MKTG 330 Study Guide for Exam IV PDF

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Study Guide for Exam IV Chapter 19 – Consumer Sales Promotion: Sampling and Couponing 1. Brand management objectives of SP a. Generating purchase trial and retrial ● (new customers) b. Encouraging repeat purchases ● (current customers) c. Reinforcing brand images 2. Consumer rewards from SP (benefits, incentives, or inducement) to encourage behavior brand managers desire. a. Utilitarian benefits ● Obtaining monetary savings ● Reducing search and decision costs ● Obtaining improved product quality b. Hedonic benefits ● Being a wise shopper ● Achieving a need for stimulation and variety ● Obtaining entertainment value ● Being viewed as tech savvy ● Socializing with others on a deal with a group coupon c. Immediate vs. delayed rewards Immediate: ● Generated trial and retrial: samples, instant coupons. Shelf-delivered coupons, mobile phone coupons ● Encouraging repeat purchases: Price-offs, bonus packs, in- on- and near pack premiums, games ● Reinforcing brand image: --none Delayed: ● Generated trial and retrial: Scanner-delivered coupons, media- and mail delivered coupons, online coupons, social (group) coupons, mail-in and online premiums, bounce-back coupons, free-with-purchase premiums ● Encouraging repeat purchases: in- and on- pack coupons, rebates and refunds, continuity programs ● Reinforcing brand image: self-liquidating premiums, sweepstakes and contests 3. Relationship between brand management objectives and major consumer oriented sales promotions ( see table 19.1 in particular) Brand management objectives: the analysis and planning on how that brand is perceived in the market. (brand equity) Consumer-oriented sales promotion programs: induce purchase of a brand, the marketer may have a number of different objectives for both new and established brands. (web)

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EX: obtaining trial and repurchase, increasing consumption of an established brand, defending current customers, targeting a specific market segment, or enhancing advertising and marketing efforts.

4. Sampling (e.g. Direct mail, Newspapers and magazines, Door to door sampling etc.) The premier sales-promotion device for generating trial usage by delivering an actual- or trial-sized product to consumers. ● Distribution methods: direct mail, newspapers, magazines, door to door, on- or in- pack sampling, high-traffic locations/ unique venues, in-store sampling, online sampling 5. Major sampling practices ● Targeting sample recipients ● Using creative distribution methods ● Estimating return on investment 6. Ideal circumstances for using sampling

○ New or improved brand is demonstrably superior/ has direct relative advantages ○ Product concept is so innovative that it is difficult to communicate by advertising alone ○ Promotional budgets can afford to generate consumer trial quickly 7. Sampling problems ● Expense ● Potential mishandling ● Waste in distribution ● May exclude non-users ● May fail to reach sufficient number of consumers to justify expense ● Consumers may misuse them ● Pilferage ● In- or -on package samples do not capture current non-consumers 8. Couponing: promotional device that rewards consumers for purchasing the coupon-offering brand by providing cents-off or dollars- off savings 9. Coupon distribution methods (e.g., Freestanding Inserts (FSIs), In stores, Direct Mail, magazines, newspapers, in- and on- package, online.) 10. Point of purchase couponing Instantly Redeemable Coupons: ● Peelable from the package at the POP ● Represent an immediate reward ● And alternative to price-off deals Shelf-Delivered Coupons: ● Instant coupon machines ● Machines are attached to the shelf alongside coupons-sponsoring brands

Scanner delivered coupons: ● Reward is delayed with the checkout coupon ● Potentially very effective b/c they provide a way to carefully target coupon distribution Mobile phone coupons: ● Using mobile phones to aid grocery shopping is of interest to 40% of consumers ● Multiple grocers are developing technology, or finding partner firms, to allow shoppers to scan groceries and redeem targeted coupons 11. Mail and media delivered coupons a. Mail delivered coupons ● Highest household penetration (95%) ● Highest redemption rate of all mass-delivered coupons (3.5%) ● Increase the amount of product purchases ● Relatively expensive ● Inefficient and expensive for brands enjoying a high market share b.

FSIs and other media delivered coupons ● 89.4% of all coupons distributed via Sunday newspaper FreeStanding Inserts (FSIs) ● Broad exposure ● Relatively cheaper ● Reminder function ● Advertising function ● Redemption rate is very low (1%) ● Don’t generate much trade interest ● Susceptible to misredemption ● Declining readership c. In and on pack coupons ● Included either inside a product's package or as a part of the package’s exterior ● Affords consumers with a delayed reward that is designed more for encouraging repeat than trial purchases ● A coupon for one brand is often promoted by another brand ● Virtually no distribution costs ● Such coupons offer a delayed value, do not reach non-users, and do not leverage trade interest d. Online and social group coupons ● Are distributed by many online sites (e.g.,www.coupons.com;www.groupon.com) ● Allows consumers to print their own coupons, at no additional cost to ● the advertiser ● Has potential for fraud in that criminals can alter their printed coupons ● Can be distributed wirelessly

Chapter 20 – Consumer Sales Promotion: Premiums and Other Promotions 12. Premiums: Articles of merchandise or service offered as a form of gift by manufacturers to induce action on the part of the sales force, trade representatives, and/or consumers a. Free with purchase premiums ● Delayed consumer reward ● Generating trial and re-trial b. Mail in and online offers ● Delayed consumer reward ● Generating trial and re-trial c. In- and on-pack premiums ● Immediate or delayed consumer reward ● Encouraging repeat purchase d. Near-pack premiums ● Immediate consumer reward ● Encouraging repeat purchase e. Self-liquidating offers ● Delayed consumer reward ● Reinforcing brand image 13. Price-offs: A  clearly labeled reduction in a brand’s regular price ● Reward current brand users ● Get consumers to increase purchase quantity ● Establish a repeat-purchase pattern ● Ensure that promotional dollars reach consumers when used together with trade allowances ● Obtain off-shelf display space ● Provide the sales force with an incentive to obtain retailer support Regulations apply: ● Only used on brands with established retail prices ● Limit to three promotions per year for each product size ● Must be at least 30 days between promotions ● No more than 50% of volume comes from promotion ● Manufacturer must provide display materials ● Dealer required to show regular and promotion price 14. Bonus packs: E  xtra quantities of a product that a company makes available to consumers at the regular price 15. Refunds vs. Rebates ● Refunds are cash reimbursement for purchasing consumer packaged goods ● Rebates are cash reimbursement for purchasing a durable good ○ Offer delayed value ○ Achieve customer-holding objectives

16. Phantom discounts ● Many consumers never bother to redeem rebates ● At the time of brand choice, consumers tend to exaggerate the benefit to be obtained from a rebate relative to the future effort required to redeem a rebate-offer 17. Rebate fraud ● Can occur when rebate offers are promoted, but are not fulfilled ● Consumers can commit fraud by submitting phony receipts 18. Sweepstakes vs. Contests ● Sweepstakes: purely on the basis of chance, no need for proofs of purchase ● Contest: solve the specific contest problem and may need proofs of purchase ● Both sweepstakes and contests exist to primarily to enhance a brand’s image ● Sweepstakes are preferred because they are relatively inexpensive and simple to execute 19. Continuity promotions ● Reward consumers’ repeat purchasing of a particular brand ● Often referred to as reward, loyalty, or point programs ● Encourage consumers to stick with a particular brand to accumulate points to use toward rewards 20. Overlay promotions: Combines two or more promotion techniques together (e.g., premium offer and a coupon in a FSI). 21. Tie-in promotions (Intra-company vs. Inter-company): Simultaneous promotion of multiple brands in a promotion ● Inter-company (between the same companies) ● Intra-company (between different companies) ● Tie-ins are cost-effective, but lead time is lengthened ● The partners’ images should reinforce each other Chapter 21 – Public Relations, Word of Mouth Influence, and Sponsorships 22. Marketing public relations: An organizational activity involved in fostering goodwill between a company and its various publics, such as ● Employees ● Suppliers ● Stockholders ● Governments ● The public ● Labor groups ● Citizen action groups ● Consumers Functions: ● Advice and counsel ● Publications ● Publicity ● Relationships with other publics

● Corporate image advertising ● Public opinion research 23. Value of MPR: An aspect of public relations involving an organization’s actual or prospective customers ● More credible form of marketing than regular advertising and promotion ● Considerably less expensive than advertising due to its use of publicity ● Not useful for all products, in particular those that lack uniqueness or visibility ● Useful only to the point that newsworthiness wears off 24. Proactive MPR a. Product releases b. Executive statement releases c. Feature articles 25. Reactive MPR C a.  risis management 26. Commercial vs. Conspiracy vs. Contamination rumors ● Commercial rumors are widely circulated but unverified propositions about brands and companies ● Conspiracy rumors involve supposed company policies or practices that are threatening or undesirable to consumers ● Contamination rumors deal with undesirable or harmful product or store features 27. Anti-rumor campaign elements a.   Focus on specific points in the rumor that need to be refuted b. Emphasize that the conspiracy or rumor is untrue and unfair c. Pick appropriate media and vehicles for delivering message d. Select a credible spokesperson to deliver the message on the company’s behalf 28. Word of Mouth influence: I nformal communication among consumers about products and services, both complex and difficult to control a.  Strong and weak ties b. Opinion leaders 29. Buzz creation vs. Viral marketing ● Buzz creation refers to the systematic and organized effort to encourage people to talk favorably about a particular brand—either over the fence or online—and to recommend its usage to others who are part of their social network ● Viral marketing refers to techniques that use social networks to increase brand awareness or other marketing objectives, through a self-replicating, viral process, similar to the spread of a virus 30. Rules for social epidemics a.  Law of the Few b. Stickiness Factor c. Power of Context 31. How to ignite self-generating demand a.   Design the Product to Be Unique or Visible b. Select and Seed the Vanguard

c. d. e. f.

Ration Supply Use Celebrity Icons Tap the Power of Lists Nurture the Grass Roots

32. Sponsorship marketing: a form of brand promotion that ties a brand to a meaningful athletic, entertainment, cultural, social, or other type of high-interest public activity 33. Reasons for using sponsorship marketing a.   May avoid the clutter inherent in advertising media b. Help companies respond to consumers’ changing media habits c. Help companies gain approval of various constituencies d. Can enhance a brand’s equity e. Enables targeting specific geographic regions or demographic and lifestyle groups 34. Event sponsorship 35. Factors to consider in choosing events a. Image matchup b. Target audience fit c. Sponsor misidentification d. Clutter e. Complement other marcom elements f. Economic viability 36. Sponsorship agreements 37. Customized events ● Developing your own events rather than sponsoring existing events ● Provides a brand total control over the event ● Can be more effective and less costly

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38. Ambushing: when companies that are not official sponsors of an event undertake marketing efforts to convey the impression that they are 39. Cause-related marketing: T  he company contributes to a designated cause every time the customer undertakes some action (e.g., a purchase) that supports the company and its brands 40. Benefits of cause related marketing a.  Enhances  corporate or brand image b. Thwarts negative publicity c. Generates incremental sales d. Increases brand awareness e. Broadens customer base f. Reaches new market segments g. Increases sales at retail level

Chapter 22 – Packaging, Point of Purchase Communications, and Signage 41. Functions of packaging

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a. Draw attention to a brand b. Break through competitive clutter at the point of purchase c. Justify price and value to the consumer d. Signify brand features and benefits e. Convey emotionality f. Motivate consumers’ brand choices Packaging structure a. Color and color meanings ● Cultural aspect of color meaning b. Design and Shape Cues ● Horizontal vs. vertical lines ● Slanted vs curvy lines ● Angular shapes ● Golden ratio c. Packaging Size d. Physical Materials (e.g., Metal, Plastic, Soft materials, Foil, and Wood) The VIEW model in evaluating packaging a. Visibility: t he ability of a package to attract attention at the POP b. Information: f ormation pertains to the right type and quantity of information that is provided by the packaging c. Emotional appeal: concerns a package’s ability to evoke a desired feeling or mood d. Workability: refers to how a package functions rather than communicates i. Protection ii. Storage iii. Access iv. Inhibit breakage v. Environmental friendliness POP communications a. Permanent vs. semi-permanent vs. temporary displays Permanent: Intended for 6 months or more Semi permanent: intended for 6 months Temporary displays: intended for fewer than two months b. Instore media (e.g., Radio, Digital signage, Shopping cart ads, Shelf ads, and Floor graphics): e xecuted by a third party (in-store, radio advertising, digital signage, shopping cart ads, shelf ads, and floor graphics) Accomplishments of using POP a. Manufacturers ● Keeps the company’s name and brand name before the consumer ● Reinforces brand image ● Calls attention to sales promotions ● Stimulates impulse purchasing b. Retailers ● Attracts the consumer’s attention

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● Extends the amount of time spent in the store ● Maximizes available space ● Better organized shelf and floor space (improves inventory control and turnover) 46. POP’s influence on consumer behavior (i.e. Informing, Reminding, Encouraging, Aiding merchandizing) ● Informing: POP materials alert consumers to specific items and provide potentially useful information ● Reminding: Reminds consumers of brands they have previously learned about via broadcast, print, or other advertising media ● Encouraging: Influences product and brand choices, Encourages unplanned purchasing, and impulse buying ● Merchandising: Effective and efficient use of retail space Accomplishes: ● Delivers useful information ● Simplifies shopping ● Sets brands apart ● Informs consumers of new products and brands ● However, consumers can be overwhelmed by excessive POP stimuli 47. Unplanned purchases ● Unplanned purchasing means that many product and brand choice decisions are made while the consumer is in the store rather than beforehand ● Since the late 1970’s the share of unplanned purchasing has been consistently increasing ● Unplanned purchasing is highest for products like croutons, magazines, gums and mints, feminine hygiene products, and air care ● POP displays increase brand lift, the average increase of in-store purchase decisions when POP materials are present versus when they are not 48. Factors affecting unplanned purchasing (elevated when..): ○ Consumers are on a major shopping trip ○ They shop more of a store’s aisles ○ The household size is large ○ They are deal prone 49. Brand lift index : the percentage increase in the primary objective of a brand advertising campaign, and is used by brand marketers to measure the extent to which their advertising has shifted consumer perception against awareness, attitudes, favorability, intent, or preference. 50. On-premise business signs: cost-effective and efficient form of communication available to retail businesses 51. Functions of on-premise business signs a. Attract new customers’ b. Brand the retail site in consumers’ minds c. Create impulse buying decisions Types of on- premise signs: Free-standing: monument, pole signs, a-frame (sandwich board signs), portable signs, inflatable signs

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Building-mounted: projecting signs, wall signs, roof signs, banners, murals, canopy signs, awning signs. 52. Conspicuity of business signs: Conspicuity for signage is determined by the contrast between the sign and its background. A sign must be conspicuous first, b ecause, without it, t he sign’s legibility and readability  are moot points. While the appropriate size for signs is addressed on this website under the heading “How big should a sign’s letters be?”, conspicuity includes factors that only indirectly relate to size. 53. Out of home advertising ● Transit advertising ● Skywriting advertisements ● Billboard advertising 54. Forms of billboard ads (i.e. Poster Panels, Bulletins, Digital Billboards, and Specialty Billboards) ● Poster panels: regularly seen alongside highways and in other heavy traveled locales ● Bulletins: hand painted, or computer generated vinyl images ● Digital billboards: relatively new; represent 30% of OOH revenue in the USA; rotates ads every 4 to 10 seconds; expensive and controversial in some areas ● Specialty billboards: use different artistic and graphical techniques in an engaging and creative way 55. Strengths of billboard advertising a. Broad reach b. High frequency c. Geographic flexibility d. Low cost per thousand e. Substantial brand identification f. Excellent last reminder before purchasing 56. Limitations of billboard advertising a. Demographic non-selectivity b. Short exposure time c. Environmental concerns...