REVIEW SHEET M300 Final Exam Fall 2014 Video camera monitoring for exams Video cameras may be used to monitor the room during student assessment activities including but not limited to exams tests and quizzes Video recordings may be used to investigate or support disciplinary action All access to and use of video equipment and recordings will follow applicable IU policies Coverage Whatever we covered in class after Midterm Exam not cumulative 1 Course Notes after midterm exam 2 Homework including those not turned in after midterm i e sales forecast homework Kenmore Appliance computing price elasticity and IMC budget allocation problem the case of Dell Computer etc 3 Cases discussed after midterm Gardenburger Advertising Strategy Case Burroughs Wellcome Case The following topics represent most potential areas for questions not all inclusive 1 IMC five major IMC tools be able to tell the differences among them be able to tell the advantages and disadvantages be able to judge when they should be used etc 1 2 International marketing product promotion adaptation grid international marketing entry strategies Exporting sell to interested parties in another country Products are handled by middlemen Licensing for a fee a foreign company buys the right to use the company s manufacturing process trademark trade secret etc Contract manufacturing the international company contracts with a manufacturer in the host country to manufacture the product in the host country using the host s standards Unlike licensing the international firm has little control over manufacturing process The host company owns the manufacturing facilities Joint ownership one company joining with another to create a product or service Direct investment foreign production and marketing The foreign company owns the production capabilities Direct Marketing manufacturing or assembling in one country and marketing in another 3 Consumer buyer readiness stages and its relationship with IMC design Advertising and PR most effective during the awareness and knowledge stages of buyer readiness Personal Selling most effective during liking preference conviction stage of buyer readiness Sales Promotion most effective during purchase and repurchase stage of buyer readiness 4 IMC budget allocation problem the case of Dell Computer be able to judge what will happen if some of the conditions change without actually running Solver 5 Research results on advertisement and sales promotion shown in the notes 2 6 Comparison of different types of advertisement TV Radio Newspapers Direct mail Magazines Outdoor ad Be able to judge when they should be used 7 Three main types of distribution strategies intensive selective and exclusive Be able to judge when they should be used Intensive Distribution the objective is to saturate the market with product uses an undifferentiated marketing strategy or mass marketing to reach customers image of being sold everywhere is consistent with the nature of the product often used by convenience goods and commodity manufacturers Selective Distribution a limited number of retailers or dealers are used to reach target market strategy should be consistent with the image of the product as a good that can be bought in only certain stores shopping goods commonly employ this strategy Exclusive Distribution only one or a limited number of retailers market the product in a particular geographical area strategy should be consistent with the high quality image of the product many specialty goods employ this strategy 3 8 Different types of channel conflicts Horizontal Conflicts occur among firms at the same level of the channel e g Two car dealers Vertical Conflicts occur between different levels of the same channel e g Ford and Firestone 9 Different types of Channel organization vertical marketing system horizontal marketing system hybrid marketing system Vertical Marketing Systems VMS channel members act as a unified marketing system Corporate channel leadership through ownership Contractual independent firms joining together to obtain economies or sales impact e g Franchise organizations Administered channel leadership through power of one member Note Degree of direct control varies Horizontal Marketing Systems Horizontal cooperation e g banks in grocery stores Hybrid Marketing Systems e g retailers sales force and online 10 Sales forecast like the taking home homework Kenmore Appliance be able to use all kinds of forecasting models draw conclusions etc Two popular techniques for forecasting sales are moving average models MAM and Exponential Smoothing Models ESM Both models rely on historical data to forecast sales so they are extrapolative techniques MAM utilize the following formula Sales t 1 1 n Sales t Sales t 1 Sales t 2 Sales t n 1 where Sales t 1 forecasted sales for an upcoming period Sales t sales in timet present period Sales t 1 sales in time t 1 last period n span which captures the average of the last n observations before the forecast period 11 Business cases discussed after midterm Gardenburger Advertising Strategy Case Burroughs Wellcome Case 4 12 Push vs pull strategies Demand Push Communication Strat Demand Communication Strat 13 Loss leader what is it how to use A product sold at a loss to attract customers 14 Price elasticity be able to calculate and interpret Elasticity change of demand change of price 15 Cost plus pricing be able to do all the calculations and draw conclusions Profit Revenue Expenses Revenue Units sold X unit price Customer Value Product s Benefits Price Price Markup Cost 16 Pricing strategies for products skimming vs penetration strategy When and how to use it Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first then lowers the price over time Penetration pricing is the practice of offering a low price for a new product or service during its initial offering in order to attract customers away from competitors SEE MORE BELOW 5 17 Relationship between price elasticity pricing action and revenue Price affects the marketer s profit more directly than the other elements of the mix Here s how Profit Revenue Expenses Revenue Units sold X unit price 18 Three IMC budget approaches pros and cons 19 Determine prices for different segments given price elasticities 20 Several types of demand oriented pricing promotional customary psychological value based pricing etc Promotional Pricing using of temporary price reductions that