marketing chapters 12-14

Retailing is
the process by which organizations sell goods and services to consumers for their personal use
Four factors motivate innovative merchants to reinvent the way they do business:
Changes in economic conditions
Demographic and cultural change
Retailtainment is
all about marketing strategies that enhance the shopping experience
vulnerability phase
high prices, luxurious facilities, excellent services and amenities
entry phase
low margin, low prices, limited or no services, low-end facilities
trading-up phase
moderate prices, better facilities, some services, increased quality merchandise
its merchandise mix
One of the most important strategic decisions a retailer makes is what to sell
Merchandise breadth
Narrow vs. broad assortment (consists of all the product lines that the company has to offer to its customers.) refer to slide 26
Merchandise depth
Shallow vs. deep assortment (refers to the number of subcategories a category has.) refer to slide 26
product line
is a group of related products under a single brand sold by the same company.
A category killer
is a specialty store that carries a large section of products within a given category (ex. best buy, lowe’s, toys-r-us)
Department stores sell
a broad range of items and offer a deep selection organized into different sections
Retailers may be categorized based on a variety of factors, including:
Merchandise mix – both breadth and depth of assortment
Service levels offered to customers
Store size
Nonstore retailing is
any method a firm uses to complete an exchange that does not require a customer to visit a store (ex. direct selling, automatic vending, B2C E-commerce)
Direct selling occurs when
a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise (Door-to-door sales, Party and networks, Multilevel marketing)
Automatic vending
Usually best suited to low-cost convenience goods
Offers many benefits to consumers and marketers
B2C e-commerce is
online exchange between companies and individual consumers
Services are
acts, efforts, or performances exchanged from producer to user without ownership rights. (Service industry account for four out of every five jobs in the U.S. and nearly 80% of GDP)
Four “I”s of Services
Inconsistency (Variability)
Inventory (Perishability)
A service encounter occurs
when the customer comes into contact with the organization
Servicescapes are
the actual physical facility where the service is performed, delivered, and consumed
The SERVQUAL scale is
a popular instrument to measure customer service quality.
SERVQUAL identifies consumer perceptions of service quality on five components:
Integrated marketing communication (IMC) involves
the planning, execution, and evaluation of coordinated, brand communication programs over time to targeted audiences
Encoding is
the process by which the idea is translated into a physically perceivable form that conveys meaning (ex. words, music, spokesperson)
The message is
the actual content of communication that goes from the source to a receiver
messages are in the form of
Sales promotion
A salesperson’s pitch
Word of mouth
The medium is
the communication vehicle that reach members of the target audience
Marketers face two major challenges :
Target market exposure to medium
Does product conflict with medium
The communication model also acknowledges that noise—anything that interferes with effective communication
can block messages
To complete the communication loop, the source
gets feedback from receivers.
Promotion mix refers to
communication elements that the marketer controls.
Mass (One-to-Many) Communication:
Includes advertising, sales promotion, and public relations
Personal (One-to-One) Communication:
Includes personal selling and direct marketing
marketing communications do what
inform, remind, persuade and build relationships with consumers
Steps to Develop the Promotional Plan
Step 2: Establish the Communication Objectives
Creating a new customer occurs as a result of a series of messages.
Messages are designed to move the consumer closer to purchase, and hopefully, loyalty.
The process of moving the consumer forward in this fashion is known at the hierarchy of effects.
Steps to Develop the Promotional Plan
Step 3: Determine and allocate the marketing communication budget
Decision 1: Determine the total marketing communication budget
Decision 2: Decide on a push or pull strategy
Decision 3: Allocate spending to specific promotion activities
Steps to Develop the Promotional Plan
Step 4: Design the Promotion Mix
Designing promotional mix involves:
Determining promotional tools to be used
Specifying message to be communicated
Communication Goals
Attention, interest, desire, and action (AIDA model)
Steps to Develop the Promotional Plan
Step 5: Evaluate the Effectiveness of the Communication Program
Marketers use a variety of ways to monitor and evaluate the company’s communication efforts.
Sales promotion are the easiest to evaluate as they often occur over a fixed, short period
Advertising has delayed effects, more difficult to clearly link to sales
Brand awareness, recall of product benefits, image are typical ad campaign measures
Multichannel promotion offers several benefits
Boosts effectiveness of either online or offline strategies used alone
Allows marketers to repeat messages across channels, strengthening awareness and providing more customer conversion opportunities
Advertising is
nonpersonal communication from an identified sponsor using mass media
User-generated content (UGC)
includes the millions of product-related comments, reviews, photos, images, and videos posted online by consumers (ex. doritos contest)
Execution format
describes the basic structure of the message
Common formats include
Slice of Life
refers to the mood or attitude the message conveys
Owned media may include
websites, blogs, Facebook, and Twitter accounts. (Controlled by company, effective for relationship building)
Paid media includes
display ads, sponsorships, and paid key word searches
(Most similar to traditional advertising, less trusted by consumers)
Earned media refers
to word of mouth or buzz on social media.
(Most credible to consumers, no company control)
Mobile advertising
is advertising that is communicated to consumers via a handset (gps new ad)
Branded entertainment refers to
paid placement of brands within movies, TV shows, video games, and even retail settings
Support media include
directory advertising, outdoor advertising, and transit advertising
Three main types of advertising are
product, institutional, and local/retail
Sales promotions are
programs designed to build interest in or encourage purchase of a good or service during a specified period
How does sales promotion compare to advertising?
Both are paid promotional activities with identifiable sponsors
Differ in that sales promotions typically have a more immediate short-term objective
Changing communication landscape
Viral marketing refers
to activities aimed at increasing brand awareness or sales via many-to-many communication (Apple implements viral marketing when it inserts the message “Sent from my iPad/iPhone” in a text)
brand ambassadors or brand evangelists
Recruit loyal customers
Social networks
like Facebook and Twitter, are sites that connect people with other people
Virtual worlds
highly engaging digital environments where avatars “live” and interact in real time
Product review sites:
Social media sites that enable people to post stories about their experiences with goods and services
Mobile apps are
software programs designed for smartphones and other devices that entertain, educate, and inform users.
Location-based social networks integrate
sophisticated GPS technology embedded in smartphones with a social networking platform
a collection of products offered in book form, usually consisting of product descriptions and accompanied by photos of the item
Direct mail
A brochure/pamphlet offering a specific good or service at one point in time
Direct marketing conducted by telephone
Direct-response advertising
allows consumer to respond by immediately contacting the provider with questions or an order
Direct-response TV (DRTV) includes
short commercials of less than 2 minutes
Infomercials are
typically half-hour or hour-long commercials resemble a talk show, often with heavy product demonstration elements
M-commerce refers to
promotional and other e-commerce activities transmitted over mobile phones and other mobile devices
short-messaging system (SMS) marketing
M-commerce through text messages
direct marketing includes
Mail order
Direct response advertising
Personal selling occurs when
a company rep interacts directly with a prospective customer to communicate about a good or service.
Transactional selling:
approach that focuses on making an immediate sale with little concern for developing a long-term relationship with the customer.
Relationship selling
process by which a salesperson secures, develops, and maintains long-term, profitable customer relationships
Prospecting is
the process by which salespeople identify and develop prospect lists.
(Sources include: Directories and commercial databases, Web search engines, customer referrals, trade shows, and cold calling)
Once prospects are identified, salesperson must then
qualify leads
In the preapproach stage
salespeople try to learn as much as possible about prospects
Several key events occur within first minutes of approach
Salesperson tries to learn more about customer
Create a positive first impression
Build rapport
Once preapproach is done, time to approach, or
contact, the prospect
Objections are
reasons why a prospect is reluctant to make a commitment
closing the sale is
a natural conclusion to the dialogue
Common closing techniques include:
Last objection close
Assumptive or minor points close
Buy-now close
Follow-up after the sale includes
arranging for delivery, payment, and purchase terms
Public relations (PR) is
the communication function that seeks to build good relationships with an organization’s publics
which is unpaid media exposure about a company
Crisis management
process of managing firm reputation in face of a negative event
PR is counted on to achieve objectives like:
Introduce products to retailers and consumers
Influence government legislation
Enhance organizational image
Manage a crisis
Call attention to a firm’s community involvement
Guerrilla marketing involves
“ambushing” consumers with promotional content in places they don’t expect to encounter such messages (flash mobs)

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