FINAL Flashcards
What is AIDA?
It underlies the consumer journey/purchase funnel. It entails awareness, interest, desire, and action.
What are offline, interactive marketing tools?
Engage potential customers by encouraging active participation or interaction in a physical environment: personal selling, sales promotions (competitions), and direct marketing (telemarketing)
What are offline, passive marketing tools?
Req minimal active effort from business after set up: advertising, sales promotions (coupons), public relations, direct marketing (catalogs)
What are online, interactive marketing tools?
Direct marketing (mobile marketing) and online marketing (blogs & social media)
What are online, passive marketing tools?
direct marketing - email marketing
What is inbound marketing?
Focuses on attracting potential customers by providing value and creating content that draws them to your brand organically. It’s customer-centric and aims to solve problems or fulfill needs. A bit more organic and personalized
What is outbound marketing?
Actively pushes your message to potential customers, often without them seeking it. It’s typically interruptive and brand-centric. Reaches a wider audience regardless if it applies to you. Useful for immediate exposure
How do consumers look to solve problems?
They search for solutions using keywords & phrases
What are the three types of media?
Paid, earned, and owned
What is paid media?
traditional advertising: print, television, radio display, direct mail, paid search, retail/channel
What is earned media?
word of mouth, facebook comments, twitter mentions & replies
What is owned media?
corporate website, campaign microsite, blog, brand community, facebook fan page
What are ways to assess ad responses?
Number of exposures.
What are diminishing returns in ads?
increasing the # of times you want your audience to see an ad, but it no longer has the same impact
What is a linear pattern in ads?
As the number of exposures increase so does the impact
What is the threshold effect in ads?
It means the audience needs to see the ad a certain number of times before they take notice. In this context, the threshold is the minimum level of exposure required to generate meaningful results, such as awareness, interest, or conversions.
What is the learning curve with wear out effect in ads?
In the initial phase, audience awareness and response improve as ad exposure increases. After a certain point, additional exposures lead to diminishing returns and may even cause a decline in effectiveness.
How are offers beneficial?
They help stimulate short term sales. It helps with action in purchase funnel. It can trigger competitive response, but can make consumers more deal prone.
How does the IMC budget vary?
It can vary by strategic goal, stage in product life cycle, competitive context, and time
What are rules of thumb when creating the IMC budget?
Competitive parity (company aligns its spending, strategies, or actions with those of its competitors), percentage of sales, and available budget
What are IMC objectives?
increase awareness, prompt trial, increase repeat units, increase sales, and increase customer loyalty
What are the metrics for IMC?
Return on marketing investment = (GM - Marketing Expenditures)/Marketing Expenditure
What is reach?
% of target population exposed to a specific marketing communication with a certain time period
What is frequency?
of times target consumers are exposed to an ad within certain time
What is cost per thousand (cpm)?
Used to compare costs of media. a targeted CPM by determining the % of readers, viewers or listeners in your target market.
What is cost per click (cpc)?
Also used to compare costs of media and to set advertising costs.
What is awareness?
It is the TOTAL of ALL the impressions from ALL marketing vehicles. In reality, awareness cannot be calculated for just one ad.
How to calculate CPM$?
(Marketing $ spent/Impressions received) * 1,000
How to calculate awareness from CPC?
(Marketing $ spent/CPC$)/total market
How to calculate awareness from CPM?
((($Marketing budget/CPM)1,000)0.50)/4/TOTAL MARKET
The 0.50 takes into consideration the average ad impact. The 4 takes into consideration a consumer will only remember an ad after seeing it 4 times.
What does supply chain refer to?
suppliers, manufacturers, intermediaries, and retailers
What is a marketing channel?
Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
What is a direct marketing channel?
Manufacturer –> Consumer
What is an indirect marketing channel?
Manufacturer –> Distributor wholesaler –> retailer –> consumer
Why use intermediaries?
They help create efficiency because they allow one retailer to be in charge of distributing various products to the consumer. They also adjust for assortment & quantity discrepancies, facilitate searching process, maintain relationship with existing customers, and provide market intelligence
What is a manuf rep?
Works for manufacturers as an external selling force. Does not typically take ownership of goods
What is a wholesaler/distributor?
Purchases goods and sells to retailers – common in food products
What is an agent/broker?
An intermediary with legal authority to act on behalf of the manufacturer – typically does not take ownership of goods
What is a retailer?
Sells to end consumer
Steps in retail strategy
Choosing retailing partners –> identifying types of retailers –> developing a retail strategy –>
What is an independent marketing channel?
A distribution system where each entity involved in the process of moving a product or service from producer to consumer operates independently and has its own goals, ownership, and decision-making authority
What is administered Vertical Marketing System?
Independent with dominant member
Ex: Proctor & Gamble has strong influence on how their products are distributed & promoted
What is contractual Vertical Marketing System?
A type of distribution channel where the relationships between the different levels (manufacturer, wholesaler, retailer) are formally coordinated through binding agreements or contracts. This system ensures collaboration and alignment of goals among independent entities while allowing each to maintain separate ownership.
What is corporate Vertical Marketing System?
A type of distribution channel where a single company owns and controls multiple levels of the supply chain, from production to distribution. In this system, one company consolidates the roles of the manufacturer, wholesaler, and retailer, allowing for complete control over the entire process
What are the three types of reaches retail partners have?
intensive, exclusive, and selective
What are advantages of bricks v clicks?
In store experiences allows customers to browse, touch, receive personal service, and use both cash and credit. Stores also provide entertainment and reduce perceived transaction risk. Online shopping provides access to deeper, broader selection, expanded market presence, and convenience, while allowing retailers collection of consumer data (e.g., email, address, credit card info)
How to manage channel relationships?
Mutual trust, open communication, common goals, interdependence, and credible commitments
What are the types of power retailers strive for?
reward, coercive, referent, expertise, information and legitimate
What is referent power?
a type of social power that stems from an individual’s ability to influence others based on admiration, respect, or identification
What is channel conflict and why do we care about it?
Channel conflict exists when one channel member believes another channel member is engaging in behavior that inhibits it from achieving its goals. Causes are incompatibility of goals, aims, or values & lack of agreement over relevant domains
What is vertical channel conflict?
Occurs when there is a disagreement or clash between different levels of the same distribution channel. This type of conflict typically arises between manufacturers, wholesalers, distributors, and retailers who operate within the same channel but may have competing goals, interests, or priorities
What is horizontal channel conflict?
Occurs when there is disagreement between retailers or same levels of the same distribution channel - think of target walmart davey spongebob story
What is critical in determining revenue?
Price, the other 3 P’s are costs that diminish profitability
What are the 5 C’s of pricing?
competition, costs, company objectives, customers, and channel members
What is an example of a profit-oriented pricing strategy?
include a companywide policy that all products must provide for at least an 18% profit margin to reach a particular goal for your firm
What is an example of a sales-oriented pricing strategy?
Set prices very low to generate new sales & take sales away from competitors, even if profits suffer
What is an example of a competitor-oriented pricing strategy?
Helps discourage more competitors from entering the market, set prices very low
What is an example of a customer-oriented pricing strategy?
Target a market segment of consumers who highly value a particular product benefit and set prices relatively high (referred to as premium pricing). Personalized medicine firms
What is profit oriented?
company assesses margin on portfolio
What is sales oriented?
set prices very low to generate new sales & take away sales from competitors, even if profits suffer
What is competitor oriented?
To discourage more competitors from entering the market, set prices very low
What is the break even point?
Quantity necessary before company begins generating profit
How to characterize the relationship between price charged and quantity sold?
Inversely related & can be characterized as elasticity. Elasticity = % change in quantity/% change in price
What happens if the price is too low?
quality interferes, short-circuits consumer journey, and lacks long term impact on consumer attitudes
How does a product’s role impact it’s pricing?
Depending on the type of role they will make prices higher.
What is an image setter?
Improve price image relative to competition. Lowest pricing freedom
What is a traffic driver?
attracts consumers to the store. low pricing freedom
What is a volume driver?
focuses on increasing units sold. medium pricing freedom
What is an impluse buy?
It increases basket size & has larger pricing freedom
What are specialty products?
they extract maximum margin & have high pricing freedom
What is a monopoly?
one firm control the market & there is less price competition
What is monopolistic competition?
Many firms sell differentiated products at different prices. Also less price competition
What is oligopolistic competition?
a handful of firms control the market. more price competition
What is pure competition?
many firms sell commodities for the same prices - more price competition
What is the focus of marketing?
create differentiated products that compete against other differentiated products
What are examples of monopolies?
DeBeers, Alibaba, and Google
What are examples of monopolistic competition?
Nike, Adidas, Puma, Under Armour, Lululemon, etc
What are examples of oligopolistic competition?
Delta, United, American, Boeing
What are examples of pure competition?
Crude oil, gold, and potatoes
What is the contribution margin?
Profit - VC = how much you have left to pay fixed costs
Why do companies offer bundled products?
Bundling is meant to increase attractiveness of an offer by offering more than one product for a price that is lower than when items are sold separately.
What are the goals associated with bundling?
encourage trial when a new product is paired with established one, motivate stocking up as a way to blunt rival product launch, and facilitate sale of slow-moving items
What are the pure components in bundling?
Items are offered at separate prices (i.e., no bundle)
What is pure bundling?
Only bundle is offered by the seller at a bundled price
What is mixed bundling?
The bundle, as well as some or all components, or smaller bundles, are priced and offered for sale
What is EDLP?
Everyday low pricing. It saves search costs of finding overall lowest prices
What is high/low pricing?
provides the thrill of the chase for the lowest price.
What is price skimming?
A company initially sets a high price for a new or innovative product and then gradually lowers the price over time. The goal is to maximize revenue from different customer segments who are willing to pay more at the early stages of the product’s launch, and then attract more price-sensitive customers as the price decreases.
What is price penetration?
A company initially sets a low price for a new product or service to quickly gain market share and attract customers. The goal is to enter the market aggressively, build a customer base, and increase brand awareness. Once a significant market share is established, the company may gradually increase the price.
What are examples of consumer promotions?
mark downs, quantity discounts, seasonal discounts, coupons, rebate, leasing, price bundling, leader pricing, and price lining
What are examples of trade promotions?
seasonal discounts, cash discounts, vendor allowances, quantity discounts, and uniform delivered v. zone pricing
What is IMC?
Integrated marketing communications - a strategy that unifies a brand’s message across the media
What are the steps in creating an advertisement?
identify target audience, set advertising objectives, determine the advertising budget, convey the message, evaluate & select media, create ads, and assess impact
How should you set your marketing objectives?
It needs to align with the product life cycle (inform, persuade, and remind)
What is category demand stimulation?
Marketing strategies and actions aimed at increasing the overall demand for a particular product category, rather than promoting individual products or brands within that category. The goal is to create a broader market interest and raise awareness for the entire category, which benefits all brands and products within that category.
What is selective demand stimulation?
A marketing strategy that focuses on increasing demand for a specific brand or product within a particular category, rather than stimulating demand for the entire category as a whole. The goal is to persuade consumers to choose one brand over its competitors.
What is the brand positioning statement?
How company wants to be perceived against all competitors. Drives product and marketing decisions. Does not change often. This helps drive the creative.
What is the unique selling proposition?
Reason to purchase and motivates a sales or trial. A brand can have several USPs. The slogan helps express the USPs (Redbull gives you wings)
What is the creative brief?
Creative briefs are developed for every campaign. Shared between marketing and creative teams (internal or external). Helps outline the strategy of a campaign
What is one simple message/single-minded proposition?
Each campaign has a single message (single purpose) optimized across and for all media used.
What are examples of mass media?
TV, radio, print, ooh, and transit
What are examples of targeted media?
youtube, streaming video, podcats, paid search, social media, influencers
What is a pulse advertising schedule?
release ads in bursts
What is a flighting advertising schedule?
ads are released for a period of time then not released
What is a continuous adveritisng schedule?
it’s released year round
What are the key elements of a creative brief?
business challenge, target audience, problem to solve, insights, single minded proposition, brand DNA, deliverables , metrics
What is a sales force?
employees of the firm, service providers, firm has more control
How does structure of sales force serve strategy?
Structure by product line, region, or customer type & Recruit and retain talent that fits category
What are the steps in the personal selling process?
generate & qualify leads, pre-approach, sales presentation & overcoming reservations, closing the sale, and follow up
What is the b2b selling process?
need recognition, product specification, RFP process ( request for proposal, outlines projects specifics), proposal analysis & supplier selection, order specification, performance assessment
What key practices influence sale success?
understanding customer success, customize the package, demonstrate quality of your product, provide attentive customer service, build & foster customer relationships
Explain straight salary (12% of firm)
Especially useful when compensating new sales rep or when they perform non selling activities. It also provides sales reps with maximum security & yields more predictable selling expenses. However, it provides little incentive
Explain straight commission (15% of firm)
Useful when highly aggressive selling is req, non selling tasks are minimized, company can’t closely control sales activities. Provides maximum amount of incentive, but reps have little financial security
Explain combination comp (73% of firms)
Useful when firms wish to provide incentive but still control sales activities. It provides certain level fo financial security and incentives. But, selling expenses are less predictable
How are sales forces organized?
Company sales force, Manufacturer’s sales reps/independent agents, Salespeople, Order getter )identify potential customers and engage them in discussions to attempt to make a sale), Order taker (process routine orders, reorders, or rebuys for producers). Sales support (enhance and help with the overall selling effort) and recruiting
What are ways to incentivize the sales force?
Straight salary
Straight commission
Combination
Bonus
Sales contest
Recognition from peers and management
Have symbolic value
What are pros and cons of incentive structure?
Pros:
Provides Sales reps with max security
Yields more predictable selling expenses
Cons:
Provides little incentive
Why do we need marketing channels?
Marketing channels are essential because they provide a pathway for products or services to move from the producer to the final consumer. These channels serve as intermediaries that help connect producers with their target market, enabling businesses to efficiently distribute and sell their products.
What determines channel power?
The more resources, influence, or strategic advantages a channel member has, the more power they hold within the channel.
What is difference between push and pull marketing?
Push = Getting the product into stores (via promotions for retailers).
Pull = Making consumers want the product and go to stores to get it.
What is the difference between margin and markup?
Margin is the term and method of percent difference between cost and price is the standard in most industries and categories. Markup on selling price is another way of saying. However markup ON COST is different.
_______ is any interference in the IMC process.
Noise
Integrated marketing communications includes
distribution
The basic goal of integrated marketing communications is to
Marketing communications is the promotion element of the seven Ps, the method by which the firm communicates value to target customers.
One of the difficulties in measuring the effectiveness of IMC efforts is the________, where consumers do not act immediately after receiving a marketing communication.
Lagged effect. If consumers responded instantly to marketing communications, measuring effectiveness would be much easier. In addition to the lagged effect, it often takes multiple exposures before a consumer fully processes a message.
What is true of competitive parity?
Competitive parity does not allow firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets, their market shares will stay approximately the same over time.
“Buy one, get one free” is what type of sales promotion?
deal
What is a deal?
A deal refers generally to a type of short-term price reduction that can take several forms, such as a featured price, a price lower than the regular price; a certain percentage “more free” offer contained in larger packaging; or a buy one, get one half off offer.
Regardless of the objective of an advertising campaign, each campaign’s objectives must be:
to inform, persuade, or remind, with a focus on a particular product or the institution in general, each campaign’s objectives must be specific and measurable.
A logo and a unique selling proposition in an ad are part of its
Ads typically have a number of brand elements that identify the sponsor of the ad, usually through a logo and a unique selling proposition.
The difference between advertising and other forms of promotion is that advertising is
Advertising is a paid form of communication, which distinguishes it from other forms of promotion.
Generally, less money is spent on advertising in B2B markets than in B2C markets because
Less money is spent on advertising in B2B (business-to-business) marketing contexts than in B2C (business-to-consumer) markets. Personal selling likely is more important in B2B markets.
The pricing method that considers what consumers may be willing to pay for a particular product based on the value received over the product’s entire lifetime is the________ pricing method.
Cost-of-ownership pricing considers not just the price initially paid but also the cost of owning the product across its lifetime.
What is a reference price?
A reference price is the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process.
Compared with other methods used to set prices,________ pricing is relatively simple.
Although they are relatively simple, compared with other methods used to set prices, cost-based pricing requires that all costs be identified and calculated on a per-unit basis.
Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering
Value-based pricing methods consider the consumers’ perceived value.
A pricing tactic is
Pricing tactics offer short-term methods to focus on select components of the five Cs. Generally, a pricing tactic represents either a short-term response to a competitive threat (e.g., lowering price temporarily to meet a competitor’s price reduction) or a broadly accepted method of calculating a final price for the customer that is short-term in nature.
______ is an activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results
Search engine marketing (SEM) is an activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results.
What step in designing a digital marketing campaign involves determining exactly what a firm hopes to promote and achieve through its campaign?
The first step should be to identify the strategy and goals for the program, during which a firm has to determine what it hopes to promote and achieve through the campaign.
The development of a clear call-to-action and eye-catching designs are important in the________ step of developing a digital marketing campaign.
A clear call to action and strong, eye-catching images and designs are important in the campaign development step (experiment and engage) of developing a digital marketing campaign.
Companies can learn a lot about customers using sentiment analysis on sites such as Facebook and X to
Using a technique known as sentiment analysis, marketers can analyze the content found on sites like Facebook, X, and online blogs and reviews to assess the favorableness or unfavorableness of the sentiments.
One important measure of social media’s effectiveness is the percentage of site visitors who take the action the site owner hoped for, such as making a purchase, subscribing to a service, or donating money. This measure is called the site’s
The conversion rate is a measure that indicates what percentage of visitors or potential customers act as the marketer hopes, whether by clicking, buying, or donating. Not only does it measure how well the site is achieving its goals, but it can also signal a serious problem.
The________ stage of the selling process offers a prime opportunity for salespeople to solidify customer relationships through great service quality.
This refers to the follow-up stage. It is essential to perform well in this stage to build relationships and earn additional orders in the future.
Effective salespeople anticipate and handle
Good salespeople know the types of reservations buyers are likely to raise. Although not all reservations can be forestalled, effective salespeople can anticipate and handle some.
One advantage of personal selling over other types of marketing communication is that
Salespeople are the frontline of the company and in the best position to get to know customers and build relationships with them.
Studies have found that customers are typically ready to make a purchase decision well before salespeople attempt to close the sale. Salespeople can learn when to close the sale by
Good salespeople listen carefully to what potential customers say and pay attention to their body language. By reading these signals, they can achieve an earlier close.
________ is a sales philosophy and process that emphasizes a commitment to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial to all parties.
Relationship selling refers to a sales philosophy and process that emphasizes a commitment to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial to all parties.
What is Margin, or Mark-up on selling price?
Shows how much profit is made relative to the final selling price, not the cost of the product to the retailer. Basically tells you what percentage of the selling price is profit after accounting for the cost of the product. Selling $ is denominator. (Basically how much they keep after selling it to consumers and taking costs into consideration so think of it going backwards)
What is Mark-up on cost?
The percentage added to the cost price of a product to determine its selling price. (Think of this from going from the beginning - so what % they add to make the selling $)
What is price equation?
Cost + Markup = Price
How to calculate margin in $?
Cost + Markup on Selling Price (Selling Price) = Selling Price
How to calculate markup on cost in $?
Cost + Markup on Cost (Cost) = Selling Price
How to convert from markup on cost $ to markup on selling $/margin %?
(Markup on cost %/100% + markup on cost%) * 100
How to convert frommarkup on selling $/margin? to markup on cost %?
(Markup on selling $ %/100% - markup on selling $%) * 100
How to calculate margin %?
Selling $ - Cost/Selling $
How to calculate markup %?
Selling $ - Cost/Cost
