Marketing Management Exam 2

Front 1

Promotions (different activities)

Back 1

advertising, price promotions, pr campaigns, events

Front 2

what do promotional tools do

Back 2

help increase awareness, help enhance appeal

Front 3

types of price promos

Back 3

coupons, BOGO, sales, rebate

Front 4

difference between advertising and promos

Back 4

Ads: long term, indirect path to sales, slow results, one way communication to customers

Promos: short term, direct path to sales, quick results, immediate incentive for customers

Front 5

sales promotion mix

Back 5

customers (pull), retailers (push*), sales force (encourage)

*sometimes doesn't work b/c retailers don't pass promotions to customers

Front 6

common reasons for using promos as a tool

DBANTSM

Back 6

capture attention, attract new customers, induce trial of new product, gather data on customers, get people to buy more, defend share (against competitors' promos), enhance merchandising & sales force support

Front 7

positive short term impact of promos

data point

Back 7

On average, a 10% promotional price cut leads to a 25.5% same-week sales increase for promoted brand.

Front 8

positive short term impact of promos

why it happens

Back 8

purchases by new customers (Primary demand increase, Brand switchers)

Increased purchases by existing customers
• Existing customers purchasing more (expanding)
• Existing customers accelerating purchases (stockpiling: cross-period shifts)

Front 9

promos used by brandswitching customers

Back 9

leads to cannibalization of a brand's products

(new customers also only buying in short term)

Front 10

promos used by existing customers

Back 10

-stockpiling--cuts away from future profits

-promos sell items at costs that are lower than what customers are willing to pay

Front 11

downsides and risks of promos

GW

Back 11

-Greedy Retailers, abuse by trade
– E.g., Retailers forward-buy, divert, and often do not pass-through the discount to their customers

-Discounts are easy to imitate…leading to price
wars, all firms losing profits

-not much positive long-term impact

-Running a promotion can be costly (may increase revenue but not profitability)

-Promos can increase customers’ price sensitivity & as their reference price drops, brand image
often cheapened.

Front 12

strategic use of promos

specific objective

Back 12

-Introduce a new brand
– Gain trial for another product
– Gather consumer data
-- Reduce brand inventory
-- Preempt competition
-- Enter new markets
-- Promote trial

-better with smaller new products

Front 13

aspects of strong promo

Back 13

– Deter imitation & attract buyers quickly
– Communicate something meaningful about the brand
– Are informative and/or have unique emotional appeal
– Are often launched by a firm/brand with an existing
differential advantage (sales promos don’t CREATE
advantages so much as they exploit existing ones.)

Front 14

what does a strategic promo accomplish

Back 14

reinforce brand image, enhance loyalty, engage
consumers with the brand, create excitement, attract attention.

Front 15

experiential marketing

Back 15

marketing strategy that directly engages consumers and invites and encourages consumers to participate in the evolution of a brand.

Front 16

hierarchy of effects model

Back 16

awareness-knowledge-liking-preference--conviction-purpose

cognition (a-l) affect (l-p) behavior/action (c-p)

Front 17

what function do ads serve

Back 17

Awareness / Informational Function
• Convey product information or announce new product
– Persuasive Function
• increase liking or purchase intention
– Reminder Function
• Keep brand/product at “top of mind”
– Marketing Program Support (vehicle for
coupons, sales rep use, etc.)

Front 18

primary price considerations

Back 18

To begin with, obvious economic inputs:
• Costs
• Levels of demand & consumers’ price sensitivity

Front 19

cost-based pricing approaches

Back 19

-mark-up approach only take cost into account

• Break-even or target return approaches
– What volume do we need to sell at this price?
– Takes into account consumer demand at various price
points

Front 20

grp

Back 20

The purpose of the GRP metric is to measure impressions in relation to the number of people in the target for an advertising campaign. GRP values are commonly used by media buyers to compare the advertising strength of components of a media plan.

GRPs (%) = 100 * Impressions (#) ÷ Defined population (#)

Front 21

walter dill scott

Back 21

have to appeal to consumer's psychology to get them to buy product

Front 22

Value-based Pricing & target costing

Back 22

constructing price to meet consumer ideals--costs are controlled to ensure price is met (e.g Henry Ford)

Front 23

traditional approach to price

Back 23

-- Maximizes short-run profits
subject to assumptions about
demand and costs
-- Is determined after product
design & quality are fixed
-- Assumes a "rational" consumer
who can assess true quality

Front 24

marketing approach to price

Back 24

Maximizes long-run profits
based on a scenario for market
evolution and the firm's strategic
advantages
-- Is part of evaluating alternative
approaches to ongoing positioning
efforts
-- Recognizes consumers' need for
& use of heurist

Front 25

Perceived Value

Back 25

Perceived Value (“consumer surplus”)=
Quality - Price - Time +/- Psychic Factors

Front 26

Direct Methods for Assessing value
from the Customer’s Perspective

Back 26

-Direct Price-Rating: name a price

Perceived-Value-Rating Method: relative allocation

Front 27

Perceived-Value-Rating Method

Back 27

Price = (rating / (100 / # of products)) * average price

Front 28

CONJOINT ANALYSIS what's it for

Back 28

used to figure out how consumers value or
“weight” various product features?

Front 29

CONJOINT ANALYSIS how it works

Back 29

consumers ranks products w/ various features, data analysis estimates the psychological trade-offs consumers make when evaluating several attributes together.

Front 30

marketing approach to price summary

Back 30

emphasizes perceived value to the customer
– recognizes that consumers’ perceptions of pricing are
subject to perceptual biases and heuristics
– Calls for price to be used strategically to complement
broad goals

Front 31

distribution channel

Back 31

• A channel of distribution is a set of interdependent firms that collaborate to make a product or service available for end-use consumption.

Front 32

Why are channel partners often needed?

Back 32

– Cost advantages - Insufficient capital for direct selling, or better rate of return on core business with partners
– Better service to customers. Channel members ADD VALUE through superior skills and/or efficiency at certain
tasks.

Front 33

channel options

Back 33

-direct channels

-agents and brokers

-merchants

-facilitators

Front 34

Vertical Marketing Systems (VMS): channel system type

Back 34

– Corporate – single ownership
– Contractual
• Franchise systems
– Administered (control exerted through size/power,
provide support, training, sales terms/obligations)

Front 35

4 primary considerations of Choosing a
Distribution Strategy

Back 35

1. cost efficiency--carrot v. stick

2. what do customers want? Complexity of buying decision, level of “touch” needed, coverage expected, etc.

3. Quality and breadth of services different partners can
offer

4. control

Front 36

value added services of distributor

Back 36

on site training, special demos, promo assistance, pr

Front 37

horizontal channel conflict

Back 37

horizontal--conflict on the same level (e.g. car dealership lowering prices and affecting other dealerships in the same area)

Front 38

vertical channel conflict

Back 38

vertical--when corporate/top-down initiatives disrupt ability to sell (e.g. KFC selling grilled chicken upset franchisers)

Front 39

multi-channel conflict

Back 39

selling online vs. in-store (e.g. matel going online b4 Christmas--direct selling created competition w/ retailers)

--can combat by only selling certain items online

Front 40

Determining advertising budget

Back 40

• Make advertising a percentage of sales—may become a self-defeating cycle o If sales are down you spend less on ads when you should be spending more

• Competitive parity—may want to spend more than established market share for expansion purposes o SOM (share of market) o SOV (share of voice)

Front 41

using fear in ads

Back 41

As that focus on fear/threats are focused on social disapproval or concrete physical danger

Ads that are too explicit or dramatic makes the consumer shutdown and ignore it

Ads must illustrate the “way out”—steps to prevent the disaster

Front 42

media ad spend in order

Back 42

-TV, digital, print

-total spend and percentage of spend is low for new media

-US Consumers’ Time on Digital Outpaces Marketers’ Spending

Front 43

digital marketing forms

Back 43

-corporate website

-affiliate programs (links to 3rd party merchant site like Amazon)

-search engine marketing (e.g. Google's ad words)

-display (banner) ads

-opt-in texts, direct email, social media, mobile games

Front 44

mobile marketing

Back 44

• Mobile marketing needs to have active component, drive interaction, drive to retail outlets…

Front 45

IMC definition

Back 45

The application of consistent brand messaging across both traditional and non-traditional marketing channels.

Front 46

Digital targeting

Back 46

—panel research is when companies pay a person to download software onto their computer so the company can track their interactions

Front 47

Manipulative practices

Back 47

Manipulative practices further the organization’s goals at the expense of the customer(s), by offering false promises,insincere communications, or artificially engineering situations to limit choice.

Front 48

market deceptions

Back 48

-stealth marketing

-raising fears/anxieties

-promote feelings of inadequacy

-in-school corporate ads bypass parents

-age compressions-children robbed of childhood

-force gender stereotypes on children

-encouraging bullying/peer pressure

Front 49

anticonsumerism tactics

Back 49

“Culture Jamming” tactics used by anti-consumerist socialmovements to get people to question conspicuousconsumption … often using shock tactics
• Subvertising – refiguring logos, product images, etc. as a critique of advertising messages

Front 50

various media advertisers can utilize

Back 50

pg 466