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finreview.w11.doc

8 Pages
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Department
Business
Course Code
BU121
Professor
Tyler Wunder

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Description
BUS 121 – FINAL EXAM STUDY FRAMEWORK Part A: 10 marks multiple choice – 2 each from chapters 8, 9, 11, 12 and 20 Part B: 60 marks short answer questions – 19 questions, 1-5 marks each Part C: 30 marks problems – 3 questions, 10 marks each • unlabelled ratio formula sheet attached at back of exam – do not remove MARKETING (10% - short answer questions only)  Promotion Promoting Products and Services Promotion (communication mix: total message sent to consumers about product) is any technique designed to sell a product. Promotional techniques – advertising must communicate the uses, feature, and benefits of products. The Promotional Mix There are four types of promotional tool. The promotional mix is the portion of marketing concerned with choosing the best combination of advertising, personal selling, sales promotions, and publicity to sell a product. Buyers recognize the need to make a purchase. Marketers must make sure that buyers are aware of their products. Advertising and publicity, which can reach many people quickly, are important. Buyers seek information about available products. Advertising an personal selling can both be use to educate consumers. Buyers compare competing products. Personal selling can be vital. Sales representatives can demonstrate product quality and performance in comparison with competitor’s product. Buyers purchase products. Sales promotion if effective because it can give consumers an incentive to buy. Personal selling can help by bringing product to convenient purchase locations. Buyers evaluate products after purchase. Advertising, or even personal selling is sometimes used to remind consumers that they made wise purchases. Advertising Promotions Advertising is promotional tool consisting of paid, non-personal communication used by an identified sponsor to inform an audience about a product. i.e., Buckley’s, it tastes awful and it works. Advertising Strategies During the introduction stage, informative advertising can help develop an awareness of the company and its product among buyers and can establish a primary demand for the product. i.e., instructors receive direct-mail advertising for new textbooks informing them of content and availability. During the growth stage, persuasive advertising can influence a larger number of consumers to buy a firm’s products rather than its competitors. During the maturity stage, comparative advertising is a strategy in which the goal is to influence the customer to switch from a competitor’s similar product by directly comparing the two – making one look inferior. i.e., Bounty claims (through ads) to have more absorbency than Scott Paper During the latter part of the maturity stage and all of the decline stage, reminder advertising keeps the product’s name in the minds of consumers. Advertising Media The specific communication devices – television, radio, newspapers, direct mail, magazines, billboards, and the Internet – used to carry a firm’s advertising message to potential customers. Most consumers ignore the bulk of the ads so it is crucial marketers know who their customers are and what messages appeal to them. Multimedia companies convey the seller’s message the same across mediums. The combination of media through which a company chooses to advertise its products is called its media mix. • Which medium will reach the people I want to reach? If a firm is selling hog breeding equipment, it might choose a business magazine or digest read by mostly hog farmers Personal Selling (Think lemonade stand or job interview) Personal selling involves a salesperson communicating one-on-one with a potential customer to identify the customer’s need and match that need with the seller’s product. It is the oldest form of selling and provides a (credible) personal link between buyer and seller. Sales calls are expensive because it includes compensation, travel, food, and lodging. Telemarketing conducts the personal selling process and arranges appointments with salesmen, thus cutting costs. Sales Force Management Setting goals at top levels of an organization; setting practical objectives for salespeople; organizing a sales force to meet those objectives; implementing and evaluating the success of a sales plan. Personal Selling Situations • Retail selling is selling a consumer product for the buyer’s personal or household use. The buyer comes to the seller. • Industrial selling is selling products to other businesses, either for resale or manufacturing. The salesperson comes to the buyer. Personal Selling Tasks Sales jobs usually require salespeople to perform all three tasks (to some degree, depending on product an the company): 1. In order processing, the receiving and follow-through on handling and delivery of an order by a salesperson. They call routinely to check supply, determine size of reorder, fill the order on their trucks, and stack the customer’s shelves. 2. Creative selling may persuade buyers that they have need for the benefits of a product (if they are not clear). Industrial products involve creative selling because buyers have not used the products before. It is also important in real estate and high-priced consumer products, but any new product can benefit from it. 3. Missionary selling promotes the company and its products over the long term, rather than to make a quick sale. (Think Drug companies) The Personal Selling Process Creative personal selling process: • Prospecting and Qualifying. Prospecting is the process of identifying potential customers. Salespeople can sift through past company records, existing customers, friends, relatives, company personnel, and business associates. Qualifying determines if prospects have the authority and to buy and ability to pay. • Approaching. The success of the later stages depends on the prospect first impression. Salespeople need to present themselves as neat and professional. • Presenting and Demonstrating. A full demonstration of the product, features, and uses. It links the benefits to the needs of the prospect. • Handling Objections. Prospects may have objectives to aspect of the product (price). It shows the salesperson the prospects’ interest and uncertainty and how to sell to them. • Closing. The process of asking the customer to buy the product. Successful salespeople know when the customer is ready to buy (signs like discussing monthly payments). • Following Up. Closing is not the end. Follow-up activities include fast processing of the order, timely delivery, and even quick service and repairs.  advertising – types, objectives, communication model – 3 key elements, media selection, “greenwashing” – 6 sins Types of Advertising Brand advertising promotes a specific brand-name product. Product advertising, a variation of brand advertising, promotes a general type of product or service. Advocacy advertising promotes a particular viewpoint or candidate. Institutional advertising promotes a firm’s long-term image rather than a specific product. In consumer markets… Retail advertising by local stores encourages customers to visit their store and to buy its products and services. Often it is actually co-operative advertising, with cost of advertising shared by the retailer and manufacturer. In industrial markets, manufacturers use trade advertising designed to reach potential wholesalers and retailers. Manufacturers use industrial advertising to reach professional purchasing agents (firm managers buying raw materials or components).  sales promotions – types, uses  public relations and publicity Sales Promotions Sales promotions are short-term promotional activities designed to stimulate consumer buying or co-operation from distributors and other members of the trade (sales agents). i.e., “Buy three and get one free,” increases the likelihood consumers will try to product – that and convenience and accessibility. Types of Sales Promotions Best sales promotions: coupons, point-of-purchase displays, incentives (free samples, premiums), trade shows, and contests/sweepstakes. • Coupons encourage new customers to try, pull customers from competition or induce more spending from existing customers. • Point-of-purchase displays strategically locate the product on sale • Premiums are free or bargain-priced items offered to customers for making a specific purchase Publicity and Public Relations Publicity is free. It is information about a company made available to consumers by the news media. There is very little a company can do to control publicity. Public relations is company- influenced activity that attempts to establish a sense of goodwill between the company and its customers through public service announcements. i.e., corporate sponsorships.  Place/Distribution – desire vs. availability, choice of distribution channel, implications of indirect channel on pricing and promotion – demand backward pricing, push vs. pull Promotional Strategies Once a firm’s promotional objectives are clear, it can develop a promotional strategy to achieve those goals. A company using a push strategy (industrial) will aggressively push its product through wholesalers and retailers, who persuade customers to buy it. In contrast a pull strategy (consumer) appeals directly to customers, who then demand the product from retailers, who demand the product from wholesalers. General Foods use a combination of both strategies. i.e., advertising creates consumer demand (pull) and it pushes wholesalers and retailers to stock these products (push). In rare cases, a company will purposely avoid both strategies. i.e., Langlitz Leathers – expensive and waiting list Distribution of Consumer Products A distribution channel is the path a product follows from the producer to the end-user (industrial or consumer). • Channel 1: Direct Distribution of Consumer Products. In a direct channel, the product travels from a producer to the consumer without an intermediary (own sales force, direct on Internet). • Channel 2: Wholesale Distribution of Consumer Products. Producers distribute products through retailers (Levi’s has its own outlets as well as provides to Gap). • Channel 3: Wholesale Distribution of Consumer Products. Retailers cannot always afford both retail and storage space. Wholesalers enter in the distribution channel as storage. Channel 4: Distribution Through Sales Agents or Brokers. Sales agents (or brokers) represent a business and sell to wholesalers and/or retailers. They receive commission in return, but never take legal possession. Firms can manufacture (do what they do best) and not have to divert resources and distribution. i.e., travel agents represent airlines, car- rental companies, hotels. The Pros and Cons of Non-direct Distribution Each link the distribution chain makes a profit by charging a markup or commission. Non-direct (more intermediaries) distribution means higher prices. E-intermediaries – wholesalers/agents who use Internet channels – also charge markups. Markup levels depend on competitive conditions and practices in a particular industry. Intermediaries provide added value by saving consumers time and money. Value accumulates with each link – intermediaries provide timesaving information and accessible quantities. Even if intermediaries are eliminated, the costs of their functions are not. i.e., selling a home agent less • Channel 5: Distribution by Agents to Consumers and Businesses. It differs from the first four channels. An agent serves as the sole intermediary and distributes to both consumers and businesses. i.e., a travel agent serves
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