MARK 3000 Exam 3 - Grantham

AIDA Model

Awareness (think)

Interest (think)

Desire (feel)

Action (do)

Awareness

Senders first must gain the attention (a multichannel approach increases the likelihood the message will be received)

Interest

Think information, peak curiosity (customer must want to further investigate the product/service)

Desire

“I like it, I want it”

Action

We actually want to make a purchase

The Lagged Effect

Repeat exposures are necessary (1 ad isn’t enough)

Ex: Bucee’s Billboards being constant across highways

Advertising

Paid for by sponsor (most visible element of IMC)

Public Relations

“How can I generate positive publicity?” (more weight than advertising)

Sales Promotions

Special incentives that encourage the purchase of a product/service

Ex: coupons, free samples, contests, etc

Personal Spending

Two-way flow of communication b/w buyer and seller to influence a buyer’s purchase decision

Direct Marketing

Marketing that communicates directly with the target market

Online/Mobile Marketing

Promotions that use the internet or mobile devices to reach consumers

Ex: Websites, blogs, social media

Methods to set and allocate IMC budget

Objective and task method (Bottom-up Method)

Rule-of-thumb methods

Objective and task method (Bottom-up method)

1. Establish objectives

2. Determine specific tasks

3. Estimate costs associated with tasks

Rule-of-thumb methods

1. Competitive parity

2. Percentage-of-sales

3. Available budget

Competitive parity

The communication budget is set so that the firm’s share of communication expenses its share of the market

Percentage-of-sales

The communication budget is a fixed percentage forecasted sales (easiest way to calculate)

Reverse - the only way for an increase of allocation for comm. is after revenue increases

Available budget

Marketers forecast their sales and expenses, excluding communication during the budgeting period

Search engine marketing

1. Clicks

2. Impressions (just to get in front of market)

3. Click through rate (clicks/impressions)

4. Return on investment

Steps in planning and executing an ad campaign

1. Identify target audience

2. Set advertising objectives

3. Determine the advertising budget

4. Convey the message

5. Evaluate and select media

6. Create advertisements

7. Assess impact

Identify target audience

Who are we communicating? (Conduct research, use the information to set the tone, select the media)

Set advertising objectives

Pull strategy and push strategy

Pull strategy

Directed to the consumer

• Manufacturer promotes to consumer

• Consumer demands product from retailer

• Retailer demands product from wholesaler

• Wholesaler demands product from manufacturer

Push strategy

• Manufacturer promotes to wholesaler

• Wholesaler promotes to retailer

• Retailer promotes to consumers

• Consumers buy from retailers

Determining the advertising budget

Considerations:

• Role that advertising plays in their attempt to meet their overall promotional objectives

• Expenditures vary over the course of the Product Life Cycle

• Nature of the market and the product influence the size of the budget

Convey the message

Unique selling proposition

Ex: Redbull (Redbull gives you wings), Statefarm (Like a good neighbor Statefarm is there), Nike (Just Do It)

Evaluate and select media

Media planning, Media mix, Media buy

Create Advertisements

• Type of medium determines the execution style

• Creativity plays a major role in the execution stage

• Execution style must match the medium and objectives

Assess impact using marketing metrics

Pretesting, tracking, post testing

Informative advertising

Creating and building brand awareness

Persuasive Advertising

Reposition an established brand (generally occurs in the growth and early maturity stages)

Reminder Advertising

To remind or prompt repurchases (household name brands)

Institutional Advertising

Public service advertising (PSA)

Federal Trade Commission (FTC est. 1914)

Enforces federal consumer protection laws.

Federal Communications Commission (FCC est. 1934)

Regulates interstate and international communications by radio, television, wire, satellite, and cable.

Food and Drug Administration (1930)

Regulates food safety, pharmaceuticals, and medical devices, ensuring public health.

Puffery

Exaggerated claims or promotional statements that are subjective and not meant to be taken literally.

Loss Leader

Draws consumers into the store, but carefully place the product (Ex: milk in the back of grocery stores)

The Personal Selling Process

1. Generate and qualify leads

2. Preapproach

3. Sales presentation and overcoming reservations

4. Closing the sale

5. Follow-up

Generate and qualify leads

Engage in active listening

Sources of Leads:

• current customers

• trade shows

• networking events

• the internet

Pre-approach

Deep dive on previous supplier and sets goals for what is to be accomplished

Sales presentation and overcoming reservations (objections)

In this step, the salesperson presents the product or service to the potential customer, addressing any concerns or objections to facilitate a purchase decision.

Closing the sale

Getting the order (often the most stressful part of sales process)

Follow-Up

5 service quality dimensions

1. Reliability (did the provider fix the problem right the first time)

2. Responsiveness (how fast)

3. Assurance (do they look like they know what they are doing)

4. Empathy (do they express concern)

5. Tangibles (indicators/cues)

Services Marketing

A branch of marketing that focuses on selling services rather than physical products, emphasizing relationships, customer experience, and service quality (Ex: Ritz Carlton)

Expanded 4P’s of Marketing

Processes, physical evidence, people

People

Employees and customers all influence quality of experience

Physical Evidence

The tangible part of the service (music, decor, degrees on the wall)

Processess

Activities which lead up to and are a part of the service (Ex: Post office using self kiosks)

Adjusting the basic marketing mix

Product: emphasize the service process

Place: Make sure customers’ expectations are met (convenience is important)

Price: Use price to adjust demand to supply

Promotion: Making services seem tangible

Service Recovery

Listen to customer, resolve problems quickly, provide a fair solution, apologize

Gross National Income (GNI)

GNI = GDP + foreign investment net income

Purchasing power parity

If exchange rates in equilibrium, product prices = if in same currency

PPP = P1/P2

Government Actions

Quota, tariff, exchange control, trade agreement

Global Entry Strategies

• Export

• Franchising

• Strategic Alliance (2 entities bringing their own specialties)

• Joint Venture (pulling of resources)

• Direct Investment (cross border investment)

Pricing Strategies

Tarrifs, quotas, anti-dumping policies, economic conditions, competitive factors

Marketing Strategy

Identifies:

1. a firm’s target market

2. a related marketing mix

3. designed to provide a sustainable competitive advantage

Sustainable Competitive Advantage

• Customer excellence (CFA, Ritz Carlton)

• Operational excellence (Uber, Warby Parker- try 5 free pairs of glasses)

• Product excellence (Disney, Apple, Google)

• Locational excellence (Jittery Joe’s)

Steps for Marketing Planning

1. Business mission & objectives

2. Situation analysis (SWOT)

3. Identify opportunities (segmentation, targeting, positioning)

4. Implement marketing miss

5. Use marketing metrics to make to make decisions (this step is a part of step 3 & 4)

Star

Main player in a high growth industry- you want to invest and grow

(High market growth rate, high relative market share)

Cash Cow

Mature, products that have received heavy investments- you want to maintain and milk test products

(low growth rate, high market share)

Question Mark

Small player with high growth- you want to do the research to know how to boost this product(watch and hold)

(high growth rate, low market share)

Dog

A product that will phase out, it’s just a matter of how you pull the plug- drop consolidate

(low growth rate, low market share)

Growth Strategies

• Market Penetration

• Product Development

• Market Development

• Diversification

Market Penetration

The more you spend, the more you save (current markets, current products and services)

Product Development

Focuses on line extensions (current market, new products and services)

Market Development

Connecting to a different target market ( new markets, current products and services)

Diversification

Focuses on new customers and new products and services

Ways to consolidate

• Harvesting

• Divestment

• Pruning

• Retrenchment

Harvesting

Cut back on resources devoted to product/marketing (advertising, etc.) You still want a presence

Divestment

Eliminate entire product line or division

Pruning

Eliminate specific product based on product line analysis

Retrenchment

Cut back geographically (similar to pruning)