Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

A plan for the optimal use of the elements of promotion; advertising, public relations, personal selling, and sales promotion

• The unique set of features of a company and its products that are perceived by the target market as significant and superior to the competition
• Ex. Product quality, rapid delivery, low prices, excellent service, or a feature not offered by the competition

The combination of promotional tools- including advertising, public relations, personal selling, and sales promotion- used to reach the target market and fulfill the organization's overall goals

• Impersonal, one-way mass communication about a product or organization that is paid for by a marketer
• Traditional media examples
• Television, radio, newspapers, magazines, books, direct mail, billboards, and transit cards
• Although the cost per contact in advertising is very low, the total cost to advertise is typically very high

The marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance

• Public information about a company, product, service, or issue appearing in the mass media as a news item
• Although organizations do not directly pay for publicity, it should not be viewed as free

• Marketing activities- other than personal selling, advertising, and public relations- that stimulate consumer buying and dealer effectiveness
• Sales promotion is generally a short-run tool used to stimulate immediate increases in demand
• Marketers often use sales promotion to improve the effectiveness of other ingredients in the promotion mix, especially advertising and personal selling
• Research shows that sales promotion complements advertising by yielding faster sales responses

• A purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other
• Personal selling attempts to persuade the buyer to accept a point of view
• Both business-to-business and business-to-consumer selling focus on building long-term relationships rather than on making a one-time sale
• Relationship selling attempts to create a long-term, committed relationship based on trust, increased customer loyalty, and a continuation of the relationship between the salesperson and the customer
• Personal selling is increasingly dependent on the Internet

• Inform the target audience
• Persuade the target audience
• Remind the target audience

• Seeks to convert an existing need into a want or to stimulate interest in a new product
• Generally more prevalent during the early stages of the product life cycle
• Is also important for a "new" brand being introduced into an "old" product class

• Is designed to stimulate a purchase or an action
• Normally becomes the main promotion goal when the product enters the growth stage of its life cycle
• The promotional message emphasizes the product's real and perceived competitive advantages, often appealing to emotional needs such as love, belonging, self-esteem, and ego satisfaction
• Aims to convert some buyers into loyal users

• Used to keep the product and brand name in the public's mind
• This type of promotion prevails during the maturity stage of the life cycle
• Its purpose is simply to trigger a memory

• The ultimate goal of any promotion is to get someone to buy a good or service or, in the case of non-profit organizations, to take some action (e.g., donate blood)

• A model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action
• This model proposes that consumers respond to marketing messages in a cognitive (thinking), affective (feeling), and conative (doing) sequence

• The advertiser must first gain the attention of the target market

• Simple awareness of a brand seldom leads to a sale
• The next step is to create interest in the product

• Advertisers have to convince potential customers that their product is the best solution to meet their desire for that particular kind of product

• Continue to advertise to more effictively communicate the features and benefits and also use promotions and price discounts to motivate customers to take action

• Promotional effectiveness can be measured in terms of consumers progressing from one stage to the next

• Although advertising does have an impact in the later stages, it is most useful in gaining attention for goods or services
• Personal selling reaches fewer people at first
• Public relations has its greatest impact in gaining attention for a company, good, or service
• Sales promotion's greatest strength is in creating strong desire and purchase intent

• The careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where a company meets the consumer

1. Procter & Gamble ($9.73 billion)
2. Unilever ($5.72 billion)
3. L'Oreal ($4.04 billion)
4. General Motors ($3.67 billion)
5. Toyota ($3.20 billion)

• A phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns

• A form of advertising designed to enhance a company's image rather than promote a particular product

• A form of advertising that touts the benefits of a specific good or service

• A form of advertising in which an organization expresses its views on controversial issues or responds to media attacks
• Used to safeguard against negative consumer attitudes and to enhance the company's credibility among consumers who already favor its position

• A form of advertising designed to stimulate primary demand for a new product or product category
• Heavily used during the introductory stage of the product life cycle
• Offers consumers in-depth information about the benefits of the product class
• Also seeks to create interest

• A form of advertising designed to influence demand for a specific brand
• Use this when the product enters the growth phase of the product life cycle and other companies begin to enter the marketplace
• Promotion appeals more to emotions during this phase
• Advertisements may begin to stress subtle differences between brands, with heavy emphasis on building recall of a brand name and creating a favorable attitude toward the brand

• A form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes
• Used for products experiencing slow growth or those entering the marketplace against strong competitors

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

• A specific communication task that a campaign should accomplish for a specified target audience during a specified period

• (Defining Advertising Goals for Measured Advertising Results)
• All advertising objectives should precisely define the target audience, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur

• A feature of the product such as its easy-open package or special formulation

• What consumers will receive or achieve by using the product
• Should answer the consumer's question "What's in it for me?"
• Benefits might be such things as convenience or savings

• A reason for a person to buy a product
• Typically play off consumers' emotions or address some need or want the consumer has

• A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
• Usually becomes the campaign's slogan

1. Profit
1. Lets consumers know whether the produt will save them money, make them money, or keep them from losing money
2. Health
1. Appeals to those who are body conscious or who want to be healthy; love or romance is used often in selling cosmetics and perfumes
3. Fear
1. Can center around social embarrassment, growing old, or losing one's health; because of its power, requires advertiser to exercise care in execution
4. Admiration
1. Frequently highlights celebrity spokespeople
5. Convenience
1. Is often used for fast-food restaurants and microwave foods
6. Fun and Pleasure
1. Are the keys to advertising vacations, beer, amusement parks, and more
7. Vanity and Egotism
1. Are used most often for expensive or conspicuous items such as cars and clothing
8. Environmental Consciousness
1. Centers around protecting the environment and being considerate of others in the community

1. Slice-of-Life
1. Depicts people in normal settings, such as at the dinner table or in their car
2. Lifestyle
1. Shows how well the product will fit in with the consumer's lifestyle
3. Spokesperson/Testimonial
1. Can feature a celebrity, company official, or typical consumer making a testimonial or endorsing a product
4. Fantasy
1. Creates a fantasy for the viewer built around use of the product
5. Humorous
1. Advertisers often use humor in their ads
6. Real/Animated Product
1. Creates a character that represents the product in advertisements, such as the Energizer Bunny or Starkist's Charlie the Tuna
7. Symbols
1. GEICO's suave gecko and disgruntled cavemen became cult classics for the insurance company
8. Mood or Image
1. Builds a mood or image around the product, such as peace, love, or beauty
9. Demonstration
1. Shows consumers the expected benefit
10. Musical
1. Conveys the message of the advertisement through song
11. Scientific
1. Uses research or scientific evidence to give a brand a superiority over competitors

• The channel used to convey a message to a target market

• The series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience

• 30% of every media dollar goes toward television ads
• 20% toward magazines
• 18% for newspaper ads

• Newspapers
• Magazines
• Radio
• Television
• Internet
• Advergaming
• Outdoor Media
• Alternative Media

• The manufacturer and the retailer split the costs of advertising the manufacturer's brand
• Encourages retailers to devote more effort to the manufacturer's lines

• A 30-minute or longer advertisement that looks more like a television talk show than a sales pitch

• Another popular Internet advertising format in which companies put ad messages in Web-based or video games to advertise or promote a product, service, organization, or issue

• The combination of media to be used for a promotional campaign
• Media mixed decisions are typically based on
• cost per contact
• reach
• frequency
• target audience considerations
• flexibility of the medium
• noise level
• life span of the medium

• The cost of reaching one member of the target market
• Enables an advertiser to compare media vehicles, such as television versus radio

• The number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
• Reach is related to a medium's ratings, generally referred to in the industry as gross ratings points, or GRP

• The number of times an individual is exposed to a given message during a specific period
• Advertisers use average frequency to measure the intensity of a specific medium's coverage

• The ability of an advertising medium to reach a precisely defined market

• Designation of the media, the specific publications or programs, and the insertion dates of advertising

1. Continuous media schedule
2. Flighted media schedule
3. Pulsing media schedule
4. Seasonal media schedule

• A media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle

• A media scheduling strategy in which ads are run heavily every other month or every two weeks, to achieve a greater impact with an increased frequency and reach at those times

• A media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods

• A media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used

• Theory of scheduling that says an advertiser should maintain a continuous schedule over as long a period of time as possible
• Main premise is that advertising works by influencing the brand choice of people who are ready to buy

1. Press relations
2. Product publicity
3. Corporate communication
4. Public affairs
5. Lobbying
6. Employee and investor relations
7. Crisis management

• A public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events

• A public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image

• A type of sponsorship involving the association of a for-profit company and a nonprofit organization; through the sponsorship, the company's product or service is promoted, and money is raised for the nonprofit

• Coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event

• Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value

• Is targeted to the ultimate consumer market

• Is directed to members of the marketing channel, such as wholesalers and retailers

• Rewards consumers for repeat purchases

1. Loyal customers
2. Competitor's customers
3. Brand switchers
4. Price buyers

• A certificate that entitles consumers to an immediate price reduction when they buy the product

• The promotional coupons inserts found in newspapers, have been the traditional way of circulating printed coupons

• A cash refund given for the purchase of a product during a specific period
• Reward is not as immediate as coupons

• An extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product

• A promotional program designed to build long-term, mutually beneficial relationships between a company and its key customers

• A loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service

• Are promotions in which participants use some skill or ability to compete for prizes

• Depend on chance and participation is free
• Usually draw about ten times more entries than contests do

• A promotional program that allows the consumer the opportunity to try a product or service for free

• A promotional display set up at the retailer's location to build traffic, advertise the product, or induce impulsive buying

• A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers

• Money offered to channel intermediaries to encourage them to "push" products- that is, to encourage other members of the channel to sell the products

• Is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

• A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships

• The set of steps a salesperson goes through in a particular organization to sell a particular product or service

1. Generating leads
2. Qualifying leads
3. Approaching the customer and probing needs
4. Developing and proposing solutions
5. Handling objections
6. Closing the sale
7. Following up

• Identification of those firms and people most likely to buy the seller's offerings

• A recommendation to a salesperson from a customer or business associate

• A process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations

• A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects' needs or financial status

• Determination of a sales prospect's 

1. recognized need,
2. buying power, and
3. receptivity and accessibility

• A process that describes the "homework" that must be done by a salesperson before he or she contacts a prospect

• A determination of the customer's specific needs and wants and the range of options the customer has for satisfying them

1. The product or service
2. Customers and their needs
3. The competition
4. The industry

• A formal written document or professional presentation that outlines how the salesperson's product or service will meet or exceed the prospect's needs

• A formal meeting in which the salesperson presents a sales proposal to a prospective buyer

1. Effective eye contact
2. Use of visuals
3. Choice of language
4. Speech
5. Body movement

• The process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement

• The final step of the selling process, in which the salesperson ensures delivery schedules are met, goods or services perform as promised, and the buyers' employees are properly trained to use the products

• That which is given up in an exchange to acquire a good or service

• When goods and services are exchanged, the trade is called barter

• The price charged to customers multiplied by the number of units sold

• Revenue minus expenses

1. Profit-Oriented Pricing Objectives
1. Objectives include profit maximization, satisfactory profits, and target return on investment
2. Sales-Oriented Pricing Objectives
1. Objectives are based either on market share or on dollar or unit sales
3. Status Quo Pricing Objectives
1. Seeks to maintain existing prices or to meet the competition's prices
2. Essentially a passive policy

• Means setting prices so that total revenue is as large as possible relative to total costs

• Net profit after taxes divided by total assets

• A company's product sales as a percentage of total sales for that industry

• A pricing objective that maintains existing prices or meets the competition's prices

• The quantity of a product that will be sold in the market at various prices for a specified period

• The quantity of a product that will be offered to the market by a supplier at various prices for a specified period

• The price at which demand and supply are equal

• Consumers' responsiveness or sensitivity to changes in price

• A situation in which consumer demand is sensitive to changes in price

• A situation in which an increase or a decrease in price will not significantly affect demand for the product

Elasticity formula

• Elasticity (E) = (Percentage change in quantity demanded of good A)/(Percentage change in price of good A)
• If E is greater than 1, demand is elastic
• If E is less than 1, demand is inelastic
• If E is equal to 1, demand is unitary

• A situation in which total revenue remains the same when prices change

1. If price goes down and revenue goes up, demand is elastic
2. If price goes down and revenue goes down, demand is inelastic
3. If price goes up and revenue goes up, demand is inelastic
4. If price goes up and revenue goes down, demand is elastic
5. If price goes up or down and revenue stays the same, elasticity is unitary

1. Availability of substitutes
1. When many substitutes exist, demand is elastic
2. Price relative to purchasing power
3. Product durability
4. A product's other uses
5. Rate of inflation

• A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity

• A cost that varies with changes in the level of output

• A cost that does not change as output is increased or decreased

• Total variable costs divided by quantity of output

• Total costs divided by quantity of output

• The change in total costs associated with a one-unit change in output

• The cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for

• Retail price = Cost/(1-Desired return on sales)

• Practice of marking up prices by 100%, or doubling the cost

• A method of setting prices that occurs when marginal revenue equals marginal cost

• The extra revenue associated with selling an extra unit of output or the change in total revenue with a one-unit change in output

• A method of determining what sales volume must be reached before total revenue equals total costs

• Break-even quantity = Total fixed costs/Fixed cost contribution

• Stocking well-known branded items at high prices in order to sell store brands at discounted prices

• A private electronic network that links a company with its suppliers and customers

• Charging a high price to help promote a high-quality image

• Hedonistic consumption refers to pursuing emotional responses associated with using a product, such as pleasure, excitement, arousal, good feelings, and fun

• Refers to the notion that consumers must allocate their budgets across alternative goods and services

1. Ease of use
2. Versatility
3. Durability
4. Serviceability
5. Performance
6. Prestige

1. Establish pricing goals
2. Estimate demand, costs, and profits
3. Choose a price strategy to help determine a base price
4. Fine-tune the base price with pricing tactics

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

• A pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

• A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market

• Charging a price identical to or very close to the competition's price

• Laws that prohibit wholesalers and retailers from selling below cost

• An agreement between two or more firms on the price they will charge for a product

• Prohibits any firm from selling to two or more different buyers, within a reasonably short time, commodities (not services) of like grade and quality at different prices where the result would be to substantially lessen competition
• Act also makes it illegal for a seller to offer two buyers different supplementary services and for buyers to used their purchasing power to force sellers into granting discriminatory prices or services

1. There must be price discrimination
2. The transaction must occur in interstate commerce
3. The seller must discriminate by price among two or more purchasers
4. The products sold must be commodities or other tangible goods
5. The products sold must be of like grade and quality, not necessarily identical
6. There must be significant competitive injury

• The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

• The general price level at which the company expects to sell the good or service

• A price reduction offered to buyers buying in multiple units or above a specified dollar amount

• A deduction from list price that applies to the buyer's total purchases made during a specific period

• A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period

• A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill

• A discount to wholesalers and retailers for performing channel functions

• A price reduction for buying merchandise out of season

• A payment to a dealer for promoting the manufacturer's products

• A cash refund given for the purchase of a product during a specific period

• Setting the price at a level that seems to the customer to be a good price compared to the prices of other options

• A price tactic that requires the buyer to absorb the freight costs from the shipping point ("free on board")

• A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge

• A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone

• A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

• A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped

• A price tactic that offers all goods and services at the same price (or perhaps two or three prices)

• A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities

• The practice of offering a product line with several items at specific price points

• A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store

• A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise

• A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality

• Marketing two or more products in a single package for a special price

• Reducing the bundle of services that comes with the basic product

• A price tactic that charges two separate amounts to consume a single good or service

• An extra fee paid by the consumer for violating the terms of the purchase agreement

1. Cost-oriented tactics
2. Demand-oriented tactics

• A price tactic used for industrial installations and many accessory items in which a firm price is not set until the item is either finished or delivered

• A price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made

• The use of discounts by salespeople to increase demand for one or more products in a line

• Stresses to customers that they are getting a good value for their money

• Can also stimulate demand during a recession

1. Cultivate selected demand
2. Create unique offerings
3. Change the package design
1. Another way companies pass on higher costs is to shrink product sizes but keep prices the same

1. Renegotiating contracts
2. Offering help
3. Keeping the pressure on
4. Pairing down suppliers