Marketing

Objectives Course Organization  Tasks of Marketing  Major Concepts & Tools of Marketing  Marketplace Orientations  Marketing’s Responses to New Challenges 

Defining Marketing Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler (p. 7)

Simple Marketing System Communication

Industry (a collection of sellers)

Goods/services Money

Information

Market (a collection of Buyers)

Company Orientations Towards the Marketplace Production Concept

Consumers prefer products that are widely available and inexpensive

Product Concept

Consumers favor products that offer the most quality, performance, or innovative features

Selling Concept

Consumers will buy products only if the company aggressively promotes/sells these products

Marketing Concept

Focuses on needs/ wants of target markets & delivering value better than competitors

Objectives Define value & satisfaction - understand how to deliver them  The nature of high-performance businesses  How to attract & retain customers  Improving customer profitability  Total quality management 

High Performance Business Set strategies to satisfy key... By improving critical business... and aligning...

Stakeholders Processes

Resources

Organization

Satisfied Customers: Are loyal longer  Buy more (new products & upgrades)  Spread favorable word-of-mouth  Are more brand loyal (less price sensitive)  Offer feedback  Reduce transaction costs 

Customer Development Suspects

First-time

Prospects customers

Disqualified prospects

Repeat customers

Clients

Inactive or ex-customers

Advocates Partners

Customer/Product Profitability Analysis Customers C1

P r o d u c t s

P1 P2 P3 P4

+ + +

High profit customer

C2

+

Mixed-bag customer

C3

+

-

Losing customer

Highly profitable product Profitable product Losing product Mixed-bag product

Objectives Corporate and division strategic planing  Business unit planning  The marketing process  Product level planning  The marketing plan 

Market-Oriented Strategic Planning Objectives

Resources

Skills

Opportunities

Market-Oriented Strategic Planning Objectives

Resources

Profit and Growth Skills

Opportunities

Corporate Headquarters Planning Define the corporate mission  Establish strategic business units (SBUs)  Assign resources to SBUs  Plan new business, downsize older businesses 

The Marketing Plan Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives

Marketing Strategy Action Programs Projected Profit-and-loss Controls

Objectives Components of a marketing information system  Criteria of good marketing research  Decision support systems for marketing management  Demand measurement and forecast 

A marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. A marketing intelligence system is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment.

Research Approaches Observational Focus-group Survey

Behavioral Experimental

Secondary-Data Sources Internal Sources  Government Publications  Periodicals and Books  Commercial Data  On-Line  Associations  Business Information 

Good Marketing Research: Is scientific Is creative Uses multiple methods Realizes the interdependence of models & data Acknowledges the cost & value of information Maintains “healthy” skepticism Is ethical

Demand Company Demand Market Demand

Estimating Current Demand Total Market Potential  Area Market Potential  Industry Sales  Market Share 

Estimating Future Demand Survey of Buyers’ Intentions  Composite of Sales Force Opinion  Expert Opinion  Past Sales Analysis  Market Test Method 

Objectives Tracking & Identifying Opportunities in the Macroenvironment  Demographic, Economic, Natural, Technological, Political, & Cultural Developments 

Macroenvironmental Forces World trade enablers  Asian economic power  Rise of trade blocs  International monetary crises  Use of barter & countertrade  Move towards market economies  “Global” lifestyles 

Macroenvironmental Forces Opening of “new” markets  Emerging transnational firms  Cross-border strategic alliances  Regional ethnic & religious conflict  Global branding 

Demographic Environment Worldwide Population Growth

Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical Shifts in Population

Shift from Mass Market to Micromarkets

Economic Environment Income Distribution Subsistence economies Raw-material-exporting economies Industrializing economies Industrial economies

Savings, Debt, & Credit Availability

Changing Role of Government

Higher Pollution Levels

Natural Environment

Increased Costs of Energy

Shortage of Raw Materials

Accelerating Pace of Change

Unlimited Opportunities for Innovation

Issues in the Technological Environment

Varying R & D Budgets

Increased Regulation

Increased Legislation PoliticalLegal Environment SpecialInterest Groups

Social/Cultural Environment Of Oneself Of the Universe Of Nature

Views That Express Values

Of Others

Of Organizations

Of Society

Social/Cultural Environment

Objectives Influences on Buying Behavior  Buyer Decision Making 

Simple Response Model

Stimulus

Organism

Response

Cultural Factors Culture Subculture Social Class

Buyer

Social Factors

Reference Groups

Family

Roles & Statuses

Influences on Consumer Behavior Personal Influences Age and Family Life Cycle Stage Occupation & Economic Circumstances

Lifestyle Personality & Self-Concept

Psychological Factors

Motivation Beliefs & Attitudes Perception

Learning

Four Types of Buying Behavior High Involvement

Low Involvement

Significant differences between brands

Complex Buying Behavior

VarietySeeking Behavior

Few differences between brands

DissonanceReducing Buying Behavior

Habitual Buying Behavior

Decision Making Sets Total Set

Awareness Set

Consideration Set

Choice Set

Decision

Objectives How Business & Consumer Markets Differ  Organizational Buying Situations  Participants in the Business Buying Process  Major Influences on Organizational Buyers  Business Buyer Decision Making  Institutional & Government Buying 

Organizational Factors

PurchasingDepartment Upgrading

Internet Purchasing

CrossFunctional Roles

Centralized Purchasing

Decentralized Purchasing of Small Ticket Items

Long-Term Contracts

PurchasingPerformance Evaluation & Pro. Buyers

Lean Production

Need Recognition

Info Search/ Eval Purchase

Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification

Post Purchase

Performance Review

Institutional Markets Low Budgets

Captive Patrons

Government Markets Domestic Suppliers

Public Review

Cost Minimization Paperwork

Open Bids

Objectives Identifying Competitors  Evaluating Competitors  Competitive Intelligence Systems  Competitive Strategies  Customer vs. Competitor Orientation 

Industry Competition Number of Sellers - Degree of Differentiation  Entry, Mobility, Exit barriers  Cost Structure  Degree of Vertical Integration  Degree of Globalization 

Analyzing Competitors Objectives Strategies

Competitor Actions

Reaction Patterns

Strengths & Weaknesses

Competitor’s Expansion Plans Markets

Products

Individual Users Personal Computers Hardware Accessories Software

Dell

Commercial & Industrial Educational

Hypothetical Market Structure & Strategies Market leader

40% Expand Market Defend Market Share Expand Market Share

Market challenger

30% Attack leader Status quo

Market nicher Market follower

20% Imitate

10% Specialize

Defense Strategies (2) Flank defense

Attacker

(3) Preemptive defense

(4) Counteroffensive defense

(1) Position defense Defender

(5) Mobile defense

(6) Contraction defense

Attack Strategies (4) Bypass attack (2) Flank attack (1) Frontal attack Attacker

Defender (3) Encirclement attack

(5) Guerilla attack

Specific Attack Strategies   

     

Price-discount Cheaper goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing cost reduction Intensive advertising promotion

“Nichemanship”       

   

End-user specialist Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product or product-line specialist Product-feature specialist Job-shop specialist Quality-price specialist Service specialist Channel specialist

Balance

Customer + ID opportunities + Long-run profit + Emerging needs & groups

Competition + Fighter orientation + Alert + Exploit weaknesses - Reactive

Objectives Identifying Market Segments  Choosing Target Markets 

Market-Segmentation Procedure Survey  Motivations  Attitudes  Behavior Analysis  Factors  Clusters Profiling

Bases for Segmenting Consumer Markets Geographic Region, City or Metro Size, Density, Climate

Demographic Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...

Psychographic Lifestyle or Personality

Behavioral Occasions, Benefits, Uses, or Attitudes

Bases for Segmenting Business Markets Demographic  Operating Variables  Purchasing Approaches  Situational Factors  Personal Characteristics 

Effective Segmentation Measurable

• Size, purchasing power, profiles of segments can be measured.

Substantial

• Segments must be large or profitable enough to serve.

Accessible

• Segments can be effectively reached and served.

Differential

• Segments must respond differently to different marketing mix elements & actions.

Actionable

• Must be able to attract and serve the segments.

Additional Segmentation Criteria Ethical Choice of Market Targets  Segment Interrelationships & Supersegments  Segment-by-Segment Invasion Plans  Intersegment Cooperation 

Objectives Identify Differentiating Attributes  Choosing & Communicating Effective Positioning  Marketing Strategies Along the Product Life Cycle  Marketing Strategy & Market Evolution 

Product Differentiation

Form

Features

Performance

Durability

Reliability

Repairability

Quality

Style

Conformance Quality

Design

Services Differentiation

Customer Consulting

Installation

Delivery

Customer Maintenance Training & Repair

Miscellaneous Services

Ordering Ease

Differentiation Personnel  Channel 

Image Differentiation Media

Atmosphere

Symbols

Events

Important Profitable

Distinctive

Differences Worth Establishing Affordable

Superior Preemptive

Positioning is the act of

designing the company’s offering and image to occupy a distinctive place in the the target market’s mind. P 298

Sales & profits ($)

Sales & Profit Life Cycles

Introduction

Growth

Maturity

Time

Decline

Four Introductory Marketing Strategies Promotion High

Low

High

Rapidskimming strategy

Slowskimming strategy

Low

Rapidpenetration strategy

Slowpenetration strategy

Price

Maturity Stage Market Modification  Product Modification  Marketing-Mix Modification 

Decline Stage Decrease investment  Resolve uncertainties - stable investment  Selective niches  Harvesting  Divesting 

Market Evolution Emergence  Growth  Maturity  Decline 

Objectives    

Challenges in New Product Development (NPD) Organizational Structure & NPD Stages & Management of NPD Diffusion & Adoption of New Products

Why New Products Fail    

 

“Over Championing” Overestimated Demand Poor Design Poor Marketing Execution High Development Costs Strong Competitive Reaction

Challenges in NPD    

  

Idea Shortage Fragmented Markets Social & Governmental Constraints Cost Capital Shortage Need for Speed Shorter Product Life Cycles

Probability of Success

Overall probability of success

=

Probability of technical completion

X

Probability of commercialization given technical completion

Probability of economic success given commercialization

X

Concept Development & Testing

1. Develop Product Ideas into Alternative Product Concepts

2. Concept Testing - Test the Product Concepts with Groups of Target Customers

3. Choose the Best One

Consumer-Goods Market Testing

Simulated Test Market

Controlled Test Market

A few stores that have Test in a simulated agreed to carry new shopping environment products for a fee. to a sample of consumers. SalesWave Standard Research Test Market Test offering trail to a sample of consumers in successive periods.

Full marketing campaign in a small number of representative cities.

Commercialization

Whom

Product Price Place Promotion

When Where

Characteristics of the Innovation Rate of Adoption    



Relative advantage Compatibility Complexity Divisibility Communicability

Objectives    



Factors to Consider Before Going Global Selecting Foreign Markets Foreign Market Entry Product Adaption for Global Marketing Management & Organization of Global Activities

Major Decisions in International Marketing

Deciding whether to go abroad

Deciding which markets to enter

Deciding how to enter the market

Deciding on the marketing program

Deciding on the marketing organization

Challenges in Going Global    



Shifting borders Unstable governments Foreign-exchange Corruption Technological pirating

Criteria for Entry   

Market Attractiveness Risk Competitive Advantage

Five Models of Entry Into Foreign Markets

Indirect Exporting

Direct exporting

Licensing

Joint ventures

Amount of commitment, risk, control, and profit potential

Direct investment

Internationalization Process

No Export Export via Agents

Sales Subsidiaries Production Abroad

Five International Product and Promotion Strategies Product

Do not change promotion

Do not change product

Adapt product

Straight extension

Product adaptation Product invention

Promotion Adapt promotion

Develop new product

Communication adaptation

Dual adaptation

Pricing Challenges

>Price Escalation >Transfer prices >Dumping charges >Gray markets

Whole-channel Concept for International Marketing Seller Seller’s international marketing headquarters

Channels between nations Channels within foreign nations

Final buyers

Objectives    

Product Characteristics Building & Managing the Product Mix & Product Lines Brand Decisions Packaging & Labeling

Consumer-Goods Classification

Convenience Products Buy frequently & immediately > Low priced > Many purchase locations > Includes: • Staple goods • Impulse goods • Emergency goods Specialty Products Special purchase efforts > Unique characteristics > Brand identification > Few purchase locations

Shopping Products Buy less frequently > Gather product information > Fewer purchase locations > Compare for: • Suitability & Quality • Price & Style

Unsought Products New innovations > Products consumers don’t want to think about. >Require much advertising & personal selling

Product Mix

Width - number of different product lines

Length - total number of items within the lines Depth - number of versions of each product

Product Mix all the product lines offered

Product-Line Length 

  

Line Stretching  Downmarket  Upmarket  Two-way Line Filling Line Modernization Line Featuring & Line Pruning

What is a Brand?

User

Culture

Attributes

Personality

Benefits

Values

Brand

Equity

Devoted to Brand

Values the Brand (brand as friend) Satisfied & Switching Cost Satisfied Customer (no reason to change)

No Brand Loyalty (customer will change)

Brand Strategies Product Category

Brand Name

Existing

New

Existing

Line Extension

Brand Extension

New

Multibrands

New Brands

Good Brand Names:

Lack Poor Foreign Language Meanings

Distinctive

Suggest Product Qualities

Suggest Product Benefits

Easy to: Pronounce Recognize Remember

Why Package Crucial as a Marketing Tool    

Self-service Consumer affluence Company & brand image Opportunity for innovation

Labels

Promote Describe Identify

Objectives    

Service Definitions & Classifications How Services Differ Goods Improving Service Differentiation, Quality, & Productivity Improving Customer Support Services

Categories of Service Mix

Pure Tangible Good

Tangible Good w/ Services

Hybrid

Major Service w/ Goods

Pure Service

Intangibility

Inseparability Services cannot be separated from their providers

Services cannot be seen, tasted, felt, heard, or smelled before purchase

Services

Variability Quality of services depends on who provides them and when, where, and how

Perishability Services cannot be stored for later sale or use

Inseparability Increase productivity of providers

Intangibility Use cues to make it tangible Services Variability Standardize service production & delivery

Perishability Match supply and demand

Service Differentiation

Offer

Delivery

Image

Determinants of Service Quality    



Reliability Responsiveness Assurance Empathy Tangibles

Service Excellence       

Strategic Concept Top-Management Commitment High Standards Monitoring Systems Satisfying Customer Complaints Satisfying Both Employees & Customers Managing Productivity

Complaint Resolution    

Hiring Criteria & Training for Employees Develop Guidelines for Fairness Remove Complaint Barriers Analyze Types & Sources of Complaints

Objectives   

Setting the Price Adapting the Price Initiating & Responding to Price Changes

Types of Costs

Fixed Costs (Overhead) Costs that don’t vary with sales or production levels. Executive Salaries Rent

Variable Costs Costs that do vary directly with the level of production.

Raw materials

Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production

Pricing Methods    

 

Markup Pricing Target Return Pricing Perceived Value Pricing Value Pricing Going-Rate Pricing Sealed-Bid Pricing

Some important pricing definitions   

Utility: The attribute that makes it capable of want satisfaction Value: The worth in terms of other products Price: The monetary medium of exchange.

Value Example: Caterpillar Tractor is $100,000 vs. Market $90,000 $90,000 if equal 7,000 extra durable 6,000 reliability 5,000 service 2,000 warranty $110,000 in benefits $10,000 discount!

Psychological Pricing

A 32 oz.

B 26 oz.

$2.19

$1.99

Assume Equal Quality



Most Attractive?



Better Value?



Psychological reason to price this way?

Discriminatory Pricing

Customer Segment Product-form Location Time

Objectives    

Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

How a Distributor Reduces the Number of Channel Transactions

1 2 3

4 5 6

A. Number of contacts without a distributor MxC=3X3=9

7 8 9 = Manufacturer

= Customer

How a Distributor Reduces the Number of Channel Transactions

1

3 = Manufacturer

4 Store

2

B. Number of contacts with a distributor MxC=3+3=6

5 6

= Customer

= Distributor

Distribution Channel Functions

Information Transfer Payments

Physical Distribution Risk Taking

Communication Negotiation

Ordering Financing

Customers’ Desired Service Levels    



Lot size Waiting time Spatial convenience Product variety Service backup

Channel Management Decisions

Training

Motivating

Evaluating

FEEDBACK

Selecting

Types of Vertical Marketing Systems

Corporate Common Ownership at Different Levels of the Channel

Administered Leadership is Assumed by One or a Few Dominant Members

Contractual Contractual Agreement Among Channel Members

Conventional Distribution Channel vs. Vertical Marketing Systems Vertical marketing channel

Manufacturer

Manufacturer

Wholesaler

Retailer

Wholesaler

Conventional marketing channel

Retailer

Consumer Consumer

Causes of Channel Conflict   

Incompatibility Difference in Perception Dependence

Legal & Ethical Issues in Channel Relations    

Exclusive Dealing Exclusive Territories Tying Agreements Dealers’ Rights

Objectives   

Retailing Wholesaling Market Logistics

Four Levels of Retail Service    

Self-service Self-selection Limited-service Full-service

Classification Of Retailer Types

Store Type

Length and Breadth of Product Assortment

Specialty Stores

Narrow Product Line, Deep Assortment

Department Stores

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items

Supermarkets

Wide Variety of Food, Laundry, & Household Products

Convenience Stores

Limited Line of High-Turnover Convenience Goods

Discount Stores

Broad Product Line, Low Margin, High Volume

Off-Price Retailer

Inexpensive, Overruns, Irregulars, and Leftover Goods

Superstores

Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services

Catalog Showroom

Broad Selection, Fast Turnover, Discount Prices

Types of NonStore Retailing

Direct Selling

Direct Marketing

Automatic Vending

Buying Services

NonStore Retailing Accounts for More Than 12% of All Consumer Purchases, and is trending up.

Wheel of Retailing

Mid Price Mid Status Mid Margin

Low Price Low Status Low Margin

High Price High Status High Margin

Why are Wholesalers Used?

Management Services & Advice

Selling and Promoting

Market Information

Buying and Assortment Building Wholesaler Functions Bulk Breaking

Risk Bearing

Financing

Warehousing

Transporting

Goals of the Logistics System

• Provide a Targeted Level of Customer Service at

the Least Cost.

• Maximize Profits, Not Sales.

Higher Distribution Costs/ Customer Service Levels

Lower Distribution Costs/ Service Levels

Higher

Lower Customer

Logistics Systems

Order Processing Submitted Processed Shipped

Costs Minimize Costs of Attaining Logistics Objectives Logistics Transportation Water, Truck, Rail, Pipeline & Air

Functions

Inventory When to order How much to order Just-in-time

Warehousing Storage Distribution

Transportation Modes

Rail Nation’s largest carrier, cost-effective for shipping bulk products, piggyback Truck Flexible in routing & time schedules, efficient for short-hauls of high value goods Water Low cost for shipping bulky, low-value goods, slowest form Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Air High cost, ideal when speed is needed or to ship high-value, low-bulk items

Checklist for Choosing Transportation Modes

1. Speed. 2. Dependability. 3. Capability. 4. Availability.

Rating Transportation Modes

Speed

Dependability

Capability

Availability (No. of Geographic Points Served)

Cost

(Door-todoor delivery time)

(Meeting Schedules on Time)

Rail

3

4

2

2

3

Water

4

5

1

4

1

Truck

2

2

3

1

4

Pipeline

5

1

5

5

2

Air

1

3

(Ability to Handle Various Products)

4

3

(Per TonMile)

5

Source: See Carl M. Guelzo; Introduction to Logistics Management Englewood Cliffs, NJ: Prentice Hall, 1986), p. 46.

The Marketing Communications Mix

Advertising

Sales Promotion

Public Relations

Personal Selling

Direct Marketing

Any Paid Form of Nonpersonal Presentation by an Identified Sponsor. Short-term Incentives to Encourage Trial or Purchase. Protect and/or Promote Company’s Image/products.

Personal Presentations.

Direct Communications With Individuals to Obtain an Immediate Response.

Message Problems

Selective Attention

Selective Distortion

Selective Retention

Effective Communications Step 1. Identifying the Target Audience

Step 2. Determining the Communication Objectives Buyer Readiness Stages Awareness Knowledge Liking Preference

Conviction Purchase

Step 3. Designing the Message

Message Content Rational Appeals Emotional Appeals Moral Appeals Message Structure Draw Conclusions Argument Type Argument Order Message Format Layout, Words, & Sounds, Body Language Message Source Expertise, Trustworthiness, Congruity

Step 4. Select Communications Channel

Personal Communication Channels Nonpersonal Communication Channels

Step 5. Establish the Budget

Affordable

% Of Sales

Competitive Parity

Objective & Task

Step 6. Decide on Communications Mix

Advertising Public, Pervasive, Expressive, Impersonal Sales Promotion Communication, Incentive, Invitation Public Relations & Publicity Credibility, Surprise, Dramatization Personal Selling Personal Confrontation, Cultivation, Response Direct Marketing Nonpublic, Customized, Up-to-Date, Interactive

Step 7. Measure Results

Step 8. Manage the IMC Process

Factors in Developing Promotion Mix Strategies

Type of Product/ Market

Buyer/ Readiness Stage Push vs. Pull Strategy

Product LifeCycle Stage

Push Versus Pull Strategy

Producer

Marketing activities

Intermediaries

Marketing activities

Demand

End users

Push Strategy Marketing activities

Demand Producer

Intermediaries

Demand End users

Pull Strategy

Objectives    

Developing & Managing an Advertising Program Deciding on Media & Measuring Effectiveness Sales Promotion Public Relations

Advertising Objectives   

Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time

Informative Advertising Build Primary Demand

Persuasive Advertising Build Selective Demand

Comparison Advertising Compares One Brand to Another

Reminder Advertising Keeps Consumers Thinking About a Product.

Advertising Budget Factors

Market Share & Consumer Base Stage in the Product Life Cycle

Product Substitutability

Competition & Clutter

Advertising Frequency

Profiles of Major Media Types Newspapers Advantages: Flexibility, timeliness; good local market coverage; broad acceptance, high believability Limitations:

Television Advantages: Limitations:

Direct Mail Advantages: Limitations:

Short life; poor reproduction quality; small pass-along audience

Combines sight, sound, motion; high attention; high reach; appealing to senses High absolute costs; high clutter; fleeting exposure; less audience selectivity

Audience selectivity; flexibility, no ad competition within same medium; allows personalization Relative high cost; “junk mail” image

Profiles of Major Media Types

Radio Advantages: Mass use; high geographic and demographic selectivity; low cost Limitations: Magazines Advantages:

Limitations:

Outdoor Advantages: Limitations:

Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences

High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership Long ad purchase lead time; waste circulation; no guarantee of position

Flexibility; high repeat exposure; low cost; low message competition Little audience selectivity; creative limitations

Advertising Strategy Message Execution Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Testimonial Evidence

Slice of Life

Scientific Evidence Technical Expertise

Lifestyle Typical Message Execution Styles

Fantasy

Mood or Image

Personality Symbol

Musical

Advertising Evaluation

Advertising Program Evaluation

Communication Effects

Sales Effects

Is the Ad Communicating Well?

Is the Ad Increasing Sales?

Why the increase in Sales Promotion?         

Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter

%t of total - 3 yr.MA

Long-Term Promotional Allocation

60 50 40 30 20 10 0

Trade Promo Media Adv

Cons. Promo

1986

88

90

92

94

1996

Year Cox Direct 19th Annual Survey of Promotional Practices

Channels of Sales Promotions

MANUFACTURER

Push

Trade Promotions RETAILER

Push

Retail Promotions

CONSUMER

Consumer Promotions Pull

Consumer Promotion Consumer-Promotion Objectives

Consumer-Promotion Tools

Entice Consumers to Try a New Product

Samples

Advertising Specialties

Lure Customers Away From Competitors’ Products

Coupons

Patronage Patronage Rewards Rewards

Get Consumers to “Load Up’ on a Mature Product

Cash Refunds

Hold & Reward Loyal Customers

Price Packs

Consumer Relationship Building

Premiums

Contests Sweepstakes Games

Point-of-Purchase Displays

“Deal Proneness,” Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997 

 

Examination of “deal proneness” among consumers in a supermarket setting Surveys & Grocery Receipts used Eight types of deals:  Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon

“Deal Proneness,” Liechtenstein, Burton, & Netemeyer Cluster analysis yielded two interpretable results:  49% are “deal prone,” 51% not  24% High “Deal prone,” 50% intermediate, 26% deal insensitive  “Deal-proneness” a generalized construct - (crosses type of promotion)  Younger & Less educated more likely to be deal prone

Trade Promotions

Trade-Promotion Objectives

Trade-Promotion

Tools

Persuade Retailers or Wholesalers to Carry a Brand

Price-Offs

Premiums

Give a Brand Shelf Space

Allowances

Patronage Displays Rewards

Buy-Back Guarantees

Discounts

Promote a Brand in Advertising Push a Brand to Consumers

Push Money Free Goods

Contests

Specialty Advertising Items

Business-to-Business Promotion

Business-Promotion Objectives Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople

Business-Promotion Tools Conventions Trade Shows Sales Contests

Major Public Relations Tools

Public Service Activities

Web Site News

Speeches

Corporate Identity Materials Audiovisual Materials

Written Materials

Special Events