Marketing 2210 Midterm 2 PDF

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The Key Ch. 15 The Major Advertising Decisions Advertising objectives - Communication objectives o Informative advertising  Customer value  How a product works  Price changes o Persuasive advertising  Build brand preference  Change perceptions  Buy now – persuade o Reminder advertising  Maintain relationships  Remind customers of upcoming need - Sales objectives Budget decisions - Talked about in advertising planning o % of sales o Affordable method o Competitive parity o Objective and task Developing an advertising strategy - Message decisions (1) o Message strategy – the general message that will be communicated to consumers. This begins with Identifying customer benefits that can be used as advertising appeals o Must develop creative concept (or the big idea) that will bring the message strategy to life in a distinctive and memorable way. The creative concept will guide the choice of specific appeals to be used in an advertising campaign.

o Advertising appeals should have three of the following characteristics:  They should be meaningful, pointing out benefits that make the product become desirable to consumers  They must be believable; consumers must believe that the product will deliver the benefits  They must be distinctive; they should tell how the product is better than competing brands. o Message Execution  The message execution must capture the target market’s attention and interest. The message can be presented in various execution styles:  Lifestyle – Show how a product fits with a particular lifestyle  Mood or image – Builds image around the product (intrigue, love, serenity)  Scientific evidence – Scientific evidence about the brand - Media decisions (2) o Reach, frequency, impact  Reach - % of people in target market who are exposed to the ad  Frequency - # of times the avg. person is exposed to the message  Impact – The qualitative value of the message through a given medium o Major media types  Television  Internet  Direct-mail  Magazines o Specific media vehicles  Media vehicles are specific media within each general media type. For ex, tv media vehicles include AMC  Should plan against media effectiveness factors, such as  Audience quality  Audience engagement

 Editorial quality o Media timing (pulsing or continuity)  Continuity: Schedule ads evenly over given period  Pulsing: Scheduling ads unevenly over given period o Advantages and limitations of each media form  Television  Pro: Mass market at low cost per exposure  Cons: High cost, less audience selectivity  Internet  Pros: High selectivity, interactive capability  Cons: Audience controls exposure  Direct-mail  Pros: High audience selectivity, personalized  Cons: High cost per exposure  Magazines  Pros: high geo & demo selectivity, long life  Cons: High cost o Cost per thousand (CPM)  In looking at media vehicles and types, compute the lowest cost to reach the most target consumers of a costper-thousand basis Advertising campaign evaluation - Why has advertising effectiveness fallen 40% in the past 10 years? o More complicated media environments  Media mix is shifting. Mass-media costs rising, audiences shrinking, and new digital media emerging. Many marketers are supplementing the traditional mass media with specialized and highly targeted media that cost less and engage consumers more fully o Consumers use of computers and PVR’s to eliminate advertising o Look at:  Communications effects  Tells whether the ads and media are communicating the ad message well. Before an ad is placed, the advertiser can show a product to consumers and

ask their attitudes towards it. After the ad is run, the advertiser can measure how the ad affected consumer product awareness, knowledge, and preferences.  Sales and profits model  Hard to measure. Many other factors such as price and quality affect sales other than advertising.  One way to measure is to compare past sales with past advertising expenditures. Another is the advertising elasticity: % change in sales / % change in advertising expenditures - What makes advertising effective? o Information that is of value o Presented in a way that rewards the consumer for listening o Information that is interpreted exactly as it was intended Integration of Marketing and Advertising Planning Advertising planning (1) - Input from marketing plan o Marketing situation o Market potential analysis o Current distribution of market share o Strategic growth options available o Consumer behaviour  How do people buy?  How complex is the purchase behaviour? Advertising planning (2) - Advertising budget o % of sales o Competitive parity o Affordable method o Objective and task method - Creative strategy o Based on Product Life Cycle (PLC) theory o Stage in PLC determines creative strategy options - Creative tactics

- Media objectives o Reach; frequency; impact - Media strategy o Types of media o Media vehicles o Continuity or pulsing Public Relations: Building good relations with the company’s various publics by obtaining favourable publicity, building a good corporate image, and handling unfavourable rumours and stories. - Press releases o Create newsworthy information in the media to attract good attention to product/person/service - Product publicity o Publicizing specific products - Lobbying o Building national or local relationships PR can have a strong impact on public awareness at a much lower cost than advertising. Instead of paying for time in the media, they pay staff to develop and circulate information and manage events

Ch. 16 Chapter objectives - The role of Company sales people - Major sales force management steps - Personal selling process (transactional versus relationship selling - Sales promotion campaigns o How developed o How delivered o Key criteria Personal Selling - Personal presentation by the firm’s salesforce for the purpose of making sales and building customer relationships Perspectives on the promotional mix

- We are dealing with what is now the most important aspect of the promotional mix for most retailers: o Sales promotion o Advertising o Personal selling o Public relations o Publicity - The relative importance of these promotional mix elements - Has changed dramatically over the past 30 years or so: o Was 66/33 for advertising over sales promotion o These numbers have reversed o What happened? Nature of Personal Selling - Everyone lives by selling something - Buying Is not about transactions – it is about relationships - Very often the selling process is a highly competitive one – where there is a pre-qualification process - The role of the sales force varies by industry and by firm within an industry Managing the sales force - Sales force management: Analyzing, planning, implementing, and controlling sales force activities o Includes:  Designing a sales force strategy and structure  recruiting and selecting salespeople  training salespeople  compensating salespeople  supervising and motivating salespeople  evaluating salespeople - The sales force structure o Territorial sales force structure – a sales force structure that assigns each salesperson to an exclusive territory in which that salesperson sells the company’s full product line

o Product sales force structure – A sales force structure in which salespeople specialize in selling only a portion of the company’s products o Customer sales force structure – Structure in which salespeople specialize in selling only to certain customers or certain industries

- Complex sales force structures o When the company sells a wide variety of products to many types of customers over a broad geographic area, it often combines several types of sales force structures - Sales force size o Many companies use a workload approach to set sales force size. Using this approach, a company first groups accounts into different classes according to size, account status, or other factors related to the amount of effort required to maintain the account. It then determines the # of salespeople needed to call on each class of accounts the desired # of times. - Other sales force strategy o Outside sales force: Salespeople travel to call on customers in the field o Inside sales force: Salespeople who conduct business from their offices via telephone, the internet, or visits from prospective buyers o Team selling: Using teams of people from sales, marketing, engineering, and even upper management to service large, complex accounts - Recruiting and selecting salespeople o The best salespeople to recruit and select possess four key talents: Intrinsic motivation, a disciplined workstyle, the ability to build relationships with customers, and the ability to close a sale

- Training salespeople o Should have several goals when training salespeople:  Teach salespeople about different types of customers and their needs, as well as buying motives and buying habits customers. Teach them how how to build relationships with customers  How to sell effectively and the basics of the selling process  How to identify with the company and its products, as well as how to identify the competitors - Compensating salespeople o Fixed amount – salary o Variable amount – commission or bonuses based on sales performance - Supervising salespeople o The goal of supervision is to help salespeople work smart by doing the right things in the right ways o Many companies help salespeople identify target customers and set call objectives, a tool known as a call plan. Some also specify how much time the sales force should spend prospecting for new accounts and other time management priorities. Another tool is the time-and-duty analysis, which identifies the time spent travelling, and doing administrative chores. A 4 or 5:1 ratio of selling versus administration is the key to being effective in a sales position - Motivating salespeople o The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals o Management can increase motivation and performance through  Organizational climate: The feeling that salespeople have about their value and rewards for a good performance  Sales quotas, a standard that states the amount a salesperson should sell  Positive incentives

- Evaluating salespeople o Management should evaluate  Sales reports  Call reports (completed activities)  Expense reports from salespeople  Sales and profit performance in the salesperson’s territory.  On a broader level, is the sales force as a whole working? Are we accomplishing customer relationships, sales, and profit objectives? Are costs in line with outcomes?

The personal selling process - Selling process: The steps that salespeople follow when selling - Steps in the selling process include: o Prospecting & qualifying  Need to know how to qualify leads (that is how to identify the good ones and screen out poor ones)  Can do this by looking at their financial ability, volume of business, special needs, and possibilities for growth o Preapproach: Salesperson learns as much as possible about a prospective customer before making a sales call  Salesperson should set call objectives, which may be to qualify the prospect, gather information, or make a sale  Determine best approach, personal visit, phone call? o Approach: Salesperson meets customer for first time o Presentation & demonstration  Tell the value story to customer and show to the company’s offer solves the customer’s problem and adds value to them. o Handling objections: Seek out, clarify, and overcome any objections to buying o Closing: Salesperson ask for order o Follow-up: Follow up to ensure satisfaction and repeat business

The steps in the selling process are described as transaction oriented. Their aim is to help salespeople close a specific sale with a customer - This strategy is to build short-term sales, placing little emphasis on customer needs. Relationship selling is a strategy whereby the objective is building longterm relationships. The sales rep gets to know their customer, and their needs. After this has been accomplished, then the salesperson tries to make a sale. Value selling – Demonstrating and delivering superior customer value and capturing a return on that value that is fair to both the customer and the company. Sales promotion objectives - Objectives vary widely. o Sellers may use consumer promotions (pull oriented) to urge short-term customer buying or enhance customer brand involvement o Sellers may use trade promotions (push oriented) to get retailers to carry new items or more inventory, or to promote the company’s products and give them more shelf space o For the sales force, objectives include getting more sales force support for current/new products or getting salespeople to sign up new accounts. Key question: - Is the desired promotion ‘franchise-building’ or ‘non-franchisebuilding’ in its orientation? o Does it serve to build a long-term relationship with the customer? Sales promotion strategy options Franchise building - Build long-term brand preference - Link with advertising and sales promotion - Prominently show brand name, product picture, and key users/celebrity endorsers

Non-franchise building - Designed to accelerate the purchase decision making process - Shift the normal demand cycle forward - No brand information - No positioning in text - Cents off, volume rebates, etc. Sales promotion options: Behavioural shaping Type of sales promotion - Free samples distributed; large discount coupon Behaviour change - Induce product trial Type of sales promotion - Discount coupons prompt purchase with little cost; coupon good for small discount on next purchase Behaviour change - Induce purchase with relatively little financial obligation required by the customer Type of sales promotion - Small discount coupon prompts purchase with moderate cost Behaviour change - Induce purchase with moderate financial obligation Type of sales promotion - Purchase occurs without coupon assistance Behaviour change - Induce purchase with full financial obligation Sales promotion options by program objectives Major sales promotional tools - There is a range of sales promotion tools, such as; o Samples o Coupons o Refunds

o Premiums: Additional related products that are of value to customers o Point of purchase displays o Event marketing

- Business Promotions: Sales promotion tools used to: o Generate leads o Stimulate purchases o Reward loyal and valued customers o Outline and profile what is new to the market to ‘best’ customer’s first

- Key decisions o Size of incentive: Key Is not to make customers sensitized to price decrease to spur volume sales o Set conditions for participation: Can’t just have a program for selected customers o How will the program be launched and promoted? Through the trade or directly to key accounts o Length of the sales promotional program is critical: must be long enough to allow key accounts to achieve the desired results o Lastly, organizers of selected sales promotions need to have an idea for how success for the program will be evaluated? Increase in sales, increase in leads, increase in loyalty, ability to pre-empt the competition

Ch. 17- Direct and online marketing Objectives - Definition and scope - Major forms and movement within them - Understand how companies have moved to take advantage of the internet - How is online marketing executed?

- Public policy and ethical issues related to online marketing Direct Marketing definition - Connecting directly with carefully targeted segments or individual customers, often on a one-to-one interactive basis. Perspective: - Direct marketing today is much more than just putting your catalogue on the web and taking orders - It is about managing a database based on the idea of loyal customers, while not always near a retail store, may be willing to buy your product on a regular basis - Access appears to be wining out over the associated risk of shopping online – in a wider variety of categories - More comparative information is available online than in the past and as a result, the consumer is a much more knowledgeable purchaser - With higher expectations with respect to price – as channel intermediaries have been eliminated Forms of Direct Marketing - Direct-mail marketing Direct-mail marketing – Direct marketing by sending an offer, announcement, reminder, or other item to a person at a physical or virtual address. o Direct mail is by far the largest direct-marketing medium o Well suited for direct, one-to-one communication. o Can be highly targeted, personalized, is flexible, and allows for the easy measurement of results - Catalogue marketing Catalogue marketing – Direct marketing through print, video, digital catalogues that are mailed to select customers, made available in stores, or presented online - With the rise of the Internet, more and more catalogues are going digital. o Web based catalogues eliminate printing and mailing costs. o Online catalogues offer an almost unlimited amount of merchandise. o Online catalogues allow real-time merchandising; products and features can be added or removed as needed, and prices can be adjusted instantly to match demand

- Telephone marketing Telephone marketing – Using the telephone to sell directly to customers - Marketers use outbound telephone marketing to sell directly to consumers and businesses. - They use inbound toll-free numbers to receive orders from television, print ads, direct mail, and catalogues o Many advantages, including purchasing convenience and increased product and service information. - Do-not-call legislation has hurt the telemarketing industry. - Two major forms of telemarketing – inbound consumer telemarketing and outbound B-to-B telemarketing – remain strong and growing. This legislation also helps. Rather than making unwanted calls, many of these marketers are developing “opt-in” calling systems, in which they provide useful information and offers to customers who have invited the company to contact them by phone or email. - Direct-Response Television advertising Direct-response television (DRTV) marketing – Direct marketing via television including direct-response television advertising (for infomercials) and home shopping channels - Direct-response television advertising often 60-120 seconds in length - Infomercials are usually a full 30-minute advertisement for a single product Online Marketing - Online marketing – Efforts to market products and services and build customer relationships over the internet - Seen in the context of overall promotional mix strategy and channel strategy o Can be complicated if you are eliminating a channel in favour of another or operating parallel channels o Run the risk of alienating existing channel members o From ‘bricks and mortar’ to ‘clicks and mortar’ Online marketing domains - Business-to-business (B-to-B) online marketing – Businesses using online marketing to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices.

- Business-to-consumer (B-to-C) online marketing – Businesses selling goods and services online to final consumers. - Consumer-to-Consumer (C-to-C) online marketing – Online exchanges of goods and information between final consumers. - Consumer-to-Business (C-to-B) online marketing – Online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases. Setting up Online - Create a website to o Disseminate information o Build interest o Feed the sales cycle - Build online social network of existing users Creating a Website - The first step in conducting online marketing is to create a website. However, beyond simply creating a website, marketers must design an attractive site and find ways to get consumers to visit the site, stay around, and come back often - Websites vary greatly in purpose and content. The most basic type of website is a corporate (brand) website – A website designed to build customer goodwill, collect customer feedback, and supplement other sales channels rather than sell the company’s products directly - Other companies create a marketing webs...