Marketing Exam #2

Logistics

movement of the product

Direct channel

producer —> consumer

Retail channel

producer —> retailer —> consumer

Slotting fees

expenses paid to retail stores for them to open shelf space for you

Wholesale channel

producer —> wholesaler —> retailer —> consumer (wholesaler represents your product to walmart/target)

Agent channel

producer —> agent —> wholesaler —> retailer —> consumer ( gents represent the producer and help find buyers, i.e. Amazon)

Intensive Distribution

products sold in high quantities, so we make them as available as possible (i.e. soft drink vending machines all over)

Spatial convenience

limit the amount of travel for a consumer to get a product they want

Exclusive Distribution

products are so expensive, the market can’t support more than 1 retail store (i.e. only 1 Toyota dealership in Harrisonburg)

Selective Distribution

choose your retailers to match the perception of the brands (i.e. Rolex sold at high-end places NOT Walmart)

Independent retailer

small specialty retailers that have a lot of various options

Corporate Chain

corporate determines what products are sold at each location (i.e. Home Depot)

Franchises

individually owned stores pick a certain percentage of their store’s stock (i.e. ACE Hardware)

Self Service

you do all of the work yourself (i.e. vending machine)

Limited Service

reactive service (associate will help you if you find someone and ask them for help, i.e. Walmart)

Full Service

proactive service (associate comes up to you and helps through your entire experience, i.e. Bloomingdale’s)

Merchandise Breadth

number of different product lines

Merchandise Depth

number of items within each product line

Premium Retailers

combination of customer orientation and brand orientation (i.e. Nordstrom)

Emergent retailers

combination of cost orientation and sales orientation (i.e. 5 Below and Dollar Tree)

Hybrid retailers

combination of customer orientation, brand orientation, sales orientation, and cost orientation (i.e. Walmart, Target, Home Depot)

Promotional Mix

advertising, sales promotion, professional salespeople, sponsorships/public relations, and direct marketing

Advertising

TV, Radio, Magazine, Internet, Billboard (i.e. christmas blend starbucks coffee)

Sales promotion

Coupons, BOGO, Sweepstakes (i.e. BOGO drinks during a certain time period)

Professional salespeople

Salary, commission, bonus (i.e. barista)

Public relations

Publicity, sponsorship, social responsibility (i.e. sponsoring a movie)

Direct marketing

Coupons, surveys, brochures, catalogs, e-mails (i.e. postcards with coupons)

Integrated Marketing Communications (IMC)

integrate all promotional mix tools to create a unified message across all pages (not always seasonal)

6 key elements of the communication process

Noise

may distort the messages that they are receiving

Promotion Decision Process

Planning, Implementation, Evaluation

Planning

developing the promotion program

Implementation

executing the promotion program

Evaluation

assessing the promotion program

Pull strategy

the consumer already knows what brand they want to purchase when they go to the store (consumer is targeted)

Push strategy

target wholesalers and retailers to push the product to the consumers

Percentage of Sales Budgeting

using past numbers to create percentages for budgeting

Competitive Parity Budgeting

comparing to your competitors’ budgets

All-You-Can-Afford Budgeting

revenue for the year - COGS - Fixed costs = what you can spend

Objective and Task Budgeting

how much you have to spend to be able to reach a certain percentage of people from your target customers (what we used for the BP)

Design the promotion to the appeals of customers

Humor, sex, emotion, scarcity, demographic (gender, age) lifestyle, bandwagon (i.e. Barbie campaign with girls having adult professions)

Planning the Scheduling of the promotion

seasonality, target market media habits, target market usage

Implementation

1. Pretest the promotion

2. Find an agency or get the marketing people hired to carry out the promotion

Evaluation

assessing the promotion program

Advertising Evaluation

Ad recall (have people watch a bunch of ads; unaided recall: they can remember my ad with no help; aided recall: they remember it with clues; unsuccessful campaign: they can’t remember the campaign even after aided)

Sales Promos Evaluation

usage rate of coupons

Personal selling evaluation

order amount, quota (“I expect you to sell # per year” —> reward if succeeded)

PR evaluation

press clippings (do something good and let everyone know what you did)

Direct marketing evaluation

response rates (traffic gain from emails, postcards, and flyers)

Reminder Ad

reminding customers of their selling point (i.e. timberland shoes having high durability)

Comparative Ads

comparing our company/product directly against a competitor (i.e. Mcdonald’s coffee compared to Starbucks)

Developing Advertising Program

1. Identifying the Target Audience

2. Specifying the Advertising Objectives

3. Setting the Advertising Budget

4. Creating the Actual Message

5. Selecting the Advertising Media

6. Scheduling the Advertising

7. Pre-testing

8. Executing

9. Post-tesing

Setting the Advertising Budget: best way to reach 1000 customers

Cost per Thousand Impressions (CPM) = Advertising Cost ($) / [Impressions Generated (#) / 1000]

Selecting the Advertising Media

Television, Radio, Magazines, Newspapers, Yellow Pages, Internet, Outdoor, Direct mail

Scheduling the advertising

How often and when?

Continuous

non stop advertising

Flighting

some sort of seasonality; pick and choose certain months (i.e. sunscreen in summer)

Pulsing

base amount spent, while also increasing spending in certain seasons

Full-service agency

pre-testing, executing, and post-testing

Limited-service (specialty) agency

search engine optimization

In-house agency

range of services depending on company needs

Guerilla (surprising people) Marketing

low-budget advertising method (i.e. coke machine giving away free drinks, pizza, and flowers)

Street Art

billboard that lines up to ground

Augmented Reality

Ikea QR codes where you can place furniture in your room before buying it

Hashtag Campaigns

rewarding people who use that hashtag in their posts

Sales promotion goal

customers trial and repurchase our products

Coupons

increase traffic so search engine optimization improves

Deals

incentives to make customers purchase multiple of a product (BOGO free)

Premiums

increasing the quantity without increasing the price (i.e. 25% extra free)

Contests

incentivizing repeat purchase (i.e. monopoly sets of properties give a way higher fine price)

Sweepstakes

incentive to receive/gather contact info of customers (i.e. if you put email you will be registered to win a free vacation —> email list will be used for email campaign later on)

Samples

giving free samples to customers so they can try before purchasing (i.e. Costco samples)

Loyalty

incentivize repeat purchases (subway sandwich punches —> free sub after buying 9)

Point-of-purchase displays

displays in stores that are meant to get the attention of customers to incentivize unplanned purchases (i.e. Coke 0 balancing upside down)

Rebates

manufacturer gives discounts on products you are purchasing (higher ticket items like automobiles and electronics)

Product Placement

having various brands placed in movies/tv shows as regular products (i.e. someone drinking a coke)

News Release

cover demo as a story and then see it everywhere on social media

News Conference

a planned event where an organization or person invites members of the media to hear an announcement and ask questions

Reactive Publicity

getting a bad review, challenging negative comments, getting backlash on an ad, and having to post something addressing it

Sponsorships

having an event to make the brand look good

Social responsibility

each product you donates x amount to a cause (i.e. shoes for kids)

Digital Marketing

directly communicate with individual consumers through email or digital mail

Growth

how to get them to open mail (handwritten name and address have a better response rate)

Value (goal)

Direct orders (came to the website with an order), lead generation (those who go to the website give their contact information or answer a question about the product), traffic generation (encourage customers to go to your website and they do)

Influencer marketing

influencers are often categorized by their audience size (in order: Insta, Facebook, TikTok, YouTube, Twitter, Snapchat)

Prospecting

prospects vs. leads (goal is not to sign contracts, but to collect as many business cards as possible)

Approach

make a first impression by contacting them and asking for an appointment

Presentation: scripted vs. consultative

scripted: prepared beforehand

consultative: starts by asking questions—> identify any challenges —> find solutions to those challenges

Handling objections

acknowledge and convert, ag