Midterm 2 Flashcards
Impact on individuals
A. High prices
American marketing system causes prices to be higher than they would be without it.
High costs of distribution
High advertising and promotional costs
Excessive markups.
B. High Pressure Selling
Belief that products are sold, not bought – lack of concern for consumers
Criticism of marketing: Economic impact on individuals
- Economic impact on individuals
1a) High prices
American marketing system causes prices to be higher than they would be without it.
High costs of distribution
High advertising and promotional costs
Excessive markups.
1b) High Pressure Selling
Belief that products are sold, not bought – lack of concern for consumers
- Promotion of unsafe or unhealthy products
- Planned obsolescence: the practice of designing products to break quickly or become obsolete in the short to midterm forcing consumer to buy a new one
- Does a disservice to disadvantaged customers
Impact of advertising on society
- False wants and too much materialism
- Shop till you drop (shopkins)
- Cultural pollution
Our senses are constantly being assaulted by advertising. Pollution of people’s minds with messages of materialism, sex, power or status. - Too much political power
Industries, Big Tobacco, Big Food, Big Oil, Big Pharma hold too much power over government and mass media.
CARU
CARU: Children’s Advertising Review Unit
- Acts as an administrative agency (guidelines and procedures)
- Promotes “responsible children’s advertising
- Focuses on HOW products are advertised to children
Describe the Fair Information Practice principles (self-regulation of tech companies)
Notice – the website should post its privacy policy
Choice – Consumer’s level of control over being profiled and how their information is used
Access – Ability to access info collected on you and make amendments to it
Security – Advertisers should protect the data from loss, misuse or improper access.
Enforcement – all industry members should be monitored by an independent 3rd party
Federal regulations: FTC, FDA and FCC
The Federal Trade Commission (FTC)
Monitors deceptive and unfair practices
Consent decree, cease-and-desist order, and corrective advertising
The Food and Drug Administration (FDA)
Protects public health (safety and security)
The Federal Communications Commission (FCC)
Regulates advertising in the media
Protects children’s privacy only till 13 yo (COPPA )
Recognize reasons for targeting children
Children are not able to recognize the persuasive intent of advertising
Understand marketing techniques used to promote low-nutrient high-calorie foods and beverages
Describe the ways (including theories) food marketing works
- Claim commitment to Public Health
(McDonald’s sponsoring fitness programs and nutrition education, NASCAR sponsorship) - Seek influence through campaign contributions
- Include toys (Happy Meal)
- Silence critics
- Mascots or appealing logos
- Cheap prices or deals on fast food
- Consumer behavior theory
Identify four conditions of the Food marketing Defense model
MUAA
Motivation: - Interest and desire to resist
Understanding: - Understand underlying processes and outcomes
- Understand how to effectively resist
Awareness: - Attend to marketing stimuli
- Comprehend persuasive intent
Ability: - Cognitive ability to effectively resist
- Available cognitive resources
Be able to dispel misconceptions about food marketing influence (slide # 44)
Marketing plan and its impact on IMC
- The marketing plan:
Helps managers analyze and improve all company operations - Defines the role of advertising in the marketing mix
- Enables better implementation, control, and continuity of advertising programs
- Ensures efficient allocation
of IMC dollars
The strategic square
- Out of every 100 companies:
1 should play defense
2 should play offense
3 should flank
And 94 should be guerrillas.
Defense: Only for market leaders
Introduce new products and services
Block strong competitive moves by copying them rapidly
Offense: Consider the strength of the leader position.
Launch an attack on as narrow a front as possible, preferably with a single product
Launch the attack at the leader’s weakest position
Flanking: Make moves into uncontested areas.
Use surprise. Too much research wastes precious time.
Keep up the pursuit, too many companies quit when they’re ahead.
Guerrilla:
Find a market segment small enough to defend.
Never act like a leader, no matter how successful you’re.
Be prepared to abandon the market or product at a moment’s notice.
Top-down vs bottom-up marketing plan
Bottom Up: Marketing tactics ↑, Marketing Strategy ↑, Marketing results
A top-down marketing strategy is Situational analysis, marketing objectives, marketing strategy, marketing tactics
Be able to recognize a consumer-oriented mission statement
Examples: “We make the Internet buying experience fast, easy, and enjoyable- we’re the place where you can find and discover anything you want to buy online.” (Amazon)
“We deliver low prices every day and give ordinary folks the chance to buy the same things as rich people.” (Walmart)
SWOT – understand its components
- Strengths and Weaknesses – internal brand/company factors
S: unique product benefits, customer service
W: high levels of unsold inventory, small ad budget
Opportunities and Threats – external (legal, competitive, societal, cultural) factors
O: more Internet use by everyone due to pandemic
T: Economic instability, competitors
Use Strengths and Opportunities to facilitate success - Be aware of Weaknesses and Threats as barriers to success
Transactional vs Relationship marketing
Relationship marketing focuses on building a relationship between the brand and the customers
Transactional marketing is focused on making the sale
Costs of a broken relationship
- Negative word of mouth (WOM)
- Cost of lost customers
Lifetime customer value (LCV): total profit value of a customer to a marketer over the course of that customer’s lifetime - Cost of acquiring new customers
It costs 5 to 8 times as much in marketing, advertising, and promotion to acquire a new customer as it does to keep an existing one
Levels of relationship (examples) and profit margins
- Basic transactional relationship. The company sells the product but does not follow up in any way (Target).
- Reactive relationship. The company sells the product and encourages customers to call if they encounter any problems (Men’s Wearhouse).
- Accountable relationship. The company phones customers shortly after the sale to check whether the product meets expectations and asks for product improvement suggestions and any specific disappointments. This information helps the company to continuously improve its offering (Acura dealership, local veterinarian).
- Proactive relationship. The company contacts customers from time to time with suggestions about improved product use or helpful new products (Tupperware).
- Partnership. The company works continuously with customers (and other stakeholders) to discover ways to deliver better value (Nordstrom’s Personal Shopper, Amazon).
Sources of brand messages
- Planned messages: least impact
advertising, sales promotion, publicity, and personal selling - Product messages: great impact
a product, its packaging, price, or distribution elements; - Service messages: greater impact than planned
messages resulting from employee interactions with customers - Unplanned messages: dramatic impact on customers’ attitudes
gossip, unsought news stories, rumors, or major disasters
The Integration Triangle
SAY (Planned messages) -> DO (Product, service messages) ->CONFIRM (Unplanned messages
- The integration triangle is a simple illustration of how perceptions are created from the various brand message sources. Planned messages are say messages, what companies say about themselves. Product and service messages are do messages because they represent what a company does. Unplanned messages are confirm messages because that’s what others say and confirm (or not) about what the company says and does.
- Constructive integration occurs when a brand does what its maker says it will do and then others confirm that it delivers on its promises.
Advertising Pyramid and Circle
Pyramid of 5 layers, (in order from top to bottom): Action, Desire, Conviction, Comprehension and Awareness
Creative vs media strategy
Creative strategy: serves as the creative teams guide for writing and producing an ad
Media strategy: helps media planners determine how messages will be delivered to consumers
Cultural sensitivity and its importance
CS: Things that motivate, inspire and generate commitment depend on each individual culture of origin
Significance: Ignoring or mishandling cultural differences can mean marketing and advertising blunders and failure to build sustainable sources of competitive advantage
Requirements for going global
Has each country’s market for the product developed in the same way?
Are the targets similar in different nations?
Do consumers share the same wants and needs?
Glocalization: Localized approach: adaptation of products, packages, and advertising campaigns to suit each market
Hall’s Low-context and High-context cultures
Low:
- explicit message via spoken or written word
- Direct, logical efficient (Western cultures)
- what you say is what you mean
High:
- most messages are delivered through body language, nonverbal cues and the circumstances, in which communication takes place
- Indirect, intuitive, unemotional contemplative
Lewis’s model of cultural types
- Linear active - organized, rational, show respect for rules and contracts, rules apply to everybody
- Multi-active cultures -feelings and emotions are important, relationships and connections, happy to improvise and change plans, believe in hierarchy, respect status, personal relationships and friendships are more important than rules/regulations
- Reactive cultures - listening/establishing the other’s position and then react to it, try to avoid confrontation, don’t want to “lose” face or cause someone to lose it
Define ethical marketing
Honesty: Lack of manipulation + exaggeration in promotion
Empathy: Deep understanding of customers’ needs
Promise-keeping: Genuine intention to fulfill promises given to customers and society
Sustainability: Commitment to public, enviro/social well-being
Transparency: Openness about business operations used in marketing
CFBAI
Children’s Food and Beverage Advertising Initiative
- A voluntary pledge program
- Focuses on WHAT foods are advertised to children
