ADV 205 Lecture 13 Outline of Current Lecture I Building Relationships Current Lecture Building Relationships IMC Approach o Building relationships Three types of communications o Direct Marketing Database Marketing Direct Response Any direct communication to a consumer or business recipient that is designed to generate a direct response o Direct order o Lead generation o Traffic generation o Personal Sales o Sales promotions Direct marketing most common o Direct sales original most effective o Direct mail o Catalog sales o Telemarketing o Direct response advertising mass media o Internet Foundation of DM Databases o Maintain customer contact o Build relationships Target segment and grade consumers Regency frequency monetary o Benefits Offers accountability tracking Cost effective targeting Offers convenience to time sensitive consumers House list list of the marketer s own customers or members its most important target market Probably its most valuable list These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Response list Derived from people who purchase or responded to a related direct mail offer in past i e pet food ad for collars Similar to the target audience Sold by brokers Compiled list People who meet a specific demographic profile i e graduating seniors Problem maybe only half by through mail Prost of Direct mail advertising o Selectivity o Extensive reach o Flexibility o Control o Personal impact o Exclusivity o Response o Testability o Drives online sales Cons o High cost per exposure o Delivery problems o Lack of content support o Selectivity problems o Negitive attitudes o Environmental concerns Personal selling main goal is to be a problem solver for the client o Advantages Face to face contact allows for instant feedback Allows for information gathering Salesman can represent the company build relationships o Disadvantages Expensive Salesman have bad reputations STORY Meridian Plumbing says need new faucet She doesn t want to buy his buys faucet from lows Kid comes from lows and says don t need new faucet and fixes old one in 10 minutes The role of personal selling o Gathering information o Providing information o Fulfilling orders o Building relationships Keeping commitments servicing solving problems o Telemarketing Ads delivered through phone calls inbound outbound More marketing dollars are spend on telemarketing than on any other medium Telemarketing is almost as persuasive as personal sales but less expensive Sales promotions direct inducements that offer extra incentives to move the product from the manufacturer to the consumer Three broad goals o To stimulate demand o To improve the marketing performance of resellers o To supplement advertising personal selling and public relations activities o Advertising tries to change attitudes promotions try to change behavior Advantages of sales promotions o Adds value to the product o Creates differentiation among brands o Helps immediate sales advertising helps long term Disadvantages o Innefective at building brand equity o Negative impact on attitudes toward the brand must be bad o Sales increases may not be very profitable same people o Implementation costs and risks uneven demand extra cnts to produce store sweepstakes o Short term orientation o High cost competition war Sales promotions as push strategies used to influence retailers to get shelf space and protect the product against competitiors o Trade advertising o Trade promotions Types of trade discounts o Buying allowance o Reducing in price Linked to quantity requirement Deducted from invoive or given as credit Intended effects Gain or retain distribution Get lower shelf price Ward off competition load retailers Ex alprose chocolat buy 4 bars for 3 sell 4 bars for 5 minimum 20 case quantity o Off invioce allowance no quantity requirement Price reduced for specific time period 8 10 weeks Deducted direct from invoice Ex Cottonelle bath tissue manufactureers price 3 235 per 6 roll pack 8 packs per case 25 88 reg case price to retailer 5 case allowance Net price to retailer 20 88 2 61 per pack o Other deals Slotting fees Direct cash payments to retailer for costs associated with new item Legitimate or fair business expenses Bill back allowance o Money incentive for featuring my brand in advertising or instore displays o Advertisng or displays buyback allowances Cooperative advertising manufacturer pays all or part of local ads run by retailers Display allowance manufacturer pays for retailer to provice specific display may provide materials POP 50 of supermarket purchases unplanned Buyback allownces whatever isn t sold company will buy back But wait there is more o Cash rebate Cash discount or return check Payment for performing some task Rebate based on annual purchase volume G E up to 4 5 of net yearly purchases o Scan down or scan back Manufacturer only offers discount on units sold during promotion period Prevents stockpiling Limitations o Legal Restrictions Must offer promotional equal deal to all competing retailers o Practical Problems Hard to monitor performance Diverting bring products to somewhere else they will sell better Forward buying A few nice extras o Dealer promotions and contests o Push money cash or prizes to those who meet sales requirements o Company conventions and meetings Maximizing Effectiveness Trade deals work best for o Short time periods infrequent intervals o Products with high holding or storage costs for retailer o Linkage to consumer promotion Concerns o COST Cost passes on to consumers in a form of higher prices 11 cents of every dollar spent on product goes to trade promotions Meijer o Impact on small manufacturers When the cost to stock a new item can reach 1 5 to 2 million Large guys have an advantage Consumer promotions WHY THE GROWTH o Results occur quickly o Results are measureable greater accountability Unlike advertising when evaluated for contribution to sales easier to document o Proliferation of brands You look at 60 sauces this is a way to gain attention o Retailer demands o They work Role of sales promotions Traditional View o Short term incentive to purchase a product or service o Changes behavior by altering the price value relationship o Tactically driven discipline not much analytical thought relation to the marketing mix New view o Need for strategic focus o Consider both short and long term effects New