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1

Ethics

Accepted principles of right or wrong that govern

- the conduct of a person

- the members of a profession

- the actions of an organization

2

Business ethics

Accepted principles of right or wrong governing the conduct of business people

3

Ethial strategy

A strategy, or course of action, that does not volate these acepted principles

4

Why is customer satisfaction important in the U.S.?

Basic objective of our market-related economic system has been to satisfy consumer needs as they, the consumers, see them

Implies that political freedom and economic freedom go hand in hand and that citizens in a free society have the right to live as they choose

The majority of American consumers would be unwilling to give up the freedom of choice they now enjoy

5

Marketing Concept

Means that an organization aims all its efforts at satisfying its customers - at a profit

customer satisfacition, total comapny effort, profit (or another measure of long-term success) as an objective

6

Marketing strategy

Specifies a target market and a related marketing mix. It is a big picture of what a frim will do in some market 

two parts: target market and marketing mix

7

Marketing program

Blends all of the firm's marketing plans into one "big" plan 

An integrated part of the whole-company strategic plan 

8

Marketing plan

A written statement of a marketing strategy and the time-related details for carrying out the strategy

It should spell out the following: what marketing mix will be offered, to whom and for how long.

2. what company resources will be needed at what rate

3. what results are expected (sales and profits perhaps monthly or quarterly, customer satifaction levels, and the like)

9

SWOT analysis

Identifies and lists the firm's strengths and weaknesses and its opportunities and threats

The name SWOT is simply an abbreviation for the first two letters of the words strengths weaknesess opportunties and threats

A good SWOT helps the manager focus on a strategy that takes advantage of the firm's strengths and opportunities while avoiding its weaknesses and threats to its success

10

4 p's

Product 

Place

Promotion

Price

11

True or False: A marketing plan is a static document it should not change over the planning period

False

12

Which ethical issues are most relevant to business?

Employment practices

Human rights

Environmental regulations

Corruption

Moral obligation of companies

Product safety

13

Ethical dilemma

Situations in which none of the available alternatives seem ethically acceptable

14

Why do Managers behave unethically?

Personal ethics

Decision making processes

Organizational culture

Unrealistic performance expectations

Leadership

Societal culture

15

How can managers make ethical decisions?

1. Hire and promote people with a well grounded sense of personal ethics

2. Build an organizational culture that places a high value on ethical behavior

3. Make sure that leaders within he business articulate the rhetoric of ethical behavior and act in a manner that is consistent with that rhetoric

4. Put decision making processes in place that require people to consider the ethical dimensions of busniess decions

5. Develop moral courage

16

The Marketing Concept guides:

ethics

17

Micro-Macro Dilemma

Group needs vs. individual needs

Social responsibility, should all needs be satisifeied? What if profits suffer?

18

Invest in customer satisfaction

Allow your customer to complain!

Train and empower your employees to act!

19

Sources of Marketing Inefficiency

Lack of interest in customers

Improper blending of the 4P's

Lack of understand of the enviornment

20

Criticisms of Macro-marketing

Advertising wastes resources

Consumers are too easily controlled - consumers are not puppets, needs and wants change

21

Marketing Objectives SMART

Specific

Measurable

Attainable

Relevant to the target

Timely

22

Combiner

Aims at 2 or more submarkets with the same marketing mix

23

Legal and Ethical Concerns

Consumer Privacy

Legal vs. ethical

Supply chain

targeting & deception

24

Pricing

Pricing directly affets the bottom line

Your pricing policy addresses:

- brand/company objectives

- image/positioning

- behavior of channel and end-user

25

One-Price Policy

The same for everyone

Frequently purchased items

Convenient

Low cost

Maintains goodwill

26

Flexible Price Policy

Different customers, different prices

Databases make it easier

Salepeople can adjust prices

Too much cutting can hurt profits

27

Discount price policies are designed to:

Elicit a specific action from the consumer or channel member

Satisfy a specific business requirement

28

Discount Policies

Discounts are reductions from list price that are given by a seller to a buyer who either gives up some marketing function or provides the function himself

Quantity discounts - cumulative quantity discounts encourage repeat purchase and relationships, noncumulative ecnourage large orders

Seasonal discounts smooth out demand

Cash discounts encourage early payment

Trade (functional) discounts go to middlemen

29

Allowance policies

Designed to get the channel to perform specific duties or take on certain responsibilities

30

Common Types of Allowances

Advertising

Trade-ins

Stocking

Push money

31

Common geographic policies

FOB

Zone

Freight Absorpotion

Uniform Delivered

32

Zone pricing

An average freight charge to all buyers within specific geographic areas

33

Uniform Delivered pricing

The same (average) freight charge to all buyers

34

Freight Absorption Pricing

Seller pays freight cost so delivered price matches competition

35

Key issues with price discrimination

Robinson-patman act

proportionatley equal basis

like grade and quality

cost differences

36

Robinson-Patman Act

Regulates price discrimation - selling the same products to different buyers at different prices

Cost differences can justify price differences - analysis must habe been done in advance

You can match a competitor's prices

Functional discounts are usually ok

Does not apply to sales to final customers

37

Cost Based end-user strategies

Cover cost

Achieve a specific profit/market share objetive

Does not consider demand/external environment

38

Demand based end user strategy

What does the customer value?

What are they willing to pay?

39

Skimming price policy

Tries to sell at the top of the market at a high price before aiming at more price-sensitive customers

40

Skimming policy graph

More vertical than penetration

41

Penetration pricing

Firm tries to sell the whole market at one low price

42

 Legality of Pricing Policies Key Issues

Unfair Trade Practice Acts

Price Fixing

Dumping

Phony List Prices

 

43

Price

The amount of money that is charged for something of value

44

Sales oriented objective

Seeks some level of unit sales, dollar sales, or share of the market without referring to profit

 

45

Status-quo objectives

Managers satisfied with their current market share and profits sometimes adpot status quo objectives

Managers may say the want to stabailize prices, or meet competition, or even avoid competition

46

Profit-oriented objective

Seeks to get as much profit as possible

It might be stated as a desire to earn a rapid return on investment

47

One-price policy

Adv: conveneience and goodwill among customer

Dis. this can be a price competitors can undercut especially is if the price is somewhat high

48

Flexible-pricing policy

Frequent changes to price are easier

Most common in the channels

49

Skimming price policy

Tries to sell the top at a high price before aiming at more price-sensitive customers

*used if there are few substitutes or if some customers are not price sensitive

**also useful when you dont know very much about the shape of the demand curbe

50

Penetration Pricing Policy

Tries to sell the whole market at one low price

*when the elite market is small

**when the whole demand curve is fairly elastic

***more attractive if selling larger quantities resulsts in lower costs because of economies of scale

Also wise if the firm expects strong ompetition very soon after introduction

51

Rebates

Refunds paid to consumers ater purchase

52

Geographic Pricing Policies

FOB

Zone pricing

Uniform delivered pricing

Freight-absorption pricing

53

Value pricing

Means setting a fair price level for a marketing mix that really gives the target market superior customer value

54

Unfair trade practice acts

Puts a lower limit on prices, especially at the wholesale and retail levels

55

Dumping

Pricing a product sold in a foreign market below the cost of producing it or at a price lower than its domestic market

These laws are usually designed to protect the country's domestic producers and jobs.

*illegal

56

Phony list prices

Prices customers areshown to suggest that the price has been discounted from list

Unethical

57

Wheeler Lea Amendement

Bans unfair or deceptive acts in commerce

58

Price fixing

Competitors getting together to raise, lower, or stabilize prices- completely illegal in the US

59

Robinson-Patman Act makes illegal any price discrimination - 

selling the same products to different buyers at different prices if it injures competiotion

Does permit some price differences but they must be based on:

1. cost differences

2. the need to meet competition

**Both buyers and sellers are considered guilty if they know they're entering into discriminatory agreements

60

______________________________ regulates price discrimination

Robinson-Patman ACt of 1936

61

Target return objective

Sets a specific level of profit as an objective

Often stated as a percentage of sales or of capital investment

62

Nonprice discrimination

Agressive action on one or more of the Ps other than price

63

Adminstered prices

Price policies usually lead to administered prices - consciously set prices

Instead of letting market decide, most firms set their own prices

64

Introductory price dealing

Temporary price cuts to speed new products into a market and get customers to try them

Raise prices as soon as the introductory offer is over

65

Basic list prices

The prices final customers or users are normally asked to pay for products

66

Discounts

Reductions from list price given by a seller to buyers who either give up some marketing function or provide the function thesselves

67

Quanitity discounts

Discounts offered to encourage customers to buy in larger amounts

68

Cumulative quantity discounts

Apply to purchases over a given period- and the discount usually increases as the amount purchased increases

Encourage repeat buying by reducing the customer's cost for addtional purchases

69

Noncumulative quantity discounts

Apply only to individual orders

Encourage large orders but do not tie a buyer to the seller after that one purchase

70

Seasonal discounts

Discounts offered to enocurage buyers to buy earlier than present demand requires

71

Net

Means that payment for the face value of the invoice is due immediatley. These terms are sometimes changed to net 10 or net 30 which means payment is due within 10 or 30 days

72

Cash discounts

Reductions in price to encourage buyers to pay their bills quickly

73

2/10 net 30

Buyer can take a 2 percent discount off the face value if the invoice is paid within 10 days. Otherwise, the full face is due within 30 days

74

 Sale price

Temporary discount from the list price

75

Everyday low pricing

Setting a low list price rather than relying on frequent sales, discounts, or allowances

Many supermarkets

76

Allowances

Like discounts, are given to inal consumers, coustomers, or channel members for doing something or accepting less of something

77

Advertising allowances

Price reductions given to firms in the channel to encourage them to advertise or otherwise promote the suppier's products locally

78

Stocking allowances

Slotting allowances*

Given to an itermediary to get shelf space for a product

79

Push money (prize money) allowances

PMs or spiffs

Given to retaliers by manufacturers or wholesalers to pass on to the retailers salesclersk for aggresively selling certain items

80

Trade-in allowance

A price reduction given for used products when similar new products are bought

Give the marketing manager an easy way to lower the effective price without reducig list price

81

FOB

Means free on board

Typically FOB names the place

82

Uniform delivered pricing

Making an average freight charge to all buyers

83

Freigh absorpotion pricing

Abosorbing frieght cost so that a firm's delivered price meets that of the nearest competitor

84

Value pricing

Setting a fair price level for  a marketing mix that really gives the target market superior customer value

85

Wheeler-Lea Amendment

Bans unfair or deceptive acts in commerce

86

Markups

Dollar amount added to the cost of the products to get the selling price

87

Markup percent: Two methods to calculate

 

 

Based on selling price: the percentage of selling price that is added to the cost to get the selling price

- percent of selling price unless otherwise noted

Based on cost: the percentage of cost that is added to the cost to get the selling price

88

Mark-ups and profit

Products may be marked up several times through the channel

- the sequence of markups is the markup chain

High markups dont always mean high profits - depends on the stockturn rate

89

High markups dont always mean:

big profits

90

Average-cost Pricing

Adds a reasonable markup to the average cost of a product

Simplifies pricing

Quite common, especially among middlement

Usually based on estimates or past records

- actual average cost depends on quantity sold!

- quantity sold depends on price

91

The Marketing Manager must consider various kinds of costs

Total Variable cost

total cost

average cost

average fixed cost

average variable cost

total fixed cost

92

Break-even analysis

Used to evaluate whether the firm will be able to cover costs at a particular price

indicates the break-vevn point (units or dollars) needdd to break even

93

Problems with break even analysis

Assumes any quantity can be sold at at a given price

Total cost curve is assumed to be a straight line

94

Cost based

What it costs you to make and deliver to the customer + margin

95

Value based

What the customer is willing to pay

96

Types of demand-oriented pricing

Value-in-use

Auctions

Sequetial reductions

reference

Leader & Bait

97

Can you buy the advertised brand?

Leader= legal

bait = unethical

bait and switch = illegal

98

Pricing a Full Line

Full=line pricing

Costs are complicated

Complentary product pricing

99

Product-Bundle Pricing

Bundle pricing is a "win-win"

- the customer pays less for the total bundl than they would  buyig the items individually

- the custoemrs buys more for a higher ticket value on a given purchase

Producer must keep an eye on margins to make bundles profitable

Consumers must perceive a value

100

Markup (percent)

Percentage of sellibg price that is added to the cost to get the selling price

1.20 markup on the 3.60 selling price is a 33.33% markup

101

Markup

A dollar amount added  to the cost products to the cost of products to get the selling price

102

Markup chain

The sequence of markups firms use at different levels in a channel

103

Stockturn rate

The number of times the average invnetory is sold in a year

104

Average-cost pricing

Means adding a reasonable markup to the average cost of a product

105

Total fixed cost

The sumn of those costs that are fixed in total

106

Total variable cost

The sum of those changing expenses that are closely related to output

107

Total cost

Sum of total fixed and total variable costs

108

Average cost per unit 

Obtained by dividing total cost by the related quaniyty

109

Average fixed cost (per unit(

Dividing total fixed cost by quantity

110

Average variable cost

Dividing total variable cost by the related quantity

111

Break even point

The quantity wherethe firm's total cost will just equal its total revenue

112

Marginal analysis

Focuses on the changes in total revenue and total cost from selling one more unit to find the most profitable price

113

Value in use pricing 

Setting prices that wil capture some of what customers will save by substituting the firm's product for the oe currently being used

114

reference price

the price they expect to pay

115

bait pricing

Setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store

116

Psychological pricing

setting prices that have special appeal to target customers. 

Whole range of prices that potential customers see the same

117

Odd-even pricing

Setting prices that end in certain numbers

118

price lining 

Setting a few price levels for a product line and then marking all items at these prices

Assumes that customers have a certain reference price in mind that they expect to pay for a product

119

Demand=backward pricing 

Setting an acceptable final consumer price and working backward to what a producer can charge

Consumer products

120

Prestige pricing

Setting a rather  highe price to suggest high quality or high status

121

Full-lie pricing

Settibng prices for a whole line of products

122

Complentary product pricing

Setting prices on several products as a group

123

Product bundle pricing

Settig one price for a set of products

124

Bid pricing

Offering a specific price for each possible job rather than setting a price that applies for all customers

125

Negotiated price

Price set based on bargaining between buyer and seller

126

Surge pricing

Let supply and demand determine the price

127

Price promotion

It is all about the $$ and the behavior desired

A disciplined, measured approach is required

Easy to make costly mistakes

Focus should be long term but is often short term

128

Consumer promotion

Complex

designed to attract the desired target while reinforcing the product image

ofte paird with a price promoiton

both costs are factored into margin

129

Key problems with sales promotion

Erodes brand loyalty

not for amateurs

hard to manage

need for aleternatives

130

What is supply chain?

The complete set of firms, facilities, and logistics activities involved in procuring materials, transforming them into entermediate and finished products, and distributing the to customers

Focus on information flows

131

Goal of Supply Chain

Right product. Right Quantity Right place right time

132

Supply chain managment is all about tradeoffs

Cost - speed- quality

133

Retailing

Activities involved in the sale of products to final consumers

consumers buy about 4.5 trillion a year from retailers

retailers must develop their own strategy to survive

wholesaling and retailing are changing rapidly

134

Key features affecting consumers retail choice

Convenience

Product selection

Fairness in dealings

Helpful information

Prices

Social image

Shopping atmosphere

135

Retailing on the Internet

Moving information

New meaning of convenience

amount of information

online costs for retailers & customers

Brick & mortar stores add online capabilities

136

Some Trends in retailing

Growth of interent merchants and online retailing

electronic retailing

more price competition

vertical integration

more chains and franchises - chains becoming larger, more powerful

more and better information

137

What a wholesaler might do for producer-suppliers

Provide part of the selling function

Store inventory

Supply capital

Reduce credit risks

Provide marketing infrmation

138

Types of Agent Wholesalers

Auction companies

selling agents

brokers

manufactuer's agents

139

Manufacturers' agents

Sell similar products for several noncompeting producers

work on a commission basis

basically are independent, aggressive sales reps

Especially helpful to small producers and producers whose customers are very spread out

140

Brokers

Main purpose is to bring buyers and sellers together

Usually have a temporary relationship with buyer and seller while the deal is negotiated

Earn a commission - from either the buyer or seller - dpeending on who hired them

141

Retailing

Covers all of the activies involved in the sale of products to final consumers

142

General sstores

Carried anything they could sell in reasonable volume

143

Single line stores

Stores that specialize in certain lines of related products rather than a wide assortment

144

Specialty shop

Type of conventional limited line store - suaually small and has a distinct personality

145

Department stores

Largest stores that are organized into many seperate departments and offere many product lines

146

Mass merchandising concept

Says that retailers should offer low prices to get faster turnover and greater sales volumes

147

supermarkets

Large stores specialzing in groceries with self-service and wide assortments

148

Discount houses

Offered "hard goods" at sbustantial price cuts to customers who would go the discounter's low rent store, pay cash, and take care of any service problems themselves

149

Mass-merchandisers

Large, self-service stores with many dpeartments that emphasize soft goods but still follow the discount houses' emphasis on lower margins and fast turnover

150

Supercenters

Very large stores that try to carry not only food and drug  but all goods and services that conumser purchases routinely

151

Convenience food stores

Convenience oriented varaionat of the conventiaonal limited line food store

152

Automatic vending

Selling and delivering products through vending machines

153

Wheel of retailing theory

Says that new types of retaliers enter the market as low-status, low-margin, low-price operators and then evolve into more conventional retailers offering more services with higher operating costs and higher prices

154

Scrambled merchandising

Carrying any product lines they think they can sell profitably

155

Corpporate chain

A firm that owns and managers more than one store

156

Cooperative chains

Retailer-sponsored groups that run their own buying organizations

157

Voluntary chains

Wholesaler-sponsored groups that work with independent retailers

158

Franchise operation

Franchisor develos a good marketing strategy and the retail franchise holders carry out the srategy in their onw units

159

Wolesaling

Concerned with the activities of those persons or establishments that sell to retailers and other merchants but that do not sell in large amounts to final consumers

 

160

Wholesalers

Firms whose main function is providing wholesaling activities

161

Manufactuerers' sales branches

Warehouyses that producers set up at seperate locations away from their factories

162

Merchant wholesalers

Own the products they sell

163

Service wholesaler

Merchant wholesalers that provide all the wholesaling functions:

1. general merchandise

2. single line

3. specialty

164

Single line wholesalers

Service wholesalers that carry a wide variety of nonperishable items

165

Specialty wholesalesr

Service wholesalers that carry a very narrow range of products and offer more information and service than other service wholesalers

166

Limited function wholesalers

Provide only some wholesaling functions

167

Cash and carry wholesalers

Operate like service wholesalers - except that the customer must pay cash

168

Drop shippers

Own the products they sell- but they do not actually handle, stock, or deliver them

169

Truck wholesalers

Specialize in delivering products that they stock in their own trucks

170

Rack jobbers

Speialize in hard-to-handle assortments of products that a retailer doesnt want to manager

171

Catalog wholesalers

Sell out of cataglos that may be distributed widely to smaller industrial customers or retailers that might not be called on by other wholesalers

172

Agent wholesalers

Wholesalers who do not own the products they sell

173

Manufacuter's agent

Sells similar products for several noncompeting producers - for a commission on what is actually sold

174

Export or import agents

Basically manufactuerers agents who specialize in international trade

175

Brokers

Bring buyers and sellers togehter

176

Export and import brokers

Operate like other borkers, but they specialize in brining together buyers and sellers from differenty countries

177

Selling agents

Take over the whole marketing job of producers not just the selling function

178

Combination export manager

A blend of manufactuerers' agent and selling agent - handling the entire eport function for several producers of similar but noncompeting lines

179

Auction companies

Provide a place where buyers and sellers can come together and bid to complete a transaction

180

____________ is the more accepted method of markup

cost-based

181

Marketers like the markup method based on selling price

It makes it look better because it is often lower

182

Average-cost pricing

Adds a reasonable markup to the average cost of a product

simpliifies priincing

quite common, middle men

Usually based on estimates or past recors

- actual average cost depends on quantity sold!

183

Problems with break even analysis

Assumes any quantity can be sold at a ggiven price

Total cost curve is assumed to be a straight line

184

Fixed cost contribution per unit

Price - variable cost

Contribution margin per unit

185

Value-in use example

Buying a copy machine

we will charge you more up front but overtime you will incurr less costs

186

Sequential Reductions

Going out of business sales

Continue to markdown to get more and more groups in

187

Reference price

Something that the consumers expect to pay for the product

If it is too low, they may see it as something that is not worth it

188

Leader & Bait

 

Leader - prices product very low to attract customers

ex. run a 1 day discount on milk and increase foot traffic

LEGAL

Bait - you set a price unusually low for an item

- when the customer comes in you try to get them to buy something else

ex. looking for 10 dollar mp3 and they are like nahh you should buy the 100 dollar mp3 player

not illegal

189

Bait and Switch

 

Illegal

We are bringing you in a fake advertisement

190

Psychological Pricing

Discover range a customer is willing to pay for a product

If you go below psychological barrier they will notice and buy

191

Odd-even pricing

Seen in gas stations

end in some number

192

Price Lining

Group their items in a good, better, best

neck ties 15, 20, and 25 dollars

193

Demand-Backward

Get an idea of what your price could be and then roll that price back

194

prestige pricing

set a high price to indicate quality

*common in luxury products

195

Harry Winston Watches are an example of:

prestige pricing

196

Bundle pricing

You see it in the fast food industry

idea: win win for restaraunt and consumer

- consumer spends more

- additional items are added in at savings

197

Bundle pricing

Counsumers have to perceve a value

Producer must keep an eye on the margin

198

Wholesalers sell to:

Other wholesalers or other businesses

199

3 basic types of wholesalers

Merchant wholesalers - majority

Agent wholesalers - popular option for companies who cannot afford their own sales force

Manufacturere sales branches

200

What a wholesaler might do for producer-suppliers

Provide part of the selling function

Store inventory (cut producers's warehousing costs)

Supply capital (by purchasing producers's put before it is sold to final custmoers)

reduce credit risks

provide marketing information

201

Merchant wholsealers

Take title to the product

 

202

Limited function merchant wholesaler

 

Cash and carry wholesaler

Drop shipper

Truck wholesalers

Rack jobbers

catalog wholesalers

203

Agent wholesalers

 

Deal brokers

Do not take title to the goods

Make the deal and take a commission

204

Cash and Carry

Buy inventory from supplier - when customer comes in they do not offer any credit

205

Drop-shippers

Take title but they dont handle the product

No physical handling of the product

206

Truck wholesalers

deliver products that they stock in their own trucks

fill gaps in a distribution channel

207

Rack Jobber

Take title to goods

Service oriented

They bring in a display rack of greeting cards and keep it stocked and monitor inventory - sell products to the store whatever it sells

Understand their customer and market

208

Catalog wholesalers

Send out a catalog to their customers

Being replaced by the interent

209

Agent Wholesalers

Do not take title to the goods

manufacuterers' agents - independent agents that take on a number of noncompleting lines and they represent those lines to retailers

- save cost of full time sales force

brokers - bring buyers and sellers together - their relationship with people tends to be temporary. 

selling agents - take over the whole marketing job. when a company wants to liquidate seasonal items. or liquidate an obsolescent ish product

Auction companies - ebay cristies. They take a percentage on the total selling price

 

210

Manufactuerer's agents

Sells similar products for several nonocompeting producers

work  on commission basis

independent, agressive sales reps

helpful to small producers and producers whose customers are very spread out and small

211

Brokers

Bring buyers and sellers together

temporary relationshisp

earn a commisssion

212

Takes title =>

merchant wholesaler

213

Promotion objectives

 

Linked to the marketing objectives which are derived from business objetives

When promotion objevtives become unhinged from the marketing objectives the liklihood of failiure increases

214

Advertising objectives should be specific

Specific 

Measurable

Attainable

Relevant to the target

Timely

Link to marketing strategy

link to promotion

215

Nature of the media

Different media have different costs and advantages

Who it reaches

with what frequency 

at what impact

at what cost

216

Ad agencies

Specialists in planning and handling mass selling details for advertisers

make monehy on percentage of media they buy

15% is not required, but still common

 

217

Personal selling

Often the single largest operating expense

1 or 10 people in sales work

218

Order Getter

Responsible for brining in new business and closing deals

219

Order takers

work in support of order getters

once business is in house, they service that business

220

Supporting staff

Support order takers and getters

Missionary salespeople - pave way for order getter to come in and close business

technical specialists - a team selling expert

221

Missionary salesperson

Not actually selling accounts - she is supporting them

222

Sales manager responsibilities

Estimate hwo much work can be done by any one prson in a given time period

Use that info to estimate who many people are needed in total

 

223

Sales Selection and Training

Written job description

Multiple interviews

personnel and psycholgical tests

background checks

initial and ongoing training

224

Key steps in the personal selling process

Prospect for new customers => set effort priorities => select target

225

Selling formula approach

Used for mid-range products

226

Read same sales script to every potentail customer

prepared sales presentation

227

Setting the Promotion Budget

Percentage of sales - most popular to set marketing budget, not the best, easy, take a fixed percentage of last years sales

problem: incorrectly assumes sales drives marketing

Task method - zero based budgeting

228

Adoption process

Diagrams how people understand a product category

229

Innovators

First people to adopt product

risk takers

230

Early adopters

 

Get information from sales people and innovators

Not necessarily viewing advertising

231

Early majority are:

most influenced by advertisement

232

Market introduction

Innovators jump on board

Not making any money

Heres why this new idea is better than your old solution

233

Market growth

When the early adopters come in as well as some of the early majority

Marketing strategy changes from explaining the category to here is why my brand is best

234

Market maturity

You get the late majority entering in and sales peakY

You have to add a lot more features and benefits

Say your brand is better than everybody elses

235

Sales decline

Could still be profitable

Marketing expenses could go down

They could pay more

236

Wicks Hot Chili

For manly men chili

237

Two regulatory agencies for labeling

CTC ACT of 1914 held that flase misleading labels  lables constitute unfair competition

Both federal and state laws regulate labelign

238

FDA regulates:

food and drug labels

239

The importance of packaging

PAckaging can enhance the product

UPC Codes speed handling

Packaging can lower distribution costs

Packaging sends a message

240

Promote

Cleanex package in the shape of a watermellon

241

Display packaging

Difficult to open

242

Pros and Cons to the skippy type of packaging

They dont have to change their production line

 

243

New ketchup bottle does what?

 

Enhance product usage

244

What have we learned?

Product incorporates many attributes

A well thought out product will addresss the needs of the company, the consuer and will oprimize the mix

245

Individual product

A particular product within a product line

A stock keeping unit (sku)

246

Product line

set of individual products that are closely relatd

Depth and breadth

Breadth impies number of product lines

Depth concerns choice within product lines

247

Product assortment

The set of all product lines and individual products thta  firm sells

248

Warranty policies

Regulated by magnuson-moss act - producers must often a clearly written warranty if they offer one

Service guarantee

May improve marketing mix

Promises in writing

249

Consumer Product Classes

Convenience products - inexpensive, buy them a lot

ex. staples, impulses, emergency

Shopping products - homogeneous and heterogeneous

Unsought products - new unsought, regularly unsought

250

Shopping products

Homogeneous - considers brands but price is the decider

Heterogeeous - considers brands, effort made, something other than price decides

251

Specialty products

Brand insistence - you will accept no substitutes for

 

252

One product may be seen in:

several ways

253

Jack buying a shirt

Homogenous shopping product - thought all the shirts were the same so selected based on price

254

Business products are different

Derived demand - a business is not going to buy something that they cant turn around and resell

Inelastic industry demand

Tax treatments differ

 

255

Business product classes

Installations - one time or very infrequent large expensive purchases

professional services

accessories - can be expensive but bought more often

component parts and materials - you are buying radios if you are making cars

Mro supplies

Raw materials

256