Chapter 19 Flashcards
Cooperative Advertising
A cost-sharing arrangement where manufacturers and retailers jointly fund advertising efforts.
Ex: A shoe brand contributes to a local retailer’s ad campaign featuring its products.
Vertical Cooperative Advertising Agreement
A partnership where a manufacturer helps cover advertising costs for a retailer selling its products.
Ex: Nike reimburses a sporting goods store for running local ads featuring Nike shoes.
Horizontal Cooperative Advertising Agreement
A joint advertising effort between two or more retailers promoting complementary products.
Ex: A coffee shop and a bookstore share the cost of an ad encouraging customers to “grab a coffee and a book.”
Public Relations (PR)
The strategic management of a company’s image through media relations and community engagement.
Ex: A retailer sponsors a charity event to improve its public reputation.
Publicity
Free media coverage generated by company actions, events, or newsworthy stories.
Ex: A local newspaper writes about a store’s grand opening without the retailer paying for the coverage.
Personal Selling
Direct, face-to-face interaction between a salesperson and a customer to influence a purchase.
Ex: A car dealership representative helps a customer choose the best vehicle for their needs.
Order-Taking Sales
A salesperson who assists customers with routine purchases but does not actively persuade them.
Ex: A cashier at a grocery store helps customers complete their purchases.
Order-Getting Salesperson
A salesperson who actively seeks out new customers and persuades them to make purchases.
Ex: A real estate agent convincing a client to buy a house.
PMs (Promotional or Push Monies)
Financial incentives given to salespeople by manufacturers to promote specific products.
Ex: A cosmetics brand offers store employees a bonus for selling its new perfume.
Canned Sales Presentation
A scripted sales pitch used repeatedly with different customers.
Ex: A phone sales agent follows a set script to pitch a new credit card offer.
Need-Satisfaction Approach
A sales technique that focuses on identifying and fulfilling a customer’s specific needs.
Ex: A mattress salesperson asks about a customer’s sleep habits before recommending a product.
Sales Promotion
Short-term incentives designed to boost sales or encourage customer engagement.
Ex: A “Buy One, Get One Free” deal on sneakers.
Word of Mouth (WOM)
Informal communication where customers share opinions about a product or service.
Ex: A satisfied customer recommends a new restaurant to friends.
All-You-Can-Afford Method
A budgeting method where a company spends as much as possible on promotions after covering other expenses.
Ex: A small business dedicates its remaining budget to social media ads.
Incremental Method
A budgeting method that adjusts promotional spending by adding or subtracting a fixed amount from the previous year’s budget.
Ex: A retailer increases its ad budget by 5% compared to last year.
Competitive Parity Method
Setting a promotion budget based on what competitors are spending.
Ex: A clothing store matches a competitor’s advertising spend in a local magazine.
Percentage-of-Sales Method
Allocating a fixed percentage of revenue toward advertising and promotions.
Ex: A retailer dedicates 7% of its total sales to marketing efforts.
Objective-and-Task Method
Setting a promotion budget based on the specific objectives a company wants to achieve.
Ex: A company determines it needs $50,000 in advertising to reach 100,000 potential customers.
Hierarchy of Effects
A model describing the stages a consumer goes through before making a purchase (awareness, interest, desire, action).
Ex: A customer first sees an ad for a new phone, researches it, desires it, and finally buys it.
Reach
The total number of people exposed to an advertisement.
Ex: A TV commercial reaches 500,000 viewers nationwide.
Frequency
The number of times an individual is exposed to an advertisement.
Ex: A person sees the same Instagram ad for a new sneaker brand five times.
Massed Promotion Effort
A marketing strategy where promotions are concentrated within a short period.
Ex: A retailer runs all holiday ads in the weeks leading up to Christmas.
Distributed Promotion Effort
A marketing strategy that spreads promotions evenly throughout the year.
Ex: A skincare brand releases new discount offers every month instead of just during holidays.
