Marketing 3000 Exam 4

*Chapter 10: Promotion*
Promotion
defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or to promote an idea.
Integrated Marketing Communications (IMC)
the concept of designing marketing activities – advertising, personal selling, sales promotion, and public relations — to provide a consistent message across all audiences
4 Elements of Promotion
1.) Advertising
2.) Personal Sellings
3.) Public Relations
4.) Sales Promotion
Advertising (1st element of promotion)
-paid form of non-personal communication
-more efficient and has low costs
-ex. got milk
-can be propaganda idk
Personal Selling (2nd element of promotion)
-two-way, personal (face-to-face) communication
-*most effective*
-usually *most expensive*
-builds relationships through good interaction
Public Relations (3rd element of promotion)
-communications management that seeks to influence stakeholders (publicity, lobbying, etc.)
-shareholders meetings
Sales Promotion (4th element of promotion)
-short-term inducement of value to arouse interest (coupons, samples, contests, etc.)
-these start and end at specific times
-ex. JoAnn’s Fabrics
Promotional Mix
consists of the basic tools or elements that are used to accomplish an organization’s communication objectives
-combines one or more promotional elements
-goal is to integrate marketing communications
Advertising (promotional mix)
-any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor
-*propaganda:* communication from an unidentified sponsor
Advertising Advantages
1.) it’s a very *cost effective* way of communicating (particularly w large audiences that are geographically dispersed)
2.) it’s a valuable tool for *creating and maintaining brand equity*
3.) it can be *integrated* w other promotional tools to help *generate support* from retailers and other trade members
4.) it provides an ability to *control the message* (what, when and how something is said and where it is delivered)
Advertising Disadvantages
1.) the *cost* of producing and placing ads (particularly tv commercials) can be *very high*
2.) *difficult* to determine *effectiveness* of it
3.) there are *credibility and image problems* associated w/ advertising
4.) the vast # of ads has created *clutter problems*, and consumers are *not paying attention* to much of the advertising they see/hear
The common classifications of advertising to the consumer market include: (5 things)
1.) national
2.) retail / local
3.) direct-response
4.) primary
5.) selective demand
Sales Promotion (promotional mix)
-includes *short-term* marketing activities that provide *extra value* of incentive to the sales force, distributors, or the ultimate consumer, and can stimulate *immediate sales*
-two categories: *consumer oriented* (rebates, samples, coupons, and contests) and *trade oriented* (trade show exhibits, sales contests, and dealer pricing incentives)
Sales Promotion Advantages
1.) it can provide *extra incentive* to consumers of middlemen to purchase or stock and promote a brand
2.) it is a way of appealing to the *price sensitive* consumer
3.) its effects can often be more *directly measured* than those of advertising
Sales Promotion Disadvantages
1.) *doesn’t* help establish or *reinforce brand image* and short-term *sales gains* are often achieved at the *expense of long-term brand equity*
2.) consumers may be cluttered or *bombarded* with too many coupons, contests, sweepstakes, and other promotional offers
3.) consumers may become *overly reliant* on sales promotion incentives, which can *undermine* the development of favorable attitudes and *brand loyalty*
4.) *promotion wars* develop in some industries, during which marketers use sales promotion incentives extensively. this results in *lower profit margins* and makes it *difficult to sell products at full price*
Public Relations and Publicity (promotional mix)
-*public relations (PR) :* has a broader objective than publicity. purpose is to *establish and maintain a positive image of the company* among its various publics.
-a management function that evaluates public attitudes, identifies the public policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance
-often used for constituencies other than consumers (ex. lobbying gov officials)
-*publicity:* important comm technique used in PR, but only one of several tools that may be used.
-the non-personal communications about an organizations product, service, or an idea that is not directly paid for or run under identified sponsorship
Public Relations and Publicity Advantages
1.) the *credibility* of publicity is usually *higher* than other forms of marketing communication
2.) it is a *low cost* method of communicating
3.) it often has *news value* and generates *word-of-mouth* discussion among customers
Public Relations and Publicity Disadvantages
1.) there is a *lack of control* over what is said, and when, where, and how it is said
2.) it can be *negative* as well as positive
-publicity is *essential* for those in the *introduction stage* or new to the world start ups of the PLC bc of low cost and has an advantage of newsworthiness
Personal Selling
-is direct, person-to-person communication whereby a seller attempts to assist and/or persuade prospective buyers to purchase a company’s product or service or to act on an idea
-*most effective promotional tool*
-*most expensive* one as well
-as cost, risk, and complexity of a situation increases, so does the need for personal selling (ex. personally selling trident gum to a customer is weird, so its geared toward higher priced items like cars or real estate and is business to business – selling new flavor of trident gum to walmart)
Personal Selling Advantages
1.) the *direct contact* between buyer and seller allows for more *communication flexibility*
2.) the *message can be adapted* to specific needs or to the situation of the customer
3.) it allows for more immediate and *direct feedback*
4.) promotional efforts can be *targeted to specific markets* and customers who are the best prospects
Personal Selling Disadvantages
1.) it can be *expensive*, with a high cost per contact
2.) it is *difficult* to have a *consistent and uniform message* delivered to all customers
-if it weren’t so expensive, it’d almost always be the best promotional tool
Factors Affecting Promotional Mix Decision: (5)
1.) target audience
2.) stage of product life cycle
3.) product characteristics
4.) buyer stage decision
5.) distribution channel strategy
Target Audience (1st factor affecting promo mix dec)
– *stakeholders other than consumers:* public relations (like microsoft and exon mobil using lobbying and press conferences to prevent antitrust actions)
-*channel members:* personal sales is main promotional tool. ex. walmart
-*consumers:* advertising (particularly when there is a large # who are geographically dispersed – cost efficient)
Product Life Cycle (2nd factor affecting promo mix dec)
1.) *introduction (to inform)*
-publicity to potential consumers
-advertising to stimulate primary demand
-personal selling to channel members
-ex. if chicago tribune writes review about apple
2.) *growth (to persuade)*
-advertising to differentiate brand
-personal selling to channel members
3.) *maturity (to remind)*
-reminder advertising (less persuasive ex. bud weiser)
-sales promotion: some effort is made here to encourage switching
4.) *decline*
-not much money is usually spent on promotion
-limited sales promotion
random: insurance co’s use advertising such as state farm and progressive
-sales promotion ex: retailers or supermarkets
Product Characteristics (3rd factor affecting promo mix dec)
-*complexity:* technical sophistication of product (info required to understand it)
-*purchase risk:* financial, social, physical (hair transplant)
-*the higher the complexity and purchase risk:* the greater the need for personal selling as opposed to advertising
-personal selling for pharmaceuticals is now going towards advertising
-stocks brokers/travel agents are examples idk
Stages of Buying Decision (4th factor affecting promo mix dec)
-*pre-purchase:*
-advertising to inform
-sales promotion to induce trial (samples)
-*purchase:*
-personal selling to close sale (retail->clothes and cars sales people)
-sales promotion (coupons, p.o.p., displays)
-*post-purchase:* personal selling and advertising to reduce anxiety
Channel Strategies (5th factor affecting promo mix dec)
-*push strategy:* (target channel members)
-personal selling (to inform / gain support)
-sales promotion (contests to motive, discount allowances to support channel effort) ex. canon says whoever has the most sales gets a free vaycay
-*pull strategy:* (target consumers / end users)
-advertising (nicoderm: “ask your dr…” intel inside
-consumer sales promotion sometimes too
Push Versus Pull Strategy
-push strategy (personal selling): producer to intermediaries then to end users
-pull strategy (advertising): producer to end user to intermediaries back to producer
Global Promotion Issues
1.) consumer and trade promotions
2.) publicity and media events
3.) public relations
4.) trade fairs
5.) personal selling
The extent to which sales promotion is globalized or localized depends on what?
-depends on the scale or scope of the sales promotion being discussed
Large Media Global Events
-contrived to maximize company and brand exposure around the world and are generally well-known and established co’s.
-global events are no created by marketers but capitalized on in the form of sponsorships which are increasing. ex. super bowl, olympics
Cross-Marketing
-another technique for global exposure
-involves products and services that tie into movies, people, or events of global recognition and popularity (feeds off of the product’s brand image and preference)
-tie-ins are typically entertainment related, ex movies
Day-to-day, common-fare _____________________ tools are greater in number and generally require more ___________________
-sales promotion
-localization
One of the barriers to greater globalization of sales promotion activities is what?
-is the extent of regulation differences across countries.
-ex. US vs EU
Trade Fairs
-more popular and account for more of the promotions budget in European and other foreign countries
-many are sponsored by government agencies which provide financial or other assistance to co’s
Trade Fair benefits multinational firms with increasing global emphasis in the following ways: (6)
1.) identifying potential distributors for new markets
2.) introducing the company’s latest products and models
3.) discovering industry trends and developments
4.) spotting new competitive developments
5.) creating press coverage and media publicity, nurturing fledgling or ongoing business relationships
6.) building morale among local representatives
Who often enjoys more opportunities for publicity? Global or domestic?
-global
T/F Negative publicity can have positive benefits for international companies?
-True, but it can close foreign markets before a firm even attempts to enter and may predispose intermediaries and customers against the company and its products
-Benetton claims to be one
What does a multinational firm do when it has to counter the effects of nationalistic feelings when the company exerts a major impact on the domestic market?
-attempts to put forward the face of a good citizen that makes significant positive contributions to the local economy thru affordability, choice, and product quality, and impacts the over quality of life.
What is the last marketing activity to be globalized?
-personal selling due to the significance of one-on-one interactions between buyers and sellers.
-these are quite culture-bound and require more adaptation
Important consideration in determining whether to use personal selling efforts of intermediaries:
-whether to hire local nationals to be salespeople or to send home country expatriates into the foreign market to perform the sales function.
Most important consideration for that global stuff is:
-determining the extent to which selling strategies and techniques used in the domestic market can be directly transferred to any given foreign market.
Elements in the Communication Process: (8)
1.) starts with noise
2.) sender
3.) encoding
4.) message (media)
5.) decoding (understanding)
6.) receiver
7.) response
8.) feedback
ex. car noise, tornado alert, honking, phone call
Message Problems
1.) selective attention
2.) selective distortion: trying to get attention but oversees actual product
3.) selective retention: repeat ads
AIDA
-attention
-interest
-desire
-action
Attention
-get the attention of the target market
-break through clutter by reaching and focusing on the target market
-involves right choice of media and message
-distinctive and relevant message
-ex. hardee’s uses sex to increase food drive… idk
Interest
-generate interest in what your selling (focus on benefits not features) ex. ford mustang has a v6 engine(feature) vs mustang has a powerful yet fuel efficient engine (benefit)
-talk directly to needs of target market. ex. (gatorade “thirst quenching”. folger’s coffee-reason to wake up need. got milk-having it available need.
Desire
-build desire by using logic and emotion
-logic: show benefits and uses of product/service. ex. *69 service, volvo-guy doing splits to show dynamic steering
-emotion: *humor*(allstate mayhem, miller lite ads build desire to have fun and drink w friends), *sex*(calvin klein, special k ad builds desire to lose weight/ eat special k), *fear*(head and shoulders, rogaine and other personal care products)
Action
-get target market to act
-direct action: buy the product, try product, send for free info kit etc.
-indirect action: encode a thought or image – remember name of product, have positive image, associate product with benefit.
-always call for action
-ask for sale (“can i wrap this for you?”, “would you like blue or green?”, “so next time you call long distance, remember to dial…”)
*Public Relations and Sales Promotion*
(in notes only)
Sales Promotion
-short term activity to motivate buying, typically done by lowering price
-internet’s timeliness
Four Main Parts of Public Relations
1.) publicity
2.) event sponsorship
3.) issue sponsorship
4.) lobbying, community, employee and investor relations
Publicity
How do u manage unfavorable publicity?
-efforts to capture media attention which includes: press relations and releases and product publicity.
-managing unfavorable publicity-successful crisis management (have plans in place, have good media relations, support of top management(respond immediately), and tell truth and address problem directly) ex. johnston and johnston Tylenol recall or bad ex = rebound hangover pill
Things to Remember for Press Releases: (3)
1.) hype words: ex. break thru. state of the art
2.) write like a journalist: never use “i” or “we”
3.) the shorter the better
Event Sponsorship
-ford, wrangler, etc. sponsor PBR tour
-B of A official sponsor for olympics (p&g video)
-sprint official sponsor of the tony awards
Issue Sponsorship
-education, health care and social program investment (be genuine, don’t be too hype)
-public broadcasting, NAACP scholarships, food bank partnering
-if genuine and not hyped, very effective
Consumer Sales Promotion Tools
1.) coupons
2.) premiums
3.) rebates
4.) contests and sweepstakes and games
5.) point-of-purchase
6.) sampling
7.) price packs (cents-off deals)
Coupons (consumer promotion tool)
-certificate that entitles consumer to immediate price reduction when they buy
-distribution and redemption *decreasing*
-newspapers and mass mailing inefficient for targeting certain segments (pet food coupon to petless household)
-instant coupons and internet coupons *increasing*
-coupons can promote early trial of a new brand or stimulate sales of a mature brand
Rebates (consumer promotion tool)
-cash-refund offers that occur after the purchase rather than at the retail outlet. customer sends a “proof of purchase” to manufacturer
-most consumers don’t take advantage
-studies have shown redemption rates of as low as 2%
-depends on size of rebate
Premiums (consumer promotion tool)
-goods offered either free or at a low cost as an incentive to buy a product.
-can be inside package(in-pack) or outside the package(on-pack), or thru the mail.
-*promotional products:* ad specialty that are useful articles imprinted w an advertiser’s name, logo, or message that are given as gifs to consumers
-ex. buy cologne or perfume – get cosmetics, toiletry bag. buy a happy meal – get free toy. or get 20% more in a shampoo bottle
-ex. spend $75 at vic secret to get free tote
-buy a mac book get a free printer
Contests and Sweepstakes (consumer promotion tool)
-give consumers the change to win something, such as cash, trips, or goods, by luck or thru extra effort
-*contests:* involve skill. calls for consumers to submit an entry to be judged by a panel that will select the best entries
-*sweepstakes:* involve luck only. calls for consumers to submit their names for a drawing. ex. random drawing, HGTV dream home giveaway, mcds monopoly
-*games:* presents consumers with something every time they buy that may or may not help them win a prize
Point-of-Purchase (consumer promotion tool)
-displays or demonstrations that take place at retail locations at the point of purchase or sale
-shelf talkers, extenders, end-aisle displays(doubled sales) etc.
-between *70-80% of purchase decisions are made in the store* (<-- on test!)
Sampling (consumer promotion tool)
-offers a trial amount of product. *most effective* but also *most expensive* way to introduce a new product
-some free, some require a small charge to offset its costs
-allowing consumer to try a product with no risk
-sample might be delivered door-to-door, sent by mail, handed out in a store, attached to another product, or featured in an ad.
-sometimes combined into sample packs that can be used to promote other products and services
-distribution is key (food supplements at running events, drinks at bars, special events like football games or festivals.)
-ex. costco, yogurt, sephora idk
Price Packs aka “cents off deals” (consumer promotion tool)
-offer consumers savings off the regular price of a product
-very effective in stimulating short term sales (even more than coupons sometimes)
-reduced prices are marked directly on the label or package and can be single packs sold at reduced price, or 2 related products banded together
-ex. if u buy 1 shampoo its $1.50 but if u buy 2 its only $2
Trade Sales Promotion
-to help push product through distribution channel
-*trade allowances:* price reduction offered to intermediaries
-*push money:* contests or cash incentives for retail sales people
-*training or store demonstrations*
-*free merchandise:* some retailers expect to get this especially for introducing new products
-*conventions and trade shows:* event planning.
Alternative Vehicles
-trend is away from traditional promotion
-need for more effective/efficient tools (main promotional tool limitations: clutter and low credibility contexts and sophisticated/jaded consumers)
-marketers seeking different communication tools( ex hot air balloon sponsorship – small but growing industry, creative attention getting tool, and clutter-free positive environment) another ex. is video games
-tv and radio declining so they do less commercials so ads are going other places.
Product Placement
-paid integration of product communication into media
-fastest growing promotional expenditure (expected to grow at 20% rate through 2011)
-growing fastest in reality tv, niche learning channels, movies (ex. man of steel = most ever)
-david lynch video: he said its, “fcking bs”
Other types of Product Placement
-not just spending stuff to stars
-keys is to find someone who likes your product
-labron and glaceau
-oscars gift baskets
Types of Product Placement
-celebrities: gifting the talent (armani tuxedos and Yves saint laurent dresses guarantee) also at 2009 oscars, gucci sunglasses, a sprint pcs phone, & more
-product seeding: just sending stuff to the stars: keys is to find someone who likes you product (ex. 50mcent – glaceau vitamin water)
Drops Ins
-the *last* slide of the day sponsored by Excedrin (for headache relief that *lasts and lasts* long after the lecture is over, its excedrin)
-sports broadcasts: *hot* pitch of the day brought to you by the new hardees *hot* n spicy chicken sandwich
-growing use in both tv and radio
-another ex. case something red zone at miz football games
*Chapter 11: Advertising and Sales Promotion*
Advertising can be tired to either __________ or ___________________.
sales objectives or communication objectives
Sales Objectives
-may be used when the advertising is to result in a *direct* sale.
-ex. may include online, tv or direct mail ads that communicate a direct appeal(“Buy Now!”) with a *direct* means to order (“call 1-800-GET-THIN”)
-the advertising expenditures can be tied *directly* to *sales* in the *short-term*
Communication Objectives
-most advertising have communications objectives bc *short-term* effects are *indirect*
-might include % of ppl exposed to the ad who can: *recognize* the ad when shown to them (*aided recall*), *recall* the ad w/o it being shown (*unaided recall*), have *awareness* of the brand when given the product category or associate the brand w a particular attitude (ex. honda cars are reliable – if honda knows that 30% of consumers consider the “reliability” the most important attribute, then by raising the % comm objectives should increase sales over the long term.
-these should be liked thru marketing research to *increased sales* over the *long-term*
To make non-direct advertising its most efficient, we need to use ______________________ to correlate the linkage between ___________________ and something we can measure with a communication objective.
-marketing research
-increased sales
-bottom line is that although we may measure results of advertising using comm objectives, in the short term, ultimately *advertising expenditures are always accountable to sales results in the long term.*
Advertising Budgeting: (4 methods to think about)
1.) all i can afford
2.) percent of sales
3.) competitive parity
4.) the objective and task approach
All I Can Afford (advertising budget method)
Who typically uses this method and why?
Is this a good approach? Why or why not?
– the advertising budget is set as a *predetermined % of profits* or “whatever is left” after other resources are allocated
-often used by *smaller* business due to its *simplicity* and bc it ensures *reasonable* limits on *spending*
-*isn’t the best approach* bc there is no connection between opportunities to use effective advertising and what is “left over” (ex. a firm entering a new market may be threatened by new competition and there may be a need to increase ad expenditures significantly)
Percent of Sales (advertising budget method)
Who typically uses this method?
Problems with this method?
-a % is applied either to the *previous year’s sales* or to the *forecasted* ones for the *upcoming year*
-*most popular* method used by *small* firms
-problem with this is: if a firm allocates 10% of prev yr’s sales to ads and this has little/no effect of sales than this $ is wasted.
-worse case: case where ad does affect sales, but thanks to an economic downturn, sales fall and this guarantees a cut in ad expenditures when it could potentially help the most –> endless cycle of declining sales
Competitive Parity (advertising budget method)
Problems with this?
-advertising budgets are based on *competitors* in their industry (“me too” approach)
-this assumes that other firms in the industry know what they are doing and follow similar goals/strategies
-fails to connect the *budget* to what is *actually needed*
The Objective and Task Approach (advertising budget method)
Advantages?
Disadvantages?
What firms use this?
-*sales* and *communication* objectives are *set* then the advertising tasks to accomplish the objectives are *defined*
-advantages: *logically* connects advertising *goals to the budget*, forces *planning/discipline*, and it provides a means for learning how to make advertising *more effective* in the *long run*
-disadvantages: can be *difficult* to determine the *right objectives*, achievable objectives, it may be *time-consuming* and it could result in a *costly ad budget* w/o means to measure the effectiveness
-*most effective* budget method!
-most *large firms* combine the objective/task method w/ research expenditures: marketing, advertising and measurement.
-if smaller firms can’t see *direct effects* from ads they don’t have to confidence to spend $ on research that ensures them long term effectiveness
Which method does Joel recommend for smaller firms?
-recommends that smaller firms rely on *expertise of media representatives* but only when the reps have the customer’s overall interest as a priority.
-they should experiment with expenditures and have the media provide means of reliable measurement plan
Message Strategy
For what type of buying decisions?
What should message stress?
-the advertising message should be built upon *sound consumer motivation* or *behavior theory*
-for *routine decisions* (soft drinks) the *ad affect* or likability of the ad will have a significant effect on the consumer’s decision to purchase a product.
-the message needs to be *consistent* w both the targeted market(s) interest and the brand’s positioning strategy.
-message should only stress *one core concept* (benefit) and take advantage of an appropriate medium’s strength
Advertising Media Mix
-involves putting together an effective media mix for an advertising camplaign involes establishing *reach* and *frequency* goals.
-*reach:* the # of diff targeted audience members exposed to the ad at least once within a given time frame (a month)
-*frequency:* the # of times on average that those reached are exposed to the ad over the given time frame
-*impact* = reach x frequency
-for instance, if *brand awareness* is valued over recall, then *reach* needs to be *higher* and *frequency lower*
Advertising Mix Media Difficulties: (3)
1.) *Media Fragmentation:* at any time, a targeted audience may be split over hundreds of tv channels and thousands of internet sites
2.) *Increased Clutter:* the #’s of messages consumers are subjected to is growing. advertising itself is becoming more prevalent in virtually every medium, so each ad has more competition.
3.) *Critical-Thinking Consumers:* advertising is examined and not just accepted today. particularly among “millennials”, authenticity is valued over hype
Advertising Media Mediums: (7)
1.) Internet
2.) Outdoor
3.) Magazines
4.) Radio
5.) Television
6.) Direct Mail
7.) Newpapers
Internet (advertising media medium)
Strengths? Weaknesses?
-strengths: timely, interactive, low cost, high info content possible, measurable results( click-thru rates)
-weaknesses: low attention getting, seen as intrusive (pop-ups), short message life
Outdoor (advertising media medium)
Strengths? Weaknesses?
-strengths: no competing clutter, flexible, repeat exposure, relatively inexpensive
-weaknesses: viewer distractions, non-selectivity of audience, creative limitations
Magazines (advertising media medium)
Strengths? Weaknesses?
-strengths: high audience selectivity, color reproduction, pass-along readership, high attention
-weaknesses: long closing periods (ads must be ready 4-6 weeks before publication), wasted circulation, no guarantee of position w/o extra fee
Radio (advertising media medium)
Strengths? Weaknesses?
-strengths: low cost, mass use, audience selectivity, means of reaching low-income people
-weaknesses: low attention, listener distractions, audio only, short life
Television (advertising media medium)
Strengths? Weaknesses?
-strengths: offers sight, sounds and motion, attention getting
-weaknesses: expensive, non-selectivity of audience, short message life
Direct Mail (advertising media medium)
Strengths? Weaknesses?
-strengths: audience selectivity, flexible, no competing clutter, allows personalization
-weaknesses: high cost, low attention (many just see as junk and throw away)
Newspapers (advertising media medium)
Strengths? Weaknesses?
-strengths: offers local coverage, flexible and timely
-weaknesses: non-selectivity, short life, expensive
Sales Promotion Again
-a process of providing *short-term incentives* to *encourage purchase* or sales of product or service.
-offers the buyer *reasons to buy now* (coupons)
-also intended to *stimulate reseller effectiveness* (sales contests)
-*grown rapidly* recently bc of pressure to increase sales, increased competition, and declining efficiency of the other mass communication methods
-should help to reinforce the product’s postion and built long term customer relationships and build brand equity.
-usually used with advertising, personal selling, or other promotion mix tools
Depending on the target of the sales promotion, the objective may be one of the following: (3)
1.) *consumer promotions* may be used to *increase short term sales* or *build long term market share*
2.) objectives for *trade promotions* include getting retailers to *carry new items* and more inventory, getting them to advertise the product and give it *more shelf space*, and getting them to *buy ahead*
3.) for *sales force*, objectives include getting *more sales force support* for current or new products of getting salespeople to sign up *new accounts*
Consumer Promotion Tools
1.) samples
2.) coupons
3.) rebates
4.) contests, sweepstakes, and games
5.) price packs
6.) premiums
7.) point of purchase (POP) promotions
Trade Promotion Tools
-can persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers. many tools are same as consumer ones
-exclusive trade promo tools:
1.) *discount off the list price:* aka price-off, off-invoice, or off-list.
2.) *allowance:* manufacturer offers allowance in return for the retailer’s agreement to feature the manufacture’s products in some way. *advertising allowance* compensates retailers for advertising product. a *display allowance* compensates them for using special displays.
3.) *free goods:* are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size
4.) *push money:* cash or gifts to dealers or their sales forces to “push” the manufacturer’s goods
Sales Promotion to Industrial Customers (B to B)
-co’s spend billions of $$ each yr on promotion to industrial customers
-used to generate business leads, stimulate purchases, reward customers, and motivate salespeople
Conventions and Trade Shows
-organized to promote their products. firms selling to the industry show their products at the trade show.
-vendors receive many benefits, such as opportunities to find new sales leads, contact customers, introduce new products, meet new customers, sell more to present customers, and educate customers with publications and audiovisual materials.
-*trade shows* also help companies reach many prospects not reached thru their sales forces
-*sales contest:* is a contest for salespeople or dealers to motivate them to increase their sales performance over a given period. (motivate and recognize good company performers, who may receive trips, cash prizes, or other gifts.
*Business-To-Business (B2B) Marketing*
-in class notes
Business Marketing
-is the marketing of goods and services to: companies, government bodies, institutions (hospitals), and non-profit organizations (red cross)
-it’s for use in producing their products and/or to facilitate their operations
-can be used directly or indirectly
What distinguishes B2B from B2C(consumers)
-B2B: goods or services are sold for any use other than personal consumption
-it is *not* the nature of the product; it is the reason for the *transaction*
B2C or B2B Transaction?
1.) you buy a gear to fix your mountain bike
2.) ford buys the same gear to fix a machine
3.) xerox buys soft drinks for its cafeterias
4.) you start a landscaping business and purchase a lawnmower
5.) the US gov buys…anything
1.) B2C
2.) B2B
3.) B2B
4.) B2B
5.) B2B
B2B vs B2C Marketing Characteristics
-sales volume: b2b=greater. b2c=smaller
-purchase volume: b2b=greater. b2c=smaller
-number of buyers: b2b=few. b2c=many(ex. many buyers for betty crocker cake mix. not a lot of b2b)
-size of individual buyers: b2b=larger. b2c=smaller
-location of buyers: b2b=concentrated. b2c=diffuse
-buyer-seller relationship: b2b=closer. b2c=more impersonal
-nature of channel: b2b=more direct. b2c=less direct
-buying influences: b2b=multiple. b2c=single/ multiple (ex. mult ppl involved w buying car. but sometimes not as many for b2c)
-type of negotiations: b2b=more complex. b2c=simpler
-use of reciprocity: b2b=yes. b2c=no
-use of leasing: b2b=greater. b2c=less
-key promotion method: b2b=personal selling. b2c=advertising
Business to Business: It is All About Demand
-*derived demand:* the demand for a company’s products comes from (derived) the demand for *their customer’s products*. most demand comes from consumers
-walmart isn’t going to buy hershys is to customers are demanding it –> pull advertising
-*joint demand:* two products are used together and demanded together – both products are consumed at the same time. ex. apple iphone cover sales directly related to iphone sales. Microsoft office & PC’s)
Other Characteristics of Business Demand
-inelastic demand: catapillar machines idk its very specialized though
-fluctuating demand: easter candy, flowers (seasonal kinda)
Major Uses of B2B Products
-for *additional production* (components are combined into subassemblies and become part of the finished product) ex. light fixtures
-for *use in operations*, but not part of the finished product
-for *resale*
Classifying Business Goods and Services – 3 main categories
-3 main categories of products
1.) *Entering Goods:*
-become part of the finished product
-cost assigned to the manufacturing process
2.) *Foundation Goods:*
-capital items
-typically depreciated over time
3.) *Facilitation Products:*
-support organizational operations
-handled as overhead expenses
Entering Goods
-*raw materials*(ex. wheat,lead,copper)
-farm products & natural products
-only processed as necessary for handling & transport
-require extensive processing
-*manufactured materials & parts:*
-any product that has undergone extensive processing prior to purchase
-component materials: require additional processing
-component parts generally do not require additional processing
Foundation Goods
-*installations:*
-major long-term investment items
-buildings, land, fixed equipment, etc
-*accessory equipment:*
-less expensive & short lived
-not considered part of fixed plant
-portable tools, PC’s, etc
-helps run operations
Facilitating Products
-*supplies:*
-any supplies necessary to maintain the organization’s operations
-*services:*
-maintenance & repair support
-advisory support
-logistical support
Categories of B2B Customers
1.) commercial enterprises (indirect channel member and facilitators, OEMs-original equipment manufacturers, users=customers)
2.) governmental organizations
3.) institutions
*Chapter 12: Building Relationships*
How much more expensive is it to obtain a new customer as opposed to keeping an existing one?
4 to 10 times more expensive
Customer Lifetime Value (CLV)
-if customer satisfaction can be maintained or increased over time, the total expenditures over that customer’s lifetime of loyalty or or CLV will greatly increase.
-ex. if discover gets a college student to apply for and keep using their credit card over his/her lifetime, then the CLV will likely be very high.
-also word-of-mouth referrals can help for referrals unless it’s negative WOM
The importance of building customer relationships is most important in the ___________ world bc why?
-B2B world bc thats where *stakes* of each sale are *high* and the *#* of potential *buyers is low*
-ex. proctor and gamble rely on walmart to carry their products and vice versa
B2B Personal Selling: what is the should be the priority for salespeople?
-it should be on *improving* the *relationship* rather than on any one particular sale. (trust is critical between B2B partners)
-ex. if red baron pizza promises a 20% costco profit increase if they buy an additional 1000 cases of product and it works then good, but if they fail to sell those extra cases then costco will not trust or like red baron much.
Transaction Selling Vs Relationship Selling
-*transaction:* where the focus is upon *”making the sale”*. ex. girl scout cookies, a used car.
-the *repeat* sale is *unlikely* and the amount of *dependence* between buyer and seller is *low*
-*relationship:* where the focus is on *helping the customer* and building the relationship as a result.
-*repeat* sales are critically *important* and the amount of *dependence* between buyer and seller is *high*
The Traditional Sales Process
-*prospecting:* locating and qualifying prospects
-*the pre approach:* planning the sales call
-*the approach:* making a good first impression
-*the presentation:* presenting the value proposition. Uncovering and handling objections. the closing.
-*follow-up:* checking in with the customer right after the oder (solution) is delivered
Why is the traditional sales process considered simplistic?
-it is *adequate for most sales calls*. it was developed to fit both transaction and relationship selling but it’s simplistic bc it puts focus on a *one-shot effort to make the sale*
-B2B selling usually involves a more complex process in which meetings/conversations may take place before a presentation is made
Selling Attitude: What is the buyer’s trust dependent on?
What should the attitude of the salesperson be concentrated on?
-the *expertise* and the *intent* of the salesperson
-the success of clients rather than the salesperson’s success. (helping customer needs to be priority)
Consulting Process:
1.) learning
2.) analyzing / synthesizing
3.) teaching
Learning (1st step in consulting process)
What does effective listening involve?
What is the ultimate goal in learning from you potential customer?
-staying present in the moment, focusing on what the client is literally saying (words, etc), and sustained concentration
-to qualify whether or not the firm represents a potential opportunity which involves 4 steps
-at some point, more in depth questions about the money available, the ppl who will be involved in the decision, and the time frame for providing a solution need to be asked
Learning (continued)
What are the 4 steps in learning?
1.) *get out all the potential issues:* what are all the potential problems or opportunities that exist for this firm?
2.) *prioritize the issues:* what is the one problem area that if eliminated, would have the biggest impact?
3.) *collect evidence and impact:* evidence defines problems and measures success. ex. “u said that ur biggest prob was that your customers needed 2-day delivery. if ur customers could get deliveries in 2 days, what would this mean to u in $?”
4.) *explore context and constraints:* how does the issue fit into the firm’s overall mission/strategy? who or what else might be affected by a solution. what has stopped the firm before from resolving these issues?
Learning (continued)
Other than customer learning, what else can be learned during this process?
-there is non-customer learning required including you *own firm’s products/solutions*, *industry knowledge*, as well as *technical skills*
-this expertise must be developed *before* developing the solution
Analyzing / Synthesizing (2nd step in consulting process)
What is the goal?
Where do you begin?
-to design a *customized* solution that fits your customer’s need
-begin with a *realistic assessment* of what solution your firm can provide *that other co’s can’t provide* (start w/ own unique strengths)
Analyzing / Synthesizing (continued)
If your firm’s product strengths don’t fit you customer’s problem exactly what do you do?
-you can offer a different perspective that can *reframe* the problem in a perspective that is more in line with your firm’s solutions
-ex. asking kellogs co to create a new giant sized tub of cheez it crackers for a walmart customer (flexibility will vary for both sales organizations and customers)
-good sales managers should back the salesperson’s request for flexibility if *increased sales* and a better *customer relationship* are likely
Teaching (3rd step in consulting process)
-to successfully teach your customer, you have to *challenge their assumptions* and *bring new insights and expertise* in a consulting/problem-solving manner.
-ex: suppose a buyer from 7-11 tells a salesperson they’re worried about an economic downturn and are going to reduce planned purchases. the salesperson will need to *be prepared w legitimate info* that supports a *real solution* and change their perspective by saying, “although this winter has seasonal declines, the spring forecast is is looking good w a 10% increase in sales.”
Teaching (continued)
Teaching Sales Pitch Process
1.) *assess customer key problems:* ex: “in working w other companies in you industry, the key challenges that we repeatedly see are A,B,&C. Is that what you see or do u have some other key challenge?”
2.) *offer different perspective that challenges assumption:* this should be something that connects the other challenges mentioned to a bigger problem. ex: “but all these probs are part of a bigger challenge, D. if D is solved, the others go away.”
3.) *lay out the business case:* this is where you provide data, graphs, etc. to back up you assertion in step 2. the goal is for your customer to see a clear return on investment (ROI)
4.) *make it connect emotionally:* the customer needs to see this problem as one that directly applies to them. tell a story to get them to reconnect emotionally and see that it is applicable. ex: “i understand ur a little different, but this is how we’ve seen this go for other co’s…”
5.) *convince them of the solution:* this is a point-by-point review of the specific things needed in a solution to the problem. this is about getting agreement to the nature of the solution
6.) *offer you solution:* explain why your firm’s solution is better than anyone else’s.
Teaching (continued)
Is there a “bad” time to offer a solution?
-yes, it is vital that you stay away from offering the solution until the *nature of the solution is agreed to*
Post Sales Service:
Whats the most important phase in the sales process?
What if a solution is underperforming?
Who’s responsibility is it to follow up and make sure customer is satisfied?
What is the wanted outcome for the salesperson after satisfying the customer?
-making sure that the *solution did what was intended* and that the *customer is satisfied*
-some consumer packaged goods co’s (CPG) may use *advertising* to pump up sales for a sales solution that is underperforming. ex: if nestle sells a new flavored hot pocket to food lion supermarkets and sales weren’t living up to forecast, nestle may increase advertising in mid-atlantic to boost sales
-no matter the type of solution or size of firm, it is the *salesperson’s responsibility*
-once you help *satisfy* customer, you will be seen as a *trusted consultant* and that is where *building relationships begins*
Building Relationships Using Social Media
What can social media offer?
What are Blog Posts?
-social media offers a relatively *cost-effective* way of communicating with consumers and hopefully strengthening relationships in the process
-blog posts can be used to establish a firm as an *industry expert* while providing *real value* to buyers
-in the B2C it usually *isn’t* cost-effective to use *personal selling* as a promotional tool. so normally *advertising* is used to persuade consumers
Listening and Responding to Consumers:
How can company websites (like facebook, twitter, etc) help the communication between consumers and the co?
What 3 things can help the strengthen the message that the brand intends to transmit?
-*consumer conversations* can reveal that the message the brand *intends* to transmit via its marketing *may not be the message being heard*(these also reveal customer support issues and in some cases, customers will solve each other’s problems)
-the marketing needs to be improved, the target audience needs to be changed, or a fundamental product change is needed
Listening and Responding to Consumers: (continued)
How Can Social Data Conversations help?
-social data from conversations outside your brand (like product category or target audience level) can reveal insights about what consumers care about
-this can inform your product development, business strategy, messaging and positioning, and inform the tactics you pursue to win customers.
-social data from consumer convos can provide brand, product, and consumer insights
-provides a rich, real time, rejuvenated data source that brands use to make smarter decisions
-there are business benefits of *higher consumer satisfaction* with *lower costs* by *managing customer support* (ex. phone support may cost $10-20 per inquiry whereas social media discussions can provide as little as $2 per inquiry or even $0 if customers answer each other’s ?’s
Responding in Real Time
-monitoring social media allows firms to respond in *real time* to customer complaints or other issues.
-ex. kaldi’s coffee: someone tweeted they couldn’t find a parking spot so the owner tweeted back directions to open parking which can help build a good relationship
Viral Marketing
What do Viral Marketing Campaigns do?
Class Example of Viral Marketing?
-a marketing technique that uses pre-existing social networks to spread communication thru self-replicating viral processes, analogous to the spread of pathological and computer viruses
-the campaigns facilitates and encourages people to pass along a marketing message voluntarily. these can be video or audio clips(youtube), interactive flash games, branded software, images and even text msgs or twitter
-Hotmail.com which was the first free web based email service
Principles Behind Viral Marketing:
What are the two goals of viral marketing?
1.) for consumers to take action as a result of the viral message (buy). this depends on the ability to reach target markets w persuasive messages (communicate a point of diff on a significant attribute)
2.) and to forward the message. (it is the forwarding of messages that makes them both *cost effective and credible*)
Companies have had success getting messages attended to and passed on by? (3 ways)
1.) *providing something of value for free* (hotmail, video clips, games, sweepstakes entry)
2.) *exploiting existing networks* (making content that can be transferred via youtube of facebook)
3.) *expanding the company or brand’s network* (affiliate programs, links on other websites, blogs, RSS feeds)
What is key in getting people to forward viral messages?
-generating the *proper emotional response*
What are 6 primary emotions tied to passing on viral messages?
1.) surprise
2.) joy
3.) sadness
4.) anger
5.) fear
6.) disgust
Viral Example: World Wildlife Fund (WWF) on Snapchat
– WWF used snapchat to reach a global audience to emphasize the fact that endangered species are disappearing around the world just as fast as selfies disappear from snapchats
-worked bc of vibrant images, the relatable (and sad) tag-lines, and their ability to mesh something meaningless like selfies to animals that need out help, and used a hashtag
*Personal Selling: In Class Notes*
Almost Everyone “Sells” in their Work (in B2B)
-US bureau of labor statistics say 1 in 9 americans work in sales (2nd largest category)
-Non-Sales Selling:
-most non-salespeople spend time persuading, influencing or convincing others in their work
-study shows people spend average of 40% of their time persuading, influencing or convincing others
-alec baldwin vid for selling real estate
Why Most of You Will End up Selling
-*elasticity need:* greater cross-functional job requirements (leadership requires persuasion)
-*growth in areas requiring selling skills:* *entrepreneurship*(must do everything including selling). *education*(persuading students that to give up time/effort to study important subjects) *medicine*(moving patients to adopt healthier behaviors, take medicine…)
Types of Sales Jobs
-*retail selling:* a retail sales person sells goods or services to consumers for their personal, non-business use (ex. hot dog vendor, dillard’s, etc)
-*direct selling:* face to face sales to consumers, typically in their homes, who use the products for their non-business personal use (transactional)
-*selling for a wholesaler:* (B2B) for resale, for use in producing other goods, and for use within an organization
-*selling for a manufacturer:* (B2B) working for the firm who manufactures the product and usually one of the most prestigious jobs to find
Relationship Selling (6 types)
1.) non-adversarial (you either make sale or fail)
2.) non-manipulative
3.) consultative
4.) partnering
5.) problem solving
6.) goal: long-term relationship
-the relationship is more important than the sale
-ex. little red book joel read on plane suggested adversarial which shouldn’t always be used
Three Levels of Relationship Marketing
1.) *transaction selling:* customers are sold to and not contacted again (usually high pressure)
2.) *relationship selling:* the seller contacts customers after the purchase to determine if they are satisfied and have future needs (manufac. or wholes-selling – at&t or verison)
3.) *partnering:* the seller works continually to improve its customers; operations, sales, and profits
How important are Relationships and Dependence for each of the 3 relationship marketing types?
-transactional selling: relationship and dependence are low (ex. girl scout: she’s dependent on u to buy her cookies)
-relationship selling: relationship and dependence are moderate
-partnership selling: relationships and dependence are high
-ex. walmart partners with P&G to maximize sales for each other so relationships are very important as well as dependence on each other to succeed
Consultative Selling
-the process of helping the customer achieve strategic short and long term goals thru the use of the seller’s good and services
-a highly interactive dialogue between a salesperson and a customer
-a balance exchange of information
What are the 3 Roles of Consultative Selling?
1.) *team leader:* coordinates all info, resources, and activities needed to support customers before, during, and after the sale
2.) *business consultant:* gives advice and service. uses internal/external resources to gain an understanding of the customer’s business and marketplace
3.) *long-term ally:* creates a “win-win” situation. as customers sales and profits grow, so do the salespersons. the ability of the sales person to fulfill the role of long-term ally is a pivotal factor in determining *transaction* vs *relationship*
-be an advocate for you customer
The Customer-Seller Relationship Gap
-may occur when the salesperson’s interest in the customer declines
-usually after the sale
-yet the customer’s interest increases after the sale
-this is one reason why service after the sales is so important
-follow-up: make sure it helps customer
The Keys to Success
-knowing and satisfying target customers with competitively superior products and services
-marketing is the company function that defines customer targets and the best way to satisfy their needs and wants competitively and profitably
-marketing’s main customer contacts are *salespeople*
The Keys to Success (5 important points)
1.) finding/focusing on the target market
2.) get target market to *know*,
3.) *like*,
4.) and *trust* you
5.) you can only do this by helping the customer (most important point)
10 Important Steps in the Customer Relationship Selling Process
1.) *prospecting:* location and qualifying prospects
2.) *pre approach:* obtaining interview. planning: determining sales call objective, developing customer profile, customer benefit program, and sales presentation strategies
3.) *approach:* meeting prospect and beginning customized sales presentation
4.) *presentation:* further uncovering needs; relating product benefits to needs using demonstration, dramatization, visuals, and proof statements
5.) *trial close:* asking prospects’ opinions *during* and *after* presentation
6.) *objections:* uncovering objections
7.) *meet objections:* satisfactorily answering objections
8.) *trial close:* asking prospect’s opinion *after* overcoming each objection and immediately before the close
9.) *close:* bringing prospect to the logical conclusion to buy
10.) *follow up and service:* serving customer after the sale (*most important*)
*Advertising* (in class notes)
Major Advertising Decisions: (5)
1.) *objectives setting* then
2) *budget decisions*
which lead to…
3.) *message decisions* and
4.) *media decisions*
5.) then *campaign evaluation*
Advertising (Communication) Objectives
-specific communication *task*
-accomplished w a specific *target* audience
-during a specific period of *time*
1.) *informative advertising:* build *primary* demand
2.) *persuasive advertising:* build *selective* demand
3.) *comparison advertising:* compares one brand to another (growth stage)
4.) *reminder advertising:* keeps consumers thinking about a product ( maturity stage)
The 5 M’s of Advertising
1.) *Mission:* a lot affects the direct sales other than just advertising. -sales goals. -advertising(com) objectives
2.) *Money:* factors to consider: -stage in PLC (maturity stage = most $ spent), market share and consumer base (size), competition and clutter (category), advertising frequency (fast food), and product substitutability
3.) *Message:* -message generation, evaluation and selection, and execution. -social responsibility review (lumosity made untrue claims which resulted badly for them)
4.) *Media:* -reach (# of households reached), frequency, and impact. -major media types. -specific media vehicles. -media timing. -geographical media allocation
5.) *Measurement:* -communication impact. -sales impact. (unaided vs aided recall: unaided= food ad you heard. aided = name top 3 food you… idk)
Example Question: Which has a disadvantage of “creative limitations”?
-outdoor
-ex. billboards bc you only see them for a second
Example Question: Direct mail has which of the following disadvantages as an advertising medium?
-relatively high costs
Example Question: Television has which of the following advantages?
-sigh, sound, and motion
Basic Communication Model:
*Sender* (source) –> *Message* –> *Channel* (medium) –> *Receiver* (consumer) –> feedback–> back to Sender
-ex. of good advertisements: Mercedes commercial w/ kid going to police station in middle of night just to ride in car
-opinion is all in the eye of the beholder though
Elements in the Communication Process:
*Sender* –> encoding–> *Message* (media)–> decoding –> *Receiver* –> response –> feedback
-noise is in the middle, surrounded by all those elements
Comprehensive Communication Model
-pg. 83 in note packet
Barriers to Communication
-selective perception (when u filter out stuff)
-psychological noise (anxiety or pre-occupation with a text or exam etc)
Issues in Credibility
-credibility in *informal sources*: random actors in ads (ex. leggo my ego commercials)
-credibility in *formal sources* ex. when doctors are in commercials saying that this is the best toothpaste to use. ex in class was cigarettes)
-credibility in *spokespersons and endorsers*: celebreties like shack o neil
-*message* credibility: super important
Issues in Designing Persuasive Communications
-communications strategy
-media strategy (where to advertise)
-message strategies (designing the msg)
Issues in Message Presentation:
-msg framing (context matters, ex. MLK)
-one sided versus two sided msgs
-comparative advertising (paper towel ads: compares the absorption to another brand)
-order effects (1st and last are remembered the most)
-repetition
Advertising Appeals
-fear
-humor
-wow experience
-abrasive advertising
-sex in advertising
-audience participation
*Services: In Class Notes*
What is a service?
-any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product
The Tangibility Continuum
-*good dominant products: tangible:* includes: sugar, house, automobile, & custom-made clothing
-*service-dominant products: intangible:* includes: restaurant dining experience, air travel, health care, ad agency services, and education
-ex. of service growth co’s: Apple or IBM
-ex. of intangible: valet parking
Distinctive Characteristics of Services
1.) *intangibility:* can’t be stored, can’t try out product
2.) *inseparability:* employ and idk. product and consume at the same time. ex. teachers /students. or movies do this too.
3.) *variability:* employee performance. ppl vary on how well they can deliver their services. (much greater w/ services than manufactured goods)
4.) *perishability:* empty hotel rooms, or unsold concert / sports tickets
Improving Service Quality
-listening, reliability, basic service (adequate level), service design, *recovery plan* (when u know service will fail so u need a plan), surprising customers (positive surprises like flowers or wine in hotel room), fair play, teamwork, employee research, and servant leadership (employees need to perform at a high level and managers need to too)
3 P’s of Improving Service Quality
1.) *People:* training and monitoring is paramount
2.) *Process:* process differentiation maybe standardized (easy) vs customized (more difficult). ex. Mcds(standardized) vs Whataburger or In-n-out… i guess
3.) *Physical Evidence:* servicscapes. ex. target (more appealing) vs walmart – focuses on tangibles like the building, the interior of a plane or hotel room decor.
-ex. univ of miz service gate: ppl percieve campus as beautiful with open spaces- shows ppl miz cares about us.
Solutions to Customer Failures
-redesign processes and redefine customer roles to simplify service encounters
-incorporate the right technology to aid employees and customers
-create high-performance customers by enhancing their role, clarity, motivation, and ability
-encourage customer citizenship where customers help customers
-ex. united: new policy where u obvi dont physically pull someone of plane
-long-term service is very important
Gaps That Cause Unsuccessful Service Delivery: (6)
1.) gap between *consumer expectation and management perception:* listening gap – caused by inadequate communication
2.) gap between *management perception and service quality specifications:* standards design gap: difficulty between managers and front line ppl and support ppl. (ex. mean manager at restaurant)
3.) gap between *service quality specifications and service delivery:* performance: most difficult to close bc employee performance or customer interference (ex. someone kicking back of seat on airplane or movie theater of baby crying)
4.) gap between *service delivery and external communications:* communications: over promise and raise expectations too high so customers are dissatisfied. (ex. doctors saying 2 months to live and being incorrect)
5.) gap between *perceived service and expected service:* expectancy gap theory. kind of involves all of the above in a way
Determinants of Service Quality: (5 things)
1.) *Reliability:*
2.) *Responsiveness:* quickly meet customer needs efficiently
3.) *Assurance:* ensure customers confidence in decision
4.) *Empathy:* listen, understand, and demonstrate to customers
5.) *Tangibles:* service scape, artifacts idk. ex. hotel shower head brands are used to get ppl to think a hotel is nice
Who are the customers in a hospital?
Who is the key customer in the hospital?
-patients (key customer)
-family members
-referral doctors
-suppliers
-employees
What is patient satisfaction?
-“hospital services and its perception by the patient” minus “patient expectations”
0 = patient satisfied
– = patient dissatisfied
+ = patient delighted
Patient Satisfaction: 4 random things to remember
-patient satisfaction measures need to be developed from the patients perspective
-patients are becoming better informed
-involved patients for making improvements
patient satisfaction is not *static* but *dynamic*
Patient Expectations:
-good medical care, good nursing care, less waiting time, excellent hospitality, personal attention, courteous behavior, affordable charges, cleanliness, good coordination, cooperation among the staff, discipline, communication and information, transparency in the charges and procedures
Why Customer Satisfaction? (3 reasons)
1.) health care is generally becoming competitive
2.) providers must not only maintain high clinical standards but also service that satisfies the patients
3.) to meet the dual challenge, providers must have an understanding of what constitutes both clinical excellence and customer satisfaction
*Branding (In Class Notes)*
Brand
-a name/symbol that identifies a distinct product
Brand Types: (3)
1.) manufacturer’s brand – ex. green giant, del monte
2.) private brand (owned by reseller) ex. gerbes private selection green beans
3.) generic brand – ex. “green beens”
First Brand?
When do you not brand?
-signals quality to consumers –> cattle
-you don’t always brand commodities like produce
Keys to Enduring Brand Leadership: (5)
1.) *Vision of the Mass Market:* contrast monitoring, MR of changing tastes. ex. pampers
2.) *Managerial Persistence:* committing effort over long time periods. ex. jbc electronics video recorder or VHS 21 years idk
3.) *Financial Commitment:* strong brands require high marketing costs – new product development marketing research and advertising. (brand leadership ex. coca cola)
4.) *Relentless Innovation:* products must be updated constantly. ex. gillette – 20 new products in portfolio, or P&G has many diff toothpastes and laundry products
5.) *Asset Leverage:* using strong position in one category to establish leadership in another related category, ex. apple: desktop –> laptop –> tablet
Brand Management Challenges: (3)
-caused by *increased competition* and *successful new technologies:*
1.) *Brand Proliferation:* growth in new competitors and line extensions. ex. crest toothpaste
1.) *Media Fragmentation / Decreased Ad Efficiency:* growth in # of stations (network buys not enough), growth in ad clutter (wrap around ads), and technologies to avoid advertising (remotes, Tivo), harder to reach a significant target market
3.) *Smarter/Variety-Seeking Customers:* more info available via internet & social media (found thru consumer reports and websites), and successful new product development (consumers more trusting of new brands and line extensions. ex. dilutes brand equity ex. when oxy clean took market share away from tide)
4 Steps to Building a Strong Brand:
1.) Establish Brand Identity (who are u?)
2.) Design Brand Meaning (what are u?)
3.) Elicit Proper Brand Imager (what do i think/feel about u?)
4.) Create Active, Loyal Relationships between Brand and Customers (what about u and me?)
1 Establish Brand Identity (building a strong brand)
-create brand salience(how much brand is brought to mind) by: a.) brand awareness thru linking brand elements to product categories (usage situation), b.) important to have brand awareness in a variety of conditions, c.) depth of brand awareness (likelihood and ease w which brand comes to mind), d.) breadth of brand awareness (range of purchase and usage situations in which brand comes to mind – related to product category level)
-most foundational
-broaden scope of usage situations. ex. vareity of usage for milk
-morten salt has multiple uses
-promote orange juice for not just breakfast
2 Design Brand Meaning (building a strong brand)
-link desired tangible/intangible brand associations w product characteristics
-defining brand performance is paramount: a.) primary ingredients and supplementary features. b.) product reliability, durability and serviceability. c.) service effectiveness, efficiency and empathy. d.) style and design. e.) price
-should exceed expectations
3 Elicit Proper Brand Imagery (building a strong brand)
-abstract associations w brand intangibles: a.) brand meeting customer’s social or psychological needs. b.) personality values of brand. ex. gates BBQ has KC roots. Abercrombie. popeyes Louisiana fast. volvo/michilin:promotes saftey. marrbaro :western. coca cola:america. bmw:luxury
4 Creative Active, Loyal Relationships between Brand and Customers (building a strong brand)
-brand resonance (nature of the relationship) types: a.) behavioral loyalty(how much/often is brand purchased. b.) attitudinal attachment (strong, personal attachment). c.) sense of community (desire to affiliate w others associated w brand) d.) active engagement (willingness to invest resources outside of purchase)
-harley davison has 1 million people. purina:games for dogs. in class ex. peanut butter jiff vs skippy
The King of Branding: Procter & Gamble
-products include: pet nutrition & care, babe & family, health & wellness, personal & beauty, and house & home
-house & home product examples: dish care, household cleaners, laundry, paper products, snacks & beverages, and special fabric care
-laundry product examples: tide, gain, downy, bounce, febreze and more
Product Line Length
-*line stretching:* downmarket, upmarket or two way
-*line filling:* bring out new model to compete with competitors (ex. new car body styles)
-*line modernization:* improvement (ex. upgraded model w new features)
-*line featuring:* ex. tide laundry idk
-*line pruning:* selling off brand (ex. blockbuster and hummer)
Trading Up (Upmarket)
adding a higher-priced product to a line to attract a higher income market and improve the sales of existing lower-priced products
-ex. purina 1 and toyota came out w Lexus
-danger: people may not believe you. ex. if Kia says they have quality cars like mercedes
Trading Down (Downmarket)
-adding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status
-ex. smirnoff –>pop-off
-danger: lower association
Two-Way Product Line Stretch: Marriott Hotels
-fairfield inn(vacationers): price low, quality economy
-courtyard(salespeople): price average, quality standard
-marriott(middle managers): price above average, quality good
-marriot marquis(top executives): price high, quality superior
Branding: Brand name selection criteria: What are the positive qualities of brand names? (4 things)
1.) legal and not in use
2.) convey benefits – ex. smart water shows benefit as making u smart. ex. mr clean. its in the name
3.) easily translated: “nova” as a car name does not translate well into some languages: means “slow” or something
4.) easily spoken
Product Characterisitics
1.) *Warranty:* a.) terms of compensation if product fails to perform. b.) signal of quality. c.) guarantee may also signal quality
2.) *Packaging:* a.)*functional value:* protect contents and add usage (ex. squeezable ketchup bottle, resealable bags, easy mac) b.)*attention getting:* bright colors or different shapes (ex. cereals like fruit loops or fresh start detergent in clear bottle or nike bright orange bags/show boxes) c.)*provide information:* functional info, usage ideas, benefits (ex. picture of completed it on Lego box, recipe for rice krispy treats)
-ultimate example: *BANANA* a.) functional bc grows w product and protects it. b.) attention getting bc its bright yellow. c.) provides info bc if green not ready to eat and if yellow its ready to eat
*Chapter 13: Marketing Mix Integration*
T/F: decisions concerning the marketing mix (or four P’s) are normally related to the type of buying decision associated with the offering
True!
Integrated Marketing Mix: Routine Decisions involve:
-price: low and also low involvement
-distribution: intensive
-promotional emphasis: advertising *pull*
-ex. chewing gum or mentos
Integrated Marketing Mix: Limited Decisions Involve:
-price: moderate / competitive
-distribution: selective
-promotional emphasis: both advertising and personal selling and sometimes sales promotion
-ex. $100 electronics at best buy involve coverage and push(sales effort).
-*trade sales promotion (retailers)*
Integrated Marketing Mix: Extensive Decisions Involve:
-price: high / exclusive and high involvement
-distribution: exclusive or very selective
-promotional emphasis: personal selling *push*
-ex. steinway pianos
-one outlet in geographical area. as risk and complexity increase, so does the personal selling aspect (houses and cars = very high)
Should the Integrated Mix table be used as an absolute guide to which buying decision, distribution decision, and promotional tool decision?
-No. the type of buying decision is dependent on the target market characteristics
-ex. a millionaire may view steinway pianos as routine decision, while a college student may not even view a frozen pizza to be routine.
-the value from the table should come from viewing the relationships in a relative sense and relating them to a desired positioning strategy.
-recall that *position* refers to how an offering is viewed relative to competitive alternatives in a category
Taco Bell Example:
-marketing research reveals that taco bell is perceived as average compared to its competitors on quality, price and availability.
-the findings found an *unmet need* among those desiring cheap fast food
-they repositioned its menu of items as low cost alternatives such as the dollar menu
-they expanded both distribution and promotion in order to gain market share
Lochhead Vanilla Example
-a family owned co that produces various extracts (vanilla, lemon, almond) for sale to consumers thru supermarkets and to businesses for use in food products
-wanted to be “the finest vanilla extract ever made” so they wanted a luxury, high quality position and should price product higher than the competition (prestige pricing) and should have exclusive or very selective distribution to maximize sales push
-point is to generate word-of-mouth recommendations to other bakers rather than trying to hype thru advertising
New Laptop Example
-manager is told to make new laptop thats, “not the best quality, not the best price, just the best value!” so basically in the middle which calls for selective distribution and a competitive pricing strategy. promotion should include advertising but one may also include trade promotion contests for retailers (sales contests)
-find a good balance
Examples of bad practices which cause firms to not succeed:
-mass marketing (should practice segmenting the marketing
-intensifying distribution and trying to grow too quickly (they should maintain a selective distribution strategy that complements their brands reputation and position)
T/F: Marketers should never think outside the existing marketing paradigms to come up with innovative solutions
False!
-ex. Uber and Airbnb’s peer-to-peer models
-you should be disciplined in your analysis of contexts involving these principles but creative in your approach toward applying them
*Appendix: Mobile Marketing*
Why is today’s mobile communication technologies so transformative? (like phones)
-it is *personal*, *pervasive*(with u all day everyday), has *proximity*(always with u)
Why is it critical for your brand to understand how mobile works in the everyday lives of consumers?
-bc it has created deeper forms of brand loyalty and paths to purchase
-it is a direct conduit into the lives and habits of consumers
-it can immediately provide solutions that react and respond to consumers in real time and eventually predict their needs
What is central to becoming “brand ready”?
What is required for a mobile strategy?
-the consumer experience
-it must create a *seamless consumer experience* that *reinforces you brand* and also *engages the consumer* across every component and needs to feel *consistent*
Examples of Mobile Tools
-push notifications
-location based services
-SMS coupons
-mobile apps
What mobile opportunities are there for brick-and-mortar businesses?
-offers opportunities for integrated in-store experiences as well as increased sales conversions
-ex. macy’s “magic fitting room” allowed customers to virtually try on outfits. lead to greater in store presence
What is the biggest impact of smartphones (according to deloitte digital)?
-the influence they exert over traditional in-store sales to drive in-store conversion and in-store average order size
-there is almost no traditional business model which mobile cannot improve in some way
The 4 Keys of Mobile (can be consumer-related or business-related)
1.) *Permission:* invite consumers to engage with your brand rather than intrude on them. make them feel secure and respect their privacy and safety
2.) *Relevance:* content needs to relate to needs of consumer and when and where they need it. mobile needs to deliver relevant content that responds at the precise moment of desire
3.) *Location:* you should create enough modular content that is tailored to multiple locations. location-enabled ads thread content w context to produce unprecedented outreach
4.) *Convenience:* mobile removes the friction between desire and attainment, problem and solution. by being accessible, keeping things simple and direct, and providing immediate solutions, your brand will be able to meet the consumer at whatever stage of the purchase cycle he is in.
Several Important Questions to ask Before Creating a Mobile Campaign:
-how is your target already using mobile to interact w your brand?
-what is the consumer looking for in the space you are in?
-what device are they using (apple android?)
-current mindset (buy now or later?)
-activity they’re involved in (buying, comparing, browsing, experiencing the brand?)
-their environment (home, work, on the go?)
-what are they expecting or searching for?
-what needs need to be fulfilled?
How Does a Brand Become Mobile Ready?
-your job as marketers is to go where the consumers are and get there first, so you can be ready to tackle the mobile future
-start w the consumers and figure out ways to align the brand’s marketing objectives with meeting the consumers’ needs
-connect mobile strategy to marketing objectives
-make mobile a priority by ensuring it has a strong voice: high level initial strategy discussions, tactical planning, execution and measurement
-fully resource mobile w both funds and staff so there is no problem maintaining the lifecycle
-foster cross-channel collaborations by finding and supporting internal evangelists across the co who can provide inspiration and edu to ensure consistent brand msging across platforms
-don’t be afraid of taking calculated risks
-define you mission on what you want the consumer experience to feel like
What are the fundamental tenets of privacy in mobile?
-*transparency*:you must provide clear and meaningful notice to consumers about what you are doing w their data you have acquired via in-store tracking, mobile web site or mobile app
-*consumer choice*: provide consumers with control by offering a choice to opt-in or opt-out, so they are able to decide whether they are comfortable w the use of their data in marketing efforts
-these are essential requirements if u used location or personal directory data (contacts, calendar, msg logs, etc)
Digital Advertising Alliance (DAA)
-a coalition of industry trade groups, which allows consumers to opt-out of receiving targeted ads
-this has been extended to include mobile marketing and advertising efforts and will be enforced by the DAA
-recognize that reaching consumers via mobile may require obtaining express written consent from consumers before hand
Mobile App Development in Higher Education
-college and university apps have gained traction over the last few years
-there’s a movement away from a one size fits all approach, toward a unique, engaging, finely targeted features and content that will aid in the recruitment of prospective students
7 Ways Schools Are Upgrading Apps to Attract and Engage More Students
1.) *Self-Guided Campus Tours Led By Student Ambassadors*. ex. Univ of Oregon
2.) *Compelling Storytelling & Creative Content*. ex. Univ of South Wales Unibox which has lecture vids, custom news feeds, clubs and more
3.) *An Impressive Range of Practical Tools:* ex. California State University Northridge provides a one stop shop for students for enrollment, course selection, payment, etc.
4.) *Segmentation By Personas & Life-Cycle Stage:* ex. diff segments of the app for current students, prospective students, alumi, professors, parents, etc.
5.) *Event Modules & Real Time Communication:* promotes important happenings on campus (open days, career fairs, orientation events, student led initiatives, athletic matches, etc. Georgetown university’s “this week in georgtown” can have push notifications, in ap msging
6.) *In Class Instructor Evaluation:*Ohio state did this and had students do evaluations in class on their smartphones.
7.) *Involving Students in Mobile App Development:* including students in this process offers several benefits like lower costs, real world experience for budding developers, and valuable opportunities for meaningful collaboration. ex. is osu and univ of albany. student from albany developed an automated msg students would recieve when laundry was done
*Advertising Commercial Examples in Class* (Monday, April 17th)
Beer Ads
-belly button beer cap one
-robe ppl in field
-horse and dog budweiser
-“most interesting man” drinking beer
-*likability transfers to product*
Demonstration Ads
-honda car parts
-ipad features
-under armor dancer
-car tires, fast sliding car into parallel spot
-beretta shotgun
Fear Ads
-weed driver ran over girl
-depressing car crash in slow motion
-*fear ads usually not super effective bc lag effects, so its hard to measure*
Humor Ads
-pepsico deaf honk ad
-nutrigrain weird “i feel great” office people
-fish talks to cat: learning new language ad
-old spice ads
Whats the worst ad?
-quiznos subs. really weird
McDonald’s Ads
-uses diff segmentation like you kids sharing fries ad, or price conscious people, or monopoly ad
Outdoor Ads
-billboards or on side of buildings
-ex. “hate dropped calls” or the “stop smoking” on the back of bus with smoke coming out of pipes
Radio Ads
-put-put golf frat guy version
Shock Ads
-bird flying off the car ad
-cats head getting chopped off by sunroof
*Exam 4 Review Example Questions*
The maturity stage of the product life cycle is associated with which one of the following?
-sales promotion
Which of the following is associated with intensive distribution?
-routine decision making
Which of the following is most appropriate to use when the levels of product complexity and risk are extremely high?
-personal selling
According to the book, prior to making a sales call, what is a key area of knowledge a salesperson should possess?
-a thorough knowledge of the company they represent, including its pas history
-in depth knowledge of the market for their merchandise
-accurate knowledge of the buyer or prospect to whom they are selling
-all of the above*
According to the book, which of the following is a major objective of trade promotions?
-support advertising and consumer promotions
-serve as a reward for past sales efforts
-reduce manufacturer’s inventories
-all of the above*
Which of the following is associated with the seller being a long term ally with the buyer?
-consultative selling
-has 3 roles: long time ally, team leader, and business consultant
-*ON TEST*
According to the book, which of the following is a potential problem of marketers depending on the use of sales promotion?
-it may make it difficult to cut back on sales promotion without losing market share
-ex. jc penny