occupation, lifestyle, life stage, and other attributes *An advertising campaign's objectives and platform also affect the content and form of its messages: -If a firm's advertising objectives involve large sales increases, the message may include hard-hitting, high-impact language, symbols, and messages. -Slogans such as Home Depot's basic message, "More saving. More doing," can aid in brand recall. When designing slogans, marketers should make them short, retain them for a long period of time, and provide large marketing budgets to make the slogan memorable. -The use of spokescharacters or design elements can also be highly effective. Spokescharacters = visual images that can convey a brand's features, benefits, or brand personality. (Flo from Progressive Insurance and the GEICO gecko are examples of spokescharacters representing specific brands.) The spokescharacter can provide a personality and improve brand equity by directly and indirectly enhancing excitement, sincerity, and trust. *Choice of media obviously influences the content and form of the message. -Effective outdoor displays and short broadcast spot announcements require concise, simple messages. -Magazine and newspaper advertisements can include considerable detail and long explanations. -because several kinds of media offer geographic selectivity, a precise message can be tailored to a particular geographic section of the target audience

upward communication

- In this way, marketing managers can gain access to a rich source of information about what customers require, how products are selling, the effectiveness of marketing activities, and any issues with marketing implementation. -also allows marketing managers to understand the problems and requirements of lower-level employees, a critical group to keep satisfied, as they are the ones who interact with customers.

Advertising

-Advertising can have a profound impact on how consumers view certain products. -Advertisements even influence how a brand's own sales force views company products. *However, many nonbusiness organizations—including governments, churches, universities, and charitable organizations—employ advertising to communicate with stakeholders. **Depending on what is being promoted, advertising can be classified as: institutional or product advertising.

Public Relations

-An organization communicates with various stakeholders, both internal and external, and public relations efforts can be directed toward any and all of them. -A firm's stakeholders can include customers, suppliers, employees, shareholders, the media, educators, potential investors, government officials, and society in general.

Importance of timing of entry into the market

-Companies that are relatively quick to enter the market after the first mover have a greater chance of building market share and brand loyalty. -Companies that enter the market later on, after many other companies have done so, face stronger competition and have more disadvantages.

Does Promotion Help Customers without Costing Too Much?

-Consumers do benefit because promotion informs them about product uses, features, advantages, prices, and locations where they can buy the products. -Thus, consumers gain more knowledge about available products and can make more intelligent buying decisions. -Promotion also informs consumers about services—for instance, health care, educational programs, and day care—as well as about important social, political, and health-related issues.

disadvantages of advertising

-Even though the cost per person reached may be relatively low, the absolute dollar outlay can be extremely high, especially for commercials during popular television shows and those associated with popular websites. -High costs can limit, and sometimes preclude, the use of advertising in a promotion mix. -Moreover, advertising rarely provides rapid feedback. -Measuring its effect on sales is often difficult, and it is generally less persuasive than personal selling.

Dollar Volume analysis

-Firms frequently use dollar volume in their sales analyses because the dollar is a common denominator of sales, costs, and profits. *A marketing manager who uses dollar-volume analysis should factor out the effects of price changes, which can skew the numbers by making it seem that more or fewer sales have been made than is the actual case.

Creating Awareness

-For an organization that is introducing a new product or a line extension, making customers aware of the product is crucial to initiating the product adoption process -is important for existing products, too. Promotional efforts may aim to increase awareness of brands, product features, image-related issues (such as ethical or socially responsive behavior), or operational characteristics (such as store hours, locations, and credit availability)

Does promotion encourage materialism?

-If promotion works, it will persuade consumers to buy more and more things -Marketers assert that these values of materialism are derived from the home but children's reliance on brand name items contradicts this -In short, YES

Why deciding how large the advertising appropriation should be is critical:

-If the appropriation is set too low, the campaign cannot achieve its full potential. -When too much money is appropriated, overspending results, and financial resources are wasted.

Sales Structure

-Inside salespeople: support personnel or take orders, follow up on deliveries, and provide technical information. -Outside sales force: is also important. Usually sales calls outside the firm are more consultative and are built on developing long-term relationships. -Using both inside and outside salespersons to manage accounts is very typical. This task is sometimes called creative selling. It requires that salespeople recognize potential buyers' needs and give them necessary information. Increasingly, inside salespersons manage the digital approaches to sales and outside salespersons are more face-to-face and relationship-oriented. -Current-Customer Sales: Sales personnel who concentrate on current customers call on people and organizations that have purchased products from the firm before. These salespeople seek more sales from existing customers by following up on previous sales. Current customers can also be sources of leads for new prospects. -New-Business Sales: Business organizations depend to some degree on sales to new customers. New-business sales personnel locate prospects and convert them into buyers. Salespeople help generate new business in many organizations, but even more so in organizations that sell real estate, insurance, appliances, automobiles, and business-to-business supplies and services. These organizations depend in large part on new-customer sales.

Benefits of Advertising

-Most cost-effective way to reach large numbers of consumers -lets the source repeat the message several times. -advertising a product a certain way can add to the product's value, and the visibility an organization gains from advertising can enhance its image. -Builds brand equity by influencing consumers' perceptions

Costs and Availability of Promotional Methods

-National Advertising / Sales Promotion: Have higher expense but low cost per individual -Some forms of advertising are relatively inexpensive: Many small, local businesses advertise products through local newspapers, magazines, radio and television stations, outdoor boards, internet ads, and signs on mass transit vehicles. -Availability of promotional techniques: Firm may find that no available advertising medium effectively reaches a certain target market. *The problem of media availability becomes more pronounced when marketers advertise in foreign countries. Some media, such as television, simply may not be available, or advertising on television may be highly regulated. For example, Sweden has some of the strictest controls for food advertising to children. *In some countries, advertisers are forbidden to make brand comparisons on television. Other promotional methods also have limitations. A firm may wish to increase its sales force but be unable to find qualified personnel.

Dealing with Unfavorable Public Relations

-Negative events that generate public relations can wipe out a company's favorable image and destroy positive customer attitudes established through years of expensive advertising campaigns and other promotional efforts -To protect its image, an organization needs to prevent unfavorable public relations or at least lessen its effect if it occurs. First and foremost, the organization should try to prevent negative incidents and events through safety programs, inspections, training, and effective quality control procedures. -Experts insist that sending consistent brand messages and images throughout all communications at all times can help a brand maintain its strength even during a crisis.

Costs can be categorized in different ways when performing marketing cost analysis:

-One way is to identify which ones are affected by sales or production volume. -Another way is based on whether or not they can be linked to a specific business function.

Coupons offer several advantages:

-Print advertisements with coupons are often more effective at generating brand awareness than print ads without coupons. -Generally, the larger the coupon's cash offer, the better the recognition generated. -Coupons reward current product users, win back former users, and encourage purchases in larger quantities. -Because they are returned, coupons also help a manufacturer determine whether it reached the intended target market. -The advantages of using electronic coupons over paper coupons include: 1.) lower cost per redemption 2.) greater targeting ability 3.) improved data-gathering capabilities 4.) greater experimentation capabilities to determine optimal face values and expiration cycles.

The content of the message sometimes affects media choice:

-Print media can be used more effectively than broadcast media to present complex issues or numerous details in single advertisements. -If an advertiser wants to promote beautiful colors, patterns, or textures, media offering high-quality color reproduction, such as magazines or television, should be used instead of newspapers.

Does promotion increase prices?

-Promotion is criticized for raising prices, but it can also lower them by stimulating demand. -It is when promotion fails to stimulate demand that prices increase because the cost of promotion must be added. -Promotion also keeps prices lower by fostering competition -Advertising is not only related to economic growth, but it can bring about it

Public Relations Tools

-Public relations professionals prepare written materials and use digital media to deliver brochures, newsletters, company magazines, news releases, blogs, managed social media sites, and annual reports that reach and influence their various stakeholders. -Public relations personnel also create corporate identity materials—such as logos, business cards, stationery, signs, and promotional materials—that make firms immediately recognizable. -Speeches are another public relations tool. Because what a company executive says publicly at meetings or to the media can affect the organization's image, the speech must convey the desired message clearly. -Event sponsorship, in which a company pays for part or all of a special event, like a benefit concert or a tennis tournament, is another public relations tool.An organization tries to ensure that its product and the sponsored event target a similar audience and that the two are easily associated in customers' minds.

Personal selling has both advantages and limitations when compared with advertising:

-Reaching one person through personal selling costs considerably more than through advertising -but personal selling efforts often have greater impact on customers. -Personal selling also provides immediate feedback, allowing marketers to adjust their messages to improve communication. -Such interaction helps them determine and respond to customers' information needs.

Determining Sales Force Size

-Sales force size influences the company's ability to generate sales and profits -size of the sales force affects the compensation methods used, salespeople's morale, and overall sales force management -must be adjusted periodically, because a firm's marketing plans change along with markets and forces in the marketing environment -One danger in cutting back the size of the sales force to increase profits is that the sales organization may lose strength and resiliency Analytical Methods can help determine optimal sales force size: -One method involves determining how many sales calls per year are necessary for the organization to serve customers effectively and then dividing this total by the average number of sales calls a salesperson makes annually -A second method is based on marginal analysis, in which additional salespeople are added to the sales force until the cost of an additional salesperson equals the additional sales generated by that person.

disadvantages of being a late mover

-The company that entered the market first may have patents and other protections on its technology and trade secrets that prevent the late mover from producing a similar product. -If customers who have already purchased the first mover's product believe that switching to the late mover's product will be expensive or time-consuming, it may be difficult for the late mover to gain market share

Promotional Resources & Objectives/Policies influences on the promotion mix:

-The size of an organization's promotional budget affects the number and relative intensity of promotional methods included in a promotion mix. *Researchers have found that resources spent on promotional activities have a positive influence on shareholder value. -An organization's promotional objectives and policies also influence the types of promotion selected. *If a company's objective is to create mass awareness of a new convenience good, such as a breakfast cereal, its promotion mix probably leans heavily toward advertising, sales promotion, and possibly public relations.

Retain Loyal Customers

-To retain loyal customers, marketers not only advertise loyalty programs but also use reinforcement advertising, which assures current users that they have made the right brand choice and tells them how to get the most satisfaction from the product. *Promotional efforts directed at customer retention can help an organization control its costs, because the costs of retaining customers are usually considerably lower than those of acquiring new ones.

Does promotion create needs?

-When referring to Maslow's hierarchy of needs, promotion does not create needs because humans would still have needs for food, water, sex, shelter, love, affection, and so on. -Promotion does however, capitalize on needs and many marketers associate their products with needs ie: Mouthwash and toothpaste appeal to the need for love, affection, and respect.

Sales Promotion

-an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers. -Examples include free samples, games, rebates, sweepstakes, contests, premiums, and coupons. *Sales promotion should not be confused with promotion; sales promotion is just one part of the comprehensive area of promotion. **Marketers spend more on sales promotion than on advertising, and sales promotion appears to be a faster-growing area than advertising.

Evaluating Public Relations Effectiveness

-counting the number of media exposures: is one way to evaluate effectiveness -Environmental monitoring: identifies changes in public opinion affecting an organization -public relations audit: is used to assess an organization's image among the public or to evaluate the effect of a specific public relations program -A communications audit: may include a content analysis of messages, a readability study, or a readership survey -social audit: Conducted If an organization wants to measure the extent to which stakeholders view it as being socially responsible

Drawbacks of coupon use:

-fraud and misredemption, which can be expensive for manufacturers. -Coupon fraud—including counterfeit internet coupons as well as coupons cashed in under false retailer names—costs manufacturers hundreds of millions in losses each year. -Another disadvantage, according to some experts, is that coupons are losing their value; because so many manufacturers offer them, consumers have learned not to buy without some incentive, whether that pertains to a coupon, a rebate, or a refund. -Furthermore, brand loyalty among heavy coupon users has increased as many consumers redeem coupons only for products they normally buy. It is believed that about three-fourths of coupons are redeemed by people already using the brand on the coupon. Thus, coupons have questionable success as an incentive for consumers to try a new brand or product. -An additional problem with coupons is that stores often do not have enough of the coupon item in stock. This situation generates ill will toward both the store and the product.

Market share analysis

-lets a company compare its marketing strategy with competitors' strategies. -The primary reason for using market share analysis is to estimate whether sales changes have resulted from the firm's marketing strategy or from uncontrollable environmental forces: -When a company's sales volume declines but its share of the market stays the same, the marketer can assume that industry sales declined because of outside factors. -However, if a company experiences a decline in both sales and market share, it should consider making changes to its marketing strategy to make it more effective. *When attributing a sales decline to uncontrollable factors, a marketer must keep in mind that factors in the external marketing environment do not impact all firms equally because firms have varying strategies and objectives. *Within an industry, the entrance of new firms, the launch of new products by competing firms, or the demise of established products also affects a firm's market share. Market share analysts should attempt to account for these effects.

Factors to consider when determining the target market:

-marketers should determine whether a selected target market aligns with the company's overall mission and objectives. -If it does, they should assess whether the company has the appropriate resources to develop a marketing mix (product, price, promotion, and distribution) that meets the needs of that target market. -The size and number of competitors already marketing products in potential target markets are concerns as well.

Employee reward programs

-should be fair, ethical, and well understood to maintain a high level of workplace satisfaction. -should also be tied to organizational goals.

Business strategic planners

-should recognize the performance capabilities of each SBU and carefully allocate resources among them. -Several tools allow a company's planners to classify and visually display its portfolio of SBUs, or even individual products, according to the attractiveness of markets and the business's relative market share. *Product quality, order of entry into the market, and market share have been associated with SBU success.

Pros of being First Mover:

-the market is, for at least a short period, free of competition as potential competitors work to develop a rival product. -Because consumers have no choice initially, being a first mover also helps establish customer brand loyalty in cases when switching to another brand later may be costly or difficult. -The first to develop a new product can also protect secrets and technology through patents.

Public Relations

. -Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. -Maintaining a positive relationship with one or more stakeholders can affect a firm's current sales and profits, as well as its long-term survival. -uses a variety of tools, including annual reports, brochures, event sponsorships, and sponsorship of socially responsible programs aimed at protecting the environment or helping disadvantaged individuals. -The goal of public relations is to create and enhance a positive image of the organization. *Increasingly, marketers are going directly to consumers with their public relations efforts through social media.

eight general areas of sales management:

1. Establishing sales force objectives 2. Determining sales force size 3. Recruiting and selecting salespeople 4. Training sales personnel 5. Compensating salespeople 6. Motivating salespeople 7. Managing sales territories 8. Controlling and evaluating sales force performance

Steps in the Personal Selling Process

1. Prospecting 2. Preapproach 3. Approach 4. Making the presentation 5. Overcoming objections 6. Closing the sale 7. Following up

Communication Process

1. Source 2. Coded Message 3. Communication Channels 4. Decoded Message 5. Receiver/Audience 6. feedback (in reverse order)

Publicity-based public relations tools have some limitations:

1.) Media personnel must judge company messages to be newsworthy if the messages are to be published or broadcast at all. 2.) Consequently, messages must be timely, interesting, accurate, and in the public interest. 3.) It may take a great deal of time and effort to convince media personnel of the news value of publicity releases, and many communications fail to qualify. 4.) Although public relations personnel usually encourage the media to air publicity releases at certain times, they control neither the content nor the timing of the communication. 5.) Media personnel alter length and content of publicity releases to fit publishers' or broadcasters' requirements and may even delete the parts of messages that company personnel view as most important. 6.) Furthermore, media personnel use publicity releases in time slots or positions most convenient for them. 7.)Other outside public relations messages can be picked up during slow news times. Thus, messages sometimes appear in locations or at times that may not reach the firm's target audiences. **Although these limitations can be frustrating, properly managed publicity-based public relations tools offer an organization substantial benefits.

Media planners take many factors into account when devising a media plan:

1.) They analyze location and demographic characteristics of consumers in the target audience, because people's tastes in media differ according to demographic groups and locations. 2.) Media planners also consider the sizes and types of audiences that specific media reach: -For instance, National Geographic reaches relatively well-educated consumers who are often highly influential decision makers. (Many marketers of vehicles, nonprofit organizations, and electronics would consider this an attractive demographic.) *Declining broadcast television ratings and newspaper and magazine readership have led many companies to explore alternative media. *New media like social networking sites are also attracting advertisers due to their large reach. *Research findings have found that, when advertising is a part of a social networking site, consumers need to see the advertising as beneficial, or it may lead them to abandon the site. *Advertisers are using social media as a tool for understanding customers and gaining insights. On the other hand, even in this age of digital media, television remains the most successful medium for advertising.

Publicity-based public relations tools offer several advantages:

1.) credibility 2.) news value 3.) significant word-of-mouth communications 4.) a perception of media endorsement. 5.) The public may consider news coverage more truthful and credible than an advertisement because news media are not paid to provide the information. 6.) In addition, stories regarding a new-product introduction or a new environmentally responsible company policy, for example, are handled as news items and are likely to receive notice. 7.) Finally, the cost of publicity is low compared with the cost of advertising.

major steps in creating an advertising campaign

1.) identifying and analyzing the target audience 2.) defining the advertising objectives 3.) creating the advertising platform 4.) determining the advertising appropriation 5.) developing the media plan 6.) creating the advertising message 7.) executing the campaign 8.) evaluating advertising effectiveness

Characteristics of marketing objectives

1.) should be expressed in clear, simple terms so all marketing and non-marketing personnel in the company understand exactly what they are trying to achieve. 2.) should be measurable, which allows the organization to track progress and compare outcomes against beginning benchmarks. 3.) should specify a time frame for its accomplishment, such as six months or one year. 4.) should be consistent with both business-unit and corporate strategies. This ensures that the company's mission is carried out consistently at all levels of the organization by all personnel. 5.) should be achievable and use company resources effectively, and successful accomplishment should contribute to the overall corporate strategy.

media scheduling decisions are affected by numerous factors:

1.) target audience characteristics 2.) product attributes 3.) product seasonality 4.) customer media behavior 5.) size of the advertising budget. *There are three general types of media schedules: continuous, flighting, and pulsing. -continuous schedule: advertising runs at a constant level with little variation throughout the campaign period. *McDonald's is an example of a company that uses a continuous schedule. -flighting schedule: advertisements run for set periods of time, alternating with periods in which no ads run. For instance, an advertising campaign might have an ad run for 2 weeks, then suspend it for 2 weeks, and then run it again for 2 weeks. *Companies like Hallmark, John Deere, and Ray-Ban use a flighting schedule. -pulsing schedule: combines continuous and flighting schedules: During the entire campaign, a certain portion of advertising runs continuously, and during specific time periods of the campaign, additional advertising is used to intensify the level of communication with the target audience.

two main reasons for promotion criticism:

1.Promotion does have flaws 2.it is a highly visible business activity that pervades our daily lives.

storyboard

A blueprint that combines copy and visual material to show the sequence of major scenes in a commercial

Reduce Sales Fluctuations

A business cannot operate at peak efficiency when sales fluctuate widely; holidays and seasonal products. -Promotional activities are often designed to stimulate sales during slumps

market opportunity

A combination of circumstances and timing that permits an organization to take action to reach a particular target market *Tommy Hilfiger saw an opportunity in the underserved market for clothing for children and adults with disabilities. The clothing includes modifications such as Velcro closures and adjustable leg openings to facilitate dressing no matter what abilities a person might have.

The Promotion Mix

A combination of promotional methods used to promote a specific product. -4 elements: 1. advertising 2. personal selling 3. public relations 4. sales promotion *For some products, firms use all four elements; for others, they use only two or three.

market growth/market share matrix

A helpful business tool, developed by the Boston Consulting Group (BCG), based on the philosophy that a product's market growth rate and its market share are important considerations in determining its marketing strategy. -Managers use this model to determine and classify each product's expected future cash contributions and future cash requirements. *However, the BCG analytical approach is more of a diagnostic tool than a guide for making strategy prescriptions.

Mission Statement

A long-term view, or vision, of what the organization wants to become. *When an organization decides on its mission, it is answering two questions: Who are our customers? and What is our core competency?

free merchandise

A manufacturer's reward given to resellers that purchase a stated quantity of products -Occasionally, free merchandise is used as payment for allowances provided through other sales promotion methods. -To avoid handling and bookkeeping problems, the "free" merchandise usually takes the form of a reduced invoice.

cost comparison indicator

A means of comparing the costs of advertising vehicles in a specific medium in relation to the number of people reached -The cost per thousand impressions (CPM) is the cost comparison indicator for magazines; it shows the cost of exposing 1,000 people to one advertisement.

Source

A person, a group, or an organization with a meaning it tries to share with a receiver or an audience

unaided recall test

A posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues

aided recall test

A posttest that asks respondents to identify recent ads and provides clues to jog their memories

kinesic communication

A salesperson and customer frequently use kinesic communication: communication through the movement of head, eyes, arms, hands, legs, or torso.

communication

A sharing of meaning through the transmission of information.

marketing objective

A statement of what is to be accomplished through marketing activities. -These objectives can be given in terms of product introduction, product improvement or innovation, sales volume, profitability, market share, pricing, distribution, advertising, or employee training activities. -Marketing objectives should be based on a careful study of the SWOT analysis, matching strengths to opportunities, eliminating weaknesses, and minimizing threats. *A marketing objective of Ritz-Carlton hotels, for example, is to have more than 90 percent of its customers indicate that they had a memorable experience at the hotel.

Motivating Salespeople

Additional efforts beyond compensation are necessary for motivation: Managers must identify their employees' needs and goals and strive to create a positive organizational climate -Enjoyable working conditions, power and authority, job security, and opportunity to excel are effective motivators, as are company efforts to make sales jobs more productive and efficient. -A strong positive corporate culture leads to higher levels of job satisfaction and organizational commitment and lower levels of job stress. -Sales contests and other incentive programs can also be effective motivators. These can motivate salespeople to increase sales or add new accounts, promote special items, achieve greater volume per sales call, and cover territories more thoroughly. *However, companies need to understand salespersons' preferences when designing contests in order to make them effective in increasing sales. -Properly designed incentive programs pay for themselves many times over, and sales managers are relying on incentives more than ever. *The most common incentive offered by companies is cash, followed by gift cards and travel. -Some companies outsource their incentive programs to companies that specialize in the creation and management of such programs.

Identify Strengths

Adequate resources can help a firm generate customer satisfaction and loyalty, goodwill, and a positive reputation, all of which impact marketing through creating well-known brands and strong financial performance.

Advertising

Advertising is a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media. -Individuals and organizations use advertising to promote goods, services, ideas, issues, and people. -Being highly flexible, advertising can reach an extremely large target audience or focus on a small, precisely defined segment.

sustainable competitive advantage

An advantage that the competition cannot copy -Utilizing the marketing mix as a tool set, a company can detail how it will achieve a sustainable competitive advantage. *Amazon maintains a sustainable competitive advantage in shipping because of its high-tech logistics system and extensive network of distribution centers, which allows the online giant to offer low prices and fast delivery.

Who Develops the Advertising Campaign?

An advertising campaign may be handled by an individual, a few people within a firm, a firm's own advertising department, or an advertising agency. -In very small firms: one or two individuals are responsible for advertising (and for many other activities as well). Usually, these individuals depend heavily on local media (TV, radio, and newspaper) for copywriting, artwork, and advice about scheduling media. -In certain large businesses (especially large retail organizations): advertising departments create and implement advertising campaigns. *Depending on the size of the advertising program, an advertising department may consist of a few multiskilled individuals or a sizable number of specialists, including copywriters, artists, social media experts, media buyers, and technical production coordinators. *Advertising departments sometimes obtain the services of independent research organizations and hire freelance specialists when a particular project requires it. -Many firms employ an advertising agency to develop advertising campaigns: When an organization uses an advertising agency, the firm and the agency usually develop the advertising campaign jointly. *How much each participates in the campaign's total development depends on the working relationship between the firm and the agency. *Ordinarily, a firm relies on the agency for copywriting, artwork, technical production, and formulation of the media plan. Advertising agencies assist businesses in several ways: -An agency, especially a large one, can supply the services of highly skilled specialists - media experts, researchers, and legal advisers. -Agency personnel often have broad advertising experience and are usually more objective than a firm's employees about the organization's products. -firms can obtain some agency services at low or moderate costs.

Pretest

An evaluation performed before the campaign begins -A pretest usually attempts to evaluate the effectiveness of one or more elements of the message. -To pretest advertisements, marketers sometimes use a consumer jury

Creating the Marketing Mixes

An organization should analyze demographic information, customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion. *For example, to grow beyond its core Baby Boomer market, Thor Industries developed a new Airstream recreational vehicle to target Millennials. To meet the needs and desires of Millennials, the Airstream Basecamp is smaller, solar powered, and can be towed with a variety of mid-size SUVs. The $36,000 Basecamp includes Bluetooth speakers, Italian cabinetry, and a panoramic window for taking in Instagram-ready views.

reinforcement advertising

Another form of competitive advertising -assures current users that they have made the right brand choice and tells them how to get the most satisfaction from that brand.

reminder advertising

Another form of competitive advertising -tells customers that an established brand is still around and still offers certain characteristics, uses, and advantages.

Noise

Anything that reduces a communication's clarity and accuracy. *Noise also occurs when a source uses signs or symbols that are unfamiliar to the receiver or have a meaning different from the one intended. *Noise may also originate in the receiver; a receiver may be unaware of a coded message when perceptual processes block it out through a lack of understanding.

SWOT analysis:

Assessment of the organization's strengths, weaknesses, opportunities, and threats Highlights: 1. Strengths of the company 2. Weaknesses of the company 3. Opportunities in the environment and industry 4. Threats in the environment and industry

Combat Competitive Promotional Efforts

At times, a marketer's objective in using promotion is to challenge a competitor's promotional or marketing programs. -This reactive approach is to prevent a sales or market share loss. -A combative promotional objective is used most often by firms in extremely competitive consumer markets, such as the fast-food & convenience stores -It is not unusual for competitors to respond with a counter-pricing strategy or even match a competitor's pricing.

arbitrary approach

At times, marketers use the arbitrary approach, which usually means a high-level executive in the firm states how much to spend on advertising for a certain period. -The arbitrary approach often leads to under-spending or overspending. -Although hardly a scientific budgeting technique, it is expedient. -In general, the corporate culture will drive advertising budget decisions but it is often not based on knowledge that will increase profits. -However, budgeting is more complicated than relying on "rules of thumb." -A recent study showed that there is a need for unified measurement of consumers' consumption of traditional media and digital media to allow marketers to properly allocate and optimize the effectiveness of their advertising spending. *It is challenging to know how much to spend and to measure advertising effectiveness.

Competitive Growth Strategies

Based on analyses of each product or business unit, a firm may choose one or more competitive strategies. Include: -market penetration -product development -market development -diversification

How to examine strengths & weaknesses:

Both strengths and weaknesses should be examined from a customer perspective. -Only those strengths that relate to satisfying customers should be considered true competitive advantages. -Likewise, weaknesses that directly affect customer satisfaction should be considered disadvantages.

Business Unit Strategies

Business strategy should seek to create value for the company's target markets and attain greater performance, which marketing research suggests requires implementing appropriate strategic actions and targeting appropriate market segments.

Identify Prospects

Certain types of promotional efforts aim to identify customers who are interested in the firm's product and are likely potential buyers.

tactile communication

Communicating through touching -less popular in the United States than in many other countries. -Handshaking is a common form of tactile communication both in the United States and elsewhere.

types of communication used and the ways in which they are used are changing as both information technology and customer interests become increasingly dynamic:

Companies are turning toward branded content and other innovative communication media to engage users in ways that they can feel entertained without feeling the pressure of being inundated with traditional marketing messages.

One way to analyze costs:

Compare a company's costs with industry averages. -Many companies check the amount of money they spend on marketing efforts and other operations against average levels for the industry to identify areas in need of improvement. *however, a company should take into account its own unique situation. The company's costs can differ from the industry average for several reasons: -its own marketing objectives, cost structure, geographic location, types of customers, and scale of operations.

coding process

Converting meaning into a series of signs or symbols *When coding meaning into a message, the source must consider certain characteristics of the receiver or audience

Integrated marketing communications

Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers. -allow an organization to coordinate and manage its promotional efforts to transmit consistent messages. -also enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets. *Thus, this approach not only creates long-term customer relationships but also enables the efficient use of promotional resources.

costs categorized based on whether or not they can be linked to a specific business function:

Costs that can be linked are allocated, using one or several criteria, to the functions that they support. *If the firm spends $80,000 to rent space for production, storage, and sales facilities, the total rental cost can be allocated to each of the three functions using a measurement, such as square footage. -Some costs cannot be assigned according to any logical criteria. These are costs such as interest paid on loans, taxes paid to the government, and the salaries of top management.

Primary Demand

Demand for a product category rather than for a specific brand -When an organization is the first to introduce an innovative product, it tries to stimulate primary demand through new introductory promotion.

The effective implementation of any and all marketing activities

Depends on a well-organized marketing department that is capable of motivating personnel, communicating effectively, employing good coordination efforts, and setting reasonable and attainable timetables for activity completion. *Managers play a key role in creating desired outcomes through supervisory actions that provide rewards, reduce risks, and recognize behaviors that implement the marketing strategy

prospecting

Developing a database of potential customers Most salespeople prefer to use referrals: recommendations from current customers—to find prospects. -Obtaining referrals requires that the salesperson have a good relationship with the current customer and, therefore, must have performed well before asking the customer for help -Among the advantages of using referrals are more highly qualified sales leads, greater sales rates, and larger initial transactions. Some companies even award discounts off future purchases to customers who refer new prospects to their salespeople. *Consistent activity is critical to successful prospecting. Salespeople must actively search the customer base for qualified prospects that fit the target market profile. *After developing the prospect list, a salesperson evaluates whether each prospect is able, willing, and authorized to buy the product. Based on this evaluation, prospects are ranked according to desirability or potential.

Overcoming Objections

Effective salespeople anticipate and counter objections before the prospect raises them *However, this approach can be risky, because the salesperson may mention objections that the prospect would not have raised.

consumer sweepstakes

Entrants ubmit their names for inclusion in a drawing for prizes. -Sweepstakes are employed more often than consumer contests and tend to attract a greater number of participants. -However, contestants are usually more involved in consumer contests and games than in sweepstakes, even though total participation may be lower. -Contests, games, and sweepstakes may be used in conjunction with other sales promotion methods like coupons.

fixed costs

Fixed costs are expenses such as rent and employees' salaries, which are not affected by fluctuations in production or sales. -Do not change between different units of time, regardless of a company's production or sales volume. *Fixed costs are generally not very illuminating when determining how to use marketing funds more effectively.

Characteristics of the Product

Generally, promotion mixes for business products concentrate on personal selling, whereas advertising plays a major role in promoting consumer goods. *Business products concentrate on: - Personal Selling - Sales Promotion *Consumer products concentrate on: - Convenience goods = advertising - Durables and expensive products = personal selling *Both = public relations *Product Price is an important factor -High-priced products: call for personal selling, because consumers associate greater risk with the purchase of such products and usually want specific and comparative information from a salesperson. -For low-priced convenience items: marketers use advertising rather than personal selling. *Marketers of highly seasonal products often emphasize: advertising—and sometimes sales promotion as well—because off-season sales generally will not support an extensive year-round sales force. *stage of the product's life cycle: -During the introduction stage: advertising is used to create awareness for both business and consumer products.For many products, personal selling and sales promotion are also helpful in this stage. -In the growth and maturity stages: consumer products require heavy emphasis on advertising, whereas business products often call for a concentration of personal selling and some sales promotion. -In the decline stage: marketers usually decrease all promotional activities, especially advertising. *Intensity of market coverage: -When products are marketed through intensive distribution: firms depend strongly on advertising and sales promotion. -When marketers choose selective distribution: promotion mixes vary considerably. -Items handled through exclusive distribution—such as expensive watches, furs, and high-quality furniture: typically require a significant amount of personal selling. *A product's use: -Manufacturers of highly personal products, such as laxatives, nonprescription contraceptives, and feminine hygiene products: depend on advertising because many customers do not want to talk with salespeople about these products. -Service businesses: often use tangible products to promote their intangible services.

Recruiting and Selecting Salespeople

In recruiting, the sales manager develops a list of qualified applicants for sales positions. Effective recruiting efforts are a vital part of implementing the strategic sales force plan and can help assure successful organizational performance. -Careful selection and training increases sales performance. -Poor selection increases recruiting and training costs, leads to lost sales, and disrupts customer relationships. -Recruitment should not be sporadic; it should be a continuous activity aimed at reaching the best applicants. The selection process should systematically and effectively match applicants' characteristics and needs with the requirements of specific selling tasks. -Finally, the selection process should ensure that new sales personnel are available where and when needed.

Following up

In the final step of the selling process—follow up—the salesperson must determine: -whether the order was delivered on time and installed properly, if installation was required -goods or services perform as promise -If the product is a service, it is important to determine if there are any concerns or if improvements can be made in the experience. -customers' future product needs. *vital to establishing a strong relationship and creating loyalty on the part of the buyer.

competition-matching approach

Marketers following this approach try to match their major competitors' appropriations in absolute dollars or to allocate the same percentage of sales for advertising that their competitors do. -Although a marketer should be aware of what competitors spend on advertising, this technique should not be used alone because the firm's competitors probably have different advertising objectives and different resources available for advertising. -Many companies and advertising agencies review competitive spending on a quarterly basis, comparing competitors' dollar expenditures on print, radio, and television with their own spending levels. -Competitive tracking of this nature occurs at both the national and regional levels.

Percent-of-sales Approach (the more widely used technique to determine the advertising appropriation)

Marketers simply multiply the firm's past sales, plus a factor for planned sales growth or decline, by a standard percentage based on both what the firm traditionally spends on advertising and the industry average. *This approach, too, has a major flaw: It is based on the incorrect assumption that sales create advertising rather than the reverse. -A marketer using this approach during declining sales will reduce the amount spent on advertising, but such a reduction may further diminish sales. -Though illogical, this technique has been favored because it is easy to implement.

Establishing Sales Force Objectives

Objectives Tell salespeople what they are expected to accomplish during a specified time period. -They give the sales force direction and purpose and serve as standards for evaluating and controlling the performance of sales personnel. -Sales objectives should be stated in precise, measurable terms; specify the time period and geographic areas involved; and be achievable.

Is Promotion Deceptive?

One common criticism of promotion is that it is deceptive and unethical. 1. some are, but not all promotion should be condemned. 2. laws, government regulation, and industry self-regulation have helped decrease deceptive promotion

buying allowance

One such trade allowance is a buying allowance: a temporary price reduction offered to resellers for purchasing specified quantities of a product. -Such offers provide an incentive for resellers to handle new products, achieve temporary price reductions, or stimulate purchase of items in larger-than-normal quantities. -The buying allowance, which takes the form of money, yields profits to resellers and is simple and straightforward. -There are no restrictions on how resellers use the money, which increases the method's effectiveness. Disadvantages: -One drawback of buying allowances is that customers may buy "forward"—that is, buy large amounts that keep them supplied for many months. -Another problem is that competitors may match (or beat) the reduced price, which can lower profits for all sellers.

Shopper, Loyalty, and Frequent-User Incentives

Organizations such as supermarkets often provide users with loyalty or shopper cards that allow them to track customer purchases while providing periodic discounts to shoppers for continued purchases *Shopper cards: -tend to have an impact on brand loyalty purchases for secondary brands, but not brands where there is strong brand performance. -A key purpose of shopper and frequent-user cards is to encourage continued loyalty. *incentives for rewarding customers who engage in repeat (frequent) purchases: -Frequent-user incentives foster customer loyalty to a specific company or group of cooperating companies. -They are favored by service businesses, such as airlines, auto rental agencies, hotels, and local coffee shops. -Frequent-user programs not only reward loyal customers but also generate data that can contribute significant information about customers that helps marketers foster desirable customer relationships.

Marketing Strategies:

Outline of how the company will achieve its objectives Highlights: 1. Target market(s) 2. Marketing mix

Marketing Implementation:

Outline of how the company will implement its marketing strategies Highlights: 1. Marketing organization 2. Activities and responsibilities 3. Implementation timetable

The cost of media is an important but troublesome consideration:

Planners try to obtain the best coverage possible for each dollar spent. -However, there is no accurate way to compare the cost and impact of a television commercial with the cost and impact of a newspaper advertisement. -Streaming advertisers are using big data from companies such as Nielsen to determine which shows interest their particular target market. -Targeted, interactive ad technology has been available for years, but by finding out how campaigns perform on specific apps and devices, marketers are able to select the less costly medium while still reaching their target market.

Should potentially harmful products be promoted?

Primary targets are products associated with violence and other possibly unhealthy activities, such as handguns, alcohol, and tobacco. *Defenders argue that, as long as it is legal to sell a product, promoting it should also be allowed

Consumer sales promotion methods

Sales promotion techniques that encourage consumers to patronize specific stores or try particular products -Online sales promotion: can create a higher level of product and brand recall. -Consumer sales promotion: methods initiated by retailers often aim to attract customers to specific locations, whereas those used by manufacturers generally introduce new products or promote established brands.

money refunds

Sales promotion techniques that offer consumers a specified amount of money when they mail in a proof of purchase, usually for multiple product purchases -Marketers employ money refunds as an alternative to coupons to stimulate sales. -Money refunds, used primarily to promote trial use of a product, are relatively low in cost. -However, they sometimes generate a low response rate and, thus, have limited impact on sales.

Support personnel

Sales staff members who facilitate selling but usually are not involved solely with making sales -They engage primarily in marketing industrial products, locating prospects, educating customers, building goodwill, and providing service after the sale. -There are many kinds of sales support personnel; the three most common: 1.) missionary 2.) trade 3.) technical salespeople.

Characteristics of the Target Market

Size, geographic distribution, and sociocultural and demographic characteristics of an organization's target market help dictate the methods to include in a product's promotion mix. -To some degree, market size and diversity determine composition of the mix. *If the size is limited, the promotion mix will probably use a more targeted form of marketing such as personal selling -Geographic distribution of a firm's customers also affects the choice of promotional methods. Personal selling is more feasible if a company's customers are concentrated in a small area than if they are dispersed across a vast region. -Distribution of a target market's demographic characteristics, such as age, income, or education, may affect the types of promotional techniques a marketer selects, as well as the messages and images employed.

Marketing Objectives:

Specification of the company's marketing objectives Highlights: 1. Qualitative measures of what is to be accomplished 2. Quantitative measures of what is to be accomplished

Identifying and Analyzing the Target Audience

Step 1 of developing an ad campaign -Advertisers research and analyze advertising targets to establish an information base for a campaign. -Information commonly needed includes: 1.) location and geographic distribution of the target group 2.) the distribution of demographic factors, such as age, income, race, gender, and education 3.) lifestyle information 4.) consumer attitudes regarding purchase and use of both the advertiser's products and competing products. -The exact kinds of information an organization finds useful depend on the type of product being advertised, the characteristics of the target audience, and the type and amount of competition. -Advertisers must be sure to create a campaign that will resonate with the target market: Generally, the more an advertiser knows about the target audience, the more likely the firm is to develop an effective advertising campaign. -Knowing the target market for a company helps in developing an effective marketing mix, including relevant promotions that specifically target this group. *When the advertising target is not well understood and differentiated, the campaign is more likely to fail.

Defining the Advertising Objectives

Step 2 of developing an Ad campaign -objectives guide campaign development -objectives should be stated clearly, precise, and in measurable terms -To provide precision and measurability, advertising objectives should contain benchmarks and indicate what the advertiser hopes to accomplish. -objective should also specify a time frame so that advertisers know exactly how long they have to accomplish the objective. -objectives in advertising are stated in terms of sales and communication

Creating the Advertising Platform

Step 3 of developing an Ad campaign *Advertising platform: Basic issues or selling points to be included in advertising campaign -serves as base to build advertising message -based on research or opinion -select product issues that are important to customers

Determining the Advertising Appropriation

Step 4 of developing an Ad campaign *Advertising appropriation: the total amount of money a marketer allocates for advertising for a specific time period. -Many factors affect a firm's decision about how much to appropriate for advertising: 1. Geographic size of the market and the distribution of buyers within the market have a great bearing on this decision 2. Both the type of product advertised and the firm's sales volume relative to competitors' sales volumes also play roles in determining what proportion of revenue to spend on advertising. -Advertising appropriations for business products are usually quite small relative to product sales -whereas consumer convenience items, such as the cosmetics sold by L'Oréal, generally have large advertising expenditures relative to sales. -For instance, Procter & Gamble spends a relatively high percentage of sales to market its product mix of cosmetics, personal care products, appliances, detergents, and pet food. *Retailers like Walmart usually have a much lower percent of sales spent on advertising.

Developing the Media Plan

Step 5 of developing an Ad Campaign A media plan: sets forth the exact media vehicles to be used (specific magazines, television stations, social media, newspapers, and so forth) and the dates and times the advertisements will appear. -The plan determines how many people in the target audience will be exposed to the message. -The method also determines, to some degree, the effects of the message on those specific target markets. *Media planning is a complex task requiring thorough analysis of the target audience. (Sophisticated computer models have been developed to attempt to maximize the effectiveness of media plans.)

Creating the Advertising Message

Step 6 of developing an Ad campaign The basic content and form of an advertising message are a function of several factors: 1.) A product's features 2.) uses 3.) benefits -The intensity of the advertising can also have an impact: research has shown that advertising that pushes too hard to the point that consumers feel uncomfortable may cause consumers to consider the product negatively. (As advertising becomes more embedded in our lives, advertisers must strive to not offend consumers by being too prevalent, obvious, or invasive.)

Executing the Campaign

Step 7 of developing an Ad Campaign -Execution of an advertising campaign requires extensive planning and coordination, because many tasks must be completed on time and several people and firms are involved. (Production companies, research organizations, media firms, printers, and commercial artists are just a few of the people and firms contributing to a campaign.) -Implementation requires detailed schedules to ensure that various phases of the work are done on time. -Advertising management personnel must evaluate the quality of the work and take corrective action when necessary. In some instances, changes are made during the campaign so it meets objectives more effectively. For example, an auto company focusing on fuel efficiency may need to add more information relative to the competition to achieve its objectives.

Evaluating Advertising Effectiveness

Step 8 of developing an Ad Campaign -A variety of ways exist to test the effectiveness of advertising, They include: measuring achievement of advertising objectives; assessing effectiveness of copy, illustrations, or layouts; and evaluating certain media. -Advertising can be evaluated before, during, and after the campaign

Internal factors of SWOT

Strengths and weaknesses are internal factors that can influence an organization's ability to satisfy target markets.

Facilitate Reseller Support

Strong relationships with resellers are important to a firm's ability to maintain a sustainable competitive advantage. -Reseller support is a two-way street: producers generally want to provide support to resellers to assist in selling their products, and in turn they expect resellers to support their products. *The use of various promotional methods can help support sales growth.

Missionary salespeople

Support salespeople, usually employed by a manufacturer, who assist the producer's customers in selling to their own customers -Missionary salespeople may call on retailers to inform and persuade them to buy the manufacturer's products. -When they succeed, retailers purchase products from wholesalers, which are the producer's customers. *Manufacturers of medical supplies and pharmaceuticals often use missionary salespeople, called detail reps, to promote their products to physicians, hospitals, and pharmacists.

strategic windows

Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

first-mover advantage

The ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace. -Being the first to enter a market helps a company build a reputation as a pioneer and market leader. *Amazon and eBay were both first-mover start-ups that remain leaders as they grow and innovate ahead of the competition.

receiver

The individual, group, or organization that decodes a coded message

channel capacity

The limit on the volume of information a communication channel can handle effectively *is determined by the least efficient component of the communication process.

communications channel

The medium of transmission that carries the coded message from the source to the receiver. -Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication (social media platforms such as Facebook and YouTube) *When a source chooses an inappropriate communication channel, several problems may arise. The coded message may reach some receivers, but possibly the wrong receivers.

Preapproach

The most successful salespeople are thorough in their preapproach, which involves identifying key decision makers, reviewing account histories and problems, contacting other clients for information, assessing credit histories and problems, preparing sales presentations, identifying product needs, and obtaining relevant literature. -Marketers are increasingly using marketing analytics and customer relationship management systems to comb through databases and thus identify their most profitable products and customers. *CRM systems can also help sales departments manage leads, track customers, forecast sales, and assess performance. A salesperson with a lot of information about a prospect is better equipped to develop a presentation that precisely communicates with that prospect.

market share

The percentage of a market that actually buys a specific product from a particular company

analyzing the actual performance of the marketing strategy:

The principal means by which a marketer can gauge whether a marketing strategy has been effective in achieving objectives *two bases—sales and cost—for evaluating the actual performance of marketing strategies.

strategic planning

The process of establishing an organizational mission and formulating goals, a corporate strategy, marketing objectives, and a marketing strategy.

push policy

The producer promotes the product only to the next institution down the marketing channel. *Flow of communication: Producer - Wholesalers - Retailers - Consumers -Each channel member in turn promotes to the next channel member. -A push policy normally stresses personal selling. *Sometimes sales promotion and advertising are used in conjunction with personal selling to push the products down through the channel.

feedback

The receiver's response to a decoded message. -Feedback is coded, sent through a communications channel, and decoded by the receiver, the source of the original communication.

competitive advantage

The result of a company matching a core competency to opportunities it has discovered in the marketplace. *Larabar gained a significant advantage over competing energy bar brands by appealing to the growing market for foods that are minimally processed and contain few ingredients.

Making the Presentation

The salesperson must attract and hold the prospect's attention, stimulate interest in and spark a desire for the product. -Salespeople who carefully monitor the selling situation and adapt their presentations to meet the needs of prospects generally have more effective sales performance. -Salespeople should match their influencing tactics—such as information exchange, recommendations, deadlines, promises, ingratiation, and inspirational appeals—to their prospects.

What strongly affects marketing activities?

The structure and relationships of a marketing unit—including lines of authority and communication that connect and coordinate individuals.

Controlling and Evaluating Sales Force Performance

To control and evaluate sales force performance properly, sales management needs information. - A sales manager cannot observe the field sales force daily and, thus, relies on salespeople's call reports, customer feedback, contracts, and invoices. -Call reports identify the customers called on and present detailed information about interactions with those clients. -Sales personnel must often file work schedules indicating where they plan to be during specific time periods. -Data about a salesperson's interactions with customers and prospects can be included in the company's customer relationship management system. This information provides insights about the salesperson's performance. -Sales managers evaluate many performance indicators: including average number of calls per day, average sales per customer, actual sales relative to sales potential, number of new-customer orders, average cost per call, and average gross profit per customer.

Compensating Salespeople

To develop and maintain a highly productive sales force, an organization must formulate and administer a compensation plan that attracts, motivates, and retains the most effective individuals. -The plan should give sales management the desired level of control and provide sales personnel with acceptable levels of income, freedom, and incentive. -It should be flexible, equitable, easy to administer, and easy to understand. -Good compensation programs facilitate and encourage proper treatment of customers. -Sales compensation programs usually reimburse salespeople for selling expenses, provide some fringe benefits, and deliver the required compensation level.

comparative advertising

To make direct product comparisons, marketers use this form of competitive advertising. -compares the sponsored brand with one or more identified competing brands on the basis of one or more product characteristics. *Surveys show that top creative advertising practitioners view comparative advertising favorably when it clearly identifies the competition. -Product categories that commonly use comparative advertising include soft drinks, toothpaste, pain relievers, foods, tires, automobiles, and detergents. **Under the provisions of the 1988 Trademark Law Revision Act, marketers using comparative advertisements in the United States must not misrepresent the qualities or characteristics of competing products.

Training Sales Personnel

Training can be formal or informal and on-the-job Can concentrate on: -The company -Its products -Its selling methods (training programs often focus on all 3) Training can be: -Aimed at salespeople at all seniority and experience levels -Training for experienced company salespeople: usually emphasizes product information or the use of new technology, although salespeople must also be informed about new selling techniques and changes in company plans, policies, and procedures. -new sales personnel require comprehensive training *Sales managers should use ethics training to institutionalize an ethical climate, improve employee satisfaction, and help prevent misconduct. Empowering the sales force through comprehensive training increases their effectiveness. Sales training may be done in: -the field -at educational institutions -company facilities -and/or online using web-based technology. *For many companies, online training saves time and money and helps salespeople learn about new products quickly.

Objective-and-task approach (one of the most logical techniques to determine advertising appropriation)

Using this approach, marketers determine the objectives a campaign is to achieve and then attempt to list the tasks required to accomplish them. -The costs of the tasks are calculated and added to arrive at the total appropriation. *This approach has one main problem: Marketers sometimes have trouble accurately estimating the level of effort needed to attain certain objectives. -A chain of retail donut stores, for example, may find it extremely difficult to determine how much of an increase in national television advertising is needed to raise a brand's market share from 8 to 10 percent.

regional issues

Versions of a magazine that differ across geographic regions

advocacy advertising

When a company promotes its position on a public issue—for instance, a tax increase, sustainability, regulations, or international trade coalitions—institutional advertising is referred to as advocacy advertising. -Such advertising may be used to promote socially approved behavior, such as recycling or moderation in consuming alcoholic beverages. -This type of advertising not only has social benefits but also helps build an organization's image.

Encourage product trial

When attempting to move customers through the product adoption cycle, a marketer may successfully create awareness and interest, but customers may stall during the evaluation stage. -In this case, certain types of promotion—such as free samples, coupons, test drives, or limited free-use offers, contests, and games—are employed to encourage product trial.

Comparing Actual Performance with Performance Standards:

When comparing actual performance with established performance standards, a firm may find that it exceeded or failed to meet performance standard benchmarks.

Managing Sales Territories

When deciding on territories, sales managers must consider size, geographic shape, routing, and scheduling. -If territories have equal sales potential, they will almost always be unequal in geographic size. (Note: managers should try to create territories with equal sales potential) -if sales territories requiring equal amounts of work are created, sales potential for those territories will often vary -Many sales managers try to balance territorial workloads and earning potential by using differential commission rates -The geographic size and shape of a sales territory are the most important factors affecting the routing and scheduling of sales calls. Next in importance are the number and distribution of customers within the territory, followed by sales call frequency and duration -Those in charge of routing and scheduling must consider the sequence in which customers are called on, specific roads or transportation schedules to be used, number of calls to be made in a given period, and time of day the calls will occur. -the major goals should be to minimize salespeople's non-selling time (time spent traveling and waiting) and maximize their selling time.

recall test

When recall is evaluated, respondents are not shown the actual advertisement but instead are asked about what they have seen or heard recently. -Recall can be measured through either unaided or aided recall methods.

Product placement

a form of advertising that strategically locates products or product promotions within entertainment media to reach the product's target markets. -A growing technique for reaching consumers is the selective placement of products within the context of television programs viewed by the target market. *For instance, the James Bond film Spectre featured the vehicles Aston Martin and Land Rover.

dealer loader

a gift to a retailer that purchases a specified quantity of merchandise. -Dealer loaders are often used to obtain special display efforts from retailers by offering essential display parts as premiums. *For example, New Belgium Brewing can provide a Fat Tire bicycle to hang in a pub. Marketers use dealer loaders to obtain new distributors and push larger quantities of goods.

market

a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products.

Proxemic communication

a less obvious form of communication used in personal selling situations, occurs when either person varies the physical distance separating them. -When a customer backs away from a salesperson, for example, he or she may be displaying a lack of interest in the product or expressing dislike for the salesperson

merchandise allowance

a manufacturer's agreement to pay resellers certain amounts of money for providing promotional efforts like advertising or point-of-purchase displays. -This method is best suited to high-volume, high-profit, easily handled products. -A drawback is that some retailers perform activities at a minimally acceptable level simply to obtain allowances. Before paying retailers, manufacturers usually verify their performance. Manufacturers hope that retailers' additional promotional efforts will yield substantial sales increases.

scan-back allowance

a manufacturer's reward to retailers based on the number of pieces moved through the retailers' scanners during a specific time period. -To participate in scan-back programs, retailers are usually expected to pass along savings to consumers through special pricing. -Scan-backs are becoming widely used by manufacturers because they link trade spending directly to product movement at the retail level.

feature article

a manuscript of up to 3,000 words prepared for a specific publication.

press conference

a meeting called to announce major news events. -Media personnel are invited to a press conference and are usually supplied with various written materials and photographs. -Letters to the editor and editorials are sometimes prepared and sent to newspapers and magazines. -Videos may be made available to broadcasters in the hope that they will be aired.

Consumer Jury

a panel of existing or potential buyers of the advertised product. -Jurors judge one or several dimensions of two or more advertisements. -Such tests are based on the belief that consumers are more likely than advertising experts to know what influences them. -Companies can also solicit the assistance of marketing research firms, such as Information Resources Inc. (IRI), to help assess ads

buy-back allowance

a sum of money that a producer gives to a reseller for each unit the reseller buys after an initial promotional deal is over. -This method is a secondary incentive in which the total amount of money resellers receive is proportional to their purchases during an initial consumer promotion, such as a coupon offer. -Buy-back allowances foster cooperation during an initial sales promotion effort and stimulate repurchase afterward. -If the retailer's inventory becomes low after the initial promotion, the buy-back allowance helps the retailer restock the inventory. This is often offered for bread and other perishable products. -The main disadvantage of this method is expense.

Premium money (push money)

additional compensation offered by the manufacturer to salespeople as an incentive to push a line of goods. -This method is appropriate when personal selling is an important part of the marketing effort; it is not effective for promoting products sold through self-service. -Premium money often helps a manufacturer obtain a commitment from the sales force, but it can be very expensive. -The use of this incentive must be in compliance with retailers' policies as well as state and local laws.

Dealer listings

advertisements promoting a product and identifying participating retailers that sell the product. -Dealer listings can influence retailers to carry the product, build traffic at the retail level, and encourage consumers to buy the product at participating dealers.

Sales Promotion

an activity or material, or both, that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespeople, or consumers. -encompasses all promotional activities and materials other than personal selling, advertising, and public relations. Retailers often offer buy-one-get-one-free sales, a sales promotion tactic known as a bonus or premium. -In competitive markets, where products are very similar, sales promotion provides additional inducements that encourage product trial and purchase. Supermarkets such as Whole Foods provide food samples to encourage purchases. -Sales promotion can increase sales by providing extra purchasing incentives. -marketers must ensure that sales promotion objectives are consistent with the organization's overall objectives, as well as with its marketing and promotion objectives. -When deciding which sales promotion methods to use, marketers must consider several factors, particularly product characteristics (price, size, weight, costs, durability, uses, features, and hazards) and target market characteristics (age, gender, income, location, density, usage rate, and shopping patterns). How products are distributed and the number and types of resellers may determine the type of method used. The competitive and legal environments may also influence the choice. -Declines in brand loyalty have produced an environment in which sales promotions aimed at persuading customers to switch brands are more effective. -In addition, competition from online retailers, including Amazon, have pushed retailers to use more sales promotion incentives. -Finally, a stronger emphasis placed on improving short-term performance calls for greater use of sales promotion methods that yield quick (although perhaps short-lived) sales increases.

Cooperative advertising

an arrangement in which a manufacturer agrees to pay a certain amount of a retailer's media costs for advertising the manufacturer's products. -The amount allowed is usually based on the quantities purchased. As with merchandise allowances, a retailer must show proof that advertisements did appear before the manufacturer pays the agreed-upon portion of the advertising costs. -These payments give retailers additional funds for advertising. Disadvantages: -Some retailers exploit cooperative-advertising agreements by crowding too many products into one advertisement. -Not all available cooperative-advertising dollars are used. -Some retailers cannot afford to advertise, while others can afford it but do not want to advertise. A large proportion of all cooperative-advertising dollars is spent on newspaper advertisements.

Buzz marketing

an attempt to incite publicity and public excitement surrounding a product through a creative event. -Event attendance has a positive effect on brand equity. -Some marketers are piggybacking off the events of other companies, using long lines for an event or product launch as marketing opportunities.

Sales Force Management

analyzing, planning, implementing, and controlling sales force activities -The sales force is directly responsible for generating one of an organization's primary inputs: sales revenue. -Without adequate sales revenue, businesses cannot survive. -In addition, a firm's reputation is often determined by the ethical conduct of its sales force.

Trade salespeople

are not strictly support personnel, because they usually take orders as well. -However, they direct much effort toward helping customers—especially retail stores—promote the product. -They are likely to restock shelves, obtain more shelf space, set up displays, provide in-store demonstrations, and distribute samples to store customers. -Food producers and processors commonly employ trade salespeople

Trade Sales Promotion Methods

attempt to persuade wholesalers and retailers to carry a producer's products and market them more aggressively. -To encourage resellers, especially retailers, to carry their products and promote them effectively, producers use trade sales promotion methods. *Marketers use trade sales methods for many reasons: -countering the effect of lower-priced store brands -passing along a discount to a price-sensitive market segment -boosting brand exposure among target consumers -or providing additional incentives to move excess inventory or counteract competitors. -These methods include: buying allowances, buy-back allowances, scan-back allowances, merchandise allowances, cooperative advertising, dealer listings, free merchandise, dealer loaders, premium or push money, and sales contests.

Competitive advertising

attempts to stimulate demand for a specific brand by promoting the brand's features, uses, and advantages through indirect or direct comparisons with competing brands.

1st step of strategic planning process

begins with deciding on the firm's organizational mission—its raison d'etre—and goals. These give meaning and direction to the organization.

Marketing cost analysis

breaks down and classifies costs to determine which are associated with specific marketing efforts. -lets a company evaluate the performance of marketing strategy by comparing sales achieved and costs sustained. -By pinpointing exactly where a company incurs costs, this form of analysis can help isolate profitable or unprofitable customers, products, and geographic areas. *A company that understands and manages its costs appropriately has a competitive advantage. *Evidence shows that a low-cost provider is in a position to engage in aggressive price competition.

cents-off offers

buyers pay a certain amount less than the regular price shown on the label or package. Advantages: -Like coupons, this method can serve as a strong incentive for trying new or unfamiliar products and is commonly used in product introductions. -Cents-off offers can stimulate product sales or multiple purchases, yield short-lived sales increases, and promote products during off-seasons. -Cents-off offers are easy to control and are often used for specific purposes. DIsadvantages: -If used on an ongoing basis, however, they reduce the price for customers who would buy at the regular price and may also cheapen a product's image. -In addition, the method often requires special handling by retailers who are responsible for giving the discount at the point of sale.

Big Data

can open the door to reaching the most desirable customers and have a positive effect on sales. -For instance, big data is allowing marketers to break up the Millennial generation into four categories marketers can use to target different products depending on their spending habits.

Promotion

communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization positively and accept its products. -Many organizations spend considerable resources on promotion to build and enhance relationships with current and potential customers as well as other stakeholders. -Thoughtful promotion reinforces market positioning versus the competition and creates a reason for purchase.

Artwork

consists of an advertisement's illustrations and layout.

single-source data

data that allow researchers to link together purchase behavior, household characteristics, and advertising exposure at the household level.

selective demand

demand for a specific brand To build selective demand a marketer employs promotional efforts that point out the strengths and benefits of a specific brand. -Building selective demand also requires singling out attributes important to potential buyers. -can be stimulated by differentiating the product from competing brands in the minds of potential buyers.

organization's goals and objectives

derived from its mission statement & guide its planning efforts. -Goals focus on the end results the organization seeks. -Each level of management and department within the firm should have goals that stem from the mission statement and provide direction for the firm's activities.

sales contest

designed to motivate distributors, retailers, and sales personnel by recognizing outstanding achievements. -To be effective, this method must be equitable for all individuals involved. -One advantage is that it can achieve participation at all distribution levels. Disadvantage: -Positive effects may be temporary, however, and prizes are usually expensive.

native advertising

digital advertising that matches the appearance and purpose of the content in which it is embedded. -The word "native" refers to the fact that this form of advertising is meant to resemble the content itself. -Native advertising has been associated more with improved brand perception, awareness, and engagement than standard banner ads. -Native advertising is expected to account for 74 percent of ad revenue within the next few years. -potentially misleading when consumers do not realize that a video or post is sponsored by an organization. -One survey revealed that over 50 percent of consumers felt deceived upon realizing that an article or video was sponsored content. *To avoid deception and possible legal repercussions, brands should clearly identify sponsored content on digital media sites.

posttest

evaluation of advertising effectiveness after the campaign Advertising objectives often determine what kind of posttest is appropriate: -If the objectives' focus is on communication—to increase awareness of product features or brands or to create more favorable customer attitudes—the posttest should measure changes in these dimensions. *Advertisers sometimes use consumer surveys or experiments to evaluate a campaign based on communication objectives. These methods are costly, however. -For campaign objectives stated in terms of sales, advertisers should determine the change in sales or market share attributable to the campaign. *By using data about past and current sales and advertising expenditures, advertisers can make gross estimates of the effects of a campaign on sales or market share. *However, changes in sales or market share brought about by advertising cannot be measured precisely; many factors independent of advertisements affect a firm's sales and market share. (Competitors' actions, regulatory actions, and changes in consumer preferences, weather, and economic conditions are only a few factors that might enhance or diminish a company's sales or market share) -in posttests, generalizations can be made about why advertising is failing or why media vehicles are not delivering the desired results. -Because it is difficult to determine the direct effects of advertising on sales, many advertisers evaluate print advertisements according to how well consumers can remember them.

Demonstrations

excellent attention-getters. Manufacturers offer them temporarily to encourage trial use and purchase of a product or to show how a product works. -Because labor costs can be extremely high, demonstrations are not used widely. -They can be highly effective for promoting certain types of products, such as appliances, cosmetics, and cleaning supplies. -Even automobiles can be demonstrated, not only by a salesperson but also by the prospective buyer during a test drive. -Cosmetics marketers, such as Estée Lauder and Clinique, sometimes offer potential customers "makeovers" to demonstrate product benefits and proper application.

pioneer advertising

focuses on stimulating demand for a product category (rather than a specific brand) by informing potential customers about the product's features, uses, and benefits. -Product advertising that focuses on products before they are available tends to cause people to think about the product more and evaluate it more positively. -Pioneer advertising is also employed when the product is in the introductory stage of the product life cycle

Body copy

for most advertisements consists of: -an introductory statement or paragraph -several explanatory paragraphs -and a closing paragraph. *Some copywriters have adopted guidelines for developing body copy systematically: 1.) identify a specific desire or problem, 2.) recommend the product as the best way to satisfy that desire or solve that problem, 3.) state product benefits and indicate why the product is best for the buyer's particular situation, 4.) substantiate advertising claims, and ask the buyer to take action. *Advertising should create awareness, produce interest, create desire, and ultimately result in a purchase (action).

Technical salespeople

give technical assistance to the organization's current customers, advising them on product characteristics and applications, system designs, and installation procedures. -Because this job is often highly technical, the salesperson usually has formal training in one of the physical sciences, information technology, or in engineering. -Technical sales personnel often sell technical industrial products, such as computers, heavy equipment, and steel.

The signature

identifies the advertisement's sponsor -It may contain several elements including: the firm's trademark, logo, name, and address. *The signature should be attractive, legible, distinctive, and easy to identify in a variety of sizes.

The subheadline

if there is one, links the headline to the body copy and sometimes serves to explain the headline.

Point-of-purchase (POP) materials

include outdoor signs, window displays, counter pieces, display racks, and self-service cartons. -Innovations in POP displays include sniff-teasers, which give off a product's aroma in the store as consumers walk within a radius of 4 feet, and computerized interactive displays. -These items, often supplied by producers, attract attention, inform customers, and encourage retailers to carry particular products. -Retailers have also begun experimenting with new forms of POP technology, such as interactive kiosks allowing shoppers to browse through products. -A retailer is likely to use point-of-purchase materials if they are attractive, informative, well-constructed, and in harmony with the store's image.

Consumer Contests

individuals compete for prizes based on their analytical or creative skills. -This method can be used to generate retail traffic and frequency of exposure to promotional messages. -Contestants are usually more highly involved in consumer contests than in games or sweepstakes, even though total participation may be lower. -Contests may also be used in conjunction with other sales promotional methods, such as coupons.

Consumer Games

individuals compete for prizes based primarily on chance—often by collecting game pieces like bottle caps or a sticker on a carton of french fries. -Because collecting multiple pieces may be necessary to win or increase an individual's chances of winning, the game stimulates repeated business. -Development and management of consumer games is often outsourced to an independent public relations firm, which can help marketers navigate federal and state laws that regulate games. Disadvantages: -Although games may stimulate sales temporarily, there is no evidence to suggest that they affect a company's long-term sales. -Marketers considering games should exercise care. Problems or errors may anger customers and could result in a lawsuit. *McDonald's wildly popular Monopoly game promotion, in which customers collect Monopoly real estate pieces on drink and french fry packages, has been tarnished by past fraud after a crime ring, including employees of the promotional firm running the game, was convicted of stealing millions of dollars in winning game pieces.

new introductory promotion

informs potential customers about the new product: what it is, what it does, how it can be used, and where it can be purchased. -Because this promotion is used in the introductory stage of the product life cycle, meaning there are no competing brands, it neither emphasizes brand names nor compares brands.

Relationship selling (also known as consultative selling)

involves building mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time. -Like team selling, it is especially used in business-to-business marketing. -Relationship selling involves finding solutions to customers' needs by listening to them, gaining a detailed understanding of their organizations, understanding and caring about their needs and challenges, and providing support after the sale. -relationship selling that generates loyal long-term customers is likely to be extremely profitable for the firm both in repeat sales as well as the money saved in trying to find new customers *Pharmaceutical companies have begun to change their sales tactics, spending more time listening to doctors and building relationships over simply promoting the benefits of the company's products.

advertising campaign

involves designing a series of advertisements and placing them in various advertising media to reach a particular target audience.

Team selling

involves the salesperson joining with people from the firm's financial, engineering, and other functional areas, is appropriate for such products. -The salesperson takes the lead in the personal selling process, but other members of the team bring their unique skills, knowledge, and resources to the process to help customers find solutions to their own business challenges. -Team selling is advantageous in situations calling for detailed knowledge of new, complex, and dynamic technologies like jet aircraft and medical equipment. It is also used to engage clients in construction, consulting, and other professional services. -It can be difficult, however, for highly competitive salespersons to adapt to a team selling environment. *Team selling is becoming popular, especially in companies where the selling process is complex and requires a variety of specialized skills.

captioned photograph

is a photograph with a brief description explaining its contents. -Captioned photographs are effective for illustrating new or improved products with highly visible features.

Publicity

is communication in news-story form about the organization, its products, or both, transmitted through a mass medium at no charge. -Although public relations has a larger, more comprehensive communication function than publicity, publicity is a very important aspect of public relations. -Publicity can be used to provide information about goods or services; to announce expansions or contractions, acquisitions, research, or new-product launches; or to enhance a company's image.

The headline

is critical because often it is the only part of the copy that people read. It should attract readers' attention and create enough interest to make them want to read the body copy or visit the website.

The biggest concern of marketers:

is from fake news, questionable metrics, ethics issues which social media platforms have created, creator-perceived risk, and scrutiny. (Almost 50 percent of advertisers will not spend money on risky platforms.)

Premiums

items offered free or at a minimal cost as a bonus for purchasing a product. *Cracker Jack, introduced in 1896 as the first junk food, had a prize of trivial value inside. -Premiums are used to attract competitors' customers, introduce different sizes of established products, add variety to other promotional efforts, and stimulate consumer loyalty. -Consumers appear to prefer premiums to discounts on products due to the perception that they are receiving something "free." -Creativity is essential when using premiums; to stand out and achieve a significant number of redemptions, the premium must match both the target audience and the brand's image. -Premiums must also be easily recognizable and desirable. Consumers are more favorable toward a premium when the brand has high equity and there is a good fit between the product and the premium. -Premiums are placed on or inside packages and can also be distributed by retailers or through the mail. *Examples include a service station giving a free car wash with a fill-up, a free shaving cream with the purchase of a razor, and a free plastic storage box with the purchase of Kraft Cheese Singles.

To maximize promotional effectiveness:

marketers strive for proper planning, implementation, coordination, and control of communications. -Effective management of integrated marketing communications is based on information about customers and the marketing environment, & feedback from customers. (often obtained from an organization's marketing information system)

Illustrations

often photographs but can also be drawings, graphs, charts, and tables. -Illustrations are used to draw attention, encourage audiences to read or listen to the copy, communicate an idea quickly, or convey ideas that are difficult to express. -Illustrations can be more important in capturing attention than text or brand elements, independent of size. -They are especially important, because consumers tend to recall the visual portions of advertisements better than the verbal portions. -Advertisers use a variety of illustration techniques. They may show the product alone, in a setting, or in use, or show the results of the product's use. -Illustrations can also take the form of comparisons, contrasts, diagrams, and testimonials.

Personal selling

paid personal communication that attempts to inform customers and persuade them to purchase products in an exchange situation. -gives marketers the greatest freedom to adjust a message to satisfy customers' information needs. -It is the most precise of all promotion methods, enabling marketers to focus on the most promising sales prospects. -Personal selling is also the most effective way to form relationships with customers. -Personal selling is perhaps most important with business-to-business transactions involving the purchase of expensive products. - Because of the high-risk factors involved, personal selling is often necessary to assure prospective customers about the quality of the product and answer any questions. -Despite these benefits, personal selling is generally the most expensive element in the promotion mix.

personal selling

paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. *most extensively used in the business-to-business market and also in the business-to-consumer market for high-end products such as homes, cars, electronics, and furniture.

word-of-mouth communication

personal informal exchanges of communication that customers share with one another, either verbally or through social media, about products, brands, and companies. -Most customers are likely to be influenced by friends and family members when they make purchases. -In addition, customers are increasingly going online for information and opinions about products as well as about the companies. *In general, consumers are much more likely to complain of a bad experience versus sharing praise for a good experience.

pull policy

promotes directly to consumers to develop strong consumer demand for its products. -It does so primarily through advertising and sales promotion. -Because consumers are persuaded to seek the products in retail stores, retailers in turn go to wholesalers or the producers to buy the products. -This policy is intended to pull the goods down through the channel by creating demand at the consumer level. -Consumers are told that if the stores do not have it, then they should request that the stores begin carrying the product. **Push and pull policies are not mutually exclusive. At times, an organization uses both simultaneously.

Institutional advertising

promotes organizational images, ideas, and political issues. -Institutional advertisements may deal with broad image issues, such as organizational strengths or the friendliness of employees. -can be proactive to create a favorable view of the organization or its industry or, in contrast, reactive, in response to something that may negatively impact an organization's reputation.

Product advertising

promotes the uses, features, and benefits of products. -There are two types of product advertising: pioneer and competitive.

Coupons

reduce a product's price and aim to prompt customers to try new or established products, increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. -Savings are deducted from the purchase price. -Coupons are the most widely used consumer sales promotion technique. -For best results, coupons should be easily recognized and state the offer clearly. The nature of the product (seasonal demand for it, life-cycle stage, and frequency of purchase) is the prime consideration in setting up a coupon promotion. -When deciding on the distribution method for coupons, marketers should consider strategies and objectives, redemption rates, availability, circulation, and exclusivity.

recognition test

respondents are shown the actual advertisement and asked whether they recognize it. -If they do, the interviewer asks additional questions to determine how much of the advertisement each respondent read

straight salary compensation plan

salespeople are paid a specified amount per time period, regardless of selling effort. This sum remains the same until they receive a pay increase or decrease When Useful: Compensating new salespeople; firm moves into new sales territories that require developmental work; sales requiring lengthy presale and post-sale services. Advantages: Gives salespeople security; gives sales managers control over salespeople; easy to administer; yields more predictable selling expenses Disadvantages: Provides no incentive; necessitates closer supervision of salespeople; during sales declines, selling expenses remain constant

combination compensation plan

salespeople receive a fixed salary plus a commission based on sales volume. Some combination programs require that a salesperson exceed a certain sales level before earning a commission; others offer commissions for any level of sales. When Useful: Sales territories have relatively similar sales potential; firm wishes to provide incentive but still control sales force activities Advantages: Provides certain level of financial security; provides some incentive; can move sales force efforts in profitable direction Disadvantages: Selling expenses less predictable; may be difficult to administer

straight commission compensation plan

salespeople's compensation is determined solely by sales for a given period. A commission may be based on a single percentage of sales or on a sliding scale involving several sales levels and percentage rates. When Useful: Highly aggressive selling is required; non-selling tasks are minimized; company uses contractors and part-timers Advantages: Provides maximum amount of incentive; by increasing commission rate, sales managers can encourage salespeople to sell certain items; selling expenses relate directly to sales resources Disadvatnages: Salespeople have little financial security; sales managers have minimum control over sales force; may cause sales people to give inadequate service to smaller accounts; selling expenses less predictable

corporate identity

should support all corporate activities & include: -unique symbols -personalities -philosophies

decoding process

signs or symbols are converted into concepts and ideas. -Seldom does a receiver decode exactly the same meaning the source intended. *When the result of decoding differs from what was coded, noise exists.

Free Samples

stimulate trial of a product, increase sales volume in the early stages of a product's life cycle, and obtain desirable distribution. -Sampling is the most expensive sales promotion method because production and distribution—at local events, by mail or door-to-door delivery, online, in stores, and on packages—entail high costs. -However, it can also be one of the most effective sales promotion methods. -In designing a free sample, marketers should consider factors like seasonal demand for the product, market characteristics, and prior advertising. -Free samples are usually inappropriate for slow-turnover products

Diversification

strategy of developing new products to be sold in new markets. Diversification allows firms to make better and wider use of their managerial, technological, and financial resources. *Consider Nokia, best known as a cell phone maker until it sold that business to Microsoft, which has introduced a number of internet-connected health devices, including blood-pressure monitors, scales, and thermometers under the Nokia brand name and logo. **Coca-Cola employed a diversification strategy when it introduced Gold Peak, a line of iced tea products that capitalized on the growing demand for beverages other than sweetened sodas.

Viral marketing

strategy to get consumers to share a marketer's message, often through email or online video, in a way that spreads dramatically and quickly. -Humor and the unexpected are key contributors to viral marketing success. *interestingly, viral marketing appears to be more effective for products that are less utilitarian (practical and functional) in nature.

Rebates

the consumer is sent a specified amount of money for making a single product purchase. -Rebates are generally given on more expensive products than money refunds and are used to encourage customers. -Marketers also use rebates to reinforce brand loyalty and encourage product purchase. -On larger items, such as cars, rebates are often given at the point of sale. -Most rebates, however, especially on smaller items, are given after the sale, usually through a mail-in process. Disadvantages: -One problem with money refunds and rebates is that many people perceive the redemption process as being too complicated. (To eliminate these complications, many marketers allow customers to apply for a rebate online) -Consumers might also have negative perceptions of manufacturers' reasons for offering rebates. They may believe the products are untested or have not sold well. If these perceptions are not changed, rebate offers may actually degrade product image and desirability.

target audience

the group of people at whom advertisements are aimed. -Advertisements for the Dyson vacuum cleaner target more affluent home owners, whereas the Dirt Devil targets lower- to middle-income households. *The target audience may include everyone in the firm's target market. Marketers may, however, direct a campaign at only a portion of the target market.

Approach

the manner in which a salesperson contacts a potential customer—is a critical step in the sales process. -In more than 80 percent of initial sales calls, the purpose is to gather information about the buyer's needs and objectives. -Creating a favorable impression and building rapport with prospective clients are important tasks in the approach because the prospect's first impressions of the salesperson are usually lasting ones. -One type of approach is based on referrals -The salesperson who uses the "cold canvass" approach calls on potential customers without prior consent. This approach is decreasing. Social media is becoming more typical in gaining the initial contact with a prospect. -Repeat contact is another common approach: When making the contact, the salesperson mentions a previous meeting.

Layout of an ad

the physical arrangement of the illustration and the copy (headline, subheadline, body copy, and signature). -These elements can be arranged in many ways. -The final layout is the result of several stages of layout preparation: As it moves through these stages, the layout promotes an exchange of ideas among people developing the advertising campaign and provides instructions for production personnel.

To formulate a media plan:

the planners select the media for the campaign and prepare a time schedule for each medium. *Media Planner's Goals: -primary goal = reach the largest number of people in the advertising target that the budget will allow. (Reach refers to the percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period.) -secondary goal = achieve the appropriate message reach and frequency for the target audience while staying within budget. (Frequency is the number of times these targeted consumers are exposed to the advertisement.) Media planners begin with broad decisions but eventually make very specific ones: 1.) decide which kinds of media to use *Digital marketing in particular is growing, with spending on online and mobile advertising accounting for more than 38 percent of advertising dollars. 2.) Media planners assess different formats and approaches to determine which are most effective **Some media plans are highly focused and use just one medium. Others can be quite complex and dynamic.

Closing the Sale

the stage in the personal selling process when the salesperson asks the prospect to buy the product. the salesperson may use a trial close: asking questions that assume the prospect will buy. -Trial close allows prospects to indicate indirectly that they will buy the product without having to say those sometimes difficult words: "I'll take it."

Copy

the verbal portion of an advertisement and may include: -headlines -subheadlines -body copy - & a signature. -Not all advertising contains all of these copy elements. *Even handwritten notes on direct-mail advertising that say, "Try this. It works!" seem to increase requests for free samples.

Completing all implementation activities on schedule requires:

tight coordination within the marketing unit and among other departments that contribute to marketing activities, such as production.

news release

usually a single page of type-written copy containing fewer than 300 words and describing a company event or product. -The most common publicity-based public relations tool -A news release gives the firm's or agency's name, address, phone number, and contact person.

Personal selling goals

usually involve finding prospects, determining their needs, persuading prospects to buy, following up on the sale, and keeping customers satisfied. -Identifying potential buyers interested in the organization's products is critical. Because most potential buyers seek information before making purchases, salespeople can ascertain prospects' informational needs and then provide relevant information. -To do so, sales personnel must be well trained regarding both their products and the selling process in general.

Promotional objectives

vary considerably from one organization to another and within organizations over time. -Large firms with multiple promotional programs operating simultaneously may have quite varied promotional objectives. *Possible Objectives of Promotion: Create awareness Retain loyal customers Stimulate demand Facilitate reseller support Encourage product trial Combat competitive promotional efforts Identify prospects Reduce sales fluctuations Stimulate word of mouth Generate positive social media posts

Opportunities

refer to favorable conditions in the environment that could produce rewards for the organization if acted upon. -Opportunities are situations that exist but must be exploited for the company to benefit from them.

Pros of being a late mover:

-A late mover is likely to have lower initial investment costs than the first mover because the first mover has already developed a distribution infrastructure and educated buyers about the product. -By the time a late mover enters the market, there is also more data, and therefore more certainty, about product success.

The concept of integrated marketing communications is increasingly effective for several reasons:

-Marketers can now take advantage of more precisely targeted promotional tools, such as television, direct mail, the internet, special-interest magazines, smartphones, mobile applications, social media, sales calls, and outdoor advertising. -Database marketing and marketing analytics are also allowing marketers to target individual customers more precisely. -Today, a number of promotion-related companies provide one-stop shopping for the client seeking advertising, sales promotion, and public relations, thus reducing coordination problems for the sponsoring company. *The sharing of information and use of technology to facilitate communication between buyers and sellers are essential for successful customer relationship management.

Market managers Communicating:

-Marketing managers must be in clear communication with the firm's upper-level management to ensure that they are aware of the firm's goals and achievements and that marketing activities are consistent with the company's overall goals and strategies. -The marketing unit should also take steps to ensure that its activities are in sync with those of other departments, such as finance or human resources. *It is important that communication flow upward, from the front lines of the organization (customer-contact employees) to upper management.

Market managers Coordinating:

-Marketing managers must coordinate diverse employee actions to achieve marketing objectives and work closely with management in many areas to ensure that marketing activities align with other functions of the firm. -They must also coordinate the activities of internal marketing staff with the marketing efforts of external organizations, including advertising agencies, resellers (wholesalers and retailers), researchers, and shippers. -Marketing managers can improve coordination by making each employee aware of how his or her job relates to others and how his or her actions contribute to the achievement of marketing objectives. *This requires effective communication and motivation of everyone involved in the marketing process.

Risks of being a first mover:

-There are usually high cost outlays associated with creating a new product, including market research, product development, production, and marketing—or buyer education—costs. -Also, early sales growth may not match predictions if the firm overestimates demand or fails to target marketing efforts correctly. -The company runs the risk that the product will fail due to market uncertainty, or that the product might not completely meet consumers' expectations or needs.

How to motivate marketing Personnel:

-To motivate marketing personnel, managers must address their employees' needs to maintain a high level of workplace satisfaction. -A firm can motivate its workers through a variety of methods: 1. informing workers how their performance affects department and corporate results and their own compensation 2. providing appropriate and competitive compensation 3. linking pay with performance 4. implementing a flexible benefits program, and adopting a participative management approach.

When a marketer finds that a strategy is underperforming expectations:

-a question sometimes arises as to whether the marketing objective, against which performance is measured, is realistic. -After studying the problem, the firm may find that the marketing objective is indeed unrealistic. In this case, marketers must alter the marketing objective to bring it in line with more sensible expectations. -It is also possible that the marketing strategy is underfunded, which can result in lower performance.

Corporate Strategy

-determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization's goals. -outlines the scope of the business and such considerations as resource deployment, competitive advantages, and overall coordination of functional areas. *broadest of the three levels and should be developed with the organization's overall mission in mind & answer Who are our customers? and What is our core competency?

When actual performance does not meet performance standards:

-marketers should seek to understand why a marketing strategy was less effective than expected. -Perhaps a marketing mix variable, such as price, was not ideally suited to the target market, which could result in lower performance. -Environmental changes and aggressive competitive behavior can both cause a marketing strategy to under perform

When actual performance exceeds performance standards:

-marketers will likely be satisfied and a marketing strategy will be deemed effective. -It is important that a firm seek to gain an understanding of why the strategy was effective, because this information may allow marketers to adjust the strategy tactically to be even more effective.

Components of a Marketing Plan

1. Executive Summary 2. Environmental Analysis 3. SWOT Analysis, Marketing Objectives 4. Marketing Strategies 5. Marketing Implementation 6. Performance Evaluation

Components of the Strategic Planning Process

1. begins with the establishment or revision of an organization's mission and goals. 2. The corporation and individual business units then develop strategies to achieve these goals. 3. The company performs a detailed analysis of its strengths and weaknesses and identifies opportunities and threats within the external marketing environment. 4. Next, each functional area of the organization (marketing, production, finance, human resources, and so forth) establishes its own objectives and develops strategies to achieve them, which must support the organization's overall goals and mission and should be focused on market orientation.

Establishing an implementation timetable involves several steps:

1. identifying the activities to be performed 2. determining the time required to complete each activity 3. separating the activities to be performed in sequence from those to be performed simultaneously 4. organizing the activities in the proper order 5. assigning responsibility for completing each activity to one or more employees, teams, or managers.

marketing strategy

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market. -articulates the best use of the company's resources to achieve its marketing objectives. -directs resource deployment so as to boost competitive advantage. *Marketing strategy is the key variable in strengthening organizational competitiveness **may need to be adapted as the environment changes. Some organizations fail to adapt their strategy in response to competition, consumer behavior, or other factors that may create the need for a new modified strategy.

decentralized organization

A structure in which decision-making authority is delegated as far down the chain of command as possible. -decentralized authority allows the company to adapt more rapidly to customer needs.

centralized organization

A structure in which top-level managers delegate little authority to lower levels. -marketing decisions are made at the top levels. *However, centralized decision making may prove ineffective in firms that must respond quickly to fluctuations in customer demand.

Sales analysis

Analysis of sales figures to evaluate a firm's performance -common method of evaluation because sales data are readily available, at least in aggregate form, and can reflect the target market's reactions to a marketing mix. -if sales spike after a particular marketing mix is implemented, marketers can be reasonably certain that the marketing mix was effective at reaching the target audience. *Information gleaned from sales data alone is not sufficient, however. To be useful, marketers must compare current sales data with forecasted sales, industry sales, specific competitors' sales, and the costs incurred from marketing efforts to achieve the sales volume.

Performance Evaluation:

Explanation of how the company will evaluate the performance of the implemented plan Highlights: 1. Performance standards 2. Financial controls 3. Monitoring procedures (audits)

Environmental Analysis:

Information about the company's current situation with respect to the marketing environment Highlights: 1. Assessment of marketing environment factors 2. Assessment of target market(s) 3. Assessment of current marketing objectives and performance

Strategic Business Unit (SBU)

a division, product line, or other profit center within the parent company. -PepsiCo, for example, has SBUs for Frito-Lay, Quaker, and North American Beverages as well as global divisions for its products -Each SBU sells a distinct set of products to an identifiable group of customers and each competes with a well-defined set of competitors. -The revenues, costs, investments, and strategic plans of each SBU can be separated from those of the parent company and evaluated. -SBUs face different market growth rates, opportunities, competition, and profit-making potential.

Marketing Plan

a written document that specifies the marketing activities to be performed to implement and evaluate the organization's marketing strategies. *Developing a clear and well-written marketing plan, though time-consuming, is important: -It provides a uniform marketing vision for the firm and is the basis for internal communications. -It delineates marketing responsibilities and tasks and outlines schedules for implementation. -The plan presents objectives and specifies how resources are to be allocated to achieve them. -Finally, the marketing plan helps marketing managers monitor and evaluate the performance of a marketing strategy.

Companies that truly adopt the marketing concept develop:

an organizational culture that is based on a shared set of beliefs that places the customer's needs at the center of decisions about strategy and operations.

SWOT analysis

can be helpful for gauging a firm's capabilities and resources relative to the industry. -assesses an organization's strengths, weaknesses, opportunities, and threats. -It can provide a firm with insights into such factors as timing market entry into a new geographic region or product category.

Corporate strategy planners

concerned with broad issues such as organizational culture, competition, differentiation, diversification, interrelationships among business units, and environmental and social issues. They attempt to match the resources of the organization with the opportunities and threats in the environment.

Marketing-mix decisions should have two additional characteristics:

consistency and flexibility. -All marketing-mix decisions should be consistent with the business-unit and corporate strategies. Such consistency allows the organization to achieve its objectives on all three levels of planning. -Flexibility, on the other hand, permits the organization to alter the marketing mix in response to changes in market conditions, competition, and customer needs. Marketing strategy flexibility has a positive influence on organizational performance.

Strategic performance evaluation

consists of establishing performance standards, measuring actual performance, comparing actual performance with established standards, and modifying the marketing strategy, if needed.

variable costs

directly attributable to production and sales volume. -stated as a per quantity (or unit) cost. -Variable costs include the cost to produce or sell each unit of a specific product, such as the materials and labor, or the amount of commissions that are paid to salespeople when they sell products.

Successful marketing implementation requires:

employees know the specific activities for which they are responsible and the timetable for completing them.

Growth Share Matrix Developed by the Boston Consulting Group

enables a strategic planner to classify a company's products into four basic types: stars, cash cows, dogs, and question marks.

performance standard

expected level of performance against which actual performance can be compared. -might be a 20 percent reduction in customer complaints, a monthly sales quota of $150,000, or a 10 percent increase per month in new-customer accounts. -derived from marketing objectives that are set while developing the marketing strategy. *Marketing objectives directly or indirectly set forth performance standards, usually in terms of sales, costs, or communication dimensions, such as brand awareness or product feature recall.

Cash cows

have a dominant share of the market, but low prospects for growth. -They typically generate more cash than is required to maintain market share. *Bounty paper towels represent a cash cow for Procter & Gamble because it is a product that consistently sells well.

Question marks, sometimes called "problem children"

have a small share of a growing market and generally require a large amount of cash to build market share. *The Google Home voice-activated speaker, for example, is a question mark relative to Amazon's Echo with Alexa.

Dogs

have a subordinate share of the market and low prospects for growth. -are often found in established markets. *The MP3 player would probably be considered a dog by a company like Apple, as most customers prefer to listen to music on their smartphones.

Weaknesses

limitations a company faces in developing or implementing a marketing strategy

How to use SWOT analysis

marketers must seek to convert weaknesses into strengths, threats into opportunities, and match internal strengths with external opportunities to develop competitive advantages.

Selecting the Target Market

may be the most important decision a company makes in the strategic planning process and is crucial for strategic success. -The target market must be chosen before the organization can adapt its marketing mix to meet the customers' needs and preferences. *If a company selects the wrong target market, all other marketing decisions are likely to be in vain.

Levels of Strategic Planning

mission statement corporate strategy business unit strategy marketing strategy marketing mix elements

Stars

products with a dominant share of the market and good prospects for growth. -However, they use more cash than they generate to finance growth, add capacity, and increase market share. *Amazon's Fire tablet computers might be considered stars because they are gaining market share quickly but remain well behind Apple, the leader.

Executive Summary:

provides an overview of the entire marketing plan so that readers can quickly identify the key issues and their roles in the planning and implementation process. -The executive summary includes: an introduction, an explanation of the major aspects of the plan, and a statement about the costs.

Threats

refer to barriers that could prevent the company from reaching its objectives. -Threats must be acted upon to prevent them from limiting the organization's capabilities.

Strengths

refer to competitive advantages, or core competencies, that give the company an advantage

Product development

strategy of increasing sales by improving present products or developing new products for current markets. *Electric guitar maker Fender, for example, introduced an online guitar lesson service to help ensure that new buyers of Fender guitars learn to play well enough to want to buy more Fender guitars. **Perhaps the most common example of product development occurs in the automotive industry, in which car manufacturers regularly introduce redesigned or completely new models to their current markets.

market penetration

strategy of increasing sales in current markets with current products. *Coca-Cola, for example, boosted sales due to a promotion that offered soft-drink bottles and cans labeled with hundreds of different personal names, song lyrics, and phrases such as "Friends," "Family," and "BFF."

Market development

strategy of increasing sales of current products in new markets. *Arm & Hammer, for example, successfully introduced its baking soda, the firm's basic product, into new markets for use as a carpet deodorizer, as a freshener for litter boxes, as a laundry detergent, as deodorant, and as a toothpaste **also occurs when a company introduces its products into international markets for the first time. When Baskin Robbins opened its first ice cream shop in South Africa, it paid special attention to local tastes for its flavors and planned to swap out flavors regularly

late-mover advantage

the ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace. -Competitors that enter the market later can benefit from the first mover's mistakes and have a chance to improve on the product design and marketing strategy. *One example is Google Home. Home was not the first smart speaker/home automation device, but Google's technology and experience with voice search along with richer features may give Home a late-mover advantage over first mover Amazon Echo.

Analysis of marketing environment

the marketing environment (which includes economic, competitive, political, legal and regulatory, sociocultural, and technological forces) can threaten an organization and influence its overall goals, affecting the amount and type of resources the company can acquire. *However, these forces can also create favorable opportunities that can help an organization achieve its goals and marketing objectives.

Marketing implementation

the process of putting marketing strategies into action. -Through planning, marketing managers provide purpose and direction for an organization's marketing efforts and are positioned to implement specific marketing strategies.

basic unit of measurement for sales

the sales transaction -A sales transaction results in an order for a specified quantity of the organization's product sold under specified terms by a particular salesperson or sales team on a certain date. -Organizations should record all information related to a transaction so that they can analyze sales in terms of dollar volume or market share.

The major indicators of a firm's overall health

the size and vulnerability of the cash cows, the prospects for the stars, and the number of question marks and dogs. -Particular attention should be paid to products that require large cash flows, as most firms cannot afford to sponsor many such products. If resources are spread too thin, the company will be unable to finance promising new product entries or acquisitions.

core competencies

things a company does extremely well—sometimes so well that they give the company an advantage over its competition.