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My study guide Ch 13 Ch 18 Chapter 14 Marketing channels and retailing Marketing Channels Marketing channel (channel of distribution) a set of interdependent

nt organizations that eases the transfer of ownership as products move from producer to business user or consumer Channel members (intermediaries, resellers, and middlemen) all parties in the marketing channel that negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer Supply chain the connected chain of all of the business entities, both internal and external to the company, that perform or support the marketing channel functions Marketing channels can attain economies of scale through specialization and division of labor by aiding producers who lack the motivation, financing, or expertise to market directly to end users or consumers Marketing Channel Functions; o Specialization and division of labor Creates greater efficiency Provides lower costs Achieves economies of scale Aids producers who lack resources to market directly Builds good relationships with customers Form utility: the elements of the composition and appearance of a product that make it desirable Time utility: the increase in customer satisfaction gained by making a good or service available at the appropriate time Place utility: the usefulness of a good or service as a function of the location at which it is made available Exchange utility: the increased value of a product that is created as its ownership is transferred Channel Intermediaries and Their Functions Intermediaries in a channel negotiate with one another, facilitate the change of ownership between buyers and sellers, and physically move products from the manufacturer to the final consumer Taking title means they own the merchandise and control the terms of the sale for example, price, delivery and date; title reflects ownership, and ownership usually implies control Retailers- sell mainly to customers as their primary function. They provide contact efficiency for customers Merchant wholesalers are organizations that facilitate the movement of products and services from the manufacturer to producers, resellers, governments, institutions, and retailers. Agents and brokers wholesaling intermediaries who do not take title to a product, but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers Product characteristics, buyer considerations, and market conditions determine the type of intermediary the manufacturer should use

Logistics the efficient cost-effective forward and reverse flow and storage of goods, services, and related information, into, through, and out of channel member companies (Definition from slide: The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished good from the point of origin to point of consumption). Channel functions performed by intermediaries; o Transactional Contacting and promoting contacting potential customers, promoting products, and soliciting orders Negotiating determining how many goods or services to buy and sell, type of transportation to use, when to deliver, and method and timing of payment Risk taking assuming the risk of owning inventory o Logistical Physically distributing transporting and sorting good to overcome temporal and spatial discrepancies Storing maintaining inventories and protecting goods Sorting overcoming discrepancies of quantity by sorting out, accumulating, allocating and assorting o Facilitating Research gathering information about other channel members and consumers Financing extending credit and other financial services to facilitate the flow of goods through the channel to the final consumer

Channel Structures Channels for consumer products o Direct channel sells directly to consumer e.g. telemarketing, mail-order and catalog shopping and shop-at-home television networks o In an agent/brokers channel, agents/brokers bring manufacturers and wholesalers together for negotiations, but they do not take title to merchandise o A retailer channel is most common when the retailer is large and can buy in large quantities directly from the manufacturer e.g. Wal-Mart, Sears and car dealers o A wholesaler channel is commonly used for low-cost items that are frequently purchased, such as candy, cigarettes, and magazines Channels for business and industrial products; o Direct channels exist between the producer to industrial user and the producer to the government buyer o Industrial distributors are wholesalers and channel members that buy and take title to products; keep inventories of their products and sell and service them Alternative channel Arrangements; o Dual distribution(multiple distribution) when a producer selects two or more channels to distribute the same product to target markets o Nontraditional channels help differentiate a firms product from the competition and include the internet, mail-order channels or infomercials o Strategic channel alliances enables companies to use another manufacturers alreadyestablished channel Factors affecting channel choice

Market factors: target customer considerations o The geographic location and size of the market Product factors: complex, customized, and expensive products vs a more standardized product o The products life cycle Producer factors: producers with large financial, managerial, and marketing resources are better able to use more direct channels o A producers desire to control pricing, positioning, brand image, and customer support also tends to influence channel selection

Marketing Channel Strategies Intensive distribution a form of distribution aimed at having a product available in every outlet where target customers might want to buy it e.g. candy, chips other snack foods o Achieves mass market selling o Convenience goods Selective distribution a form of distribution achieved by screening dealers to eliminate all but a few single areas o Work with selected intermediaries o Shopping and some specialty goods Exclusive distribution a form of distribution that establishes one or a few dealers within a given area o Work with single intermediary o Specialty goods and industrial equipment Types of Channel Relationships Arms length relationship temporary or one-time only; arises from a unique need; parties unable to develop relationship; both parties retain their independence and pursue only their own interests; low trust levels Cooperative relationships formal contract without capital investments/long-term commitment, happy medium; include nonequity agreements such as franchising and licensing, as well as joint ventures and strategic alliances Integrated relationships closely bonded relationship; explicitly defined relationships; high capital investment; any failure could affect every channel member Managing Channel Relationships Channel power the capacity of a particular marketing channel member to control or influence the behavior of other channel members Channel Control a situation that occurs when one marketing channel member intentionally affects another members behavior Channel captain a member of a marketing channel that exercises authority and power over the activities of other channel members Channel conflicts a clash of goals and methods between distribution channel members o Conflicts may occur if channel members; Have conflicting goals Fail to fulfill expectations of other channel members Have ideological differences Have different perceptions of reality

Horizontal conflict a channel conflict that occurs among channel members on the same level, such as two or more different wholesalers or two or more different retailers that handle the same manufacturers brands; regarded as healthy competition Vertical conflict a channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer Channel partnering (channel cooperation) the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage o Retailers, wholesalers, manufacturers, and suppliers can speed up inventory replenishment, improve customer service, and reduce the total cost of the marketing channel

The role of retailing Retailing all the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use- has enhanced the quality of our daily lives Classifications of Retail Operations Ownership o Independent retailers retailers owned by a single person or partnership and not operated as part of a larger retail institution o Chain stores stores owned and operated as a group by a single organization o Franchises the right to operate a business or to sell a product Level of service full service or self-service? Product assortment the breadth and depth of product line Price o Gross margin the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted Major Types of Retail Operations Department store a store housing several departments under one roof Buyer a department head who selects the merchandise for his or her department and may also be responsible for promotion and personnel Specialty store a retail store specializing in a given type of merchandise Supermarkets a large, departmentalized, self service retailer that specializes in food and some nonfood items Scrambled merchandise the tendency to offer a wide variety of nontraditional goods and services under one roof Drugstores a retail store that stocks pharmacy-related products and services as its main draw Convenience Stores a miniature supermarket, carrying only a limited line of high-turnover convenience goods Discount store a retailer that competes on the basis of low prices, high turnover, and high volume o Full-line discount stores a retailer that offers consumers very limited service and carries a broad assortment of well-known, nationally branded hard goods, including housewares, toys, automotive parts, hardware, sporting goods, and garden items, as well as clothing, bedding and linens.

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Mass merchandising a retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover of products Supercenters a retail store that combines groceries and general merchandise and goods with a wide range of services, including pharmacy, dry cleaning, portrait studios, photo finishing, hair salons, optical shops, and restaurants all in one location Specialty discount stores a retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover Category killers specialty discount stores that heavily dominate their narrow merchandise segment (e.g. Best Buy in electronics, Staples and Office Depot in office supplies, and IKEA in home furnishings) Offer a large selection of merchandise Make shopping easy Low prices every day Eliminates the need for time consuming comparison shopping Warehouse membership clubs limited-service merchant wholesalers that sell a limited selection of brand-name appliances, household items, and groceries on a cash-and-carry basis to member, usually small businesses and groups Off-price retailers a retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesnt ask for return privileges Factory outlet an off-price retailer that is owned and operated by a manufacturer Restaurants - retailing and service establishment

Nonstore Retailing Nonstore retailing shopping without visiting a store o Automatic vending the use of machines to offer goods for sale o Direct retailing the selling of products by representatives who work door-to-door, office-tooffice, or at home sales parties o Direct marketing (direct response marketing) techniques used to get consumers to make a purchase from their home, office, or another nonretail setting (e.g. telemarketing, direct mail, catalogs, and mail order, electronic retailing) Telemarketing the use of the telephone to sell directly to consumers Shop-at-home TV networks: a specialized form of direct response marketing where shows display merchandise for viewers to purchase over the telephone with a credit card. Online retailing (e-tailing) a type of shopping available to consumers with personal computers and access to the internet Franchising A franchise is a continuing relationship in which a franchiser grants to a franchisee the business rights to operate or to sell a product Franchisor the originator of a trade name, product, methods or operation, and so on that grants operating rights to another party to sell its product Franchisee an individual or business that is granted the right to sell another partys product Franchise agreements usually lasts for 10 to 20 years The franchisee usually pay an initial, one-time franchise fee The franchisee is expected to pay royalty fees, ranging from 3 to 7 percent of gross revenues

Two basic franchises are used today: o Product and trade name franchising a dealer agrees to sell certain products provided by a manufacturer or a wholesaler; most widely used in the auto and truck, soft drink bottling, tire and gasoline service industries o Business format franchisee a franchiser sells a franchisee the right to use the franchisors format or approach to doing business

Retail Marketing Strategy Retailers must develop marketing strategies based on overall goals and strategic plans Defining a Target Market o Often defined by demographics, geographics, and psychographics Choosing a Retailing Mix Retailing mix: a combination of the six Ps product, place, promotion, price, presentation, and personnel to sell goods and services to the ultimate consumer o Product offering the mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix Data mining uses complex mathematical models to help retailers make better product mix decisions Width the assortment of products offered Depth the number of different brands o Promotion Strategy advertising, public relations, and publicity, and sales promotion; goal is to help position the store in consumers minds Retailing advertising is carried out mostly at the local level Local advertising by retailers provide specific information about their stores, such as location, merchandise, hours, prices, and special sales National retail advertising focuses of image Cooperative advertising Integrating specific brands into their campaigns o Place: The proper location The location decision is important; The retailer is making a large, semipermanent commitment of resources that can reduce its future flexibility The location will affect the stores future growth and profitability Important factors to consider while choosing a community include the areas economic growth potential, the amount of competition, and geography Important factors to consider while choosing a specific site include neighborhoods socioeconomic characteristics, traffic flows, land costs, zoning regulations, public transportation, sites visibility, parking, entrance and exit locations, accessibility, and safety and security issues Freestanding store most appropriate for destination stores like Wal-Mart or Target and sellers of shopping goods like furniture and cars Destination stores stores that consumers purposely visit o Advantages; low site costs or rent, no nearby competitors and greater visibility o Disadvantage; hard to attract customers to freestanding locations Shopping centers

Strip centers located near busy streets and includes a supermarket, a variety store, and a few specialty stores Community shopping centers one or two department stores, more specialty stores, a couple restaurants and several apparel stores; off-street parking and broader variety of merchandise Regional malls offers a wider variety of merchandise; entirely enclosed or roofed to allow shopping in any weather Anchor stores or generator stores (often major department stores) are usually located at opposite ends of the mall to create heavy foot traffic Lifestyle centers combine outdoor shopping areas comprised of upscale retailers and restaurants, with plazas fountains, and pedestrian streets Store within a store many smaller specialty lines are opening shops inside larger stores to expand their retail opportunities without risking investment in a separate store Pop-up shops tiny, temporary stores that stay in one location only for a few months, Retail prices Retailings ultimate goal is to sell products to consumer and right price is critical to making the sale o Higher Prices indicate a level of quality and reinforce a prestigious image of retailers o Lower Prices offer a good value for the money Presentation of a Retail Store o Atmosphere: the overall impression conveyed by a stores physical layout, dcor, and surroundings Main element of presentation Most Influential Factors in Creating stores Atmosphere: Employee type and density (# of employees per 1000 sq ft) Merchandise type and density Fixture type and density Sound Odors Visual Factors (colors and lighting) o Goal is to use all of the sores space effectively o Decision where to place products in the store Market Based Analysis: sifts through data collected by the point-of-purchase scanning equipment Looks for products that are purchased together, so retailers can find ideal locations Personnel and Customer Service o Most retail sales involve a customer salesperson relationship, even if it is brief o Retail sales people persuade customers to buy o Sales people are trained in 2 common selling techniques o Trading Up: persuading customers to buy a higher Priced item them they originally intended

Suggestion Selling: common practice that seeks to broaden customers original purchases with related items o Today most customers are happy to help themselves as long as products are easy to find o Customer Service is critical for online retailers Websites need to be: User friendly Readily available products Easy return process Channels and Distribution Decisions for Services The fastest growing economy is the service sector In a service environment, production and consumption are simultaneous The benefits with a service are relatively intangible can only see the benefits provided by a product Service distribution focuses on three main areas: o Minimizing wait time o Managing service capacity o Improving service delivery o Establishing channel wide network coherence: helps maintain brand image New Developments in Retailing Interactivity o Getting customers involved rather then just catching their eye M-Commerce o Enables customers using wireless devices to connect to the internet and shop o Has high growth potential Part of a bigger trend of allowing people with mobile devices to compete task on the go Chapter 16: marketing communications The Role of Promotion in the Marketing Mix Promotion communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response Promotional strategy a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, and sales promotion Competitive advantage the unique set of features of a company and its products that are perceived by the target market as significant and superior to the competition Marketing Communication Communication the process by which meanings are exchanged or shared through a common set of symbols o When a company develops a new product, changes an old one, or simply tries to increase sales of an existing good or service it must communicate its selling message to the potential customers Interpersonal communication direct, face-to-face communication between two or more people Mass communication the communication of a concept or message to large audiences The Impact of Web 2.0 on Marketing Communication;

o Corporate blogs blogs that are sponsored by a company or one of its brands and maintained by one or more of the companys employees o Noncorporate blogs independent blogs that are not associated with the marketing efforts of any particular company or brand The Goals and Tasks of Promotion Informing informative promotion seeks to convert an existing need into a want or to stimulate interest in a new product Persuading persuasive promotion is designed to stimulate a purchase or an action o Emphasizes the products real and perceived competitive advantages, often appealing to emotional needs such as love, belonging, self-esteem, and ego satisfaction o Promotional messages often encourage brand switching and aims to convert some buyers into loyal customers Reminding reminder promotion is used to keep the product and brand name in the publics mind Connecting: by facilitating this exchange of information through a transparent process, brands are increasingly connecting with their customers in hope they become brand advocates that promote the brand through their own social networks o Tools include: social networks, social games, social publishing tools, as well as social commerce The Promotional Mix Promotional mix the combination of promotional tools including advertising, public relations, personal selling, and sales promotion used to reach the target market and fulfill the organizations overall goals Tools to reach a target market: o Advertising impersonal, one-way mass communication about a product or organization that is paid for by a marketer o Public relations the 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 Marketers use public relations not only to maintain a positive image but also to educate the public about the companys goals and objectives, introduce new products, and help support the sales effort Publicity public information about a company, product, service, or issue appearing in the mass media as a news item o Sales promotion marketing activities other than personal selling, advertising and public relations that stimulate consumer buying and dealer effectiveness (e.g. free samples, contests, premiums, trade shows, vacation giveaways, and coupons) Short-term tool used to stimulate immediate increases in demand Complements advertising by yielding faster sales responses o Personal selling a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other o Social media

Promotional Goals and the AIDA Concept

AIDA concept a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action o Stages go in order from Cognitive activities(thinking) -> Affective activities (feeling)-> Conative Activities(doing) o Stages (AIDA and the Promotional Mix): 1). Attention: must first gain attention of target market 2). Interest: create interest in the product ipad demonstrations on youtube 3). Desire: create brand preference. Convince the customer that their product is the best solution 4). Action: motivate customers to take action and make the actual purchase through continued advertising Integrated marketing communications Integrated marketing Communications: the careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer Marketing mangers carefully pick out what roles the promotional elements will play in the marketing mix Need to recognize the distinction between the five elements of promotion IMC is growing in popularity o Proliferation of thousands of media choices o Fragmentation of the mass market into more segments and niches o Slash of advertising spending in favor of promotional techniques that generate immediate responses o Unintegrated disjointed approach to promotion that has causes so nay companies to adopt the concept of integrated marketing communication Factors Affecting the Promotional Mix Nature of the product o Business product personal selling o Consumer product advertising and sales promotion o Specialty product personal selling Stage in the product life cycle o Preintroduction publicity; small amt. of advertising near introduction o Introduction heavy advertising and public relations to build awareness; sales promotion to induce trial; personal selling to obtain distribution o Growth Heavy advertising and public relations to build brand loyalty; decreasing use of sales promotion; personal selling to maintain distribution o Maturity slightly decreased more persuasive and reminder in nature; increased use of sales promotion to build market share; personal selling to maintain distribution o Decline advertising and public relations drastically decreased; sales promotion and personal selling maintained at low levels Target market characteristics o Geographic location personal selling o Brand loyalty advertising and sales promotion Type of buying decisions o Routine decisions advertising and sales promotion

o Complex decisions personal selling and print advertising Available funds Push and pull strategies o Pull strategy a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise o Pull Strategy a marketing strategy that stimulates consumer demand to obtain product distribution (consumer demand pulls the product down the distribution channel); heavy sampling, introductory consumer advertising, cents-off campaigns, and couponing

Integrated Marketing Communications Integrated marketing communications (IMC) the careful coordination of all promotional messages for a product or service to assure the consistency of messages at every contact point where a company meets the consumer IMC has received more attention in recent years due to the proliferation of media choices, the fragmentation of mass markets into more segmented niches, and the decrease in advertising spending in favor of promotional techniques that generate an immediate sales response Chapter 16 advertising, public relations, and sales promotion The Effects of Advertising Advertising impersonal, one-way mass communication about a product or organization that is paid for by a marketer Advertising and Market Share New brands with small market share, tend to spend proportionately more for advertising and sales promotion than those with a large market share o Market share begins to decrease no matter how much is spent on advertising and sales promotion o 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 o A certain minimum level of exposure is needed to measurably affect purchase habits The Effects of Advertising on Consumers Transforms a persons negative attitude toward a product into a positive one Reinforces positive attitudes toward brands Affects the way consumers rank a brands attributes Major Types of Advertising Institutional advertising designed to enhance a companys image rather than promote a particular product. o Designed to promote, establish, change or maintain a corporations positive identity o Usually the audience isnt asked to do anything except maintain a favorable attitude toward the advertiser and its good and services o Advocacy advertising an organization expresses its views on controversial issue or responds to media attacks Used to safeguard against negative consumer attitudes and to enhance the companys credibility among consumers who already favor its position

Try to ward off increased regulation, damaging legislation, or unfavorable outcome in a lawsuit Product advertising touts the benefits of a specific good or service o Pioneering advertising designed to stimulate primary demand for a new product or product category Introductory stage of the product life cycle Offers consumers in-depth information about the benefits of the product class Seeks to create interest o Competitive advertising designed for a specific brand Growth stage of the product life cycle Promotion becomes less informative and appeals more to emotions Stresses subtle differences between brands Heavy emphasis on building recall of a brand name Creating a favorable attitude toward the brand o Comparative advertising compares two or more specifically named or shown competing brands on one or more specific attribute Used for products experiencing slow growth or those entering the marketplace against strong competitors

Creative Decisions in Advertising Advertising campaign a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals Advertising objective a specific communication task that a campaign should accomplish for a specified target audience during a specified period o According to he DAGMAR (Defining Advertising Goals for Measured Advertising Results) method all advertising objectives should precisely define the target audience, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur Indentifying Products Benefits An attribute is simply a feature of the product such as its easy-open package or special formulation A benefit is what consumers will receive or achieve by using the product Developing and Evaluating Advertising Appeals Advertising appeals a reason for a person to by a product o Plays off consumers emotions or address some need or want the consumer has o Unique selling proportion a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign Executing the Message The AIDA plan is a good blueprint for executing an advertising message Executional styles include slice-of-life, lifestyle, spokesperson/testimonial, fantasy, humorous, real/animated product, symbols, mood or image, demonstration, musical, scientific Postcampaign Evaluation Real effect is unknown because so many variables shape the effectiveness of an ad that advertisers often must guess whether their money has been well spent

Media Decisions in Advertising Medium the channel used to convey a message to a target market Media planning the series of decisions advertisers make regarding the selection and use of media, allowing the market to optimally and cost-effectively communicate the message to the target audience The promotional objectives and the appeal and executional style of advertising strongly affect the selection of media Both creative and media decisions are made at the same time Media Selection Considerations Media mix the combination of media to be used for a promotional campaign o Cost per contract (cost per thousand) the cost or reaching one member of the target market o Cost per click: the cost associated with a consumer clicking on a display or banner ad. Pay for only engaged consumers, or those who click on the ad o Reach the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks o Frequency the number of times an individual is exposed to a given message during a specific period o Audience selectivity the ability of an advertising medium to reach a precisely defined market Flexibility Noise: level of distraction experienced b the target audience in a medium Can be created by competing ads Newspapers and magazines have high noise levels while direct mail has a low noise level Lifespan o The proliferation of media channels is causing media fragmentation and forcing media planners to pay as much attention to where they place their advertising as to how often the advertisement is repeated Media Scheduling Media schedule designation of the media, the specific publications or programs, and the insertion dates of advertising Four Basic types of media schedules: o Continuous media schedule advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle o Flighted media schedule ads are run heavily every other month or every two weeks, to achieve a greater impact with an increased frequency and reach at those times o Pulsing media schedule a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighting schedule during the best sales periods o Seasonal media schedule runs advertising only during times of the year when the product is most likely to be used Public Relations Public relations 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 Publicity the effort to capture media attention for example, through articles or editorials in publications or through human-interest stories on radio or television programs. Public relations department functions:

o Press relations placing positive, newsworthy information in the news media to attract attention to a product, a service, or a person associated with the firm or institution o Product publicity publicizing specific products or services o Corporate communication creating internal and external messages to promote a positive image of the institution o Public affairs building and maintaining national or local community relations o Lobbying influencing legislators and government officials to promote or defeat legislation and regulation o Employee and investor relations maintaining positive relationships with employees, shareholders, and others in the financial community o Crisis management responding to unfavorable publicity or a negative event Major Public Relations Tools New-product publicity public relations professionals write press releases or develop videos in an effort to generate news about their product Product Placement involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book or commercial for another product; on the internet; or at special events Consumer education some firms believe that educated consumers are better, more loyal customers Sponsorship a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image o The top three sponsorship issues: education, health care and social programs o Firms often donate a percentage of sales or profits to a worthy cause favored by their target market o Cause-related marketing involving the association of a for-profit company and a nonprofit organization; through the sponsorship, the companys product or service is promoted, and money is raised for the nonprofit Company Web Sites Managing unfavorable publicity Crisis management: the coordinated effort to handle to effects of unfavorable publicity, ensuring fast an accurate communication in times of emergency

Sales promotion Sales Promotion: marketing communication activities (other then advertising and personal selling and PR) in which a short incentive motivates a purchase Advertising reason to buy Sales promo incentive to buy Sales promotion can be targeted at 2 distinct markets o Consumer Sales Promotion: sales promotion activities targeting the ultimate consumer o Trade Sales Promotion: sales promotion activities targeting a marketing channel member such as a wholesaler or retailer Objectives of Sales Promotion o Sales promo has more effect on behavior then attitudes o Objectives of Sales promo depend on what the general behaviors of the target consumer

o Types of consumers and promotion goals Loyal Customers Buy product most or all of the time Desired Results: o Reinforce their behavior o Increase consumption o Change purchasing timing Types of Sales Promos used: o Loyalty marketing programs o Bonus packs that give incentive to get premium offered in return for proof of purchase Competitors Customers Buy a competitors similar product most or all of the time Desired Results: o Break loyalty o Persuade to switch brand Types of Sales promos used: o Sampling o Sweepstakes to create interest Brand Switchers Buy a variety of product in a category Desired results: o Persuade to buy you brand most often Types of Sales promos used: o Promotion that lowers price of the product o Trade deals that make the product more readily available then competitors Price Buyers Consistently buy the least expensive brand Desired results o Appeal to them with low prices o Supply added value that makes price less important Types of Sales promos used: o Coupons o Price off packages o Refunds or trade deals that reduce the price of the brans to match that of the brand that WOULD have been purchased Tools for Consumer Sales Promotion Coupons and Rebates o Coupon: a certificate the entitles consumers to an immediate price reduction when the buy the product Good way to encourage product trial and repurchase Likely to increase amount of product bought Promote new product use Free Standing Inserts (FSIs): type if promotional coupons found in newspapers Traditional way of circulating printed coupons

In-store coupons have become popular More likely to influence customer buying decisions o Rebate: a cash refund given for the purchase of a product during a specific period Offers price reduction Reward is less immediate Advantages of rebates to manufacturers: Manufacturers can offer price cuts to consumers directly More control over rebate promotions o Can be rolled out and shut down quickly Buyers must fill out name and info, so they use rebates to build customer databases Very good at enticing purchase, but rarely ever actually redeemed Premiums: an extra item offered to the customer usually in exchange for some proof of purchase of the promoted product o Advantages: Reinforce customers purchase decision Increase consumption Persuade non-users to switch brands o Can also include more product for the regular price Buy one get one free o Premiums can be attached to the products package Loyalty marketing Programs: a promotional program designed to build long term mutually beneficial relationships between a company and key customers o Ex. Frequent Buyer Program: a loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good of service o Popularized by the airline industry o Co-branded credit cards and an increasingly popular loyalty marketing tool o Use of internet to build customer loyalty through email and social media o Causes of BAD loyalty programs Too many emails Overly complicated restrictive programs Rewards that arent perceived value Contest and Sweepstakes o Contest: promotions in which participants use some skill of ability to compete for prizes o Sweepstakes: promotions that depend on chance and are free to participate in Normally draw more entries than contest o Neither are effective tools for generating LONG-TERM sales o Award should appeal to target market Sampling: a promotional program that allows the consumer the opportunity to try a product of service for free o Items that benefit most from sampling: Expensive items Items under $10 o Way to give out samples: Direct mail Delivered door-to-door

Packaged with another product Demonstrated or distributed o Distributing sample sot specific location types is one of the most effective methods of sampling Point of Purchase Promo o Point of Purchase Display: a promotional display set up a the retailers location to build traffic, advertise the product, or induce impulse buying Types of POP displays: Shelf talkers (signs attached to store shelves) Shelf extenders Ads on grocery carts TV monitors In store audio messages Advantage Offers manufacturers a captive audience in retail stores 70-80% of all retail purchase decisions are made in store can increase sales by 65% Tools for Trade Sales Promotion Trade promotions push a product through the distribution channel o Do not directly create demand Tools for trade sales promotions: o Trade Allowances: a price reduction offered by manufacturers to intermediaries such as wholesalers and retailers o Push Money: money offered to channel intermediaries to encourage them to PUSH products Encourages other members of the channel to sell the products o Free Merchandise o Store Demonstrations o Business Meetings, Conventions and Trade shows Benefits of Trade promotions: o Help manufactures gain new distributors o Obtain wholesaler and retailer support for consumer sales promotions o Build or reduce dealer inventories o Improve trade relations