3.17 The Marketing mix - promotion and place Flashcards Preview

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Flashcards in 3.17 The Marketing mix - promotion and place Deck (29)
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Promotion

The use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and PR to inform consumers and persuade them to buy the product

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Promotional objectives

- Increase sales by raising awareness of a product
- Remind consumers of existing products
- Encourage increased purchases
- Demonstrate the superior specification or qualities
- create or reinforce the brand image
- Correct misleading reports about the product or business and reassure the consumers
- Develop or adapt public image of the business
- Encourage retailers to stock and promote products to final consumers

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Advertising

Paid-for communication with consumers to inform and persuade

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Above-the-line promotion

A form of promotion that is undertaken by a business by paying for communication with consumers

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2 types of advertisement

1. Informative advertising
2. Persuasive advertising

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Factors affecting advertising decisions

1. Cost
2. Size of audience
3. The profile of the target audience in term of age, income, interests
4. The message to be communicated
5. The other aspects of the marketing mix
6. The law and other constraints

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Sales promotion

Incentives such as special offers or special deals directed at consumers or retailers to achieve short-term sales increases and repeat purchases by consumers

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Below-the-line promotion

Promotion that is not a directly paid for means of communication, but based on short-term incentives to purchase

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Personal selling

A member of the sales staff communicates with one consumer with the aim of selling the product and establishing a long-term relationship between company and consumer

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Direct mail

Directing information to potential customers, identified by market research, who have a potential interest in this type of product.

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Trade fairs and exhibitions

Contacts are made and awareness of products is increased in a trade fair

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Sponsorship

Payment by a company to the organisers of an event so that the company name becomes associated with the event

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Public relations

The deliberate use of free publicity provided by newspapers, TV and other media to communicate with and achieve understanding by the public

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Branding

The strategy of differentiating products from those of competitors by creating an identifiable image and clear expectations about a product

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Brand extension

Using strong brand identity as a means of supporting the introduction of new or modified products

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Marketing or promotion budget

The financial amount made available by a business for spending on marketing/ promotion during a certain time period

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Budgeting approaches

1. A percentage of sales
2. Objective-based budgeting
3. Competitor-based budget
4. What the business can afford
5. Incremental budgeting

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Packaging functions

- Protect and contain the product
- Give information (contents, ingredients, instructions)
- Support the image of the product created by other aspects of promotion
- Aid the recognition of the product by the consumer

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Channel of distribution

Refers to the chain of intermediaries a product passes through from producer to final consumer

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Promotion assess?

- Sales performance before and after the promotion campaign
- Consumer awareness data
- Consumer panels
- Response rates to advertisements

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Consumer markets and industrial markets

- Industrial goods is more likely to refer to specialist magazines or journals

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Direct selling: no intermediaries

+ no mark-up profit margin taken by other businesses
+ producer has complete control over marketing mix
+ quicker than other channels
+ fresher food product
+ direct contact with consumer offers useful market research
- storage and stock costs have to paid by producer
- no retail outlets limits the chances of more costumers getting to know the products
- not convenient for customers
- no adverts or promotion made by intermediaries, no after sales services
- can be expensive to deliver each item to consumers

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One- intermediary channel. Usually used for consumer goods but could also be an agent for selling industrial products to businesses

+ retailer holds stocks and pays for cost
+ retailer has product displays and offers after sales services
+ retailers often in locations that are convenient to consumers
+ producers can focus on production - not on selling the products to consumers
- intermediary takes a profit markup and could make the product more expensive to final consumers
- producers lose some control over marketing mix
- retailers may sell products from competitors -> no exclusive outlet
- producer has delivery costs to retailer

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Two- intermediaries channel. Wholesaler buys goods from producer and sells to retailer

+ Wholesaler holds goods and buys in bulk from producer
+ Reduces stock-holding costs of producer
+ Wholesaler pays for transport costs to retailer
+ "Breaks bulk" by buying in large quantities and sell in small quantities
+ Good way to enter foreign markets where producer has no direct contact w/ retailer
- more profit markup - expensive for consumer
- producer loses further control over marketing mix
- slows down the distribution chain

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Internet marketing

The marketing of products over the internet

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Benefits of internet marketing

Relatively inexpensive compared to the ratio of cost of no. of consumers reached
Worldwide audience
+ Consumers make purchases and leave important data about themselves
+ Convenient to use bc computer ownership is increasing
+ Accurate records can be kept e.g: number of clicks
+ Lower fixed costs
+ Dynamic pricing - different price for different countries - can be easier

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Limitations of internet marketing

- Countries with low-speed or no internet
- Consumers can't try on tangible goods before buying --> limit their willingness
- Product returns increase costs
- Cost and unreliability of postal services
- Website must be kept up to date and user-friendly --> expensive
- Worries about internet security

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Viral marketing

The use of social-networking sites or SMS text messages to increase brand awareness or sell products

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Integrated marketing mix

The key marketing decisions complement each other and work together to give customers a consistent message about the product