Marketing exam 4

4 P’s of the marketing mix

Price, Place, Product, Promotion

4 variables of promotion mix

Personal selling, public relations, sales promotion, and advertising

Personal selling

is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation.

ex. Car salesman explaining the features and benefits of cars

Public relations

is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders.

ex. Press release about meta’s new sunglasses

sales promotion

n is an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers.

ex. free samples, games, rebates, sweepstakes, contests, premiums, and coupons.

Advertising

is a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media, including television, radio, the internet, newspapers, magazines, video games, direct mail, outdoor displays, and signs on mass transit vehicles

ex. TV commercial for a new WWE action figure line

Market vs Target

Market is broad set of all potential buyers

Target is a specific segment of the overall market a company chooses to focus its marketing efforts on

Types of PR

• Media Relations

  • Press releases, interviews, news stories

• Corporate Communications

  • Company announcements, annual reports

• Crisis Management

  • Brand responses to scandals, recalls, accidents

• Community Relations

  • Sponsoring local events, charity activities

• Investor Relations

  • Earnings reports, shareholder communication

What Types of Products Use Personal Selling?

Cars, real estate, insurance, and software systems

Push vs. Pull Promotions

Push Strategy

• Targets intermediaries (retailers, wholesalers)

• Purpose: push product through distribution channels

• Examples: trade promotions, retailer incentives, volume discounts

Pull Strategy

• Targets consumers

• Purpose: create demand so consumers request the product

• Examples: coupons, samples, ads encouraging people to ask for the brand

Consumer Promotions vs. Trade Promotions

Consumer Promotions

• Target final customers

• Drive trial or purchase

• Trade Promotions

  • Target retailers/wholesalers

  • Encourage them to stock, display, or push the product

demand curves

demand curve shows the relationship between price (P) and quantity demanded (Q).

Price elasticity

Elasticity measures how sensitive consumers are to price changes

interpreting elasticity

Elastic- consumers are very sensitive to price

Inelastic-consumers are not very sensitive to price

Profit

how much the company keeps after all costs

profit-total revenue-total costs

revenue

how much you bring in from sales

revenue= price x quantity

costs

the expenses required to product and sell a product

breakeven

when the profit equals zero and revenue covers the cost

Total Revenue = Total Costs

break even point

fixed costs/ price per unit-variable cost per unit

mark up 

how much you increase cost to set price

Gross Profit / Cost

margin %

Gross Profit / Revenue