marketing exam 4

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1
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reasons for the increase in sales promotion

  • growing power of retailers

  • declining brand loyalty

  • increased promotional sensitivity

  • brand proliferation

  • short-term focus

  • increased accountability

  • competition

  • growth of digital marketing

2
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brand proliferation

occurs when a large company acquires or absorbs multiple smaller brands in similar market areas

3
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trade oriented sales promotions

promotions directed to intermediaries in the marketing channel such as wholesalers, retailers, or distributors

4
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trade oriented sales promotions objectives

  • obtain distribution for new products

  • maintain trade support for established brands

  • encourage retailers to display established brands

  • build retail inventories

5
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types of trade oriented sales promotions

  • contest and incentives

  • trade allowances

  • display and point of purchase materials

  • sales training programs

  • trade shows

6
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consumer oriented sales promotions

provides the customer with an immediate inducement to purchase a product

7
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types of consumer oriented sales promotions

  • sampling

  • premiums

  • contest and sweepstakes

  • refunds and rebates

  • bonus packs

  • price off deals

  • loyalty programs

  • event marketing

8
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free standing inserts (FSIs)

advertising booklet that contains consumer packaged-goods coupons offers

9
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how is free standing inserts devilered

delivered with newspapers (usually in sunday editions) and also via direct mail

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purpose of free standing inserts

efficient and affordable

11
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sampling

giving some quantity of a product for no charge to indue trail

  • ex: door to door

12
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couponing

oldest and most widely used sales promotion tool

  • ex: freestanding inserts

13
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premiums

offer of an item of merchandise or service either free or at a low price

  • ex: free and self liquidating premiums

14
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contest

consumers compete for prizes or money on basis of skills or ability

15
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sweepstakes

promotion where winners are determined purely by chances

  • ex: games

16
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refunds and rebates

offers by manufacturer to return a portion of purchase price

17
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bonus packs

offer consumer extra amount of product at regular price by providing larger containers or extra units

18
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price off deals

reduces price of the brand, offered on the package through specially marked price packs

19
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loyalty programs

opportunity to accumulate points for continuing to purchase specific brands

  • ex: discounts, gifts, prizes, free items

20
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event marketing

promotion that links company or brands to an event, promotions where a themed activity is developed to create experiences for consumers and promote product or service

  • ex: event sponsorship

21
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contest and incentives

stimulate greater selling effort and support from reseller management or sales

  • ex: push money (pm)`

22
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trade allowances

deal offered to encourage resellers to stock, promote, or display manufactures products

  • ex: buying, promotional, and slotting allowances

23
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displays and point or purchase materials

many consumers make purchase decisions in the store

  • ex: planograms

24
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sales training programs

for sales people to provide consumers with information about features, benefits, and advantages

  • ex: training classes, detailed manuals, product brochures, reference manuals and DVDs

25
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trade shows

forum where manufactures can display products to current and prospective buyers

  • ex: new products, generate leads, develop and maintain relationships

26
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failure fees

fee changed to cover cost associated with stocking maintaining inventories and then pulling product

27
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sales promotion trap

If you consistently run promotions, your consumers may come to expect them and only buy products or services when they're on promotion

28
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problems with contest and incentives

can cause conflict between retail sales personnel and management

29
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purpose of loyalty programs

encourage consumers to use products or services on continual basis

30
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how do hobbyists/professionals impact coupons, contest and sweepstakese?

  • presence of professional entrants defeats purpose of promotion

  • coupon usage remained high after recent recession - extreme couponing

31
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product types that work best for sampling

  • products are of relatively low unit value, so don’t cost much

  • products are divisible and can be broken into small sizes that reflect the products features and benefits

  • purchase cycle is relatively short so consumer can soon purchase again

32
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sampling pros

  • provides consumers risk-fee way to try new products

  • generates much higher trail rates than other sales promotion techniques

  • consumers experience the brand directly

33
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sampling cons

  • brand must have unique or superior benefits

  • cost can be recovered only if consumers become regular users

  • may require larger amounts of product to produce favorable results

34
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couponing pros

  • appeals to price sensitive customers

  • does not require retailers cooperation

  • reduces consumer’s perceived risk associated with trail of new brand

  • encourages repeat purchase

  • helps coax users to trade up to more expensive brands

35
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couponing cons

  • estimating how many consumers will use coupon and when is difficult

  • less effective than sampling for inducing initial product trail in a short period

  • consumers already using the brand can still use coupons

  • low redemption rates and high costs

  • could result in misredemption

36
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refunds pros

  • consumers are very responsive

  • create new users

  • encourage brand switching or repeat purchase behavior

  • perceived price reduction for consumers who plan to redeem but don’t

  • well promoted, high value rebate can increase sales significantly

37
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refunds cons

  • delay and effort to obtain savings is a deterrent

  • rebates perceived as attempts to sell products that are not faring well

  • for small refunds, other promotional incentives are more effective

  • dependence on rebates leads to:

    • delayed purchases

    • purchase only if rebates are available

38
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bonus packs pros

  • direct way to provide extra value

  • strong impact on purchase decision att time of purchase

  • effective defense against competitor’s promotion or new brand

  • may result in larger purchase orders and favorable display space in stores

39
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bonus packs cons

  • require additional shelf space without providing extra profit margins for retailers

  • appeal primarily only to current users and promotion sensitive consumers

40
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price off deals pros

  • ensure discounts reach consumers

  • present a readily apparent value to shoppers

  • encourage consumers to purchase larger quantities

41
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price off deals cons

  • can create pricing and inventory problems

  • appeal primarily to regular users, not new users

  • much adhere to regulations set by federal trade commission

42
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loyalty programs pros

  • encourage consumers to use products or services on continual basis

  • develop strong customer loyalty

  • help develop customer databases

43
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loyalty programs cons

  • consumers drop out as it takes too long to accumulate reward points

  • many require smartphone apps

44
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public relations

The management function that evaluates public attitudes, identifies the policies and procedures of an organization with the public interest, and executes a program of action to earn public understanding and acceptance.

45
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traditional role of PR

  • maintain mutually beneficial relationships between the organization and its publics

  • act as a marketing communications function

46
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new role of PR

  • work together with marketing department

  • contribute to IMC process that is consistent with marketing goals

47
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publicity

generation of news about a person, product, or service that appears in broadcast or print media

48
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corporate advertising

advertising that describes a company, rather than its products, and that is intended to show the company in a positive way to the public

49
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marketing public relations advantages

  • it is a cost effective way to reach the market

  • it is a highly targeted way to conduct public relations

  • it benefits from the endorsement of independent and objective third parties who have no association with the product

  • it achieves credibility

  • it supports advertising programs by making messages more credible

  • it breaks through the clutter

  • it circumvents consumer resistance to sales efforts

  • there can be improved media involvement among consumers

  • it can create influence among opinion leaders and trendsetters

  • it can improve ROI

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marketing public relations cons

  • there is a lack of control over the media

  • it is difficult to tie in slogans and other advertising devices

  • media time and space are not guaranteed

  • there are no standard effectiveness measures

51
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internal audiences

people who are connected to a firm with whom the firm communicates on a routine basis

52
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examples of internal audiences

  • employees of the firm

  • stockholders and investor

  • community members

  • suppliers and customers

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external audiences

people who are not closely connected with the organization

54
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examples of external audiences

  • media

  • educators

  • civic and business organizations

  • governments

  • financial groups

55
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tools of PR: press release

statement provided to the media

  • must be factual, true, and of interest to the medium and its audience

56
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tools of PR: press conferences

delivering information by interacting directly with media

57
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tools of PR: exclusives

offering one medium exclusive rights to the story

58
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tools of PR: interviews

interactions involving a spokesperson answering questions directed toward him or her

59
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tools of PR: community involvement

supporting and contributing to a community

60
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tools of PR: internet

disseminate information electronically

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tools of PR: social networks and blogs

online social platforms

  • digital public relations: intersection between traditional public relations actives and new digital marketing functions

62
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how does publicity differ from public relations

  • being a short term strategy

  • not always being positive

  • not always being controlled or paid by the organization

63
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video news release (VNR)

  • publicity piece produced by publicists so stations air it as a new story

  • marketers have control over time and place where information is released

64
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advantages of publicity

  • substantial credibility

  • news value

  • significant word of mouth

  • perception of media endorsement

65
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disadvantages of publicity

  • lack of control

  • timing

  • accuracy

66
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advocacy advertising

  • spreading ideas and explaining controversial social issue of public importance

  • indirectly support sponsor’s interests

  • issue ads: sponsored by organization to bring attention to what they consider to be an important issue

67
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advantages of corporate advertising

  • excellent vehicle for positioning the firm

  • takes advantage of benefits derived from public relations

  • reaches a selected target market

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disadvantages of corporate advertising

  • questionable effectiveness

  • raises questions of constitutionality and ethics

69
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cause related advertising

  • linking with nonprofit organizations as contributing sponsors

  • takes time and effort to be successful

70
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image advertising

  • promotes organizations overall image

  • methods:

    • general image or positioning ads

    • sponsorships

    • recruiting

    • generating financial support

71
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event sponsorships

  • sponsoring specific events or causes as part of a marketing strategy

  • builds equity and gains affinity with target audiences

72
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characteristics of economic environment

  • stage of economic development

  • economic infrastructure

  • standard of living

  • per capita income

  • distribution of wealth

  • currency stability

  • exchange rates

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characteristics of cultural environment

  • language

  • lifestyles

  • values

  • norms and customs

  • ethics and moral standards

  • taboos

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demographic environment consists of what?

  • size of population

  • number of households

  • household size

  • age distribution

  • occupation distribution

  • education levels

  • employment rate

  • income levels

75
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why companies go global

  • limited opportunities for expansion in domestic market

  • economies of scale

  • growth and profit opportunities

  • economic necessity

  • balance of trade deficit

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ethnocentrism

culture stresses buying and using products from its home country; discourages supporting other countries products

77
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standardized/global strategy

allows for a cohesive brand image across different markets

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localized strategy

a unique market approach a company takes to address purchasing habits, customer behaviors and overall cultural differences in each country it works in

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organizing for international advertising

  • centralization at home office headquarters

  • decentralization of decision making to local foreign markets

  • combination of the two

    • allows for consistency in company’s international advertising

    • permits local input and adaptation of the promotion program

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centralization at home office headquarters

protest foreign investments and control marketing effort and brand image

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decentralization of decision making to local foreign markets

local managers know the marketing situation in their countries

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international media selection

  • has multi market coverage

  • primary focus has been magazines and newspapers

83
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international sales promotions

  • economic development

  • market maturity

  • consumer perceptions

  • trade structure

  • legal restrictions and regulations

84
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pattern advertising

ads follow basic approach, but themes, copy and visual elements adapted to differences in local markets

85
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when is globalization appropriate?

  • brands or messages adapted for visual appeal

    • emotions such as joy, sentiment, excitement, pleasure

  • brands promoted with image campaigns that play to universal needs, values and emotions

    • jewelry, cosmetics, liquor, cigarettes

  • high tech and new products not steeped in cultural heritage

    • smart phones, personal computers, HDTV sets, video games, fitness trackers

  • products with nationalistic flavor if country has a reputation

    • country of origin effect

    • in global world, product origin may not be as relevant

  • products with universally similar tastes, interests, needs and values

    • wealthy (luxury products) teenagers

86
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purpose of self regulation

way to limit government interference

87
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better business bureau (BBB)

promotes fair advertising and selling practices across industries at local level

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federal trade commission (FTC)

regulates advertising at federal level and determines whether it is truthful or deceptive

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federal communications commission (FCC)

  • regulates broadcast communication

  • enforces laws governing the airing of offensive, indecent, and profane material

  • involved in issues affecting publicity and public relations

  • considering regulating use of product placements in television shows

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the food and drug administration (FDA)

  • has authority over the labeling, packaging, branding, ingredient listing, and advertising of:

    • packaged foods

    • drug products

    • cosmetics

  • requires caution and warning labels on potentially hazardous products

  • can seize products on charges of false and misleading advertising

  • polices health-related claims and labeling on food products

  • regulates advertising and promotion of tobacco products

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the U.S. postal service (USPS)

controls deceptive advertising by direct response advertisers

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bureau of alcohol, tobacco, firearms and explosives (ATF)

  • regulates and collects tax for the liquor industry

  • regulates and controls advertising of alcoholic beverages through federal alcohol administrate

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frist amendment

  • protects commercials speech

  • freedom of expression must be balanced against commercial speech

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commercial speech

speech that promotes commercial transaction

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central hudson test

determines restrictions on commercial speech

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wheeler-lea amendment

empowered FTC to act if there was evidence of injury to the public

  • issue cease and desist orders and levy fines on violators

  • extended jurisdiction

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how to determine unfairness on basis of trade practice that:

  • causes substantial physical or economic injury to consumers

  • could not reasonably be avoided by consumers

  • must not be outweighed by countervailing benefits to consumers or competition

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deceptive advertising

advertising that is untrue or may mislead the consumer

  • puffery

  • deception

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puffery

advertising that praises item with subjective opinions, superlatives, or exaggerations, and states no specific facts

  • ex: papa johns vs. domino

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advertising substantiation

requires advertisers to substantiate their claims before ad appears