Chapter 13 Notes

Distribution (Marketing) Channel
Sequence of marketing organizations that directs a product from the producer to the ultimate user. Begins with producer and ends with the consumer/business user
Middleman (Marketing Intermediary)
Marketing organization that links a producer and user within a marketing channel. Concerned with the transfer of the ownership of the products
Merchant Middleman
Actually takes the title to products by buying them
Functional Middleman
Helps with the transfer of ownership of products but does not take title to the products
Producer to Consumer
Direct channel; includes no marketing intermediaries. All services and few consumer goods are distributed through a direct channel. Control the quality and price of the products better. They do not have to pay (through discounts) for the services of intermediaries. Also can maintain closer relationships with customers
Producer to Retailer to Consumer
When retailers are large enough to buy a large enough quantity, producers sell directly to retailers. Used most often for products that are bulky, such as furniture, automobiles; perishable products, and high fashion products, reach the consumer in the shortest possible time
Middleman that buys from producers or other middlemen and sells to consumers.
Producer To Wholesaler To Retailer To Consumer
Traditional channel; many consumer goods especially convince goods, pass through wholesaler to retailer. A producer uses wholesalers when its products are carried by to many retailers that the producer cannot manage and distribute all of them. I.e. chewing gum and sodas
Middleman that sells products to other firms.
Producer to Agent to Wholesaler to Retailer to Consumer
Producer use agents which are functional middlemen that do not take title to the products and are compensated by commissions paid by producers. Agents deal with inexpensive, frequently purchased items. Use agents to market them to wholesalers. Wholesalers then sell product to whole network of retailers. Also used for seasonal products, and producers that do not have sales forces
Producer to Organizational Buyer
Direct channel; manufactures own sales forces sell directly to organizational buyers, or business users. They sell heavy machinery, airplanes, and major equipment. Allows producer to provide customers with expert and timely services, such as delivery, machinery installation, and repairs
Producer to Agent Middleman to Organization Buyer
Distribute such items as operating supplies accessory equipment, small tools, and standardized parts
Use Multiple Channels
Manufacturer uses different distribution channels to reach different market segments, may be sold through channels containing wholesalers and retailers, as well as producer to large retailers, increase sales or capture a larger share of the market with the goal of selling as much merchandise as possible.
Intensive Distribution
Use of all available outlets for a product. Widest exposure in the market place. Selling to any intermediary of good financial standing that is willing to stock and sell the product. Minimum time selecting and buying the product. Many convenience goods, including gum, candy, and soft drinks
Selective distribution
The use of only a portion of the available outlets for a product in a large geographic area. Manufactured goods such as furniture, major home appliances, and clothing
Exclusive Distribution
Is the use of only a single outlet for a product in a large geographic area. Grand pianos, fine china, expensive jewelry. Producers places requirements such as sales training, service quality, and warranty procedures
Supply-Chain Management
Is a long-term partnership among channel members working together to create a distribution system that reduces inefficiencies, costs, and redundancies while creating.a competitive advantage and satisfying customers. Includes manufacturing, research, sales, advertising, and shipping. Encourages cooperation in reducing costs of inventory, transportation, administration, and handling. Needs order cycle-times, increases profits for channel members. Buyers, sellers, marketing intermediaries work together to satisfy customers needs in delivery, scheduling, packaging, and other requirements
Category Management
Common practice for mass merchandisers, supermarkets, and convenience stores. Retailer asks supplier in a particular category how to stock shelves= enhances efficiency
Information sharing, channel members, reduce costs and improve customer service. Firms can take advantage of hundreds of electronic trading communities. Auctions, exchanges, e-procurement hubs, and online catalogs
Marketing Intermediaries: Wholesalers
Increase distribution efficiency, activities performed by wholesalers must be performed, which means cutting out wholesalers may not reduce distribution costs
Wholesalers help retailers by:
1.Buying large quantities and selling to retailers in smaller quantities and delivering goods to retailers.
2.Stocking in one place the variety of goods that retailers otherwise would have to buy from many producers.
3. Providing assistance in other vital areas, including promotion, market information, and financial aid.
Wholesalers help manufactures by:
1. Performing functions similar to those provided to retailers.
2. Providing a sales force, reducing inventory costs, assuming credit risks, and furnishing market information.
Merchant wholesaler (Largest portion)
Middleman that purchases hoods in large quantities and then sells them to other wholesalers or retailers and to institutional, farm, government, professional, or industrial users.
1. Usually operation one or more warehouses at which they receive, take title to, and store goods, I.E. distributors or jobbers. Composed of sales people, shipping clerks, inventory managers, and office personnel. Must analyze available products and market needs, adapt to type, variety, and quality of products in changing conditions
Full-service wholesaler
Entire range of wholesaler functions; delivering goods supplying warehousing, arranging for credit, support for promotional activities, providing general customer assistance.
General-merchandise wholesaler
Deals with a wide variety of products, such as drugs, hardware, non perishable foods, cosmetics, detergents, and tobacco.
Limited-Line wholesaler
Stocks only a few product lines but carries numerous product lines within each line
Specialty-line Wholesaler
Carries a select group of products within a single line. Shellfish.
Agents and Brokers
Perform a small number of marketing activities and are paid commission that is a percentage of the sales price.
Middleman that expedites exchanges, represents, a buyer or a seller, and is often is hired permanently on a commission basis. Solicits orders for manufacturer ship the merchandise and bill the customers directly. Provides immediate entry into a territory, regular calls on customers, selling experience, and a known, predetermined selling expense.
Sales Agent or Manufacturer Agent
Agents that represent producers
Middleman that specializes in a particular commodity, represents either a buyer or a seller, and is likely to be a hired on a temporary basis. Long term relationships with clients
The final link between producers and consumers. May sell goods or services or both. They buy from either wholesalers or producers
Independent Retailer
Firm that operates only one retail outlet. Adding outlets, chain retailers, reach new geographic markets. As sales increase, chains usually buy merchandise in larger quantities and thus take advantage or quantity discounts. Can also classify between these two with store size
Department Store
Retail store that (1) employers 25 or more persons (2) sells at least home furnishings, appliances, family apparel, and household linens and dry goods, each in a different part of the store. I.E. Macy, Sears, JCPenny. Service-Orientated Provide credit, delivery, personal assistance, liberal return policies, and pleasant shopping
Discount Store
A self-service general merchandise outlet that sells products at lower than usual prices. Operate smaller markups and higher merchandise turnover, minimal customer service. Kmart, Walmart, and Dollar General
Warehouse Showroom
A retail facility in a large, low-cost building with a large on-premise inventory, vertical merchandise displays, warehouse materials handling technology and minimal service. Best known operation is furniture retailers. Employ few personnel, few services.
Convenience Stores
Small food store that sells a limited variety of products but remains open well beyond normal business hours. 7-Eleven, Circle K, Open Pantry stores. Limited products mixes and higher prices keep from threatening other grocery retailers.
A large self-service store that sells primary food and household products. Fresh, frozen, processed foods and cleaning supplies. May also sell housewares, toiletries, toys, games, drugs, stationary, books, and magazines, flowers, clothing. Emphasize low prices and one-stop shopping. RANDALLS!
A large retail store that carries not only food and non food products ordinarily found in supermarkets but also additional product lines such as housewares, hardware, small appliances, clothing, personal-care products, automotive merchandise, services like automotive repair, snack bars, restaurants, photo printing banking
Warehouse Clubs
A larger-scale members only establishment that combines features of cash-and-carry wholesaling with discount retailing. Small retailers or individuals may become members and purchase products at wholesale prices for business use, resale, or personal use. Product lines shallow, prices high, broad range of merchandise including perishable/nonperishable foods, beverages, books, appliances, housewares, automotive, hardware furniture. SAMS CLUB!!
Traditional specialty store
A store that carries a narrow product mix with deep product lines. Sometimes called limited- line retailers (specialty) . If they have depth in one product category they may be called single-line retailers. Attract customers by emphasizing service, atmosphere of large retailers. Gap, Bath and Body Works, and Foot Locker
Off-Price Retailers
A store that buys manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts. Sell limited lines, traditional-brand, designer merchandise, usually clothing, shoes, or housewares. T.J. Max. Charge up to 50 percent less than department stores, offer few customer services. Community dressing rooms and central checkout
Category killers
A very large specialty store that concentrates on a single product line and competes on the basis of low prices and product availability. Take business away from smaller, high-cost retail stores. The cost of maintaining such stores can drain a company and profits, which is why online retailing.
Nonstore retailing
A type of retailing whereby consumers purchase products without visiting a store. Increase percentage of total retail sales. Use direct selling, direct marketing, and vending machines
Direct Selling (door-to-door)
The marketing of products to customers through face-to-face sales presentations at home in the workplace. 28.5 billion in sales. Mary Kay use other approaches like mail, telephone, and then appointments. Party plan requires effective sales people who identify potential hosts and provide encouragement and incentives for them to organize a gathering. Tupperware, Pampered Chef.
Direct Marketing
The use of the telephone, internet, and nonpersonal media to introduce products to customers, who them can purchase them via mail, telephone, Internet. Type of Nonstore retailing that can occur through catalog marketing, direct-purpose marketing, home shopping, and online,
Catalog Marketing
A type of marketing in which an organization provides a catalog from which customers make selections and places order by mail, telephone, or the Internet. Some catalog marketers sell products spread over multiple product lines, while others are more specialized. Burped and Newport News.
Advantages in Catalog Marketing
1.Efficiency and convenience for customers because they do not have to visit a store.
2. Retailer benefits by beige able to locate remote, low-cost area, and save expensive fixtures, reduce personal selling/ store operating expenses
Disadvantages of catalog marketing
Inflexible, provides, limited service, and is most effective for only a select set of products
Direct- Response Marketing
A type of marketing in which a retailer advertises a product and makes it available through mail, telephone, or online orders, sending letters, samples, brochures, or booklets
Products gain widespread popularity, Snuggle!
The performance of marketing-related activities by telephone. Advantages: generating sales leads, improving customer service, speeding up payments, raising funds for nonprofit, and gathering market data. FTC enforces violations and companies are subject to fines up to 16,000 for each call made to numbers on the list., done business in the past. Political, charitable, and survey are not restricted
Television Home shopping
Form of selling in which products are presented to television viewers, who can buy them by calling a toll-free # and $ will credit card. HSN, most homes receive one shopping channel.
Online retailing
Retailing that makes products available to buyers through computer connections. Sell products, provide information, or distribute coupons. Retailers offer exclusive online sales and reward customers. Security remains issue i.e. identity/ cc # theft.
Automatic vending
The use of machines to disperse products. Less than 2% retail sales. Small, standardized routinely purchased products, not spoil. Vending machines now offer a wide variety of products
Planned Shopping Center
Self-contained retail facility constructed by independent owners and consisting of various stores. Promote a serve a diverse group of customers with differing needs. Comfortable atmosphere,pleasant landscaping, and special events. Single-location
Lifestyle Shopping Centers
Is a shopping center that has open-air configurations and is occupied by upscale chain and specialty stores. Combines shopping. Incorporate activities, sports, and culture in their design.
Neighborhood Shopping Centers
Consists of several small convenience and specialty stores, small grocery stores, drugstores, gas stations, and fast food restaurants. Near-by customers, Unlike lifestyle shopping centers purchases based on convenience and personal contract.
Community Shopping Centers
Includes one/two department stores and some specialty stores, along with convenience stores. Attract consumers who will drive longer distances to find products and specialty items not available in neighborhood shopping centers. Carefully planned and coordinated, generate traffic for automobile shows. Management maintains tenants that the center offers wide product mixes and deep product lines
Regional Shopping Centers
Usually has large department stores, numerous specialty stores, restaurants, movie theaters, and hotels. Smaller mix of merchandise. Carefully coordinate management and marketing activities. Large centers usually advertise, hold special events, provide transportation, National chains gain leases in regional shopping centers more easily than the small independent stores, better meet financial requirements
Physical Distribution
All those antivirus concerned with the efficient movement of products from the producer to the ultimate user, movement of the products themselves,both goods and services through their channels of distribution. Includes business functions such as: inventory management, order procession, warehousing, materials handling, and transportation. Marketers use this for integrated efforts that support marketing activities. Goal: to get the right product to the right place at the right cost, cheap.
Inventory management
The process of managing inventories in such a way to minimize inventory costs, including both holding costs and potential stock out costs. Software helps companies maintain the correct levels of inventory and know when to place orders
Holding Costs
Are the expenses of storing products until they are purchased or shipped to customers. Include money invested in inventory, the cost of storage space, insurance costs, and inventory taxes
Stock Out costs
Are sales lost when items are not in inventory. Marketers seek balance in these two costs so that the company always has sufficient inventory to satisfy customer demand, but with little surplus because storing unsold products can be very expensive.
Order Processing
The series of activities that occurs between the time an order comes into the organization and the time a product goes out the door. May include not only the means by which the customer order products, but also procedures for billing and granting credit. Fast processing=edge. The Internet is providing new opportunities for improving services associated with order processing.
Is the set of activities involved in receiving and storing goods and preparing them for reshipment. Good are held until needs and create a time utility.
Warehousing Activities
1. Receiving goods- Accepts delivered goods and assumes responsibility for them.
2. Identifying goods- Records are made of the quantity of each item received; marked, coded, or tagged for identification.
3. Sorting Goods- Delivered goods may have to be sorted before being stored.
4. Dispatching goods for storage- Items must be moved to storage areas, where they can be found later.
5. Holding goods- Protected in storage until needed
6.Recalling, picking, and assembling goods- items that are to leave the warehouse must be selected from storage and assembled.
7. Dispatching shipments- each shipment is packaged and directed to the proper transport vehicle. Shipping and accounting documents are prepared.
Private warehouse
Owned a operated by a particular firm, can be designed for a firms specific needs, must determine the best location for it. Only firms like UPS that deal with large quantities of goods need these private warehouses.
Public Warehouses
Are open to all individuals and firms. Most are located on the outskirts of the cities, where rail and truck transportation is available. Provide storage facilities, assembling/ storing shipments, and office and display places for whole/retailers. Issue receipts for goods used for funds
Materials Handling
Actual physical handling of goods in warehouses are well as during transportation. Proper, can increase efficiency and capacity of firm’s warehouse and transportation, as well saw reduce product breakage and spoilage. Reduced # of times product is handled
Unit Loading
Several small cartons, barrels, boxes are combined into one single standard-size load that can be moved efficiently by forklift.
The shipment of products to customers.Greater distance between seller and purchase, the more important is the choice of the means of transportation and the particular carrier.
A firm that offers transportation services
Common carrier
Transportation system whose firms are available to all shippers. I.E. rail road and airplanes
Contract carrier
Is available to hire by one on or several shippers. Do not serve general public and # of firms they can handle at a time is limited.
Private carrier
Owned and operated by the shipper
Freight Forwarders
Type of agent which pick up shipment, ensure that the goods are loaded onto carriers, and assume responsibilities for their safe delivery, can group multiple shipments, into one large load, thereby saving smaller firms money by charging them less.
Six criteria for selecting transportation
1. Cost of transportation- higher cost modes can convey important benefits. Relationship between cost and speed
2. Speed- measured by the total time the carrier possess the products, including time required for pickup and delivery, handling, movement, and destination.
3.Dependability-consistency of service
4.Load flexibility- degree to which the transportation mode can be adapted for moving different kinds of products with varying requirements, such as controlled temperatures or humidity levels
5. Accessibility- refers to the transportation modes ability to move goods over a specific route or network.
6. Frequency- how frequently the marketer can ship products by a specific transportation mode.
One of the most important and the least expensive modes/mode of transportation in U.S. Common carriers. Commodities can not be transported easily by many other means
Common, contract, and private carrier. Popular transportation mode because they have the advantage to move goods to areas not served by railroads. Handle freight quickly and economically, carry a wide range of shipments. Offer door-to-door service, flexible delivery schedules.
Truck retailers are loaded onto railroad flatware for much of the distance and then pulled by trucks to final destination
Fastest transportation, most expensive, all certified airlines are common carriers. Supplemental and charter lines are contract carriers. From high cost, bad geographic location, and weather conditions tiny fraction use this type. Only high-value perishable items or goods that are needed immediately.
Cargo ships and barges= least expensive, slowest form of transportation. Used for bulky, nonperishable goods, such as iron ore, bulk wheat, motor vehicles, and agricultural implements. combine this mode with land mode.
Are a high specialized modest transportation. Primarily to carry petroleum and natural gas. Coal and wood chips can also be carried through pipelines, danger might occur though animal pathways, and leak in remote areas
Integrated Marketing Communications
The coordination of promotion efforts to insure maximal informational and persuasive impact on customers. Major goal of integrated marketing communications is to send a consecutive message to customers. Helps organizations coordinate and manage promotions in order to create a consistent message. Long term customer relationships and the efficient use of promotional resources. Database marketing allows marketers to be more precise in targeting individual customers
Communication about an organization and its products that is intended to inform, persuade, or remind target-market members. Promotion which we are most familiar advertising, which attempts to inform, persuade, or remind us to buy particular products.
Promotion Mix (Marketing-Communications Mix)
Particular combination of promotion methods a firm uses to reach to reach a target markets. Make up of mix factors includes the firm’s promotional resources and objectives, nature of target market, the product characteristics, and feasibility of the various promotional methods. Four elements of promotion mix advertising, personal selling, sales promotion, and public relations.
Is a paid nonpersonal message communicated to a select audience through a mass medium. Flexible to reach a very large to a small group.
Personal Selling
Personal communication aimed at informing customers and persuading them to buy a firm’s products. More expensive and persuasive than advertising, provides immediate feedback
Sales promotion
Is the use activities or materials as direct inducements to customers or salespersons, which can add value to the product and increase the customer’s incentive to make a purchase.
Publics relations
Communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external. Very effective form of promotion
U.S. firms currently spend around what annually?
$155 billion annually on advertising.
Primary-demand advertising
Advertising whose purpose is to increase the demand for all brands of a product within a specific industry. Ex: The National Pork Producers Council.
Selective-Demand Advertising
Is advertising that is used to sell a particular brand of product. Far common type of advertising, accounts for the majority of advertising expenditures.
Immediate-Response Advertising
Selective-demand advertising that aims at persuading consumer to make purchases within a short time. Local Advertising
Reminder Advertising
Aimed at keeping the public aware of a firm’s name or product is called reminder advertising.
Comparative Advertising
Compares the sponsored brand with one or more identified competing brand. Shows that sponsored brand to be good or better than the other identified competing brands. Marketers need to be careful to present information truthfully
Institutional Advertising
Is advertising designed to enhance a firm’s image or reputation. Large firms allocate a portion of advertising dollars to build goodwill. BP launched a campaign highlighting its clean-up efforts and commitment to the Gulf region after the massive Deep-water Horizon oil leak in 2010. This advertising’s goal is restore publics confidence in demonstration long-term commitment to the environmental and economic health of the region.
Major Steps in Developing an Advertising Campaign
1. Identify and Analyze the target audience
2. Define the Advertising Objectives
3. Create the advertising platform
4. Determine the advertising appropriation
5. Develop the Media Plan
6. Create the Advertising Message
7. Execute the campaign
8. Evaluate advertising effectiveness
Identify and Analyze the Target Audience
The target audience is the group toward which a firm’s advertisements are directed. To pinpoint the organization’s target audience and develop an effective campaign, marketers analyze various factors, such as the geographic distribution of potential customers their age, sex, race, income, and education, and their attitudes toward the product, nature, and features.
Define The Advertising Objectives
The goals of an advertising campaign should be stated precisely and in quantifiable terms. Give specific details about the actual and desired position of the company and how it will arrive there, including a timetable for achieving goals. Ex: advertising objectives that will stress increasing sales by a certain %, or expanding market share
Create the Advertising Platform
Includes the important selling points, or features, that an advertiser will incorporate into the advertising campaign. Features that lack in competitors products and are important to customers. Productive way to determine what to include in a campaign
Determine the advertising appropriation
Advertising appropriation is the goal amount of money designated for advertising in a given time period. Critical- too little promotional efforts will not meet demand too much wastes resources and reduces funds. Based on historical or forecasted sales, competitors $ on advertising, and executive judgment. Proctor & Gamble, General Motors, AT&T
Develop a Media Plan
Outlines a timetable for advertisements and which media will be used. Concern is to reach the largest proportion of the target audience possible for each $ spent. Must also consider location and demographics of target marketed, the content of the message, and characteristics of audiences. Begins with general media decisions and ends will specific media vehicles for the campaign.
Create the Advertising Message
Content and form of message are influenced by the product’s features, the characteristics of the target audience, objectives of campaign, and choice of media. They must choose words and illustrations that will be meaningful and appeal to the target audience. The words will vary based on the media choice, and will move them through attention, interest, desire and action. They should be attractive and communicate the idea quickly.
Execute the Campaign
Requires extensive planning, scheduling, and coordinating because they are carried out by many people and groups and must be completed on time. Research Organizations and Production companies are a few contributors to the campaign. Advertising managers must constantly assess the quality of work and take corrective action when necessary.
Evaluate advertising effectiveness
Success should be compared against original objectives at regular intervals before, during, and after the campaign. Advertiser should track the impact of the campaign of sales and market share, attitudes, and brand awareness. Coupon offers, sales and responses, data from the past, are some way that advertising effectiveness can be evaluated.
Advertising Agency
An independent firm that plans, produces, and places advertising for its clients. Large ad agencies help with sales promotion and public relations. 15% commission.
Social and Legal Considerations of Advertising: Why Advertising is not wasteful
1. Advertising is most effective and least expensive means of communication product information to a large # of people and organizations.
2. Advertising encourages competition. Leads to development of new and improved products, wider product choices, and lower prices.
3. Advertising revenues support mass-communication media, i.e. newspapers, magazines, radio, which pays for new coverage and entertainment programming
4. Advertising provides job opportunities in fields ranging from sales to film production.
Selling Personal
Most adaptable of all promotional methods because the person presenting the message can modify it to suit the individual buyer. Most expensive because it involves the sales people communicating with customers one at a time or in small groups. Selling situations demand the face-to-face contact and adaptability of personal selling i.e. industrial. sales
Kinds of Salespersons: Order Getters (Creative Selling)
A salesperson who is responsible or selling a firm’s products to new customers and increasing sales to present customers. The process is called creative selling. Must be able to perceive the customers needs. Supply information about the product, and persuade them to buy it
Kinds of Salespersons: Order Takers
A salespersons who handles repeat sales in ways that maintain positive relationships with customers. Develop a mutually beneficial relationship of placing, receiving, and delivering orders. Active salespersons and produce a large portion of there companies sales.
Kinds of Salespersons: Inside Order takers
People that receive incoming mail, online, telephone orders for business.
Kinds of Salespersons: Outside Order Takers
People that travel to customers.
Kinds of Salespersons: Sales support personnel
Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service. Factors that effect hiring these kinds of people are characteristics, product attributes, complexity, price, distribution channels, and companies approach to advertising.
Missionary Salesperson
Usually works for a manufacturer, visits retailers to persuade them to buy the manufacturer’s products from wholesalers, who are the manufacturer’s actual customers.
Trade Salesperson
Who generally works for a food producer or processed, assists customers in promoting products, especially in retail stores. May obtain additional shelf space for products, restock shelves, set up displays, and distribute samples.
Technical Salesperson
Assists the companies current customers in technical matters. They explain how to use a product, how it is made, how to install it, or how a system is designed. Should be formally educated in science of engineering.
The Personal-Selling Process: Prospecting
First step to personal selling is to research potential buyers and choose the customers. They do this by looking through business associates, customers, telephone directories, and files. They need to have financial resources, willingness, and authority to buy product.
The Personal-Selling Process: Approaching the Prospect
A salesperson should be friendly and knowledgeable about product, customers needs, and how the product can meet those needs. Need to be sensitive to customers situation
The Personal-Selling Process: Making the Presentation
Includes the product demonstration. Salesperson points out the products features, benefits, and how it is superior to competitor’s merchandise. Sales person suggest to try out the product.
The Personal-Selling Process: Answering Objections
Prospect may raise objections or ask questions. Salesperson’s chance to eliminate objections that could prevent sales, point out additional features, or maintain special services the company offers.
The Personal-Selling Process: Closing the Sale
Salesperson asks the prospect to buy the product. Critical Point.
Trail Closing
Salespeople asks questions before to assume successful sale.
Following Up
Salesperson must follow up to ensure that the product is delivered on time, in the right quantity, and proper operating condition. He/she also makes clear that he/she is available in case problems develop. Leaves good impression.
Major Sales Management Tasks: Sales Managers Must
1. Set Sales objectives in concrete, quantifiable terms and specify a specific period of time and geographic area
2. Adjust the size of the sales force to meet changes in the firm’s marketing plan and marketing environment.
3. Attract and hire effective salespersons.
4. Develop a training program and decide where, when, how, and for whom to conduct the training.
5. Formulate a fair and adequate compensation plan to retain qualified employees.
6. Motivate salespersons to keep productivity high.
7. Define sales territories and determine scheduling
8. Evaluate sales reports, communication with customer, and invoices.
Promotion Sales
Consists of the activities or materials that are direct inducements to customers or salespersons. Ex: Free Samples or frequent flier program. Impact sales and are used to enhance supplement other promotional methods.
Sales Promotion Objectives
1. Attract New Customers
2. Encourage trail of a new product
3. To investigate the sales of a mature brand
4. To boost sales to current customers
5. To reinforce advertising
6. To increase traffic in retail stores
7. To smooth other customer demand
8. Build up reseller inventories
9. Neutralize the competitions’ promotional efforts
10. To increase the attractiveness of shelf placement and displays
Sales Promotion Methods: Consumer Sales Promotion Method
Attracts consumers to particular retail stores and motivates them to purchase certain new or established products.
Sales Promotion Method: Trade Sales Promotion Method
Encourages wholesalers and retailers to stock and actively promote a manufacturer’s product.
Sales Promotion Method
Incentives such has money, merchandise, marketing assistance, gives provide incentives to purchase products. Of the combined dollars spent of sales promotion and advertising, one-half is spent on trade promotions. One-forth on consumer promotions, and one-fourth on advertising.
Selection of Sales Promotion Methods:Factors
1. The objectives of the promotional effort
2. Product Characteristics- size, weight, cost, durability, uses, features, and hazards.
3. Target-market profiles- age, gender, income, location, density, usage, rate, and buying patterns
4. Distribution Channels and availability of appropriate resellers
5. The competitive and regulatory forces in the environment
A return of part of the purchase price of a product. Offered by the producer to consumers who submit a coupon and specific proof of purchase. Low cost promotional method
A coupon reduces the retail price of a particular item by a stated amount at the time of purchase. Customers find coupons in newspapers, magazines, and direct mail. Allows businesses to focus on existing customers and provides incentives for those customers to tell about other deals. Low cost promoting companies products.
A free product given to customers to encourage trial and purchase. To increase awareness of the product, increase sales in early stages of product life cycle and improve distribution. Most expensive sales promotion technique. Organization must consider factors like seasonal demand for the product, market characteristics, and prior advertising.
A gift that a producer offers a customer in return for buying its product. Used to attract competitor’s customers, introduce different sizes of established products, add variety to other promotional efforts, and stimulate consumer loyalty. Creativity is essential. Desirable to customers, and must suit target audience. Premiums are placed on or inside packages and can be distributed through retailers or the mail.
Frequent-User Incentives
A program developed to reward customers who engage in repeat (frequent) purchases. Used by service businesses such as airlines, hotels, and auto rental.
Point-of-Purchase Displays
Promotional material placed within a retail store. Located near where the product is being promoted. Set up by manufacturers or wholesalers
Trade show
Industry-wide exhibit at which many sellers. Organized for dealers to permit manufacturers to show their latest lines to retailers, and stimulate consumer awareness and interest such as annual home shows
Buying Allowances
Temporary price reduction to resellers for purchasing specified quantities of a product. Incentive to resellers to handle new products and may stimulate purchase of items in large quantities.
Cooperative Advertising
Arrangement whereby a manufacturer agrees to pay a certain amount of retailer’s media cost for advertising the manufacturer’s products
Public Relations
Broad set of communication activities used to create a maintain favorable relationships between an organization and various public groups, both internal and external, May include employees, stockholders, suppliers, educators, the media, government officials, and society in general. Promotes people, places, activities, and increase publics awareness of products, brands, or activities
Types of Public Relation Tools
Used to convey messages and to create images. Organizations prepare written brochures, newsletters, company magzizines, annual reports, and news releases. They can also create corporate identity materials i.e. logos, business cards, signs, and stationary. Public Relation Tools are speeches, event sponsorship (effective way to increase brand recognition and media coverage)
An important part of public relations., it increases public awareness of a firm or brand through mass media communications at no cost to the business. It is defined as the communication of a news story form about an organization, its products, or both. Organizations use publicity to provide information about products, to announce new product launches, expansions, or research, and strength the image.
News Release
A typed page of about 300 words which is provided by an organization to the media as a form of publicity. Includes firms address, phone #, and contact.
Feature Article
A piece (of up to 3,000 words) prepared by an organization for inclusion of a particular publication
Captioned Photograph
A picture accompanied by a brief explanation
Press Conference
A meeting at which invited media personnel hear important news announcements and receive supplementary textual materials and photographs.

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