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Principles of Marketing Ch. 14, 15, 16
Terms in this set (59)
a retailer owned by a single person or partnership and not operated as part of a larger retail institution. Most retailers are independent around the world, with each owner operating a singular store within a local community.
a store that is part of a group of the same stores owned and operated by a singe organization. A home office for the entire chain handles retail buying; creates unified operating, marketing, an other administrative policies; and works to ensure consistency across different locations. Examples: The Gap and Starbucks are retail chains.
a relationship in which the business rights to operate and sell a product are granted by the franchisor to the franchisee
Types of In-Store Retailers
department store, specialty store, supermarket, drug store, convenience store, discount store, full-line discount store, supercenter, specialty discount store, category killer, warehouse club, off-price retailer, factory outlet, used goods retailer, restaurant.
The retailing formats discussed so far entail physical stores where merchandise is displayed and to which customers must travel in order to shop. It enables customers to shop without visiting a physical store location. Non-store retailing is currently growing faster than in-store retailing. Examples: automatic vending, direct retailing, direct marketing, telemarketing, direct mail, shop at home television networks, online retailing.
a store that consumers purposely plan to visit prior to shopping. Examples: Web sites, Amazon is a destination web site for a variety , google is a destination web site for search info.
Executing a Retail Marketing Strategy
Retail managers develop marketing strategies based on the goals established by stakeholders and the overall strategic plans developed by company leadership. The first and foremost task in developing a retail strategy is to define the target market. Defining a retail operation entails combining the elements of the retailing mix to come up with a single retailing method to attract the target market. The retailing mix consists of the four Ps (product, promotion, place and price) plus presentation and personnel. The combination of the 6 Ps projects a store's (or Web site's) image and influences customers' perceptions. Using these impressions, shoppers position one store or Web site against another. Managers must make sure that the positioning is aligned with target customers' expectations.
the first element in the retailing mix is the product offering. Developing a product offering is essentially a question of the width and depth of the product assortment.
retail promotion strategy includes advertising, public relations and publicity and sales promotion. The goal is to help position the store or website in customers' minds. Retailers design intriguing ads, stage special events, and develop promotions aimed at their target markets. Other promotions: sales events, coupons and discounts for certain products or customer groups. One risk associated with store promotions is brand cannibalization.
the reduction of sales for one brand as the result of the introduction of a new product or promotion of a current product by another brand.
one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors
a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, sales promotion, and social media. It informs of a product's benefits and thereby positioning the product in the marketplace. The main function of a marketer's promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition.
direct, face-to-face communication between two or more people.
the communication of a concept or message to large audiences. Directed through a mass medium such as television or newspapers. When a company advertises, it generally doesn't personally know the people with whom it is trying to communicate. Furthermore, the company often can't respond immediately to consumers' reactions to its messages (unless they are using social media or other Internet-based marketing tools). Any clutter from competitors' messages or other distractions in the environment can reduce the effectiveness of the mass-communications effort. Example: Sephora uses many different mass media vehicles (magazines, Internet, and television) to reach its target audience.
The Communications Process
marketers are both senders and receivers of messages. AS senders, marketers attempt to inform, persuade, and remind the target market to take actions compatible with the need to promote the purchase of goods and services. As receivers, marketers listen to the target market in order to develop the appropriate messages, adapt existing messages, and spot new communication opportunities. Most marketing communication is a two-way, rather than a one-way process.
originator of the message in the communications process. For an advertisement, the sender is the company or organization itself.
the conversation of the sender's ideas and thoughts into a message, usually in the form of words/signs. One way of conveying a message the receiver will hear properly is to use concrete words and pictures.
requires a channel
a medium of communication-such as voice, radio, newspaper-for transmitting a message
anything that interferes with, distorts or slows down the transmission of information.
the person who decodes a message. There can be multiple receivers as consumers share their experiences and their recommendations online through social networks and other types of social media.
interpretation of the language and symbols sent by the source through a channel. Common understanding between 2 communicators or a common frame of reference is required for effective communication. Marketing managers must ensure a proper match between the message conveyed and the target market's attitudes and ideas.
the receiver's response to a message. Feedback may be verbal, as in saying "I agree" or nonverbal as in nodding, smiling, frowning or gesturing.
Goals of Promotion
People communicate with one another for many reasons. Promotion seeks to modify behavior and thoughts in some way. Promotion can perform one or more of 4 tasks: inform the target audience, persuade the target audience, remind the target audience or connect with the audience.
seeks to 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. Informative messages are important for promoting complex and technical products such as automobiles, computers, and investment services. For example, shortly after Google unveiled the Google Glass wearable computer and display, it released a series of commercials showing various practical uses for the device. A commercial titled "How It Feels" demonstrated point-of-view video and capture, messaging, video chatting, search, weather, mapping and more.
Persuasive Promotion is designed to stimulate a purchase or action. Persuasion typically becomes the main promotion goal when the product enters the growth stage of its life cycle. The target market should have general product awareness and some knowledge of how the product can fulfill its wants. The promotional message emphasizes the product's real and perceived competitive advantages, often appealing to emotional needs such as love, belonging , self-esteem and ego. For example, advertisers of Android-based smartphones try to persuade users to purchase their companies' devices instead of an iPhone.
used to keep the product and brand name in the public's mind. Prevails during the maturity stage of the life cycle. It assumes that the target market has already been persuaded of the merits of the good or service. Its purpose is to trigger a memory.
the idea behind social media is to form relationships with customers and potential customers through technological ties like Facebook, Twitter, YouTube.
most promotional strategies use several ingredients-which may include advertising, public relations, sales promotion, personal selling, and social media-to reach a target market. The proper promotional mix is the one that management believes will meet the needs of the target market and fulfill the organization's overall goals. Data plays a very important role in how marketers distribute funding among their promotional mix tactics.
any form of impersonal paid communication in which the sponsor or company is identified. Traditional media-such as television, radio, newspapers, magazines, pay-per-click online advertising, display advertising, direct mail, billboards, and transmit advertising (such as on buses and taxis and at bus stops)p are most commonly used to transmit advertisements to consumers. One of the primary benefits of advertising is its ability to communicate to a large number of people at one time. Advertising has the advantage of being able to reach the masses (through national television networks), but it can also be microtargeted to small groups of potential customers, such as television ads on a targeted cable network. (Although the cost per contact in advertising is very low, the total cost to advertise is typically very high).
marketing function that evaluates public attitudes identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance. Public relations helps an organization communicate with its customers, suppliers, stockholders, government officials, employees, and the community in which it operates. Marketers use public relations not only to maintain a positive image but also to educate the public about the company's goals an objectives. A public relations program can generate favorable publicity-public information about a company, product, service, or issue appearing in the mass media as a news item.
consists of all marketing activities-other than personal selling, advertising, and public relations-that stimulate consumer buying and dealer effectiveness. It is a short-run tool used to stimulate immediate increases in demand. Sales promotion can be aimed at end consumers, trade customers, or a company's employees. Sales Promotion include free samples, contests, premiums, trade shows, vacation giveaways and coupons. Also includes experimental marketing whereby marketers create events that enable customers to connect with brands. Marketers often use sales promotion to improve the effectiveness of other ingredients in the promotional mix, especially advertising and personal selling.
a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Both the buyer and seller have specific objectives they wish to accomplish. The buyer may nee to minimize cost or assure a quality product while the salesperson may need to maximize revenue and profits.
Content Marketing and Social Media
content marketing is a crucial part of promotion. Content created by brands is typically distributed through social media. Social media are promotion tools used to facilitate conversations and other interactions among people online.
a category of promotional tactic based on the traditional advertising model, whereby a brand pays for media space. Paid media includes: television, magazine, outdoor, radio, newspaper advertising, display advertising, on websites, pay-per-click advertising on search engines and even promoted tweets on Twitter. It is important, especially a it migrates to the Web. Paid media is used with other media types to develop an integrated message strategy.
Ex: Banner Ads, Sponsored posts
a category of promotional tactic based on a public relations or publicity model that gets customers talking about products or services by media coverage or word of mouth (WOM). Electronic word of mouth (EWOM), sharing a movie review on social media site is growing fast.
Ex: Media Coverage, SEO, Publicity Activities
a new category of promotional tactic based on brands coming publishers of their own content in order to maximize the brands' value to customers.
Ex: Websites, blogs, social media
Integrated Marketing Communications (ICM)
the careful coordination of all promotional messages for a product or a service to ensure the consistency of messages at every contact point at which a company meets the consumer. (Traditional advertising, direct marketing, social media, interactive, public relations, sales promotion, personal selling, event marketing, and other communications). Marketing managers carefully work out the roles that various promotional elements will play in the marketing mix.
a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise.
a marketing strategy that stimulates consumer demand to obtain product distribution.
Advertising Response Function
a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns
Major Types of Advertising
a firm's promotional objectives determine the type of advertising it uses.
a form of advertising designed to enhance a company's image rather than promote a particular product.
a form of advertising in which an organization expresses its views on controversial issues or responds to media attacks
a form of advertising that touts the benefits of a specific good or service.
a form of advertising designed to stimulate primary demand for a new product or product category.
a form of advertising designed to influence demand for a specific brand
a form of advertising that compares 2 or more specifically named or shown competing brands on one or more specific attributes.
Advertising is an impersonal, one-way mass communication about a product or organization that is paid for by a marketer. Advertisers must determine which types of media will best communicate the benefits of their product or service to the target audience and when for how long the advertisement will run. Promotional objectives and the appeal and executional style of the advertising strongly affect the selection of media.
the channel used to convey a message to a target market.
the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience.
advertising media are channels that advertisers use in mass communication. The 6 major advertising media are newspapers, magazines, radio, television, the Internet and outdoor media. Newspapers are one of the oldest forms of media. The advantages of newspaper advertising include geographic flexibility and timeliness. Newspapers are not the best vehicle for marketers who are trying to reach a very narrow market.
the number of target consumers exposed to a commercial at least once during a specific period, usually 4 weeks. Media plans for product introductions and attempts at increasing brand awareness usually emphasize reach.
the number of times an individual is exposed to a given message during a specific period. Advertisers use average frequency to measure the intensity of a specific medium's coverage.
Ex: Coca-Cola might want an average exposure frequency of 5 for its Powerade television ads. That means that each of the television viewers who saw the ad saw it an average of 5 times.
designation of the media, the specific publications or programs, and the insertion dates of advertising. There are 4 basic types of media scheduling: continuous media schedule, flighted media schedule, pulsing media schedule, seasonal media schedule.
the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance. It is a vital link in a forward-thinking company's marketing communication mix. Marketing managers plan solid public relations campaigns that fit into overall marketing plans and focus on targeted audiences. These campaigns strive to maintain a positive image of the corporation in the eyes of the public. As such, they should capitalize on the factors that enhance the firm's image and minimize the factors that could generate a negative image. The concept of earned media is based on public relations and publicity.
an effort to capture media attention, often initiated through press releases that further a corporation's public relations plans. For example through articles or editorials in publications or through human-interest stories on radio or television programs. Corporations usually initiate publicity through press releases that further their public relations plans. A company about to introduce a new product or open a new store may send a press release to the media in the hope that the story will be published or broadcast. Savvy publicity can often create overnight sensations or build up a reserve of goodwill with consumers. Corporate donations and sponsorships can also create favorable publicity.
marketing communication activities other than advertising, personal selling, and public relations in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value. Sales promotion is usually cheaper than advertising and easier to measure. With sales promotion, marketers know the precise number of coupons redeemed or the number of contest entries received. Sales promotion is usually targeted toward either of two distinctly different markets. Trade Sales promotion is directed to members of the marketing channel, such as wholesalers and retailers. Consumer Sales Promotion is targeted to the ultimate consumer market. The objectives of a promotion depend on the general behavior of targeted customers.
Tools for Consumer Sales Promotion
coupons, rebates, premiums, loyalty marketing programs, contests, sweepstakes, sampling, point of purchase promotion.
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