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102 Cards in this Set
- Front
- Back
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Direct marketing includes: |
Interactive TV Internet Telemarketing Direct Mail Other media |
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Growth of direct marketing: |
Consumer credit cards Catalogs Changing structure of markets Changing structure of society Technological advances Miscellaneous factors |
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Direct marketing combines with: |
Advertising (infomercials) Support media (mailers with promotion) Public relations (promotional materials) Personal Selling (telemarketing) Sales promotions (direct mail) |
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Direct marketing objectives: |
Improve selection of marketing segments Stimulate repeat purchases Cross-selling other products Customer relationship management |
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Major difference between direct marketing programs and other promotional mix programs |
Use of media |
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Media used in direct marketing |
Direct mail Telemarketing Direct-response broadcasting Internet |
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One-step approach |
Medium used directly to obtain an order (generate immediate sale) Toll-free phone orders and credit card payments |
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Two-step approach |
May use one medium to obtain inquiry and qualify prospect (screen potential buyers, telemarketing) Follow-up with a second medium to complete the sale (personal selling) |
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Highest amount of advertising dollars spent in a medium |
Direct mail |
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Mailing list |
Database from which names are generated Ability to segment markets Segmentation on basis of geography, demographics, and lifestyles Most commonly used are those who have already purchased direct mail products |
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Business of mailing list |
Companies sell names of purchasers of products to list firms A.B. Zeller, Experian, Nielsen Business Media provide lists on national level Metropolitan areas provide lists locally Threat from Internet |
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Catalogs |
Decreasing Emotional appeal Drive consumers online In conjunction with traditional sales and promotions Available online, in conjunction with store |
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Low cost Higher effectiveness than traditional direct mail Less targeted emails are spam |
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Broadcast media |
TV and radio Two-step approach common on radio Involves direct-response advertising and support advertising |
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Direct-response advertising |
Product or service is offered and sales response is solicited, through either the one- or two-step approach |
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Support advertising |
Support other forms of advertising Ex: ad telling you to look in your mailbox |
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TV spots |
Short-form programs |
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Infomercials |
Long commercial to be viewed as regular TV shows One- and two-step approaches Effective with broad demographic base Benefits retail stores |
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Home shopping |
Toll-free numbers and credit cards Hurt by Internet sales Now include designer brand names at lower price |
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Print media |
Difficult to use because of clutter and expense
Lower response rates Better in specific interest areas |
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Telemarketing |
One- and two-step approaches Potential for fraud and deception, annoyance DNC list |
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Direct selling |
Repetitive person-to-person selling (Mary Kay) Nonrepetitive person-to-person selling (encyclopedias) Party plans (Tupperware) |
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Cost per order (CPO) |
Determine effectiveness of medium by targeting a return per order and determining the number of orders needed based on the costs of the ad |
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Customer Lifetime Value (CLTV) |
Determine dollar value associated with long-term relationship with a customer Determine whether or not a customer should be acuqired More marketing effort on profitable customers |
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Advantages of direct marketing: |
Selective reach (less waste coverage) Segmentation capabilities Frequency (depending on medium) Testing Timing Personalization Costs (higher, but more profitable) Measures of effectiveness (immediate feedback) |
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Disadvantages of direct marketing: |
Image factors (junk mail, annoyance, low-budget) Accuracy (lists not current) Content support (cannot create mood) Rising costs (postal, print) DNC lists |
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Database sources: |
List brokers
Standard rate and data service U.S.P.S. Direct Marketing Association U.S. Census Bureau Experion Simmons Market Research Bureau |
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Reasons for rapid Internet adoption: |
Increased desire for information Speed and convenience Ability to control the flow of information being received Ability to conduct e-commerce Ability to target customers effectively Increased accountability of business |
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Web objectives: |
Create awareness (better for small companies with limited budgets) Generate interest (promotions) Disseminate information (about company and products/services) Create an image Create a strong brand Stimulate trial (coupons, samples) Create buzz (viral, WOM) Gain consideration (blogs, discussion boards) |
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Advertising on the Internet (Web 1.0) |
Banner ads Sponsorships (regular, content) Pop-ups/Pop-unders (when leaving site) Interstitials (waiting for site to download) Paid searches (organic=relevance, nonorganic=paid, SEO - improving traffic through organic) |
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Behavioral targeting |
Advertisers' targeting consumers by tracking website surfing behaviors Retargeting: user visits website and leaves without purchase, targeted d displays on subsequent websites |
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Contextual advertising |
Advertisers targeting ads based on content of web page |
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Rich media |
Interactive digital media that exhibit dynamic motion (video, audio, animation) Online commercials (pre-rolls - watch before seeing content) Video-on-demand (video clips of entertainment) Webisodes (short feature films by advertiser) |
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Advertising on the Internet (Web 2.0) |
Interactive information sharing |
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New media |
Forums and chat rooms (group sharing and discussion) Social networking (peer networking) Content aggregators (hosting of content for information and entertainment) Virtual reality Online gaming Blogs (opinions, information) Portals (aggregating news, comm. tools) Social news sites (peer-ranked stories) |
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Motivations for social media |
To share ideas, activities, and events Community involvement To gain information Entertainment Remuneration (creation and exchange of user-generated content) |
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Big Four of social media |
Google+ YouTube (Instagram) (Pinterest) LinkedIn) |
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Podcasting |
Using the internet to distribute audio/video files for downloading |
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RSS (really simple syndication) |
Uses XML to organize and format web-based content in a standard way Can send out notifications when new material is available |
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Blog |
Web-based publication consisting primarily of periodic articles, reverse chronological order |
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Other 2.0 media forms |
Augmented reality (Second Life) QR codes NFC (less effort from consumer) |
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Internet metrics |
Clicks Post-click conversions Cost per conversion Unique visitors Average frequency Frequency to conversion ratios Advertising exposure time Ad interaction rate View-through rate Visits Webpage eye tracking Offline sales lift Cross-media models |
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Advantages of Internet |
Target marketing Message tailoring Interactive capabilities Information access Sales potential Creativity Exposure Speed Complement to IMC |
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Disadvantages of Internet |
Measurement problems Clutter Potential for deception Privacy Irritation |
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Sales promotion |
A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or ultimate consumer with the primary objective of creating an immediate sale |
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Consumer-oriented promotions |
Samples Coupons Premiums Contests/sweepstakes Refunds/rebates Bonus packs Price-offs Loyalty programs Event marketing |
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Trade-oriented promotions |
Contests and dealer incentives Trade allowances Point-of-purchase displays Training programs Trade shows Cooperative advertising |
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Reasons for sales promotion increases: |
Growing power of retailers (vs. brands) Declining brand loyalty (vs. price/convenience) Increased promotional sensitivity (incentives) Brand proliferation (trial, shelf space) Fragmented consumer markets (regional, direct and digital) Short-term focus of marketers (investors) Increased accountability (measurable results) Competition (comarketing with manufacturer) Clutter (attract attention Growth of digital marketing ("liking") |
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Sales promotion concerns |
Fewer dollars to build brand equity (long-term vs. short-term) Encourages customers to purchase on basis of price (rather than brand) Detracts from value of brand |
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Consumer Franchise-building vs. Nonfranchise-building promotions |
CFB: communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity (frequency programs, loyalty programs, reward programs) non-FB: designed to accelerate the purchase decision process and generate immediate sales increase (price-off deals, bonus backs, rebates) |
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Objectives of consumer-oriented sales promotion |
Obtaining trial and repurchase Increasing consumption of established brand Defending current customers (market share, brand loyalty) Targeting a specific market segment Enhancing IMC and building brand equity |
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Sampling works best when: |
Products are of relatively low unit value Products are divisible (small pieces reflect full features) Purchase cycle is relatively short (consumer will make immediate purchase and not forget) |
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Benefits of sampling: |
Risk-free trial Direct experience of brand |
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Limitations of sampling: |
Brand must have unique or superior benefit Benefits of some products difficult to gauge immediately |
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Sampling methods |
Door-to-door sampling Sampling through mail In-store sampling On-package sampling Event sampling Packets in newspapers Toll-free numbers Internet/social media |
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Couponing advantages: |
Appeals to price-sensitive consumers Can offer discounts without retailer cooperation Effective way to induce product trial Defends market share and encourages repurchase |
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Couponing disadvantages: |
Hard to tell how many consumers will use and when Often used by loyal customers who would purchase anyway Low redemption rates and high costs Misredemption and fraud |
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Types of coupons (in/on pack): |
Bounce-back: redeemable for next purchase of same brand Cross-ruff: redeemable on the purchase of a different product (same company or tie-in) Instant: redeemable immediately, attached to outside of package |
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Types of coupons (in-store) |
Tear-off pads Handouts in-store On-shelf dispensers: draw consumers' attention to product on shelf Electronic dispensers: kiosks at checkout, targeted |
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Value pack |
Coupons mailed to specific zip codes or addresses Geographic, demographic targeting |
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Premium |
An offer of an item, merchandise, or service, free or at a low cost, that is an extra incentive for customers |
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Types of premiums: |
Free: only requires purchase of the product (Happy Meals, airline miles) Self-liquidating: consumer required to pay some or all of the cost of the premium (Marlboro gear through catalog) |
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Contest vs. sweepstakes |
Contest: promotion where consumer compete for prizes or money on the basis of skills or ability
Sweepstakes: promotion where winners are determined purely by chance; cannot require proof of purchase as condition for entry Both can detract from franchise building |
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Refunds (rebates) |
Offers by the manufacturer to return a portion of the product purchase price, usually after customer supplies proof of purchase
Benefits: induce trial, encourage repeat purchase Problems: delay and effort for small reward |
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Bonus packs |
Offer the consumer an extra amount of a product at the regular price by providing larger containers or extra units Advantages: direct way to provide extra value, visible value, defensive maneuver against competitor promotion or introduction of new brand Disadvantages: Additional shelf space without extra profit margins, appeal primarily to current users or non-loyal consumers |
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Price-off deals |
Offered right on the package through specially marked price packs Advantages: controlled by manufacturer (discount reaches consumer, not retailer), visible value to consumer (reference price point), encourage larger purchases Disadvantages: pricing and inventory problems for retailers, appeal primarily to current users or non-loyal consumers, FTC regulates frequency and timing of use |
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Loyalty (frequency) programs |
Programs designed to encourage repeat purchase or patronage of a specif brand Benefits: encourage customer loyalty, customer retention, building relationships with loyal stomers, developing databases Limitations: short-term promotions that overreward regular users and don't develop long-term loyalty, difficulty differentiating, drop-outs due to length of time to accumulate rewards |
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Event marketing |
Company or brand is linked to an event or themed activity is developed for the purpose of creating experiences for consumers and promoting a product or service Advantages: associate brands with certain lifestyles, interests, and activities; connect with consumers in comfortable environment; consumers welcome company participation; distribute samples and information |
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Trade-oriented promotion objectives: |
Obtain distribution for new products Maintain trade support for established brands Encourage retailers to display established brands Build retail inventories |
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Types of trade-oriented promotions: |
Contests and incentives Trade allowances Displays and point-of-purchase materials Sales training programs Trade shows Cooperative advertising |
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Contests and incentives (trade-oriented) |
Awards tied to product or program sales, new account placements, merchandising efforts Push money (pm) to sales staff to encourage product promotion |
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Trade allowances |
Discount or deal offered to retailers or wholesalers to encourage them to stock, promote, or display the manufacturer's products Buying allowances: price reduction on merchandise ordered during fixed period Promotional allowances: discounts for performing certain promotional or merchandising activities in support of brands Slotting allowances: fees retailers charge for providing shelf space (failure fees for not meeting minimum sales level) |
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Displays and point-of-purchase materials |
Help manufacturers obtain more effective in-store merchandising Planograms: configurations of products that occupy a shelf section in a store |
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Sales training programs |
Conduct classes or training sessions for retail employees, training through manufacturer employees, manuals and brochures |
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Trade shows |
Forum where manufacturers can display their products to current and prospective buyers Demonstrating products, identifying new prospects, gathering customer and competitive information, writing orders for a product |
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Cooperative advertising |
Cost of advertising shared by more than one party Horizontal: sponsored in common by a group of retailers or other organizations providing products or services to the market Ingredient-sponsored: supported by raw materials manufacturers; to help establish end products that include the company's materials and/or ingredients (Intel, Splenda) Vertical: manufacturer pays for a portion of the advertising a retailer runs to promote the manufacturer's product and its availability in the retailer's place of business |
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Coordinating sales promotion with advertising and other IMC tools |
Budget allocation (promotional objectives, market and competition, brand's life cycle stage) Coordination of ad and promotion themes (promotion theme should tie in with positioning platform for company and brand) Media support and timing (delivery of promotion materials, informing consumers, creating awareness and interest) |
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Sales promotion trap |
One firm uses sales promotions to differentiate product or service Successful promotions lead to competitors copying All competitors using sales promotions lowers profit margins for each firm and makes it difficult for any one firm to stop promotions Less promotional spending leads to higher profits |
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Public relations |
Determination and evaluation of public attitudes Identification of policies and procedures of an organization with a public interest Development and execution of communications program designed to bring about public understanding and acceptance |
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Integration of PR into the promotional mix |
Separate functions Coordinated and equal Integrated - both Marketing and PR are tools for IMC |
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Marketing public relations (MPR) |
Marketing objectives that may be aided by public relations activities |
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MPR functions |
Building marketplace excitement before media advertising breaks (Apple)
Improving ROI (reducing costs) Creating advertising news where there is no product news (Super Bowl ads) Introducing a product with little or no advertising (Apple) Providing a value-added customer service (product recipes) Building brand-to-customer bonds (Pillsbury Bake-Off) Influencing the influentials (opinion leaders) Defending products at risk and giving consumers a reason to buy |
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MPR advantages: |
Cost-effective way to reach the market Highly targeted way to conduct PR Benefits from endorsements by independent third parties Achieves credibility Supports advertising programs by making messages more credible Breaks through the clutter Circumvents consumer resistance to sales efforts Improved media involvement among consumers Influence among opinion leaders and trendsetters Improve ROI |
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MPR disadvantages:
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Lack of control over media Difficult to tie in slogans and other advertising devices Media time and space not guaranteed No standard effectiveness measures |
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Process of PR |
Determining and evaluating public attitudes Establishing a PR plan Developing and executing the PR program Measuring effectiveness of PR |
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Reasons for conducting research about public perceptions: |
Provides input into planning process Serves as early warning system Secures support internally Increases effectiveness of communication |
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Process for PR plan development: |
Define PR problems Plan and program Take action and communicate Evaluate the program |
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Determining relevant target audiences (stakeholders) |
Internal audiences - employees (bulletin board), stockholders and investors (annual financial report), community (company activities), suppliers and customers (social goodwill) External audiences - media (press release), educators (research, case examples), civic and business organizations (financial contributions), governments (lobbying), financial groups (corporate reports) |
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PR tools |
Press release: factual, true, of interest Press conference: major accomplishments, breakthroughs, emergencies, local events Exclusives: offer one medium exclusive rights to story if medium reaches target audience Interviews: spokesperson from firm Community involvement: local memberships, contributions, participation Internet: provide information, archive press releases, link to other sites Social networks and blogs: disseminate information from website |
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Advantages of PR: |
Credibility: not recognized as advertising Cost: time and expenses of program Avoidance of clutter: not perceived as news Lead generation: inquiries give sales leads Ability to reach specific groups: social networks and blogs Image building: insurance against later misfortunes |
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Disadvantage of PR |
Potential for incomplete communication process Receiver not making connection to the source Lack of coordination with marketing department Inconsistent, redundant communications |
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Measuring PR effectiveness |
Tells management what has been achieved through PR Provides management with way to measure PR achievements quantitatively Gives management a way to judge quality of PR achiements |
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Publicity |
Generation of news about a person, product, or service that appears in broadcast or print media |
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Publicity (subset of PR) vs. PR |
Short-term strategy vs. long-term Not always positive vs. positive image creation Often originates outside the firm vs. under control of (paid for by) organization |
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Publicity advantages: |
Substantial credibility (not sponsored by company) News value (frequency of exposure) Significant WOM Perception of media endorsement (within medium it appears) |
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Publicity disadvantages: |
Lack of control of sources/recipients Lack of control of timing Lack of control of accuracy |
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Corporate advertising |
Extension of PR function Does not promote specific product or service Promotes the organization (enhancing image, assuming a position on issue or cause, seeking involvement) |
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Why corporate advertising is controversial: |
Consumers not interested Costly form of self-indulgence Firm viewed as in trouble Waste of money |
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Objectives of corporate advertising |
Creating a positive image for the firm Communicating the organization's views on social, business, and environmental issues |
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Types of corporate advertising |
Image advertising: general image or positioning ads, sponsorships, recruiting, generating financial support Event sponsorships: apparel and equipment, concerts, stadiums, college football bowl games Advocacy advertising: propagating ideas and elucidating controversial social issues of public importance in a manner that supports sponsor interests Cause-related marketing: link with charities or nonprofit organizations as contributing sponsors |
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Corporate advertising advantages |
Excellent vehicle for positioning the firm Takes advantage of benefits derived from PR Reaches select target market |
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Corporate advertising disadvantages |
Questionable effectiveness Constitutionality and/or ethics |
