Chapter 15 Flashcards
Objectives Guide Implementation
Awareness => Internet => Evaluation and Trial => Decision -> confirmation
2 types of advertising
Product advertising
Institutional advertising
3 types of product advertising
Pioneer advertising
Cometitive advertising
reminder advertising
3 types of competitive advertising
Direct
Indirect
Comparative
Life Cycle Stages
Market Introduction
Market Growth
Market Maturity
Sales Decline
Risks of comparative advertising
Annoy your consumer
Tarnish your image
Illegal in some countries
Measuring Advertising is Not easy
Awareness
trial
Preference
Use
New media metrics
perceptions
mesage/ ad content
Research Assessment
Success depends on the total marketing mix, not just promotion
- the effectiveness of promotion is hard to seperate from the effects of the other elements of the mix
ex. a great advertisement cannot be faulted for failing to sell a poorly deisnged product
Advertising Regulation
Federal Trade Commission controls unfair or deceptive advertising
- can require corrective advertising
- focus is on what is deceptive, instead of what is subjectively defined as unfair
Comparative advertising claims may need to be sustained
- rules are not always clear
- hard to define exactly what research is needed
Puffery
Puffery protects marketers whose claims are either so excessive they are clearly not expected to be believe, or so generic they have no substantive meaning
“Better, best, greatest, finest”
Weasel words
Used in advertising to make a claim look legitimate to the casual listener or reader
Proves to be empty and meaningless
help control acne
helps, acts, works, can be, up to, as much as, refreshes, comforts, fights
Deception
Causes consumers to have a false belief about the advertiser’s or competitor’s product
Deception is material
Someone has been or is likely to be hurt
Generation Y
Millenials
Digital natives
text preference
1-3 talk about a brand online monthly
2/3 say they participate in one or more content creating activities on the internet
Gen Y more characteristics
Ad savy/skeptics
Multi taskers
Open to new ideas and trying new products
PR
More cost effective
Greater longevity
Has a far wider audience
Credability
Extend your marketing tactics with a PR plan
Social networking
Crowd power
Guerilla Marketing
Viral marketing
Sales Promotion
Other than advertising that stimulate interest, trial, or purchase
May be targeted at channel members, final customers or users, or employees
Sales promotion spending is increasing
Key problems in managing sales promotions
Erodes brand loyalty
not for amateurs
need for alternatives
hard to manage
Advertising objectives
Specific
measurable
attainable
relevant to the target
timely
link to marketing strategy
link to promotion
Ad agencies
Specialists in planning and handling mass selling details for advertisers
15% is not required, but still common
Some services are provided on a fee basis
increased use of performance-based pay
Product advertising
Tries to sell a product
Institutional advertising
which promotes an organization’s image, reputation, or ideas rather than a specific product
Pioneer advertising
Tries to develop primary demand for a product category rather than demand for a specific product
Competitive advertising
Tries to develop selective demand for a specific brand
Direct type
aims for immediate buying action
Indirect type
points out product advantages to affect future buying decisions
Comparative advertising
Means making specific brand comparrisons using actual product names
Reminder advertising
Tries to keep the product’s name before the public
Advertising allowances
price reductions to firms further along in the channel to encourage them to advertise or otherwise promote the firm’s products locally
Cooperative advertising
Involves producers sharing in the cost of ads with wholesalers or retailers
Copy thrust
What the words and illustrations should communicate
Advertising agencies
Specialists in planning and handling mass-selling details for advertisers
Corrective advertising
ads to correct deceptive advertising
4 critical advertising and promtion decisions a marketing manager must make:
- advertising objectives and what they want to achieve
- who the target audience
- what kind of advertising to use
- which media to use to reach target customers
- what to say (copy thrust)
- who will do the work - the firm’s own marketing or advertisnig people our otuside agnecies
Why is it important for advertising objective be specific?
Every ad campaign should have clearly defined objectives
The marketing manager must decide exactly what advertising should do
Advantages of advertising allowances and cooperative advertising
coordination and integration of messages in the channel
allowances dont ensure coorporation
Vertical coordination examples
advertising allowances
cooperative advertising
Criteria when deciding the best advertising medium to use?
depends on:
- your promotion objectives
- what target markets you want to reach
- the funds available for advertising
- the natuer of the media - icnluding who they reachm, with what frequency, with what impact, and at what cost
AIDA model
getting attention
holding interst
arousing desire
obtaining action
Supply Chain
The complete set of firms, facilities, and logistics activities involved in procuring materials, transforming them into intermediate and finished products, and distributing them to customers. Focus on information flows
Goal of Supply Chain
Right Product. Right Quantity. Right Place, Right Time
Rankings based on:
Peer opinion
Gartner Opinion
3-year weighted ROA
Inventory Turns
3- year weighted revenue growth
Takeaway of supply chain rankings:
Takeaway: leading global brands are leaders in supply chain management
Supply Chain is Good for the World
Source Sustainable Materials
transport efficiently
recycle via reverse logistics
create what people will buy “reduce waste”
supply chain = sustainability
What does a supply chain look like?
supplier - manufactuer - wholesaler/distributor - retailer - consumer
supply chain is all about tradeoffs
cost - speed- quality
Operations Research
The academic discipline of studying how analytical methods can be used to make better decisions
Linear Optimization
A widely used technique to find an optimal solution using aset of algebraic equations
ERP Enterprise Resource Planning
Provides a real time view of core business processes using common databases
track business resources - cash, faw materials, production - and the status of business commitments: orders, purchase orders and payroll in one single application
A systems Approach
- Know your Target Market
- focus on total cost
5 major transportation modes
rail
truck
water
pipelines
air
Why do we have inventory?
needed when production doesnt match consumption
keep prices steady
achieves production economies of scale
builds channel flexibility
Total Inventory Cost
Cost of storage facilities
handilng costs
cost of damage while in inventory
cost of risks
cost of inventory becoming obsolete
interest expense & opportounity cost
cost of storage facilities
Place
Making goods and services available in the right quanties and locations, when customers want them
Channel of distribution
any series of firms or individuals who participate in the flow of products from producer to final user or consumer
Direct marketing
direct communication between a seller and an individual customer using a promotion mehtod other than face to face seling
disrepancy of quantity
difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want
Discrepancy of assortment
The difference between the ilnes a typical producer makes and the assortment final consumers or users want
Regrouping activities
Adjust the quantities or assortments of products handled at each level in a channel of distribution
Accumulating
Involves collecting products from many small producers
Bulk breaking
involves dividing larger quantities into smaller quantities as products get closer to the final market
Sorting
Seperating products into grades and qualities desired by different target markets
Assorting
Putting together a variety of products to give a target market what it wanst
Traditonal channel systems
The various channel members make little or no effort to cooperate with each other
Channel captain
A manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflcts
Vertical marketing systems
Channel systems in which the whole channel focuses on the same target market at the end of the channel
Corporate channel systems
corporate ownership all along the channel
Vertical integration
acquiring firms at different levels of channel activity
Administered channel systems
the channel members informally agree to cooperate with each other
contractual channel systems
the channel members agree by contract to cooperate with each other
ideal market exposure
Make a product available widely enough to satisfy target customers needs but not exceed them
Intensive distribution
selling a product through all responsible and suitable wholesales or retailers who will stock or sell the product
Selective distribution
selling through only those intermediairies who will give the product special attention
Exclusive distribution
selling through only one intermediary in a particualr geographic area
multichannel distribution
occurs when a producer uses several competing channels to reach the same target market - perhaps using several intermediaires in addition to selling directly
reverse channels
channels used to retrieve products that customers no longer want
exporting
selling some of what the firm produces to foreing markets
Licensing
selilng the right to use some process, trademark, patent, or other right for a fee or royalty
Management contracting
means that the seller provides only management and marketing skills - others own the production and distribution facilities
joint venture
a domestic firm enters into a partnership with a foreign firm
direct investment
means that a parent firm has a division in a foreign market
Logistics
The transporting, storing, and handling of goods in ways that match target customers’ needs with a firm’s marketing mix - both within individual firms and along a channel of distribution
Physical distribution (PD)
Another common name for logistics
Customer service level
How rapidly and dependably a firm can deliver what they, the customers, want
Physical distribution conept
Says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level
Total cost approach
evaluating each possible PD system and identifying all of the costs of each alternative
supply chain
the complete set of firms and facilities and logistics activiteis that are involved in procuing materials, transforming them into finished products, and distributing them to customers
Electronic data interchange (EDI)
an approach that puts information in a stnadardized format easily shared between different comuter systems
Transporting
The marketing function of moving goods
Containerization
grouping individual items into an economical shipping quanity and selling them in protective containers for transit to the final destination
piggyback service
means loading truck trailers, or flatbed trailers carryiing containers, on railcars to provide both speed and flexibility
private warehouses
storing facilities owned or leased by companies for their own use
public warehouses
independent storing facilities
distribution center
a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs
