Prin of Marketing Exam 4 (Ch 13-16)

Retailing

all the activities in selling products or services directly to final consumers for their personal, non-business use

Retailers

businesses whose sales come primarily from retailing

who is the largest retailer in the US

walmart

Shopper Marketing

focusing the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online, or mobile shopping

Types of retailers

classifies by:

amount of service

product line

relative prices

organizational approach

amount of service classifications

self

limited

full

self-service

cost (walmart)

-serve customers who are willing to perform their own locate-compare-select process to save money. They include Wal-Mart and supermarkets.

Limited service

convenience (lowes)

-provide more sales assistance because they carry more shopping goods about which customers need more information. Examples include Macy's and JC Penney.

full service

destination (saks)

-assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices. Examples include department stores and specialty stores.

Product line

specialty store (sunglass hut)

dept store (nordstorm)

supermarket (Kroger)

convenience (7 eleven)

superstore (meijer)

discount (walmart)

off price retailer (tj maxx)

Relative price

discount stores (walmart)

off-price retailers (tj maxx)

discount stores

low margins, high volume

off-price retailers

buy at less than wholesale and sell at less than retail

Organizational approach

corporate chains, voluntary chains, retailer cooperatives, franchise organizations

corporate chains

are two or more outlets that are commonly owned and controlled

(macys, CVS)

Franchises

contractual associations between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system

Direct-mail marketing

involves an offer, announcement, reminder, or other item to a person at a particular address

(ulta)

Personalized

Easy-to-measure results

Costs more than mass media

Provides better results than mass media

Appeal of catalogs

nostalgia and engagement

brand building

multi-channel

reaching specific demographics

Telemarketing

involves using the telephone to sell directly to consumers and business customers

Direct-response television

-60 to 120 second advertisements that describe products or give customers a toll-free number or website for ordering

-30-minute infomercials such as home shopping channels

Omni-Channel Retailing

creates a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping—creates a single shopping experience.

(CarMax)

Retailer Marketing Mix Decisions

Segmentation, targeting, differentiation, and positioning involve the definition and profile of the market so the other retail marketing decisions can be made.

Until retailers define

their markets, they cannot make good decisions about details related to marketing mix.

Retailer Marketing mix decisions

product assortment

services mix

store atmosphere

product assortment

differentiate while matching shoppers' expectations

services mix

what services differentiate it from competitors

store atmosphere

create a unique store experience, such as with experiential retailing

Prerequisite

define and profile their markets

Price policy

must fit the target market and positioning, product and service assortment, and competition

-high markup on lower volume (louis vuitton)

-low markup on high volume (marshalls)

Everyday low pricing (EDLP)

involves charging constant, everyday low prices and offering few sales or discounts. (walmart)

High-low pricing

involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions

Promotion decision

advertising

personal selling

sales promotion

public relations

direct marketing

Central business districts

located in cities and include department and specialty stores, banks, and movie theaters

shopping center

is a group of retail businesses planned, developed, owned, and managed as a unit

The rise of megaretailers

involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions (home depot)

Superior information systems

Buying power

Large selection

Showrooming

the practice of checking out merchandise in stores, then buying it online.

Webrooming

the practice of first checking out merchandise online, then buying it in traditional stores.

Wholesalers

are firms primarily involved in wholesaling activities

-typically buy from producers and sell to retailers and industrial consumers)

Promotion Mix (marketing communications mix)

the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships

-ads

-sales promotion

-personal selling

-public relations

Advertising

any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor

-broadcast

-print

-online

-mobile

-outdoor

Sales promotion

is a short-term incentive to encourage the purchase or sale of a product or service.

Discounts

Coupons

Displays

Demonstrations

Personal selling

is the personal interaction by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships.

-sales presentations

-trade shows

-incentive programs

Public relations

involves building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

-press releases

-sponsorships

-events

-web page

New marketing communications model

Consumers are changing.

Marketing strategies are changing.

Advances in digital technology

Content marketing

creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels

new marketing goal

engaging customers

Integrated marketing communications (IMC)

carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

Sender

is the party sending the message to another party

steps in developing effective marketing communication

1. Identify the target audience

2. determine the communication objectives

3. design the message

4. choose the media to send the message

5. select message source and collect feedback

1. Identify the target audience, deciding

what, when, how, where, who

will be said

2. determine the communication objectives

by identifying the desired response based upon where the target audience is in the five customer journey stages

-awareness (i know about the product)

-appeal (like the product)

-ask (want to know more)

-act (buying and relating to product)

-advocacy (telling others about product)

3. Design the message

Message content - "what to say."

Message structure - "how to say it."

1. Draw a conclusion or leave it to the audience?

2. Present the strongest argument first or last?

3. One-sided or two-sided argument?

Message format - "how to say it"

Headline, copy, photos, illustrations, colors, medium

Rational appeal

relates to the audience's self-interest

-shows the benefits

-emphasizes quality, economy, value

emotional appeal

attempts to stir up positive or negative emotions to motivate a purchase

-range from humor, love, joy to fear and guilt

-based on assumptions that consumers feel before they think

moral appeal

is directed to an audience's sense of what is right and proper

4. Choose Communication Channels and Media

Personal communication involves two or more people communicating directly with each other.

•Face to face

•Phone

•Mail or e-mail

•Social media

•Texting or Internet chat

Personal communication channels

Personal communication channels

are effective because they allow for personal addressing and feedback.

Opinion leaders

people whose opinions are sought by others

buzz marketing

cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities

Nonpersonal communication

channels are media that carry messages without personal contact or feedback, including:

-major media

-atmospheres

-events

major media

print, broadcast, display, online, paid and unpaid

atmospheres

environments that create or reinforce a customer's leaning toward buying the product

events

staged occasions that attract and connect target audiences with the product

5. Select the Message Source

The message's impact depends on how the target audience views the communicator.

•Celebrities

▪Athletes

▪Entertainers

•Professionals

▪Health care providers

5. Collect Feedback

involves the communicator understanding the effect on the target audience by measuring behavior resulting from the content.

-marketing research

-response analytics

Setting the Promotional budget (4 methods)

1. affordable method

2. perscentage-of-sales method

3.competitive-parity

4. objective-and-task

affordable method

sets the promotion budget at the level management thinks the company can afford

percentage-of-sales method

sets the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price

Competitive-parity method

sets the promotion budget to match competitors' outlays

Objective-and-task method

develops the promotion budget by specific promotion objectives and the costs of tasks needed to achieve these objectives.

Push vs pull strategy

Push involves pushing the product through channels (John Deere)

Pull focuses marketing activities on inducing the final consumers to buy the product (tide)

Advertising Decisions

objective setting, budget decisions, message decisions + media decisions, advertising evaluation

Setting ad objectives

specific communication task to be accomplished with a specific target audience during a specific time

-informative

-persuasive

-reminder

Informative ad

used when introducing a new product category to build primary demand

Persuasive ad

important with increased competition to build selective demand

Comparative ad

when a company compares its brand with other brands.

reminder ad

when a company compares its brand with other brands.

Setting the ad budget

-stage in product life cycle (intro, growth, maturity, decline)

-market share (leader, challenger, follower, nicher)

-competition (4 methods)

developing ad strategy

the strategy by which the company accomplishes its advertising objectives and consists of:

1. Creating advertising messages

2. Selecting advertising media

Message and content strategy

The first step in creating effective advertising content is to plan a message strategy—the general message that will be communicated to consumers.

•Prompts consumer engagement with the product or company

•Identifies consumer benefits

•Follows from company's broader positioning and customer value creation strategies

creative concept

the compelling "big idea" that will bring an advertising message strategy to life in a distinctive and memorable way.

Message execution

when the advertiser turns the big idea into an actual ad execution that will capture the target market's attention and interest.

Message Execution Styles

-slice of life

-lifestyle

-fantasy

-mood/image

-musical

-personality symbol

-technical expertise

-scientific evidence

-endorsement

Product placement

is a form of advertising in which branded goods and services are featured in a video production that targets a large audience.

The major steps in advertising media selection are:

1. Determining reach, frequency, impact, and engagement

2. Choosing among major media types

3. Selecting specific media vehicles

4. Choosing media timing

Reach

is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time.

Frequency

is a measure of how many times the average person in the target market is exposed to the message.

Impact

is the qualitative value of a message exposure through a given medium, e.g. more believable.

Engagement

is a measure of things such as ratings, readership, listenership, and click-through rates.

Communication effects

indicate whether the ad and media are communicating the ad message well

-can be tested before or after the ad runs

Sales and profit effects

compare past sales and profits with past expenditures or through experiments.

Lobbying

involves building and maintaining relations with legislators and government officials to influence legislation and regulation.

Investor relations

involves maintaining relationships with shareholders and others in the financial community.

Development

involves public relations with donors or members of nonprofit organizations to gain financial or volunteer support.

Salespeople

are an effective link between the company and its customers to produce customer value and company profit by

•Representing the company to customers

•Representing customers to the company

•Working closely with marketing

Sales activities

•Prospecting

•Communicating

•Servicing

•Gathering information

Making sales

Social selling

•is the use of online, mobile, and social media to engage customers, build stronger customer relationships, and augment sales performance.

Seven personality traits of top salespeople

1. modesty

2. conscientiousness

3. achievement orientation

4. curiosity

5. lack of gregariousness

6.lack of discouragement

7. lack of self-consciousness

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

1. Prospecting

identifying qualified potential customers through inquiries or referrals from:

-customers

-suppliers

-dealers

-internet

-purchasing names