Marketing Exam 3 Study Guide PDF

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Exam 3 Study guide for MKTG - Chapters 12, 13, 15, and 16...

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Marketing Exam 3 Study Guide Chapters 12, 13, 15, and 16

Chapter 12: Advertising Promotion Mix  A promotion mix, or marketing communications mix is a specific blend of promotion tools: -Advertising -Sales promotion -Personal selling -Public relations (PR) -Direct and digital marketing New Marketing Communications Model  Factors changing the face of today’s marketing communications: -Changing consumers *Better informed, more empowered. -Changing marketing strategies. *Market fragmentation. -Advancements in digital technology.  Marketers reach smaller consumer segments in interactive and engaging ways.  Mix of traditional mass media and a wide array online, mobile, and social media.  Content marketing: managers create, inspire, and share brand messages and conversations. Integrated Marketing Communications

Nature of Promotion Tools  Advertising -Reaches masses of buyers at a low cost per exposure. -Builds a long-term image for the product. -Can trigger quick sales. -Has a public nature and is viewed as legitimate. -Very expressive. -Impersonal and lacks the direct persuasiveness of salespeople.  Personal Selling -Personal interaction between two or more people. -Allows all kinds of customer relationships to spring up. -Buyer feels a greater need to listen and respond. -Most expensive promotion tool.  Sales Promotion -Wide assortment of tools with unique qualities. -Attracts attention and offers incentives to purchase. -Used to dramatize product offers and boost sales. -Invites and rewards quick response but has short-lived effects.  Public Relations (PR) -Very believable to readers. -Can dramatize a company or product. -Reaches many prospects. -Effective and economical when thought out well.  Direct and Digital Marketing -More targeted and interactive. -Immediate and personalized. Push vs. Pull Promotion Strategy

Major Advertising Decisions

Possible Advertising Objectives  Informative Advertising (often used for new products) -Communicating customer value. -Building a brand and customer image. -Telling the market about a new product. -Explaining how a product works. -Suggesting new uses for a product. -Informing the market about a price change. -Describing available services and support. -Correcting false impressions.  Persuasive Advertising (important when competition is intense) -Building brand preference. -Encouraging switching to a brand. -Changing customer perceptions of product value. -Persuading customers to purchase now. -Creating customer engagement. -Building brand community.  Reminder Advertising (important for mature products) -Maintaining customer relationships. -Reminding consumers that the product may be needed in the near future. -Reminding the customer where to buy the product. -Keeping the brand in the consumer’s mind during off-seasons.

Methods of Setting the Advertising Budget  Affordable Method (how much the owner or department thinks can be spent on advertising, not based on any definite objective).  Percentage-of-Sales Method (predict the financing needed to accomplish their sales goals. Based on the sales growth and growth of company).  Competitive-Parity Method (based on what a brand of firm’s competitors are estimated to be spending.  Objective-and-Task Method (determining advertising expenses based on set objectives). Advertising Strategy  Accomplishes the company’s advertising objectives. -Informative vs. Persuasive vs. Reminder.  Major advertising strategy elements: -Creating advertising messages. -Selecting advertising media. Creating the Advertising Message and Content  Breaking through the clutter!  Merging advertising and entertainment. -“Advertainment”  Message and content strategy. -Compelling creative concept = the BIG idea.  Message execution. -Image, musical, scientific evidence, lifestyle.  Consumer-generated content. -Incorporate the voice of the consumer. Selecting Advertising Media  Advertising media: vehicles through which advertising messages are delivered to their intended audiences.  Steps in advertising media selection: 1. Determining reach, frequency, impact, and engagement. 2. Choosing among major media types. 3. Selecting specific media vehicles. 4. Choosing media timing.

Profiles of Major Media Types

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Television -Advantages: *Good mass-marketing coverage. *Low cost per exposure. *Combines sight, sound, and motion. *Appealing to the senses. -Disadvantages: *High absolute costs. *High clutter. *Fleeting exposure. *Less audience selectivity. Digital, Mobile, and Social Media -Advantages: *High selectivity. *Low cost. *Immediacy. *Engaging capabilities. -Disadvantages: *Potentially low impact. *High audience control of content and exposure. Newspapers -Advantages: *Flexibility and Timeliness. *Good local market coverage. *Broad acceptability and high believability. -Disadvantages: *Short life. *Poor reproduction quality. *Small pass-along audience. Direct Mail -Advantages: *High audience selectivity. *Flexibility. *No as competition within the same medium. *Allows personalization. -Disadvantages: *Relatively high cost per exposure. *Junk mail image.

Magazines

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-Advantages: *High geographic and demographic selectivity. *Credibility and prestige. *High-quality reproduction. *Long life and good pass-along readership. -Disadvantages: *Long ad and purchase lead time. *High cost. *No guarantee of position. Radio -Advantages: *Good local acceptance. *High geographic and demographic selectivity. *Low cost. -Disadvantages: *Audio only. *Fleeting exposure. *Low attention. *Fragmented audiences. Outdoor -Advantages: *Flexibility *High repeat exposure. *Low cost and low message competition. *Good positional selectivity. -Disadvantages: *Little audience selectivity. *Creative limitations.

Evaluating Advertising Effectiveness & Return on Advertising Investment  Return on advertising investment: net return on advertising investment divided by the costs of the advertising investment.  Advertisers should regularly evaluate. -Communication effects. *Consumer recall, product awareness or preference. -Sales and profit effects. *Compare to past sales/profit effects.

Organizing for Advertising

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Small firms may use their sales department staff. Large companies may have their own advertising departments. Advertising agency: assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.

International Advertising Decisions  Standardization benefits: -Lower advertising costs. -Greater global advertising coordination. -More consistent worldwide image.  Standardization drawbacks: -Ignores the fact that country markets differ in their cultures, demographics, and economic conditions. Problems Faced by Global Advertisers  Countries differ in: -Media costs and availability. -Advertising practices.  Diversity between countries requires advertisers to adapt their campaigns to meet local -Cultures and customs, media characteristics, and regulations. Functions of Public Relations (PR) Departments  Press relations or press agency.  Product publicity.  Public affairs.  Lobbying.  Investor relations.  Development. Public Relations (PR)  Promotes products, people, ideas, organizations, and nations.  Builds good relations with consumers, investors, the media, and communities.  Rebuilds interest in commodities for trade associations.  Ex) Milk PEP’s “Built with Chocolate Milk” public relations campaign is repositioning chocolate milk. Role and Impact of PR  Strong impact on public awareness at a lower cost than advertising.  Power to engage consumers and make them part of the brand’s story.  Limited and scattered use.  Powerful brand-building tool. Major Public Relations Tools:  News, special events, written materials, audiovisual materials, corporate identity materials, and public service activities.

Chapter 13: Selling and Sales Promotion

Personal Selling  Personal presentations by a sales force to engage customers, make sales, and build customer relationships.  Salesperson: represents a company to customers by performing the following activities: -Prospecting and communicating. -Selling and servicing. -Gathering information and building relationships. The Role of the Sales Force  Links the company with its customers.  Coordinates marketing and sales. Sales Force Management  Sales force management: analyzing, planning, implementing, and controlling sales force activities.  Major steps in the sales force management:

Designing the Sales Force Structure and Strategy  Types of sales force structures: -Territorial, Product, and Customer (or market).  Salespeople can be specialized by: -Customer and territory. -Product and territory. -Product and customer. -Territory, Product, and Customer. Sales Force Size  May range from only a few to thousands.  Companies may use the workload approach to set sales force size. -Accounts grouped into classes based on size, status, or the amount of effort required to maintain the account. -Number of salespeople needed to call on each class of accounts is then determined.

Other Sales Force Structure and Strategy Issues  Outside sales force (Field sales force). -Travels to call on customers in the field.

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Inside sales force. -Conducts business from their offices via telephone, internet, or visits from prospective buyers. -Technical sales support people. -Sales assistants. -Telemarketers and online sellers. Team selling. -Teams of people from different departments used to service large, complex accounts.

Recruiting & Selecting Salespeople  A company should analyze the sales job and the characteristics of its most successful salespeople.  Sources for the recruitment of salespeople: -Referrals from current salespeople. -Employment agencies. -Internet and online social media. -Posting ads and notices. -College placement services. -Salespeople at other companies. Training Salespeople  Goals of training are to teach salespeople: -About different types of customers. -How to sell effectively. -About the company’s objectives, organization, products, and the strategies of competitors. Compensating Salespeople  Elements of compensation: -Fixed amount (Salary). -Variable amount (commission or bonuses). Supervising Salespeople  Help salespeople work smart by doing the right things in the right ways.  Tools of supervision: -Call plan. -Time-and-duty analysis. -Sales force automation system. Motivating Salespeople  Encourage salespeople to work hard and energetically toward sales force goals.  Management can boost sales force morale and performance through its: -Organizational climate. -Sales quotas. -Positive incentives. How Salespeople Spend Their Time:

Evaluating Salespeople and Sales Force Performance  Management gets information about its salespeople: -From sales, call, and expense reports. -By monitoring the sales and profit performance date in the salesperson’s territory. -Through personal observation, customer surveys, and talks with other salespeople.  Formal evaluations force management to develop standards for judging performance. Steps in the Selling Process

The Personal Selling Process

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Value selling: demonstrating and delivering superior customer value capturing a return on that value that is fair for both the customer and the company. Value selling requires: -Listening to customers. -Understanding customers’ needs. -Coordinating the company’s efforts to create lasting relationships based on customer value.

Sales Promotion Objectives  Consumer promotions: -To urge short-term customer buying or boost customer brand engagement.  Trade promotions: -To get retailers to carry new items and more inventory buy ahead, or promote the company’s products and give them more shelf space.  Business promotions: -To generate business leads, stimulate purchases, reward customers, and motivate salespeople.

Chapter 15: Global Marketplace

Global Firm  Operates in more than one country.  Gains R&D, production, marketing, and financial advantages that are not available to purely domestic competitors.  Faces increasing problems: -Highly unstable governments and currencies. -Restrictive government policies and regulations. -High trade barriers and corruption. Major International Marketing Decisions

Looking at the Global Marketing Environment  International trade system -Trade barriers *Tariffs or duties *Quotas and exchange controls *Nontariff trade barriers -Biases against the bids -Restrictive product standards -Excessive host-country regulations or enforcements -Ex) Because of nontariff obstacles, Walmart recently suspended its once ambitious plans to expand into India.  Economic environment  Political-legal environment  Cultural environment World Trade Organization (WTO)  Established by the General Agreement on Tariffs and Trade (GATT) in 1995.  Promotes world trade by reducing tariffs and other international trade barriers.  Negotiates to reassess trade barriers and establish new rules for international trade.  Imposes international trade sanctions and mediates global trade disputes. Regional Free Trade Zones

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Economic community: group of nations organized to work toward common goals in the regulation of international trade. -European Union (EU). *Represents one of the world’s single largest markets. -0.5 billion consumers and 20% of global exports. -North American Free Trade Agreement (NAFTA). -Central American Free Trade Agreement (CAFTA-DR). -Union of South American Nations (UNASUR).

Economic Environments  Factors reflecting a country’s market attractiveness: -Industrial structure *Subsistence economies -agriculture, consume output, bartering. *Raw material exporting economies -rich in 1+ natural resources, exports = revenue. *Emerging economies -manufacturing growth, consume output, more need for raw materials. *Industrial economies -export manufactured goods, trade amongst other industrial nations. -Income distribution *Low-, medium-, and high-income households depending on the industrial structure of the nation. Political-Legal Environments  Considerations for a company to do business in a country: -Country’s attitude toward international buying. -Government bureaucracy. -Political stability. -Monetary regulations.  International trade involves: -Cash transactions and bartering. Impact of Culture on Marketing Strategy  Companies that understand cultural nuances can: -Avoid expensive and embarrassing mistakes. -Take advantage of cross-cultural opportunities. -Ex) KFC made Chinese consumers a bit apprehensive when “finger licking good” was translated to “eat your fingers off”. Deciding Whether to go Global  Factors influencing the decision: -Attacks on a company’s home market by global competitors. -Expanding customer base in international markets. -Better opportunities for growth. Deciding Which Markets to Enter

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A company should: -Define its international marketing objectives and policies. -Decide what volume of foreign sales it wants. -Choose in how many countries it wants to market. -Determine the types of countries to enter. -Evaluate each market.

Market Entry Strategies

Deciding on the Global Marketing Program  Standardized global marketing -Using the same marketing strategy and mix in all of the company’s international markets.  Adapted global marketing -Adjusting the marketing strategy and mix elements to each international market. *Creates more costs. *Produces a larger market share and return. Five Global Product and Communication Strategies

Global Price Considerations  Set a uniform price globally -Ignores income distribution.  Set according to the customers -Ignores actual costs.  Use a standard markup of the company’s costs everywhere -Ignores consumers.

Chapter 16: Social Responsibility and Ethics

Marketing Concepts  Marketing concept: focuses on meeting the company’s short-term sales, growth, and profit...