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FSU ADV 3008 - Exam 3 Study Guide

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ADV 3008 Exam 3 Study Guide – summer_2013 I Love Saving Money – 7/23/2013 Price Incentive Sales Promotion • Integrated Marketing Communication a management concept designed to make all aspects of marketing communication work together as a unified force o Advertising o Sales Promotion o Public Relations o Not all of these work entirely independently • Sales Promotion  a direct inducement which offers an extra value or incentive for the product to the sales force, distributors, or the final consumer with the primary objective of creating an immediate sale o Incentive to behave in a certain way (bribe)  Short term behavior oriented • Advertising vs. Sales Promotion o *Advertising appeals to the heart o *Sales promotion appeals to the wallet o Creates an image over time  Ex: how we think of Apple over time o Relies on emotional appeals  Advertising to the heart  Sales promotion to the wallet o Contributes somewhat to profitability  Long term profitability o Adds intangible value to the product o If you put humor in the ad, it doesn’t add value to the actual product • Sales Promotion vs. Advertising o Creates immediate action o Rational appeals  Ex: buy one, get one free  Money is more rational to people o Contributes significantly to short term profitability o Adds tangible value  Get additional product because of promotion • Coordinating Promotions o Awareness before promotion  This is created through the advertising  Comes first o Speak with one voice  Tone’s of both products should integrate • Behavioral Learning o Future Behavior id determined by reinforcement accompanying past behavior  If you buy a product and like it you get positive reinforcement  want to keep buying the producto Promotional tools act as reinforces along with product performance (the primary reinforcement) to increase the profitability of repeat purchase  Product is the primary reinforcer (the trigger)  Promotion is the kicker • But it cannot save a bad product  Brand loyal consumer are the ideal • Shaping  the process of learning a complex behavior by learning a series of successive approximations of the final behavior o Over time you are trying to shape consumer behavior  Takes time to transform brand loyal consumers o Errors in implementation  Improper fading • Ex: if you do not have a coupon, may go back to an old product  Overuse • Ex: people overuse he product because of the coupon but, they only value the product at coupon price • Ex: Pizza ads always have a special because people are use to it o People see the value of pizza at the sale price • If you train a consumer to buy products with a coupon  risk is going to back to buying at retail • Price Oriented Promotional Tools o Samples  Product given to consumer free of charge  Opportunity to try the product before making a purchase • Eliminates two big issues when company faces product trial: o Eliminate financial risk o Eliminate inconvenience  People often do not know where to buys a new product  Samples Effective When: (Ex: Coke Zero Ad commercial, product was brought in for a different product purchaser than Diet Coke, aimed towards men and used sampling for them to try product) • Brand is clearly superior o In a blind taste testing for coke zero, they compared it with regular coke o Gave product to consumer so they can decide because coke new the product was superior • Product comes in limited varieties • Purchase cycle is short o Sample now, buy it 10 minutes later • Attitudes or behaviors must be created or changed o Zero calorie drink for men o Coupons  certificates presented to a dealer that give the bearer a states savings on the purchase of a product  Likely users are current users of the product • Person most likely to use a coupon is the consumer of the product • Why do we coupon: o Retains current userso Encourages brand switching  People will switch when they see a deal o Increases in-home inventory  Amount of product a consumer has at home  This is valid with larger purchases to help get more inventory which lengthens the purchase cycle • Forces people to not buy another brand o Lengthens purchase cycle o Money Refunds/ Rebates  Used usually for more expensive items • Ex: Cellphones  A partial refund following a purchase • Consumer purchases product • Mail in proof of purchase • Refund send at a later time o Redemption problems  Delay of reinforcement • Rather buy the product that saves you money immediately  Effort required • Have to follow the rules of the rebate • People have forgotten to do it o Company knows this information  Fall out factorI Get What? I Don’t Have to Pay for It? Added Values Sales Promotion • Added Value Promotion o Adds value to product instead of cutting down the price  Ex: codes under caps • Make you buy more of the product in order to get gains of code o Product is sold at full price o Consumers get more for their money o Doesn’t reduce price/value ratio o PremiumAn extra item is offered at a low price or free as an extra incentive to purchase  It is a separate and different item  Not cheaping value of the original product • Gets consumer in the habit of buying at a regular price • Ex: if you buy $75 worth of make up, they give you a tote bag o Objectives of Premium  Encourage brand switching • Steal competitor • Trade up to large size • Increase repeat purchase o Ex: McDonalds Happy Meal toy  Want to purchase often to collect toys, keeping you away from competitor • Put a long term message in front of the consumer o Methods of distribution  In package  In store  Package itself  Mail • Send coupon in the mail  Online • SweepstakesA game where participants have an equal chance of winning a prize, but make no payment to enter o Increases engagement o Increases awareness o Ex: McDonalds Monopoly (1 in 4 wins)  Brings people in  No purchase necessary  Still don’t have to give you a card without a purchase  Need to send in personal letter to corporate office • Lottery: o Sweepstakes with a charge to enter o Illegal in most situations  But the lottery is run by the government • Donations from


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