Principles of Marketing Final Exam

Promotion
The element of the marketing mix that is used to communicate the firms offer to the target market
Promotion Mix
Paid Advertising
Publicity/Public Relations
Personal Selling
Promotion
Social Media
Communication
The transfer of information from one entity to another
Communication Process
Sender
Encoding
Channel
Decoding
Receiver
Communication Categories
Interpersonal Communication

Mass Communication

True
Marketers are both senders and receivers of messages
4 Basic Tasks of Promotion
Inform
Persuade
Remind
Connect
Informative Promotion
convert an existing need into a want or to stimulate interest in a new product. It is more prevalent during the early stages of the product life cycle
Persuasive Promotion
designed to stimulate a purchase or an action. It becomes the main promotion goal when the product enters the growth stage of its life cycle.
Reminder Promotion
is used to keep the product/brand name in the public’s mind. It is effective during the maturity cycle.
Connecting
designed to form relationships with customers and potential customers to encourage them to be brand advocates
Public Relations
Evaluates public attitudes, identifies areas within the organization that public may be interested in, and executes a program to earn public understanding
Sales Promotion
Marketing activities other than personal selling, advertising, and public relations that stimulate consumer buying and dealer effectiveness
Personal Selling
Planned presentation to one or more prospective buyers for the purpose of making a sale
Traditional Selling
Attempts to persuade the buyer into a specific point of view; win-lose outcome
Relationship Selling
Long-term relationships; win-win outcome
Social Media
Promotion tools used to facilitate conversations among people online
AIDA
Attention
Interest
Desire
Action
APA
Advantage
Proof
Action
Integrated Marketing Communications
The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer
False
There is a best promotional mix (True/False)
True
Advertising may change a consumers negative attitude toward a product or reinforce a positive attitude (True/False)
True
Advertising can affect consumer ranking or brands attributes (True/False)
2 Types of Advertising
Institutional
Product
Institutional Advertising
Enhances a companys image rather than promote a particular product
Product Advertising
Touts the benefits of a specific brand, good or service
True
Institutional Advertising promotes the corporation as a whole and is designed to establish, change, or maintain the corporations identity. (True/False)
Advertising Campaign
A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals
Advertising Objective
Identifies the specific communication task that a campaign should accomplish for a specified target audience during a specified period
True
Before creative work can begin, advertising goals or objectives are established using the DAGMAR approach (True/False)
DAGMAR
Defining Advertising Goals for Measured Advertising
Steps of Advertising Objectives
Define target market

Define desired % change in

Define time frame in which

True
Media must be evaluated for appropriateness and efficiency (True/False)
Monitored Media
Newspapers
Magazines
Radio
Television
Internet
Outdoor Media
Unmonitored Media
Direct Mail
Trade Exhibits
Cooperative Advertising
Brochures
Coupons
Catalogs
Special Events
Major Advertising Media
Newspapers
Magazines
Radio
Television
Internet
Outdoor Media
Advantages of Newspapers
Geographic selectivity

short term advertiser commitments

Disadvantages of Newspapers
Limited demographic selectivity

limited color

Cooperative Advertising
A type of advertising where an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturers’s brand
Advantages of Magazines
Good reproduction

Demographic selectivity

High pass along rate

Disadvantages of Magazines
Long term advertiser commitments

slow audience build up

Advantages of Radio
Low Cost

Immediacy of Message

Disadvantages of Radio
No visual treatment

Commercial clutter

True
For small companies that cannot afford television or endorsements, radio advertising can help raise brand exposure and drive sales (True/False)
Advantages of Television
Wide, Diverse audience

Low cost per thousand

Disadvantages of Television
Short life of the message

Consumer skepticism

High campaign cost

Advantages of Internet
Fast growing

Ability to reach narrow target audience

Disadvantages of Internet
Difficult to measure as effectiveness and ROI

Ad exposure relies on “click through” from banner ads

Not all consumers have access to Internet

Advantages of Outdoor Media
Repetition

Moderate Cost

Flexibility

Disadvantages of Outdoor Media
Short Message

High “noise” level

Alternative Media
Shopping Carts
Computer Screen Savers
DVDs and CDs
Interactive Kiosks
Ads before Movies
Bathroom Posters
Subway Tunnel ads
Continuous Media Schedule
Advertising is run steadily throughout the period ( Hint: Type of Media schedule)
Flighted Media Schedule
Advertising is run heavily every other month or every two weeks ( Hint: Type of Media schedule)
Pulsing Media Schedule
Advertising combines continuous scheduling with flighting ( Hint: Type of Media schedule)
Seasonal Media Schedule
Advertising is run only when the product is likely ( Hint: Type of Media schedule)
Crisis Management
A coordinated effort to handle the effects of unfavorable publicity or an unexpected unfavorable event
Coupon
A certificate that entitles consumers to an immediate price reduction when they buy the product
Rebate
A cash refund given for the purchase of a product during a specific period
Premium
An extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product
Personal Selling
Involves communication between two or more people in an attempt to influence each other (Hint: Type of Selling)
Advantages of Personal Selling
Provides a detailed explanation or demonstration of the product
Advantages of Personal Selling
Two way communication- you can incorporate feedback in the presentation
Advantages of Personal Selling
Considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer
Disadvantages of Personal Selling
Time Consuming- You can reach millions of people with a television ad, would take a lifetime with personal selling
Disadvantages of Personal Selling
Control Problems- sales people are people. (Hint: Problem with selling)
Steps in the Selling Process
-Generate Leads
-Qualify Leads
-Learn about the Customer
-Develop Solutions
-Trial Close
-Close the Sale
-Follow up
MAD
Money
Authority
Desire
Price
the only element of the marketing mix the brings money in
ROI
Net Profit/Total Assets
Elastic Demand
Consumers buy more or less of a product when the price changes (Hint: type of demand)
Inelastic Demand
An increase or decrease in price will not significantly affect demand
Elastic
E>1
Inelastic
E<1
Elasticity(E)=
%change in quantity demanded of good A/ % change in price of good A
Mixed Cost
Part is fixed and part is variable (Hint: Type of cost)
Break Even Quantity=
Total fixed cost/contribution margin
BEP in $=
Unit BEP*Selling Price
Prestige Pricing
Charging a high price to help promote a high quality image
Price Skimming
A firm charges a high introductory price, often coupled with heavy promotion

Helps match supply and demand

Attracts competition

Penetration Pricing
A firm charges a relatively low price for a product initially as a way to reach the mass market
Competition and Segment Pricing
Charging a price based on the competitions price and the segment targeted
Price Fixing
An agreement between two or more firms on the price they will charge for a product
Robinson-Patman Act
Price Discrimination
Total Cost