THE TEN DAY MBA PDF
Revised and updated to answer the challenges of a rapidly changing business world, the 4th edition of The Ten-Day MBA includes the latest topics taught at Am. . Editorial Reviews. From Publishers Weekly. Can MBA programs be compressed, allowing a reader to "get at least $20, of MBA education at 99 percent of the. Read The Ten-Day MBA 4th Ed. PDF A Step-by-Step Guide to Mastering the Skills Taught In America's Top Business Schools Ebook by Steven.
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Payments made to dealers for marketing support are called spiffs. When the Communist bloc boycotted the games. When a display is at the end of an aisle it is referred to as an end cap. Self-liquidating premiums are those for which the price charged covers just costs. Trade-directed sales promotions tools include sales contests. On the retail shelf a POP can be a shelf talker. A marketer can do it by providing a high markup per item or a high turnover on lower-margin items.
Every time the United States won. They can take the form of slot-. To get those prime sports. There are many variations on the point-of-purchase display POP. A thorough analysis of the game rules and the laws must be conducted to avoid a disaster.
Premiums are items offered at low or no cost to purchasers of a product. Contests and sweepstakes are a popular promotion and the most restricted legally. Many contests are conducted by inviting customers to corporate Web sites to play a game and enter contests. Public relations PR is typically a promotional tool used to communicate to a broader audience.
In-store demonstrations. Sponsorship of prestigious or charitable events or causes is often used to create a halo effect of positive feeling toward a corporation and its products. Many retailers use a DVD player to play a recorded demonstration when a live one is not practical. Trained experts from the manufacturer are extensively used to promote products that would not otherwise generate consumer interest or be accepted by the trade.
Spiffs enable the dealer to discount. The list of possible PR targets can include politicians as well as the communities in which a company operates. This promotion tries to encourage the channel participants to carry your product. Public Relations and Publicity. PR is intended to create a favorable climate for your product. If you have no trade contacts. The PR message can be intended to create goodwill. Whatever the sales promotion you choose in a marketing mix. Trade shows are a way to promote a new or existing product to the wholesalers.
Public relations also include viral marketing. Usenet groups. This network time has great value. Tracking services. Direct sales includes the realm of the Internet. Direct Sales. With the advent of the Internet. Press conferences. Generating a positive discussion about your product in Internet chat rooms. Although it is often overlooked in the marketing mix. Opinion polls and legislative victories are often used to measure PR success. Using a PR agency allows you to tap into their media contacts to capture an audience and hopefully control the impression made about your company or products.
PR executives track their effectiveness by measuring the value of the media time or space captured. Publicity is a two-edged sword. It can take the form of a news story or even the appearance of a product in the media. If the athlete makes the national evening news or Sports Illustrated. By trying to reach opinion leaders. It is judged as more credible by the public because it is not purchased. If the customer has a continuing value.
In a competitive bidding process.
Other Internet marketing techniques include banner ads. You select your customers by their interest when they are interested. It saves smaller companies the initial investment required to establish. Direct sales are big business.
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Internet marketing is a large and growing method of directly contacting the customer and receiving a direct response. TV sales pitches cannot be as directly targeted as direct mail.
In the leading home shopping network. The other component of both direct mail. QVC Network Inc. The results are tracked by rate of return ROR and dollar amount per order. Mailers target their market with a focused mailing list to directly reach those households with a compelling mail piece.
The nature of the direct mail game is to segment. You can charge the customer the value provided. Cost Plus. This topic. Each method of promotion — advertising. Highway contractors often use this simple method.
The pricing decision. A thorny issue connected with this selling method is the backlash against the Big Brother effect of having very personal information captured in mailing lists that churn out personalized pitches. Replacement parts are a prime example — exorbitant prices are charged for a cheap but crucial cus-. Perceived Value to the Consumer.
The pricing itself can differentiate your product from the competition. Besides psychological pricing.
Because direct selling is becoming such a large part of the economy. There are many rationales behind pricing each product and service. Both the Kia and the Rolls-Royce are differentiated at opposite ends of the automobile spectrum. A penetration strategy would use a low price to gain market share. Early in the introduction phase of the PLC. Because consumer perceptions are not necessarily based on just the physical attributes of a product. But remember. Meet Competition. Consumers often attribute the characteristics of style and workmanship to a product just because of the high price charged.
RCA used this strategy to charge high prices for color TVs when they were introduced in the s. The economics of. This pricing can be used in the introductory phase or later in the PLC.
This is especially the case in commodity products and services such as gasoline. When they are high. Many avenues may be taken with any given product.
Buyers with elastic demand do not readily accept price hikes. When airline ticket prices are low. Tobacco and crack cocaine smokers. If a market is limited in size.
In the case of my gourmet packaged coffee. Price Based on the Price Elasticity of the Buyer. But what really tells the story is the economics.
If elastic. Can I do it and make money? Their demand is greater or smaller depending on the price. They are considered sunk costs — after a TV ad airs. This step may also send the marketing manager directly back to Go without collecting two hundred dollars. By that I mean that if sales triple.
Fixed costs do not vary with volume even if no sales are made. Variable costs are those that vary with the volume of products sold or manufactured. As more units are sold or manufactured. By that I mean that the consumer analysis may be exemplary. Perhaps unrealistically high sales volume may be needed to break even. What are the costs?
What is the break even? How long is the payback of my investment? What are my costs? Fixed or variable? The costs may be too high. The costs of materials and labor are variable costs. When units are actually produced. What is my break even and is it reasonable?
I determined that the prices and costs of a proposed marketing plan for the Mexican gourmet coffee were: I have provided an example from the real world.
Promotion and manufacturing are expensive. A way must be found to recoup those investments. What can be seen in the graphs is that regardless of unit volume. There should not be any crying over spilled milk.
In the coffee example. If I include the millions of research. On that level. The graphical representation of the marketing plan economics for the Mexican coffee looked like this: Is my break even reasonable in relation to my relevant market? Answering this question must be your next step. You need to decide if you can make money on the proposed marketing spending in the future.
The evaluation of the economics is always performed from the perspective of the present. What is the payback period on my investment? This is another hurdle frequently used by companies to evaluate marketing projects when they have many to choose from. The payback formula is: Imagine that — I could have reached my goal with only a. If my coffee got on the shelf. How would they react? Once in the supermarket. In my case.
In circumstances such as those I faced. This may indicate that the whole marketing development process should start again. It can be frustrating because there are no. And unfortunately for me it did. The break-even point is where the plan returns the initial investment. I revisited the marketing strategy development process outlined at the beginning of this chapter.
You have to start by asking yourself tough questions.
In the case of the coffee project I tormented myself with: Should I target another segment? Is the mail order distribution channel an option? Should I not advertise and rely on a cheap price to move my product? As these questions indicate. Seven years is a bit long for a risky venture. You may have something that can be salvaged. These are the key questions that must be addressed by a comprehensive marketing strategy. With this chapter you are armed with the MBA problem-solving structure and the MBA vocabulary to attack the marketing challenges that you may encounter.
Consumer reactions cannot easily be predicted. Figure the break even on that investment! I include the following notes that we all passed among ourselves at school to guide our case discussions and tests open notes.
Marketing also requires close attention to the numbers to be successful. It takes creativity. Trade relations. Channel mathematics. Poor at? Fit with product? Distribution channel analysis 5. Develop the marketing mix 6. Consumer analysis 2. Competitive analysis 4. Market analysis 3. Determine the economics 7. Exclude sunk costs! Buy wisely.
Pricing Strategies —Cost plus. With the criminal convictions of insider traders in the s. But I must admit. Others would express just what they thought. My more insecure classmates would not participate at all. It was revealing to see my fellow students deal with controversial topics. I fell into this last group. In any case. I took many unpopular positions just to liven up the class discussion. In the new century. Ethical dilemmas make for a lively classroom discussion.
The purpose of ethics in the MBA curriculum is not to make students model corporate citizens. It is argued that because corporations are so powerful.
Through casework and role-playing. The top business schools train their future champions of industry to deal with any challenge. Environmental issues — pollution. Relativists are not torn by ethical dilemmas since they do not believe that truth can be discovered through soulsearching. Two major topics are taught in the ethics curriculum: Professors teach relativism so that students may guard against it.
To understand relativism. Relativism examines why we often ignore ethics in our decision making. Things are rarely black or white. There are so many shades of gray. Although Friedman is exalted as one of the defenders of capitalism in economics courses. In some countries it is. Adopting a cultural relativist philosophy. In some instances U. Social relativism is akin to naive relativism. People refer to social norms to render ethical judgments.
In the produce industry. If a whole culture holds certain beliefs. Discussions about apartheid revolved around issues of cultural relativism. Multinational corporations often follow local laws and customs that may violate ethical standards in their home countries.
So many variables affect behavior that an outsider cannot possibly be privy to all the elements that went into making a decision. Role relativism distinguishes between our private selves and our public roles. ETHICS 63 Naive relativism holds that every person has his or her own standard that enables him or her to make choices. Relativism is not the only philosophical framework with which to approach ethical decisions.
There is also natural law. These concepts are also great conversational ammunition when MBAs get together on social occasions. Stakeholder analysis provides you with the tools for weighing various elements and reaching a decision. The Foreign Corrupt Practices Act of outlaws overseas bribery. The relativism concepts provide MBAs with an awareness of and a way to guard against inaction on ethical and moral issues.
They provide a framework to go beyond currently held beliefs and patterns of behaviors.
In a typical stakeholder analysis the list of potentially affected parties might look like this: Other Ethical Frameworks. D AY M B A ordinary business practice to pay bribes to get favorable treatment from businesses and government. Determine their rights and responsibilities. Consider the short. In order. Formulate contingency plans for alternative scenarios. If you are interested in walking through the steps outlined above.
Make a judgment. Bondholders Suppliers — and their industry Employees — and their families Government —federal. Board of Directors Customers —and the industry in which they operate Shareholders. Consider the relative power of each.
Get the main cast of characters. With a piece of paper. You may disagree with the way in which I have framed this issue. Global Crossing. The system of government regulation and private self-regulation was inadequate. The new provisions of the Sarbanes-Oxley Act and related agency regulations that became effective in include four broad categories of new rules: Congress was forced to legislate ethics in corporate America.
With the tools of stakeholder analysis an MBA can tackle the issue of endangered owls as well as other ethical issues and make thoughtful and informed decisions. In this situation. Other international scandals centered on rogue traders left alone to amass millions of dollars of trading losses. People can approach a situation differently and feel other stakeholders need to be represented. Where employees. The hall of shame includes Tyco.
The stakeholder analysis grid would look like that on page The internal controls systems to control fraud and corruption that the Sarbanes-Oxley Act requires are complex.
In addition to these rules. Monitor and test the controls with an early warning system of performance and management statistics. Identify the possible threats from within and outside the organization. Identify the vulnerable process gaps with control assessment tools. MBAs need to be aware of the ethical environment that they work in and the ones that they help to create. Identify all the processes within your company. After implementation of Sarbanes-Oxley. All the efforts of Sarbanes-Oxley have not appeared to stem the tide.
How do you think King Solomon knew that there was only a thirty-day supply of grain during a drought? It was from the accountants. Their audience includes employees. Within the company. Accountants have been around from the beginning of time. In modern times accounting has gone beyond the physical A. Whatever the audience or function. Corporations need to communicate their results to the world.
Lawyers with accounting knowledge. Although this area may appear tedious. Accounting answers these basic questions about a business: What does a company own? How much does a company owe others? How does the company get the cash to fund itself? All corporate activities must eventually be measured in dollars. Because knowledge is power. Because every function of business. Having expert knowledge of complex accounting rules.
10 day mba
MBAs need to be literate in accounting to understand its function. You should not attempt to memorize them. Because employee performance is often evaluated with accounting data. In settlement negotiations. Electric utilities. When the options become exercisable by the employee. FASB 90 was issued in because of the problems of faulty nuclear plant construction. The following seven concepts and vocabulary are not a set of laws.
FASB was issued to set new rules for expensing the cost of stock options. The rules do not tell the whole story. The operations were already segregated and ready to become their own independent entity.
When a small machine shop purchases a power tool. It also reported on the entire chain of Red Lobster restaurants. Darden Restaurants. Betty Crocker. Accrual accounting. General Mills prepared reports for each of its Red Lobster restaurants. Of course. Using cash basis accounting. Get the idea?
Cash accounting tells you when and how much cash changed hands. Very small businesses can get all the accounting information they need from their checking account register. General Mills spun off its restaurants into a separate company.
Using the same logic as in allocation. Without established policies for allocation and matching. The sale could be recorded at that point. For his accounting purposes. Even if a trustworthy salesman from CaseIH swears that farmer Jones is a sure bet to buy a combine.
Sales that have not been completed. By matching sales dollars with their related costs. Accountants also have an objectivity rule to guide them when in doubt. CaseIH has not delivered the machinery. Patents and inventions are also hard to value.
What value could you put on it? Their move to Memphis was uncertain. The accountant would need to have a contract and a canceled check to substantiate the entry in the books.
When gains are expected. Management could have changed their. Even if reorder costs for the same inventory had gone up.
Conservatism also dictates that transactions be recorded at their historical costs. But for the sake of argument. The records continue to value the real estate at the cost of the beads given to Indians in exchange for the property. In this way. The value of goods held in inventory is also stated at historical cost. If the value of an asset falls below the recorded cost.
Even if prices change. Conservatism dictates that the loss be recognized today. Management would have to hire a consultant to estimate the cost of cleanup and record that cost in When in doubt.
In the same way. This rule. The consistency rule insists that companies value their inventory the same way from year to year. Accountants presume that companies will continue to operate in the foreseeable future. They use historical costs. Accounting rules demand that an entity use the same accounting rules year after year. Using FIFO. Used industrial equipment has limited value to outsiders.
That enables an analyst to compare past with current results. The values assigned to items in the accounting records assume that the business is a going concern. It is just an accounting method. Steel-rolling equipment. The accounting method is independent of the physical movement of inventory. Using LIFO. As you might imagine. It may have great value to an ongoing manufacturing company such as US Steel. In fact. Which coin was actually sold. Consistency requires that the same accounting method be used from year to year.
Notice that Bounty found itself a veryprofitable market segment by providingstrength and a pretty pattern. By visualizing how your product mapsversus the competition, you may gain aninsight into how to market your existingproduct, make product changes, or add If your company has many products withina category, then you are said to have depthof line.
In the paper towel market no oneproducer dominates the category.
If your company has many products in avariety of product classes, you are said tohave breadth of product line. Kimberly-Clark has a wide breadth of paper productsin several categories: Depth andbreadth of product lines can be cleverlyused in a blocking strategy to prevent In the dog food industry, competitors foundother ways around Ralston to reach doggieowners. In the There are often many ways of reachingyour customers, as described with dog foodsales.
Distribution channel analysis iscritical, because the choice of channelinfluences the price you can charge, and,consequently, the profit margins that youmay enjoy.
Three questions should beasked to provide you with a basis for yourdistribution decision: How can my product reach the consumer? How much do the players in eachdistribution channel profit? Who holds the power in each distributionchannel available? In the case of many mail-order catalogs,there is a direct link between the marketerand the final consumer. A catalogmanufacturer of clothing has a direct pulseon sales, returns, pricing, and consumertastes.
As manufacturers of grocery items,brand managers are distanced from thebuyer. Cereal, for instance, must gothrough wholesalers and retailers beforereaching the consumer. Those middlemenare called channel intermediaries. As a Commonly used channel intermediaries tothe consumer are: As I mentioned, it is very helpful tounderstand all the paths to the consumer inorder to know all the possible ways tomarket your product.
Take the time to drawthem out on paper. A channel sketch canalso give you the insight into the retail pricethat must be charged to make a profit. Everyone who touches the merchandisetakes a cut, which is called their margin. Channel participants in most industriescalculate their cut as a markup on sellingprice. Canadian and some U.
The selling price is not theultimate retail price, but the price at whichone intermediary sells goods to the nextintermediary in the chain. The retail price iswhat a consumer pays. Because of my experience in the coffeeindustry, I will use coffee retailing todemonstrate the economics of the channels At each level of the chain,the intermediary buys the coffee from theprevious level and takes a margin based onthe sales price to the next level.
The marginis not based on cost. At eachlevel, the channel participant adds valueand incurs costs by either roasting,grinding, and packaging the coffee beans;promoting the brand; or distributing andshelving the packaged coffee for theconsumer. Collection coffee. At each level in the distribution channel, theparticipant performs its function, takes itsmargin, and sells to the next participantcloser to the consumer. Because marketing strategyis a circular process, another price,manufacturing process, or cost may haveto be altered.
Such changes could affect allthe other elements of the plan. The relative power of the channelparticipants can dictate pricing decisionsbased on the economics of the channelchosen. Kraft Foods decided to use an alternativechannel in addition to grocery stores.
Withmost products there are usually a variety ofways to reach the consumer. Each channelhas its own channel margin mathematics. By understanding the math you are betterable to make a choice of channel. Who has the power in the channels? The question of channel power is verycrucial in selecting where to sell. If yourproduct is unique and in demand, then the In the grocery trade, the power of thechannel has shifted from the manufacturersto the supermarket chains.
Each product must be tracked,shelved, and inventoried. When Mazolacooking oil produces three sizes, it takes upthree SKUs. With a finite amount of storeand warehouse space, the shelf real estatehas become valuable, and retailers want tobe paid for carrying each SKU. Marketerseven diagram their shelves like architects indrawings called planograms and fight overbest placement.
In the s the packaged good giantscould force their products on the trade. That is no longer the case. Unfortunately, slotting fees can run intomillions of dollars for a new productintroduction. Therefore, in practice, slottingfees bar smaller competitors from selling inthe supermarket.
A maker of an excellentpizza in the Midwest that I knew failed toget off the ground because it could notafford the bribes necessary for space. Feel free to interject this topic into MBAconversation as often as you like. Development of the Marketing MixConsumer Market CompetitionDistribution Plan the Marketing MixEconomics ReviseBased on judgments developed in theanalysis of the consumer, the market, thecompetition, and the distribution channels,the marketing manager must make a set oftangible decisions.
MBAs call it the actionplan. Marketing managers choose what mixof marketing efforts should be made. The development of the marketing mix isan evolutionary process whose goal is an That cannot beoveremphasized.
The ten-day MBA
The Marketing Mix How does my product fit with my otherproducts? How will I differentiate my product? How does the product life cycle affect myplans? How does the product fit with my existingproduct line?
This question tries to identify areas ofsynergy among your products, or uncover aconstraint on your activities. There would be a fit with thisline extension.
But if Maytag wanted to sellpersonal hair dryers, the fit would bequestionable. Differentiation is a broad issue that includesany way that a marketer can distinguish hisproduct from the field. Consequently thereare many ways to do it. Lifshitz somehow fails to convey the imageof English aristocracy. In many cases the so-called brand equity ofone product can be transferred to newproducts using a brand or line extensionstrategy that differentiates it from the pack.
Kraft Foods has chosen to place the Jell-Obrand name on its new pudding and icecream treats. The Jell-O brand bestowsupon the new products all the goodwill andbrand recognition brand equity that Jell-Oearned over decades.
It would take manyyears of expensive advertising to establishthe brand equity of the Jell-O brand. Accordingly, almost 70 percent of thetwenty-four thousand new productintroductions since were line andbrand extensions. The choice of any one of these productdifferentiation techniques affects the entiremarketing process, as it lays thegroundwork for your promotional efforts. Aproduct can be differentiated from thecompetition by creative advertising andpromotion, even if competing products arephysically identical.
Perceptual maps and positioning can helpto differentiate the product. All the productattributes mentioned affect the positioningof a product in the marketplace. As my perceptual map ofpaper towels indicated, consumers havespecific needs within a product class and Hopefully the brand manager will choose aniche that will yield the most sales andprofits by targeting a market segment hisproduct serves best. Positioning isinexorably tied to the market segmentselected through your consumer andmarket analysis.
Based on the point in the product life cycle PLC , different aspects of the productbecome more important in the competitivebattles. The previous discussion of the PLCnoted that product features are extremelyimportant to differentiate products in thegrowth phase, while branding isincreasingly more important in the maturityphase. The emphasis on multiplay featureson compact disc players, for example,currently indicates the growth phase of thePLC. In the mature cassette deck market,the battles over auto reverse and Dolbynoise reduction have already been playedout.
Where to Sell?
In your review of the distribution channels,the goal was to determine what avenuesexist and what margins are available. Atthis stage, having made product decisionsand a choice of target market, the marketerhas to choose an appropriate channel to fitwith the product and the intended buyers. What distribution strategy should I use? On what basis should I choose a channel ofdistribution? What type of distribution strategy should Iselect? A distributionstrategy can differentiate your product fromthe crowd.
For example, if a new designerchooses to sell exclusively at NeimanMarcus, it gives a certain cachet to theproduct. Consumers tend to perceivecertain attributes in a product, such asstyle, quality, and price, based on the pointof sale. The same designer may choose toselectively sell in only better department The California marketer of carwindow sun shields had no such concern,and selected a mass distribution strategy.
The company wanted to distribute thecardboard shade as widely and quickly aspossible. That choice made sense sincethe shades, unlike designer clothing, didnot have any status appeal and could beeasily copied and manufactured. Each of these distribution methods placescertain responsibilities upon themanufacturer and the retailer. Whenmanufacturers share the costs ofadvertising with retailers, that is called Ifthose obligations are not met, the contractis breached and the relationship can besevered.
Ralph provided theimage and the margins sought by retailers. The retailers were in turn obliged to provideRalph Lauren with special placement andselling efforts. Which channels of distribution to choose?
It depends…on a variety of factors. Thereis usually more than one choice. However,if a channel is integrated into a mutuallysupportive and internally consistentstrategy, many choices can potentially besuccessful. Three factors should serve as aguide to make a selection. Product Specifics. Another factor toconsider is the level of attention needed forthe sale.
This is related to the level ofcomplexity of the product, the newness, orthe price. The product may indicate a needfor your own sales force despite the costs. On the other hand, products such as candyand soft drinks are sold through a series ofwholesalers and distributors beforereaching the store shelves.
These productsare simple and do not require direct control Need for Control. The ability to motivate thechannels to carry your product effectivelyand appropriately enters into the placementdecision. The further the manufacturer isremoved from the consumer withdistributors, wholesalers, and jobbers, theless control the manufacturer has over howa product is sold.
Pharmaceuticalcompanies usually have their own salesforces, also called captive sales forces, thatare thoroughly trained to provide credibleinformation to doctors.
If Merck or Pfizerhad to rely on an independent sales forcethey would not have absolute control overtheir training or conduct in the field. Margins Desired.
The analysis of thechannels of distribution helps to determine Where arethe margins taken at each level?
Can yourcompany deliver the product through thechannels at a competitive price and stillreserve enough margin for itself? Based onthe available margins, channel decisionscan be made. In the case of radardetectors, Cincinnati Microwave opted tosell directly to the public through magazinedisplay advertising. They chose not to sellthrough electronics stores or other generalmerchandisers. Their managementbelieved that the technological superiorityof their Escorts and Passports would helpthe units sell themselves.
CincinnatiMicrowave chose to capture the entire retailmargin and to cut out all the middlemenwho typically distribute and sell electronics. Product PlacePromotion PricePromotional DecisionsPromotion includes all the advertising andselling efforts of the marketing plan.
Goalsetting is paramount in developing apromotional campaign. You need to knowthe mission you want to accomplish beforeyou can begin to draft or spend thepromotion budget. The ultimate goal ofpromotion is to affect buyer behavior;therefore the desired behavior must bedefined.
Different products, at differentstages of the PLC, with different levels ofinvolvement and complexity, requiredifferent promotional efforts to performdifferent missions. The promotional missionchosen for your product must be consistentwith the buying process outlined in your As with distribution,promotional efforts should be guided by astrategy.
Pull strategies are those effortsthat pull buyers to the outlets that carryyour product. Another importantmission of promotion is to encourage the Such efforts are apush strategy. Beer distributors, forinstance, spend a great deal of their timetrying to court bar owners to stock andpromote their brew on tap. Most plans havean element of both push and pullstrategies.
In the beer industry they spendheavily to advertise the brand as well as togain greater bar distribution. To pull buyers to a store or to push thedistribution channel to stock and sell, thereare five general categories of promotionalefforts: AdvertisingPersonal Selling Advertising takes many forms: Two importantthings to keep in mind are your intendedmission and the quantitative measurementof exposure required to accomplish it.
Please pay attention to the followingmeasurement vocabulary. This is what youpay for when you buy advertising. Buyingadvertising is just like buying marketingresearch—know what and why you are Reach and frequency are key quantitativemeasurements of media goals. Reach isthe percentage of the target market whosee and hear your promotion oradvertisement.
Frequency is the number oftimes they saw or heard it.
Marketers referto the number of times a person is exposedto a message as the total impressionsmade on that audience. Because of thebuying behavior associated with differentproducts, different mixes of reach andfrequency are required to induce purchase. The desired demographics andsegmentation variables of the audiencesdelivered also enter prominently into theequation. A TVprogram that attracts a muddled mix ofdemographic audiences is less valuableper audience member.
Even if you have theright media vehicle, scheduling is key inreaching your target. High GRPs do not guarantee sales. Themessage delivered is also a keydeterminant. When advertising people referto the message, copy wording , or layoutof advertising, they call it the creative, a Ad agency people who develop theideas are called creatives. Magazine and newspaper advertising ispurchased based on the size andsegmentation variables of their circulations. Magazines have a longer shelf life, butnewspapers deliver a much moreimmediate and focused geographicreadership which is best for salepromotions.
Both of these print audiencesare bought on a cost per thousand CPM readers basis. A competitive measure of media is share ofvoice. Using this measure, an advertisercan target a certain percentage of mediaspending by all competitors within a Advertisers believe thatto have an impact through the competitivemedia clutter and noise, the relativespending level is just as important as theabsolute dollars spent.
Through the clutter, it would have beenfutile to run a TV ad to promote the tinycoffee brand that I managed during mysummer internship. Any affordable adwould have been drowned out by thegiants. Remember, each medium has its strengthsin reaching people. Some are moreselective than others.
Marketers want toreach their intended targets as efficiently as Personal Selling. Marketers choosepersonal selling when they need to makedirect contact with the buyer.
This avenue is generally the mostexpensive element in any marketing mixbecause of the high cost of labor andcommissions paid. Managers of products that are new,complex, or expensive find that the benefitsof personal selling often outweigh their highcost. Because some target markets areinaccessible by other media vehicles,personal selling is sometimes the only Waterpurification systems, pharmaceuticals,encyclopedias, copiers, and industrialproducts widely utilize personal selling intheir marketing mixes.
Current theory holds that personal selling isa problem-solving and consultationprocess. Professor Derek A. Newton of theDarden School at the University of Virginiasaw personal selling as having evolvedover the years in four stages: Vacuum Sales Promotion. Sales promotion isdesigned to elicit the desired behavior fromthe consumer, the sales force, and otherchannel participants.
Sales promotions aredesigned to complement and reinforceother promotional efforts, especiallyadvertising. Each type of promotion has itsown associated vocabulary that you shouldbe aware of. If you are not a marketer,knowing the vocabulary does not make youan expert, but it can sure help you toengage in intelligent marketingconversation, if need be. There are twotypes of promotions: Consumer sales promotions techniquesavailable are coupons, refund offers, Coupons are a direct way to pass a pricereduction on to consumers.
As amanufacturer, if you give retailers adiscount in hopes that they will pass italong to consumers, you may be sadlydisappointed. Marketers use coupons toencourage trial, brand switching, and brandloyalty. Grocery coupons are most oftenplaced in a special coupon section of theSunday paper called freestanding inserts FSI. Refunds are generally used to acceleratethe normal consumer purchase cycles. Refunds are usually used to increase thequantity or frequency of purchase by Batterymanufacturers frequently use refund offers.
Samples are a high-cost way of introducinga new product. Sampling requires a cashinvestment to produce and stock thesmaller-sized packages. Sampling may also be effective forproducts that consumers would view asrisky in switching to a new brand, or thatmay have a high probability of generatingword of mouth WOM activity after use.
Many new shampoos use free or low-cost Consumers are reluctant to risk four dollarsto try a whole bottle. Premiums are items offered at low or nocost to purchasers of a product.
Self-liquidating premiums are those for whichthe price charged covers just costs. Hershey has periodically offered watchesand Christmas ornaments as premiums. Toget the goodies, chocolate lovers have tosend in wrappers as proof of purchase.
Bubble, the happy pink bubble-bath man, ispictured on inexpensive T-shirts, beachtowels, and sweatshirts that are printed onevery box. Contests and sweepstakes are a popularpromotion and the most restricted legally,because they border on gambling. A very State gambling laws must beinvestigated to ensure compliance. Thegame rules and odds of winning must alsobe scrutinized to ensure that thepromotional budget will cover theforecasted costs.
Every timethe United States won, game pieces couldbe redeemed for free food and other prizes. When the Communist bloc boycotted thegames, the United States won most of themedals, and most of the game piecesbecame winners. Trade-directed sales promotions toolsinclude sales contests, point-of-purchasedisplays, dealer incentives, trade shows,and in-store demonstrations. There are many variations on the point-of-purchase display POP. To get them in thestores requires the cooperation of thetrade.
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On the retail shelf a POP can be ashelf talker, a mini-billboard attached to theend of the shelf with a little ad used toattract attention. Freestanding aisledisplays and built-in shelf displays are otherforms of POP.
When a display is at the endof an aisle it is referred to as an end cap. To get those prime spots, the manufacturermust entice the retailer. A marketer can doit by providing a high markup per item or ahigh turnover on lower-margin items. Dealer and employee incentives: Paymentsmade to dealers for marketing support arecalled spiffs.
They can take the form ofslotting fees, case discounts, cashpayments, free merchandise, or prizes. Spiffs enable the dealer to discount,promote, or justify carrying a product. Trade shows are a way to promote a newor existing product to the wholesalers,dealers, retailers, and distributors. Thispromotion tries to encourage the channelparticipants to carry your product. Afledgling start-up company makinghousewares, for example, would need toattend trade shows to develop thedistribution contacts that might carry theirproducts to retail.
If you have no tradecontacts, you have to develop them. In-store demonstrations: Trained expertsfrom the manufacturer are extensively used Whatever the sales promotion you maychoose in a marketing mix, each elementmust have an explicit marketing mission tojustify its cost in the marketing mix. Public Relations and Publicity. Publicrelations PR is typically a promotional toolused to communicate to a broaderaudience.
PR is intended to create a The list of possible PRtargets can include politicians as well asthe communities in which a companyoperates. Sponsorship ofprestigious or charitable events or causesis often used to create a halo effect ofpositive feeling toward a corporation and itsproducts. Because the goals of PR are less definedthan a sales target, the results are moredifficult to measure. Opinion polls andlegislative victories are often used to Publicity, a form of public relations, is anyunpaid form of mass media communicationabout a company or product.
It can take theform of a news story or even theappearance of a product in the media. Publicity is a two-edged sword. It is judgedas more credible by the public because it isnot purchased; however, there is lesscontrol over the message.
Using a PRagency allows you to tap into their mediacontacts to capture an audience andhopefully control the impression madeabout your company or products. This network time hasgreat value. Accordingly PR executives track theireffectiveness by measuring the value of themedia time or space captured. Another thing that I perhaps took in the wrong way is the constant belittlement of the MBA program. Thousands of users are looking for advice right now. Visit our Beautiful Books page and find lovely books for kids, photography lovers and more.
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