MKTG 360 1nd EditionFinal Exam Study Guide Lectures: 15-19Lecture 15-191. Cause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customer engage in revenue-providing exchanges that satisfy organizational and individual objectives2. History of Cause related marketinga. American Express 1983 joined the Statue of Liberty Restoration Fundb. 1¢ for each use of its charge cardc. $1 for each new card issuedd. 28% increase in card usage over the same time period in 1982e. $1.7 million contributed by American Express to the Statue of Liberty RestorationFund3. Cause related marketing is uniquea. CRMi. Contributions to charity from sales.ii. Offering economic incentives are NOT key characteristics of CRM (e.g., coupons, refund offers) but can be included.b. Corporate philanthropyi. Donations made on behalf of the company not necessarily based on sales. ii. Can include sponsorships.4. Is cause related marketing all good?a. Prosi. Increase salesii. Boost public imageiii. Pacify customersiv. Help good causesb. Consi. Possible exploitationii. Possible trust issuesiii. Customers may not agree with the cause being helpediv. Possible employee rifts5. When is Cause related marketing successful?a. When the consumers, employees, stakeholders are on board with helping the causeb. When the consumers perceive the company to have altruistic motivesc. When there is a high fit with the caused. When the company is involved in the cause for a longer period of timee. When the company is involved with the cause besides just donating money6. Basic conceptsa. Overriding Principlei. “Click-Whirr” or Automatic Respondingii. We often rely on heuristics (rules of thumb) and respond “mindlessly”iii. Some argue mindlessness is the key to successful social influence techniquesb. Some Examplesi. Mother Turkeysii. Jewelry at Twice the Price!iii. Fixed Action Patterns at Copy Machinec. Capitalizing on Genuine Principlesi. We should listen to authorities, reciprocation is reasonable ii. Problems if used inappropriately d. Social Influence and Ego Depletioni. We are especially likely to fall back on heuristics, automatic processes, or habitual patterns when we are ego depleted à7. Principle 1- Reciprocationa. Reciprocationi. You scratched my back, I’ll scratch yoursii. Get your free samples! iii. Get a free Trip to Reno!iv. Door-in-the-Face Technique1. Ask big, get turned down, make concession, then ask smallv. That’s Not All Technique1. No chance to turn down initial request8. Principle 2- Commitment and Consistencya. Commitment & Consistencyi. Cognitive Dissonance – Leon Festinger1. We like our attitudes and behavior to be consistent2. When they are inconsistent, we feel tension3. Tension is uncomfortable, and we wish to reduce it4. We can change behavior or attitude to align the twoii. Foot-in-Door Technique1. Ask for a small act of compliance, then build on itiii. Low-Ball Technique1. Make a low offer, then increase it once people are ‘hooked’9. Principle 3- social Proofa. Social Proofi. We tend to follow the crowdii. Laugh Tracksiii. Best Seller Listsb. Descriptive vs. Injunctive Normsi. Descriptive Norms: What the majority of others is doingii. Injunctive Norms: What people “should” do10. Principle 4- Likinga. We are more likely to comply with requests from those we like. b. Liking often based on…i. Attractivenessii. Familiarityiii. Similarityiv. Ingratiation11. Principle 5- Authoritya. Authorityi. We are more likely to comply with requests from, and follow the recommendations of, authorities12. Principle 6- Scarcitya. Scarcityi. We believe that things that are scare are more valuableii. More likely to pay more for scarce resourcesiii. Works partly on the concept of “psychological reactance” – when we think we may not be able to get a limited resource, we feel our freedom has been restricted, and we react against that possibilityb. Examplesi. Overlapping appointments for selling carsii. Excuse me while I take this calliii. One day only at the Bon Marche13. Principle 7- Scarcitya. Manufacturers/Artists often use this – there were only X (number) made, and when they are gone, they are gone.b. For extra measure, they may even autograph it… signaling the limited edition andthe cue of future worth potential. 14. Distribution channelsa. The bridge between producers and final consumers, which allows firms to collaborate in the physical movement of the goods or services.15. Logisticsa. The process ofi. Planningii. Implementingiii. Controllingb. The efficient, cost-effective forward and reverse flow of raw materials, in-process inventory, finished goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.c. Logistics: The process of designing, managing, and improving the movement of products through the supply chaind. Inbound (raw inputs) and outbound (semi, or fully finished outputs) logistics are importante. Reverse logistics is increasingly important due to sustainability practices of firms16. Supply chain managementa. The integration of key business processes from end user through original suppliers, that provides products, services, and information that add value for customers and other stakeholders.b. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. c. Supply Chain Management integrates supply and demand management within and across companies.17. Intermediariesa. They handle the flow of products or services to the retailer or business user.b. Independent intermediaries: do business with many different manufacturers and many different customer firms and thus help the flow of goods throughout the marketplace.c. Merchant wholesalers: are independent intermediaries that buy goods from manufacturers and sell to retailers and other B2B organizations. d. Merchandise agents or brokers: provide services in exchange for commissions but never take title on the product.18. Distribution, the marketing mix and ethical issuesa. Distribution decisions interact with the marketing mix in a number of ways:i. Place decisions influence pricing/costsii. Distribution decisions can help develop a position in the marketiii. Nature of the product influences