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BUS-M 300 : EXAM 2
Promotion |
process of communicating product and service information to target customers and other stake holders of the firm |
promotion mix |
combo of tools firm use to communicate with customers |
objectives of promotion |
to inform, persuade and remind |
Hierachy of effects model |
awareness-familiarity-consideration-purchase-satisfaction-loyal/repeat purchase |
advertising |
any paid form of non personal presentation and promotion of ideas goods service by an identified sponsor |
new product advertising should be... |
informative (build awareness induce trial educate) |
for established brands advertising should be.. |
persuasive (remind people to use product, increase frequency of use, distinguish from other competitors) |
Product service advertisement |
objective to increase purchase |
institutional advertising |
objective to highlight the organization |
Institutional advertising pros/cons |
pro- building overall demand for product category level think cotton ads
con-doesnt help specific brand |
reminder advertising |
reminder advertising |
advocacy advertisement |
communicates a marketers position on an issue dont drink and drive |
comparative advertisement |
creating a differential advantage by comparing a product with a competitior |
comparative advertising advantages |
highlight competitive advantages highlight different selling point to impress audience and best competitors |
comparative advertising disadvantages |
lawsuits. more fierce comp, free advertising for comp, potential neg reaction from customers, not legal in some countries |
aided recall |
ask people about advertisement different parts of ad where they saw it etc |
attitude tests |
measure whether peoples attitudes have changed after seeing the ad |
sales test |
see how advertising affects actual sales |
brand extensions |
new products in different product categories |
product line extensions |
new products in the same product categories |
benefits of product line extensions |
enhance firm growth,more optimal use of company resources |
product life cycle |
describes stages new products goes through in the marketplace |
product life cycle is |
introduction, growth maturity and decline |
product life cycle concept based on four premises |
1. products have limited life
2. product sales pass through distinct stages each with different marketing implication
3. profits from product vary at different stages in the life cycle
4. products require different life cycle stages |
whats a new product |
firms view: anything different from previous product
customers view: a products newness is defined by the degree of consumer learning require to used product property |
continous innovation |
requires no new learning by customers, build customer awareness by using same distribution channels |
dramatically continuous innovation |
disrupts customers routine but little new learning required, promote points of difference between old and new |
discontinous innovation |
requires new learning and consumption paterns by customer, educate customers using promotion personal selling and trial |
new products important to firms.... |
- more sales/revenue
higher price for new product
build competitive advantage
build employee morale |
8 out of 10 new products fail because..... |
lack of competitive advantage
dont understand customers needs/ wants
too little market attractiveness
poor execution of marketing mix |
new product development process |
7 steps |
step 1.idea generation |
good ideas come from customers |
step 2. screening |
seperate ideas from those that are good and those that are not |
step 3. concept development and testing |
measure of consumer attitudes and perceptions relavant to the product. focus groups are given a description of the product and their attitudes and perceptions are assesed |
step 4. rough marketing strategy developed |
target market,price, planned sales and figures |
step 5. development |
physical product exists and can be analyzed by company |
step 6. test marketing |
process of selection specific geographical area considered to be generalizable to products overall target market |
drawback to test marketing |
expensive, competitors can disrupt and skew results, also give competitors info about products so they imitate or offer better product |
step 7. commercialization |
fully introducing new product into the marketplace, most expensive step in the process, stages requires tremendous financial resources and extensive coordination of all aspects of the marketing mix |
new product portfolio management |
new products/ projects constantly updated revised, evaluated selected prioritized |
value maximazation |
allocate resources in way maximizes value of portfolio |
strategic allotment |
final portfolio of projects is strategically aligned and truly reflects business strategy |
optimal balance |
principal concern to achieve the desired balance of projects in terms of number of parameters
ex: long term vs short term etc |
marketing mix 4 p's |
product, place, price promotion |
product |
good/ service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value |
a product is comprised of 4 levels |
core, actual, augmented, desired |
core product |
actual benefits received by consumers "buyes do not buy drills they buy holes" |
actual product |
quality level, features. design packaging and brand name of product |
augmented product |
delivery and credit warranty and after sale service associated with the products |
desired product |
product consumers really want or think they want - dessert great tasting no calories |
b2b |
business to business |
industrial product |
products sold by one business to another to serve organization needs |
b2c |
b2c business to consumer |
consumer product |
product designed to satisfy individual needs |
product line |
group of products closely related |
product mix |
number of product lines offered by a company |
depth of product line |
means firm carries a large assortment of items within line |
breadth of product line |
refers to variety of different items a firm carries |
personal selling |
personal presentations by the firms sales force for the purpose of making sales and building customer relationships |
transactional selling |
focuses on pushing a one time sale, does more pushing than listening, emphasizes adding new customers |
order takers |
process routine orders or reorders for products already sold |
outside order takers |
visits customers arrange displays and replace inventory stocks or resellers |
inside order takers |
take care of customers who call or visit firm directly |
what do order getters do? |
identify prospective customers
persuade customers to buy products
close sales
follow up on customers after sales |
negatives/positives of order getters |
make personal sales calls-much autonomy in job
do little cold calling
are costly to the firm
enjoy high salaries and personal growth
know customer better than any other person in the company |
customer training is key for order getters |
selling right solutions to the right people at the right time |
sales team |
individuals from different functional areas, a sales rep, an engineer a production person working together to satisfy customer needs |
sales partnering |
also known as collaborative selling because an alliance is formed with the customer to meet ongoing customer needs the sales rep is integral part of buyers operation |
5 steps of persuasive selling |
set the stage
state your idea
explain how your idea works
reemphasize the main benefits
close sale by suggesting the next steps |
3 steps of effective sales management |
sales plan formulation, sales plan implementation, sales force evaluation and control |
sales plan formulation |
designing an effective sales plan to generate sales and keep existing customers |
sales plan implementations |
sales plan is put into practice based off of the sales plan formulation |
sales force evaluation and control |
involves evaluating the sales force objectives and ensure that sales force objectives and ensuring that sales policies are being followed |
sales plan implementations involve three tasks |
recruitment, training, and motivation/compensation |
sales force evaluation and control 2 tasks |
quanititative assessments, behavior evaluation |
quantitative assesments |
quotas, sales calls completed selling expenses and reports are all ways to keep track of the success of a sales team |
behavior evaluation |
attitude attention to customers product knowledge , communication skills, and professional demeanor must be monitored to ensure a productive sales force |
direct marketing |
fastest growing integrated marketing communication, emails etc, computerization has made it easier to create interactions with customers |
brand |
name symbol design used to identify the products and differentiate them from competitive offerings |
y are brands important to consumers |
help consumers id products that benefit them, sign of quality and consistency and facilitate purchase |
y are brands important for companies |
make it easier to establish customer relationships and loyalty, provide legal protection for unique product features and also reduce vulnerability to price competitions |
brand name |
is the words or letters of the brands |
brand mark |
is the pictorial part of the brand |
trademark |
a brand that has been given legally protected status exclusive to the owner |
brand equity |
added value to the firm the channel or the consumer with which a brand endows a product |
brand recognition |
some knowledge of brand |
brand preference |
stage where consumer will prefer once brand over another but will not demand that brand every time |
brand insistence |
stage where no alternatives will suffice few goods reach this stage |
as equity grows competitive advantages increase allowing the firm to offer |
brand extensions to enhance performance |
brand extensions |
new products in different product categories that often carry same brand name |
pros of brand extension |
new products benefit instantly from existing brand brand name recognized by more customers faster market penetration/adoption |
cons of brand extension |
lack of fit with primary category may doom extension brand,if not done well new product may hurt sales of existing product as well |
product line extensions |
new products that closely resemble firms existing products |
benefits of PLE |
enhance firm growth, optimal use of company resources |
cannibalization |
theft of sales from existing products by the new PLE |
co-branding |
practice of marketing two or more brands together or the same package promotion or store |
sales promotion |
programs designed to build interest in or encourage purchase of product during a specified time period |
sales promotion is focused on |
immediate boost in sles |
primary objectives in sales promotion |
build awareness for the promoted product, provide info about the product, present economic incentive to buyer to purchase product |
sales promotion mix |
contests/sweepstakes, money offs/rebates, loyalty programs , samples,displays,coupons,event marketing sponsorship |
consumer promotions |
sales promotion tools used to boost short term customer buying and involvement or enhance long term customer relations |
loyalty programs advantages |
create loyalty encourage repurchase |
loyalty programs disadvantages |
high costs to the firms difficult to create a differentiated value for the customer given the many loyalty programs currently available |
point of purchase displays |
point of purchase displays |
disadvantage of point purchase displays |
difficult to get good location, execution costs may be inolved for the firm |
coupons advantages |
stimulates demands, allows direct tracing of sales, segments the market effectively creating tiered pricing |
disadvantages of the couponing |
low redemption rates wasted costs related to distribution to non coupon users/redeemers |
event marketing |
create a brand marketing even or serving as a sole or participating sponsor of events created by others |
advantages of event marketing |
creates engagement and excitement, helps build brand relationships, draw media coverage, |
disadvantages of the event marketing |
creates confusion if the brands current association are inconsistent with the event difficult to measure ROI |
temporary price reduction increase sales substantially |
creates sense of urgency consumers get economic benefits from the sales promotion short term promotion drives consumers immediate purchase |
high market share brands are less promotion elastic than low share brands |
more difficult for big brands to further increase market share than small brands market saturations |
heavily promoted brands lose equity why? |
lower prices damage luxury brand image and equity as price becomes focus rather than quality, consumers begin to think of the brand in terms of discounts and lower prices, it will therefore be much more difficult to get them to pay higher everyday price and buy into the value of the prestigous label |