MKT 487 Test 3

The main function of promotional strategy is

to convince target customers that the goods and services offered provide a competitive advantage over the competition.

A competitive advantage is

the set of unique features of a company and its products that are perceived as superior to the competition.

Communication is

a two-way process involving a sender, message encoding, channel, decoding, receiver, feedback and noise.
sender- the originator of the message in the communication process.
Message encoding- the conversion of a senders ideas and thoughts into a message

A Promotional Mix is

the combination of promotional tools used to reach the target market and fulfill the organization's overall goals.
Promotional tools include Advertising, Public Relations, Sales Promotion, Personal Selling and Social Media.
Advertising- is any form of

Digital Media can be classified as

Owned Media, Paid Media or Earned Media.

A classic model for reaching promotional goals is called the

the AIDA concept
AIDA is used for high ticket big items

AIDA stands for

Attention, Interest, Desire, Action.
Advertising - (attention, Interest
Public relations- (attention, Interest
Sales promotion- (desire, action
Personal selling - (Interest, desire, action
Social media - (attention, interest
(all of this is promotional

Factors affecting the choice of Promotional Mix include

A. Nature of the product
is it a business product or consumer product
B. Stage in product life cycle (PLC) Target market
Intro, growth, maturity, decline
C. characteristics Type of buying decision
Routine (toothpaste) or compex (car)
D. Funds ava

An Advertising Campaign is a

series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.

Advertising Campaign steps include:

a. Define Objectives
an advertising objective identifies the specific communication task that a campaign should accomplish for a specified target audience during a specified period. Hot sauce campaign on label on ways to use the product
b. ID Benefits

Advertising appeal is

the reason for a person to buy a product.

Advertising appeals play off

consumers' emotions or address some need or want of the consumer.
Advertising appeals typically play off the consumers emotions, such as fear or love, or dress some need or want the consumer has, such as a need for convince or the the desire to save mo

Criteria for evaluation of an appeal include

desirability, exclusiveness, and believability.

Common Advertising Appeals include

Profit, Health, Fear, Admiration, Convenience, Fun and Pleasure, Vanity and Egotism, and Environmental Consciousness.
Profit- Lets consumers know whether the product will save them money, make them money, or keep them from losing money
Health-Appeals t

The Unique Selling Proposition is

the desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
Usually comes from the campaigns slogan

The eleven common executional styles for advertising are

Spokesperson or testimonial,
Real/animated product symbols,
Mood or image,
Slice-of-Life- Depicts people in normal settings, such as at the dinner table or in their car. Mc

The major advertising media are

Newspapers, Magazines, Radio, Television, Internet and Outdoor Media (billboards).

Advantages of Personal Selling include:

A. Provides detailed explanation or demonstration of the product
B. Sales message can be varied according to motivations of each prospective customer
C. Directed only to qualified prospects
D. Costs can be controlled by adjusting the size of the sales for

Disadvantages of Personal Selling include:

A.Cost per contact is much greater than for mass forms of communication
B. Message provided can be inconsistent and inaccurate if the sales force is not
properly trained
C. Salespeople can convince customers to make unnecessary purchases

Relationship Selling involves
(consultive selling)
what is the purpose

building, maintaining, and enhancing interactions with customers.
The purpose is to develop long-term satisfaction through mutually beneficial partnerships (build long term relationships)

Steps in the Personal Selling Process include:

a. Generating leads (prospecting)
Cold calling
Identification of those firms and people most likely to buy the sellers offerings.
b. Qualifying leads
Determinations of a sales prospects (1) recognized need, (2) buying power, and (3) receptivity and

Social Media is
Because of it's ability to facilitate two-way communication, it is important

any tool or service that uses the Internet to facilitate conversations.
Because of it's ability to facilitate two-way communication, it is important that a company's presence on Social Media is authentic.

Categories of Social Media Users include

Creators, Critics, Collectors, Joiners, Spectators, Inactives and Conversationalists.

Price is the
price is the measure of

amount that is given up in an exchange to acquire a good or service.
Price is a measure of sacrifice (what is sacrificed to get that good); it is also an information cue: price as an indicator of quality or status.

Value is based
A reasonable price means

upon perceived satisfaction.
A reasonable price means perceived reasonable value at the time of the transaction.

Price Objectives need to be

specific, attainable, and measurable.

Objectives can be

1.Profit oriented,
profit maximization, satisfactory profits (reasonable level of profits), and target return on investment (measures management overall effectiveness in generating profits with the available assets. higher the better off)

Price Strategy is a

basic, long-term pricing framework that establishes initial price for a product and the intended direction for price movements over the product life cycle.

Price Strategies include

Price Skimming, Penetration Pricing and Status quo Pricing.
price skimming- A pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion. (market-plus). Companies often use this strategy for new products when th

Elasticity =

% change in Demand Quantity / % Change in Price
E>1 is elastic, E<1 is inelastic
= that unitary

Elastic demand is

where consumer demand is sensitive to changes in price
buys more or less when the price changes

Inelastic demand is

where an increase or a decrease in price will not significantly affect the demand for a product.

Factors that influence Elasticity of Demand include:

a. Availability of substitutes - When many substitutes are available, it is easy to switch products. This makes demand elastic.
b. Price relative to purchasing power - If a price is so low that it is an Inconsequential part of an individual's budget, dema

Marketing control consists of two activities:

a. Strategic control which focuses on effectiveness. The goal is a fit between capabilities and opportunities
Focus is effectiveness "do right things"
b. Operations control which focuses on efficiency. The goal is marketing productivity
Focus is

Strategic change is a
Sources are

Strategic change is a change in the environment affecting the long-run well-being of the organization.
Sources are:
a. Market evolution
b. Technological evolution
c. Market redefinition
d. Marketing channels
o All of them is Threat or Opportunity
o B

Whether a strategic change is a threat or an opportunity depends

on the business definition.
Biz definition consists of:
a. Selected customers
b. Customer needs
c. Means or technology used to satisfy those needs.

When strategic change causes the capabilities to no longer fit the opportunity, a company has three choices:

a. Alter capabilities to fit the opportunity
b. Change markets
c. Leave the industry

Marketing cost analysis

tracks, assigns or allocates costs to a specified segment.
It is often a source of much organizational friction.
A segment can be defined by elements of the offering mix, sales territories, marketing channels or type/size of customer.

When analyzing the product/service mix, it makes sense to keep an offering as long

as the contribution margin is positive.

A sales analysis should consider both

the behavioral aspects (sales effort and allocation of selling time) and the cost aspect (sales and administrative costs).

A marketing channel analysis considers two types of costs,

they are order getting costs and order servicing costs.

A customer profitability analysis compares

A customer profitability analysis compares revenues to customer acquisition costs and customer retention costs.
It makes it possible to classify customers by profitability (such as platinum-gold-iron-lead).