Exam 2 Ch 15

Front 1

• Communication

Back 1

is the process of conveying a message to others

Front 2

6 elements of communication

Back 2

o a source
 a company or person who has information to convey
o a message
 the information being sent
o a channel of communication
 a salesperson, advertising media, public relations tools
o a receiver
 the consumer
o the process of encoding and decoding

Front 3

o Encoding

Back 3

is the process of having the sender transform an idea into a set of symbols

Front 4

o Decoding

Back 4

is the reverse or the process of having the receiver take a set of symbols, the message, and transform the symbols back to an idea
 Performed by the receivers according to their own frame of reference:
 Their attitudes, values, and beliefs

Front 5

o Errors in communication

Back 5

 The source may not adequately transform the abstract idea into an effective set of symbols
 A properly encoded message may be sent through the wrong channel and never make it to the receiver
 The receiver may not properly transform the set of symbols into the correct abstract idea
 Feedback may be so delayed or distorted that it is of no use to the sender.

Front 6

o For the message to be communicated effectively

Back 6

, the sender and receiver must have a mutually shared field of experience—a similar understanding and knowledge they apply to the message

Front 7

feedback loop consists of

Back 7

response and feedback

Front 8

response

Back 8

the impact the message had on the receiver’s knowledge, attitudes, or behaviors

Front 9

 Feedback

Back 9

the sender’s interpretation of the response and indicates whether the message was decoded and understood as intended.

Front 10

 Pretesting

Back 10

ensures that messages are decoded properly

Front 11

• Noise

Back 11

o Includes extraneous factors that can work against effective communication by distorting a message or the feedback received
o Can be a simple error, such as a printing mistake that affects the meaning of a newspaper advertisement or using words or pictures that fail to communicate the message clearly.

Front 12

o Advertising

Back 12

 Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.
 Can be attention-getting and can communicate specific product benefits
 A company can control what it wants to say, to whom the message is sent, and when to send its message

Front 13

o Personal selling

Back 13

 Two way flow of communication between a buyer and seller designed to influence a person’s or group’s purchase decision
 Face to face communication

Front 14

o Public relations

Back 14

 Seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

Front 15

 Publicity

Back 15

is a nonpersonal, indirectly paid presentation of an organization product, or service.

Front 16

Sales Promotion

Back 16

A short-term offer designed to arouse interest in buying a product or service

Front 17

Direct Marketing

Back 17

Promotional element that uses direct communication with consumers to generate a response in the form of an order, request for former information or a visit to a retail outlet

Front 18

5 promotional elements

Back 18

1. Advertizing
2. Personal selling
3. Public Relations
4. Sales Promotion
5. Direct Marketing

Front 19

In putting together a promotional mix, a marketer faces two issues

Back 19

1. The balance of the elements must be determined
- Several Factors that affect such decisions are: Target Audience, the Stage of the Product’s Life Cycle, and the Channel of Distribution
2. Because the various promotional elements are often the responsibility of different departments, coordinating a consistent promotional effort is necessary

Front 20

Target Audience

Back 20

-Promotional programs directed to buyers of consumer products often use mass media because the number of potential buyers is large
-Personal Selling is used at the place of purchase (generally a retail store)
-Direct Marketing may be used to encourage first-time or repeat purchases
-Combinations of media alternatives is necessary today
-Intermediaries are often the focus of promotional efforts

Front 21

Introduction Stage

Back 21

Informing customers in an effort to increase their level of awareness is the primary promotional objective
-In general, all the promotional mix elements are used at this time

Front 22

Growth Stage

Back 22

The primary promotional objective of this stage is to persuade the customer to buy the product
-Advertising is used to communicate brand differences, and personal selling is used to solidify the channel of distribution

Front 23

Maturity Stage

Back 23

The need is to maintain existing buyers
-Advertisings role is to remind buyers of the products existence
-Sales Promotion in the form of discounts, coupons and events are important

Front 24

Decline Stage

Back 24

This is usually a period of phase-out for the product, and little money is spent in the promotional mix

Front 25

Channel Strategies

Back 25

Push and Pull

Front 26

Push Strategy

Back 26

Directing the promotional mix to channel members to encourage them to order and stock a product

-Personal Selling and Sales Promotions play major roles
-Salespeople call on wholesalers to encourage orders and provide sales assistance
-Sales promotions, such as case allowances, are offered to stimulate demand

By “pushing” the product through the channel, the goal is to get channel members to push it to their customers

Front 27

Example of push stategy (Ford)

Back 27

Ford Motor Company provides support and incentives for its dealers
-Dealers receive incentives when they reach a goal or maintain superior facilities or improve customer service
*All of these actions are intended to encourage Ford dealers to “push” the Ford products through the channel to consumers

Front 28

Pull Strategy

Back 28

: Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for the product

-In some instances, manufacturers face resistance from channel members who do not want to order a new product or increase inventory levels of en existing brand

-Seeing demand from ultimate consumers, retailers order the product from wholesalers and thus the item is pulled through intermediaries

Front 29

Example of Pull Strategy

Back 29

EX: Pharmaceutical companies now use “direct-to-consumer” prescription drug advertising to complement traditional personal selling
*The strategy is designed to encourage consumers to ask their doctor for a specific drug…by “pulling” it through the channel
-Print ad’s like “ Ask your doctor if Zetia is right for you” can have dramatic effects on the sales of a product

Front 30

Target Audienc

Back 30

the group of perspective buyers toward which a promotion program is directed

-Identified through marketing research and market segmentation studies
-The more a firm knows about its target audiences (lifestyles, attitudes, values) the easier it is to develop a promotion program

Front 31

Hierarchy of Effects

Back 31

The sequence of stages a prospective buyer goes through; awareness, interest, evaluation, trial, adoption

Front 32

1. Awareness-

Back 32

the consumer’s ability to recognize and remember the product or brand name

Front 33

2. Interest

Back 33

an increase in the consumer’s desire to learn about some of the features of the product or brand

Front 34

3. Evaluation-

Back 34

- the consumers appraisal of the product or grand on important attributes

Front 35

4. Trail-

Back 35

- the consumers actual first purchase and use of the product or brand

Front 36

5. Adoption

Back 36

though a favorable experience on the first trail, the consumer’s repeated purchase and use of the product or brand

Front 37

Promotion Objectives should posses three important qualities

Back 37

1. Be designed for a well-defined target audience
2. Be measurable
3. Cover a specified time period

Front 38

Several Methods can be used to set the Promotion Budget

Back 38

• Percentage of Sales (budgeting approach)- the amount of money spend on promotion is a percentage of past or anticipated sales
• Competitive Parity (budgeting method)- matches the competitors absolute level of spending or the proportion per point of market share
• All You Can Afford (budgeting method)- common to many businesses, it allows money to be spent on promotion only after all other budget items, such as manufacturing costs, are covered
• Objective and Task (budgeting method)- This is the best approach whereby the company determines its promotion objectives, outlines the tasks to accomplish those objectives and determines the promotion cost of performing those tasks