Shared Flashcard Set

Details

MKT 300 E3
Exam 3
66
Marketing
Undergraduate 3
12/13/2008

Additional Marketing Flashcards

 


 

Cards

Term
Promotion
Definition

Communication by marketers that informs, persuades and reminds potential buyers of a product in order to influence an opinion or elicit a response.

 

Advertising = long term

Promotion= short term incentives 

Term

Promotional Mix

 

(advertising, public relations, personal selling, sales promotion) 

Definition

Elements:

 

Advertising- impersonal, one-way mass communication about a product or organization that is paid for by a marketer. 

 

Public Relations- effors to influence various publics- result is hopefully publicity. Try to get others to report on us. Trying to execute promotional plan that creates goodwill for company/brand image.

 

Personal Selling- most expensive per contact

 

Sales Promotion- Marketing activities (other than personal selling, adv and public relations) that stimulate consumer buying and dealer effectiveness. Meant to encourage short term change in behavior. Examples- coupons, p.o.p., rebates, sweestakes, incentives

Term

Communication

 

 

 

Categories of Communication 

Definition

the process by which we exchange or share meanings through a common set of symbols.

 

 

 

Interpersonal Communication- personal selling

 Mass Communication- sales promotion, advertising, public relations.

Term

Characteristics of Advertising

 

Advantages and Disadvantages of Advertising 

Definition

Communication mode: Indirect and non-personal

Message Flow Direction: One-way (except personal selling)

Message Content Control: Yes

Sponsor Identification: Yes

Reaching Large Audiences: Yes

Message Flexibility: Same Message to all Audiences

 

 

Advantages- reach large number of people, low cost per contact, can be micro targeted

 Disadvantages- total cost is high, national reach is expensive for small companies.

Term
Publicity
Definition

Public information about a company, good, or service appearing in the mass media as a news item.

 

End goal is publicity comes from an independent 3rd party. 

Term
Characteristics of Public Relations
Definition

The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance.  Key word=control; publicity is the end result of PR

 

Communication Mode: Usually indirect, non-personal

Message Flow Direction: One-way

Message Content Control: No

Sponsor Identification: No

Reaching Large Audience: Usually Fast

Message Flexibility: Usually no direct control 

Term
Sales Promotion and Characteristics
Definition

(Free samples, contests, premiums, trade shows, vacation giveaways, coupons)

 

Communication Mode: Usually indirect and non-personal

Message Flow Direction: Mostly one-way

Message Content Control: Yes

Sponsor Identification: Yes

Reaching Large Audience: Fast

Message Flexibility: Same message to varied target 

Term
Personal Selling and Characteristics
Definition

Planned Presentation to one or more prospective buyers for the purpose of making a sell. Small setting, small group of people.

 

Communication Mode: Direct and face to face

Message Flow Direction: Two-way

Message Content Control: Yes

Sponsor Identification: Yes

Reaching Large Audience: Slow

Message Flexibility: Tailored to prospect 

Term

Goals and Tasks of Promotion

 

 

 

Informing, Persuading, Reminding

Definition

Informative Promotion- (Introduction and Early stage of PLC) increase awareness, explain how product works, suggest new uses, build company image

 

Persuasive Promotion- (Growth, Maturity) Encourage brand switching, change customers' perceptions of product attributes, influence immediate buying decision, persuade customers to call.

 

Reminding Promotion- (Maturity)- remind customers that product may be needed, remind customers where to buy product, maintain customer awareness

Term
The AIDA Concept
Definition
Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. (Attention, Interest, Desire, Action)
Term
Types of Buying Decision
Definition

Routine- Advertising, Sales Promotion

 

Not Routine or Complex- Advertising, Public Relations

 

Complex- Personal Selling 

Term
Integrated Marketing Communications
Definition

(Coordination) A method of carefully coordinating all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. (Coordianted effort of blending)

 

 

Reach a lot of people with a blending/combinations of the elements of the promotional mix 

 

 

Which company ad goes with. 

Term
Managing Unfavorable Publicity
Definition

Crisis Management- a coordinated effor to handle the effects of unfavorable publicity or of an unfavorable event.

 

When product gets very bad light/portrayed negatively 

Term
The Role of Public Relations vs Publicity
Definition

Public Relations- originates with the company (new product publicity, product placement, consumer education, sponsorship, websites)

 

Publicity- may or may not originate with the company. (crisis management, unfounded publicity) 

Term
Is Advertising Necessary?
Definition

It should be done in both goods times and bad times.

 

Top 200 brands account for 37% of media spending.


Supply greatly exceeds demand.

 

Ads: can be so annoying- make you act adversely. 

Term
Media Selection Considerations
Definition

Cost per contact- the cost of reaching one member of the target market.

 

Reach- The number of target consumers exposed to a commercial at least once during a time period.


Frequency- the number of times an individual is exposed to a message during a time period.


Audience selectivity- the ability of an advertising medium to reach a precisely defined market. How finite of a target market am I reaching with this? Magazines more selective than newspapers

Term
Determining Relative Cost of Media
Definition

Cost Per Thousand (CPM)

 

CPM= (Cost of ad space (absolute cost) / Circulation) * 1000

 

How many people do I reach? Apples to apples comparison 

 

 

 

New brands with a small market share spend more for advertising and sales than those with a large market share. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. Need to inform. 

Term
Advertising Campaign
Definition
A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.
Term
The DAGMAR Approach
Definition

Define

Advertising

Goals for

Measuring

Advertising

Results 

Term

Basic Principle of Marginal Analysis

 

Problems with Marginal Analysis 

Definition

Increase Spending If: The increased cost is less than the incremental (marginal) return

Decrease Spending If: the increased cost is more than the incremental (marginal) return

Hold Spending Level If: The increased cost is equal to the incremental (marginal) return

 

 

Problem:
Assumption- sales are the principal objective of advertising and/or promotion

Assumption: Sales are the result of advertising and promotion and nothing else 

Term

Budget Approaches

 

 

The Affordable Method, Arbitrary Allocation Method, Percentage of Sales Method, Competitive Parity Method, Return on investment method, objective and task method 

Definition

The Affordable Method- what we have to spare; what's left to spend

 

Arbitrary Allocation Method- no system, seemed like a good idea at the time

 

Percentage of Sales Method- set percentage of sales or amount per unit

 

Competitive Parity Method- match competitor or industry average spending

 

Return on investment method- spending is treated as a capital investment 

 

Objective and Task Method- establish objectives, determine specific tasks, estimate costs associated with tasks. Advertising great at creating awareness 

Term
Identify Product Benefits
Definition

Attribute- what the product has

 

Benefit- how that attribute can benefit customer 

Term
Unique Selling Proposition
Definition

A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

How do I differentiate myself?

 

Key to advertisement- how to tell a good/memorable story 

Term
Media Scheduling
Definition

Continuous-  advertising is run steadily throughout the period. (Never 0)


Flighted- advertising is run heavily every other month or ever two weeks. (Yes or No)

 

Pulsing- Advertising combines continuous scheduling with flighting (Never 0, combo of 1 or 2)


Seasonal- Advertising is run only when the product is likely to be used.

Term
TV Audience Measures
Definition

Rating- to get a rating, taking number that watch the show out of how many have tv

 Rating = (HH tuned to show)/ (Total US HH)

 

Share- Percentage of HUT tuned to a show. Share number always has to be equal or higher than rating; compare more apples to apples; more fair. 

Share = (HH tuned to show/ US HH using TV)

 

Term

Major Types of Advertising: Institutional vs Product

Definition

Institutional- Enhances a company's image rather than promotes a particular product

 

Product- Touts the benefits of a specific good or service (Pioneering, Competitive, Comparitive) 

Term

Product Advertising

 

 

pioneering, competitive, comparitive 

Definition

Pioneering- stimulates primary demand for new product or category; used in the PLC introductory stage

 

Competitive- influences demand for brand in the growth phase of the PLC; Often uses emotional appeal

 

Comparitive- compares two or more competing brands' product attributes; used if growth is sluggish, or if competition is strong 

Term
Alternative Advertising
Definition

 

Event creation- designing an event that features sponsorship


Guerilla Marketing- unconventional promotions on a very low budget; generally thought of as for small businesses/entreprenuers

 

Stealth Marketing- undercover marketing or roach baiting

 

Viral marketing- creating content that encourages users/customers to do your marketing for you (Burger King Chicken) 

Term
Advertising versus Sales Promotion
Definition

Advertising- reason to buy --> attitude

 

Sales Promotion- incentive to buy --> behavior

 

Sales promotions- extra incentive to buy, an inducement to intermediaries (push strategy), targeted to different parties; want to change behavior 

Term
Price
Definition

what you pay for something

OR

 

the value that you exchange for the benefits of having or using the product/service (i.e.-time, psychological costs, other resources)

 

Term

Internal Factors of Price

 

(i influence these) 

Definition

1) Marketing Objectives- to maximize profit, gain market share, infer a level of quality, to survive.

 

2)Marketing Mix Strategy- price needs to be consistent with other 3 P's

3) Costs- your costs affect your profit so set the optimal price

 

Term
External Factors of Price
Definition

1. Demand for your product

 

2) Competition- competitors price's, strength of competition

 

3) Economy- cost of components (natural resources) and economic conditions 

 

 

Term
Pricing Objectives
Definition

Profit-oriented (high)- profit maximization, satisfactory profits, return on investment

 

 Status (medium)- maintaining price and meeting competitions price (customer perception)

 

Sales- oriented (low)- market share and sales maximization 

Term
Price Elasticity
Definition

Tells us how much the demand for a product will change with a change in price.

 

E= (% change in quantity demanded of good "A")/(% change in price of Good A)

 

Factors that affect elasticity- availability of substitutes, price relative to purchasing power, product durability, a product's other uses 

Term
Elasticity of Demand
Definition

Elastic demand- Consumers buy more or less of a product when the price changes. Products that are price sensitive and have many substitutes. (Price goes down, revenue goes up OR price goes up and revenue goes down)

 

Inelastic Demand- an increase or decrease in price will not significantly affect demand. Products less price-sensitive and have very few substitutes. (price goes down, revenue goes down OR price goes up and revenue goes up)

 

Unitary Elasticity- an increase in sales exactly offsets a decrease in prices and revenue is unchanged (price goes up or down and revenue stays the same)

Term

Methods of Cost-based pricing

 

(Markup pricing, Break-Even Pricing, Profit maximization pricing) 

Definition

Markup Pricing: setting the price where price = markup + cost

Markup on Selling Price = (selling price-cost)/selling price

 

 

 Break-Even Pricing- Setting price to cover fixed costs

Break-Even Quantity= Total Fixed Costs/ Fixed cost Contribution

Fixed Cost Contribution= Price- Avg. Variable Cost

 

 

Profit Maximization:  Marketers will operate where Marginal Cost = Marginal Revenue 

 

 

Term
Other Determinants of Price
Definition

stages of the product life cycle

 

competition- high prices may induce firms to enter the market, competition can lead to price wars, global competition may force firms to lower prices

 

distribution strategy- Manufacturers offer a larger profit margine or trade allowance, use exclusive distribution, franchising, avoid business with price-cutting discounters, develop brand loyalty. Wholesalers/Retailers- sell against the brand (stocking well-known branded items at high prices in order to sell store brandsat discounted prices), buy gray-market goods.

 

promotion strategy

 

perceived quality

Term
How to set a price on a product or service
Definition

Establish a pricing goal

Estimate demand, costs & profits

Choose a price strategy

Fine tune with pricing tactics

 

(Results lead to the right price) 

Term
Price Strategy
Definition

A basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle.

 

(Hard to change price without changing perception of product) 

Term

Choosing a Pricing Strategy

 

 

Price skimming, market-penetration pricing, status quo pricing 

Definition

should be based on pricing objectives, set a price that provides a perceived value for the defined target market.

 

Price skimming- (new product pricing) high initial price, innovators and early adopters will stand in line to buy. Successful when inelastic demand, unique advantages/superior, legal protection of product, technological breakthrough, blocked entry to competitors.

 

Market-Penetration Pricing- Low initial price- hook them in. Attract large number of buyers quickly. Advantages- discourages/blocks competition from market entry, boosts sales and provides large profit increases, can justify production expansion. Disadvantages- requires gear up for mass production, selling large volumes at low prices, strategy to gain market share may fail

 

Status Quo Pricing- safe like everyone else. Advantages- simplicity, safest route to longterm survival for small firms. Disadvantages- strategy may ignore demand and/or cost 

Term
New-Product Pricing Strategies
Definition

Premium Strategy- higher price, higher quality  (skimming)

 

Overcharging Strategy- higher price, lower quality (skimming)

 

Good-Value Strategy- Lower price, higher quality (penetration)

 

Economic Strategy- Lower price, lower quality (penetration) 

Term

Product Mix Pricing Strategies

 

(Price Lining, Captive-product pricing, price bundling) 

Definition

1. Price lining- levels of pricing- price points. Different levels of what willing to deal with and pay for.

 

2. Captive-product pricing- you may have to buy main component and later particular items that go with that unit (razor and blades)

 

3. Price bundling- combine related goods, sell for one price, "package deals", could be example of co-branding 

Term
Price Adjustment Strategies
Definition

1. Discounts, Allowances and Rebates (cash, quantity, seasonal- during non peak), promotion allowance

 

2. Flexible (variable) pricing- different segments pay different rates, off-peak daily rate changes

 

3. Psychological (odd-even) pricing- the 99 principle, reference pricing, unit pricing

 

4. Other pricing tactics- single price tactic, bait pricing, two part pricing, loss leaders (leader pricing) 

Term
Customer Relationship Management
Definition

A company-wide business strategy designed to optimize profitability, revenue and customer satisfaction by focusing on highly defined and precise customer groups.

To understand customers find who is best fit for us. Looks at customers as data.

 

Strategy- organize the company around customer segments, encourage and track customer interaction with the company, foster customer-satisfying behaviors, predict future purchases. 

Term
Customer- Centric Focus
Definition

The company customizes its product and service offering based on data generated through interactions between the

 

Here's what we should be doing; focus on our best customers. Not all customers being the same level of participation to the relationship. 

Term

Touch Points in a CRM System

 

Channels for Acquiring Data 

Definition

Touch points- (one experience can affect the way you think of something) customer registration for a service, completion of warranty card, communication with customer service, customer discussions with sales, delivery and installers

 

Channels for Acquiring Data- store visits, conversations with salespeople, interactions via the Web, traditional phone conversations, wireless communications 

Term
Data Mining
Definition

A data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups.

 

20% of customers are responsible for 80% of revenue (need to make these people happy)

 

Identify and profile the best customers, calculate their lifetime value, predict purchasing behavior, individual share 

Term
Recency-Frequency-Monetary Analysis
Definition

1. Identifies customers most likely to purchase again

 

2. Identifies and ranks "best customers"

 

3. Identifies most profitable customers

 

Best does not always = most $ spent 

Term
Marketing
Definition
An organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stockholders.
Term
Marketing Management
Definition
the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
Term
Selling is only the tip of the iceberg
Definition
Peter Drucker- make selling unnecessary
Term
STP Marketing
Definition

Segmenting- divide market based on needs/benefits, demographics, lifestyles, behavioral measures

 

Targeting- Select most appropriate market(s)

 

Positioning- Target marketing messages through 4P's (exp. based on GPA) 

Term
Role of Marketing at the Corporate Level
Definition

To promote culture of customer orientation

To be an advocate for the customer

To assess market attractiveness

To develop firm's overall value proposition, the vision, and articulation of how its proposes to deliver superior value to customers. 

Term
Marketing is all about...
Definition

Creating Exchanges

Identity

Relationships

Solving Customer Problems 

Term
Experiential Marketing
Definition

How can we make something an experience? Connect with the customer

 

Provide the consumer with a total product experience that considers all the elements in an offering that encourage or inhibit consumers' interaction with the product 

Term
Strategic Opportunity Matrix
Definition

Marketing Penetration- existing markets and existing products

 

Product Development- new products, existing markets

 

Market Development- new markets, existing products

 

Diversification- new products, new markets 

Term

Tools for Consumer Sales Promotion

 

 

Consumer Promotion Objectives 

Definition

Coupons and rebates, Premiums (bonus gifts), loyalty marketing programs, contests and sweepstakes, sampling, point-of-purchase promotion

 

 

 

Promotion Objectives- Stimulate inquiries, generating product trial (learn more), encourages repurchase (2 for 1), traffic building (black Friday), increasing rate of purchase (get more while you're there)

Term
Methods of Sampling
Definition

Direct Mail

Door-to-Door

Packaging with another product

Retail store demonstration 

Term
Consumer Promotion Pitfalls
Definition

Small Redemtion Rates "effort"

Displace Sales- going to buy anyway

Stocking effect- now on sale will buy 

Term

Market Response

 

 

Displacement rate, acquisition rate, conversion rate, product line effects 

Definition

Redemption Rate: % responding to incentive

 

Displacement Rate: % of those who would buy anyway

 

Acquisition Rate- % non-regular buyers who purchase the product during promotion

 

Converstion Rate: Number of future purchases by new customers

 

Product line effects: the impact the promotions have on related products 

Term
The Sales Promotion Dilemma
Definition

We loose market share- all others maintain promotions, our firm cut back promotions

 

HIgher profits for everyone- all others cut back promotions and our firm cuts back promotions

 

Same market share, profits stay low- all others maintain promotions and our firm maintains promotions

 

We gain in market share- all others cut back promotions and our firm maintains promotions 

Term
Personal Selling
Definition

Personal presentations by salesforce for the purpose of making sales/building customer relationships.

 

Advantages of Personal selling- detailed explanation/demo, variable sales message, directed to quality product, controllable adjustable selling costs, more effective than other promotion in obtaining sale and gaining customer satisfaction

 

Good if high value product, custom made, technically complex, there are few customers, customers are concentrated 

Term
Steps in the Selling Process
Definition

Generate Leads- advertising, publicity, direct mail/marketing, cold calling, internet web site, referrals, networking, trade shows/conventions, company records

 

Qualify Leads- recognized need, buying power, receptivity and accessibility

 

Probe Customer Needs

 

Develop Solutions

 

Handle Objections

 

Close the Sale

 

Follow up 

Term
Relationship Selling vs Traditional Selling
Definition

Traditional Personal Selling- sell product, focus on closing sales, limited sales planning, discuss product, assess "product-specific needs, "Lone wolf" approach, pricing/product focus, short term sales follow up (sale beneficial)

 

Relationship selling- sell advice, assistance, counsel, focus on customer's bottom line, sales planning is top priority, build problem-solving environment, conduct discovery in scope of operations, team approach, profit impact and strategic benefit focus, long term sales follow up (market approach) 

Term

The Consultative Salesperson

 

must know everything about... 

Definition

Product or service

 

Customers

 

Competition

 

Industry 

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