Mrkt Exam 3 Study Guide PDF

Exam 3 Study Guide Marketing Communications (Module + Chapter 11 The Communication Process ○ The communication process involves six key steps: encoding, decoding, field of experience, response, feedback, and noise. ○ Encoding is the process of transfor...

Exam 3 Study Guide Marketing Communications (Module + Chapter 11 The Communication Process ○ The communication process involves six key steps: encoding, decoding, field of experience, response, feedback, and noise. ○ Encoding is the process of transforming an idea into communicable information. ○ Decoding is the process of interpreting information that was communicated into an idea. ○ The field of experience refers to the level of knowledge and understanding a sender/receiver applies to the message. ○ A response is the impact the message has on the receiver. ○ Feedback is the sender's interpretation of the receiver's response. ○ Noise includes extraneous factors that can distort messages. Integrated Marketing Communications (IMC) ○ IMC involves designing marketing communications programs that coordinate all promotional elements to provide a consistent message across all audiences. ○ IMC is important because of changes in communication technology and instant access to information through tools such as the internet and social media. ○ With IMC, organizations can coordinate their messages to build the brand and develop strong customer relationships while also helping customers satisfy their needs. Promotional Mix ○ The promotional mix is the combination of one or more communication tools used to: 1. Inform prospective buyers about the benefits of the product 2. Persuade prospective buyers to try it 3. Remind buyers later about the benefits they enjoyed via the product ○ The five elements of the promotional mix are: Advertising: Paying to disseminate a message that identifies a brand (product or service) or the organization being promoted to many people at one time Consumer sales promotion: Short-term incentives such as coupons, contests, games, rebates, and mail-in offers that supplement the advertising & sales efforts  Trade promotions: B2B marketing sales promotions such as trade shows, sponsorships, and event marketing Public relations: Involves communication designed to help improve brand image via sponsorships, event marketing, etc. Direct marketing: Delivering personalized and often interactive promotional materials to consumers via direct channels such as the internet, telephone, etc. Professional Selling: Two-way interactive, paid approach involving a buyer and seller; can be in person, via telephone, etc. The Product Life Cycle & Promotions ○ Promotional objectives and activities change over the four stages (Introduction, Growth, Maturity, Decline)of the product life cycle. Channel Strategies ○ Channel control refers to the ability to move products through distribution channels. ○ Push strategy: Promotion aimed at channel members. ○ Pull strategy: Promotion aimed at consumers. Promotion Decision Process ○ Specifying promotion objectives:This involves understanding the hierarchy of effects, which is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action: attention and awareness, interest, evaluation and desire, trial in action, adoption, and advocacy. ○ Unique selling proposition (USP): A specific benefit consumers will remember. ○ When deciding on a message strategy, organizations must consider: the audience, the objectives of the promotion, the media, the budget, and the product. Marketing Channels & Supply Chains (Module + Chapters 8 and 9) A marketing channel consists of individuals and firms involved in making a product available for use or consumption by consumers or industrial users. A supply chain consists of all organizations involved in producing, promoting, and delivering goods to customers. ○ Supply chain management involves constantly monitoring supply chains and refining them to make them as efficient as possible. Intermediaries create value by performing transactional, logistical, and facilitating functions. They also create time, place, form, and ownership utility for customers.  Direct channels involve the producer and the ultimate consumer interacting directly, while indirect channels involve intermediaries. Digital marketing channels make products available to buyers, combine electronic and traditional intermediaries, and create time, place, form, and ownership utility for buyers. Multichannel marketing involves blending different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online (also called omnichannel marketing). Dual distribution is when producers reach different consumers by employing two or more different types of channels for the same basic product. Strategic channel alliances occur when one firm's marketing channel is used to sell another firm's product. Push strategies are promotions aimed at channel members, while pull strategies are promotions aimed at consumers. Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. They can be: ○ Corporate systems: Single ownership of production and distribution. This can involve forward integration (producer owns the intermediary at the next level down the channel) or backward integration (retailer owns a manufacturing operation). Administered systems: Coordination at successive stages of production and distribution via the size and influence of a channel member. Contractual systems: Independent product and distribution firms integrate efforts on a contractual basis. These include wholesaler-sponsored voluntary chains, retailer-sponsored cooperatives, and franchising. When choosing a channel or intermediary, businesses should consider target market coverage, buyer requirements and needs, and profitability. Channel conflict can arise horizontally (between intermediaries at the same level in the channel) or vertically (between different levels in the channel). Disintermediation is a type of channel conflict that occurs when a channel member bypasses another member and sells or buys products directly. Logistics involves getting the right amount of the right products to the right place at the right time at the lowest possible cost. Effective logistics management focuses on  satisfying customer requirements, organizing and managing the flow of products, making cost-effective decisions, and providing excellent customer service. Supply chain management integrates information and logistics across firms to create and deliver products that provide value to consumers. Businesses should align their supply chains with their marketing strategies. The bullwhip effect is the tendency for supply chain managers at different levels to exaggerate the need to increase or decrease inventory in response to variations or lack of predictability in customer demand. Reverse logistics is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal. Considerations for channel choice & management: ○ Coverage of the target market ○ Satisfying consumer needs and requirements ○ Profitability Factors Affecting Channel Choice & Management: ○ Target market coverage: Intensive distribution: Placing products in as many outlets as possible. Exclusive distribution: Using only one retailer in a specific geographical area. Selective distribution: Selecting a few retailers in a specific geographical area. ○ Buyer requirements and needs: Information, convenience, variety, pre- or post-sale service. ○ Profitability: Margins earned by each channel member Channel costs (distribution, advertising, selling expenses) ○ Managing Channel Relationships: Channel conflict: Occurs when one channel member believes another is preventing them from achieving their goals. Horizontal conflict: Between intermediaries at the same level. Vertical conflict: Between different levels in the channel. Disintermediation: When a channel member bypasses another and sells or buys directly. Cooperation among channel members is important.  Channel captain: Coordinates, directs, supports, and influences other channel members through economic rewards, expertise, identification, and legitimate rights (contracts). ○ Logistics & Supply Chain Management Considerations: Logistics: Focuses on getting the right products to the right place at the right time at the lowest possible cost. Logistics management: Aims to satisfy customer requirements, organize and manage the flow of products, make cost-effective decisions, and provide excellent customer service. Supply chain: Involves various firms performing activities to create and deliver a product. Supply chain management: Integrates information and logistics across firms to create and deliver valuable products. Understanding the consumer and supply chain Harmonizing the supply chain with the marketing strategy Total logistics cost: Expenses associated with transportation, materials handling and warehousing, inventory, stockouts, order processing, and return products handling. Customer service: The ability to satisfy users in terms of time, dependability, communication, and convenience. Bullwhip effect: Exaggeration of the need to increase or decrease inventory due to variations in customer demand. Balancing factors: Supply chain managers must balance total logistics costs with customer service factors. Customer service factors: Time: Order cycle and replenishment Quick response inventory delivery systems Efficient consumer response systems Dependability: Consistency of replenishment Communication: Two-way link between buyer and supplier Convenience: Minimal effort for the buyer Vendor-managed inventory (VMI): Supplier determines the product amount and assortment a customer needs and automatically delivers the appropriate items. Digital Marketing (Module + Chapter 12) Domino's Digital Strategy ○ Domino's uses a digital order-taking and technology-enabled delivery system for its pizza and related food offerings. ○ Its target customer includes Millennials, Centennials (Gen Z), and other digitally-able individuals. ○ Domino's value proposition centers around providing fast ordering and quick delivery of tasty pizza through its multi-digital channel platform and technology-assisted/enabled means. ○ Domino's offers a wide range of pizzas and related food items. ○ It has chosen an omnichannel strategy, including its stores, website, app, and voice ordering. Notably, it doesn't use third-party delivery services like Grubhub or Uber Eats. 65% of its sales come through digital channels. ○ Domino's promotes its offerings using all digital media, with a selective approach to social media. ○ It employs a barbell pricing strategy that includes a combination of lower cost and premium products. ○ Domino's differentiates itself through its leading digital technology and its focus on providing tasty pizza. ○ Domino's future digital strategy includes an innovation garage, eBikes, Nuro robots, and a commitment to owning the customer experience. Digital Marketing Supplement ○ Digital interfaces offer sellers more control over various stages of the customer journey, including: Prior Knowledge Initial Consideration Set Evaluation (Shopping, Information Gathering and Processing) Trigger (Product Selection) Shopping Cart Moment of Truth (Purchase/Commit) Post-purchase Experience Evaluation for Repurchase -> Brand Loyalty  Cancel (Intention to Cancel) -> Service Continuity ○ Digital interfaces allow sellers to control: Information search – presentation and disclosure. The shopping experience – ‘choice architecture’. The customer service experience – ‘choice architecture’. Burton Mini-case ○ Burton, a snowboard and outdoor apparel company, has been working to decrease its reliance on retailers and increase direct-to-consumer sales. ○ In 2023, Burton's revenue breakdown was as follows: 60% from retailers, 30% from digital channels (including its website and Amazon), and 10% from its physical stores. ○ In 2018, Burton faced operational challenges in scaling up its direct-to-consumer digital channel, lacking the necessary infrastructure, knowledge, and relationships for rapid order fulfillment. ○ To overcome this, Burton partnered with Amazon in 2019 to leverage Amazon's fulfillment capabilities and reach a wider customer base in the Americas (US and Canada). ○ Burton strategically used Amazon to sell small-ticket seasonal apparel items, which had lower conversion rates on its own website. ○ This allowed Burton to focus its website on selling big-ticket, high-margin specialized products like snowboards and Gore-Tex jackets. ○ Initially, Burton sold its inventory directly to Amazon for fulfillment. ○ However, after observing Amazon's operations and customer expectations, Burton improved its direct-to-consumer capabilities. ○ By 2021, Burton was able to handle its own fulfillment for orders placed through Amazon, allowing it to manage retail prices and control the brand experience for Amazon customers. Textbook E-Commerce Conversions: A conversion happens when a customer on an e-commerce site decides to make a purchase. The sources explain that companies can increase conversions by improving their website, app, ads, emails, and marketing messages. A/B testing, which involves comparing two versions of something, and multivariate testing, which compares multiple variables, can help to optimize these elements for  better conversion rates. This information could be helpful for understanding the importance of optimizing the customer experience for e-commerce success. Digital Marketing Metrics: The sources note that the results of digital marketing are easy to measure because of the interactive nature of digital media. People either respond to an ad or they don't. Marketers analyze statistics, such as the countries and websites visitors come from, the time spent on a site, what they clicked on, and the number of conversions, to make informed decisions about modifying their digital marketing campaigns. Adding this information to the study guide would highlight how data analytics plays a crucial role in improving the effectiveness of digital marketing efforts. Challenges of Social Media Marketing: ○ Lack of Control: Brands don't have direct control over what's being said about them on social media. ○ Noisy Channels: The high volume of messages on social media makes it difficult to be heard. ○ Timing Issues: Determining the optimal frequency and timing of posts on different social media platforms can be challenging. Obstacles to E-Commerce Conversions: ○ Difficulty Finding Products: Customers might not be able to easily find what they are looking for on a site. ○ Slow Website: A slow-loading website can deter customers. ○ App Issues: If customers encounter problems using an app, they might abandon their purchase. ○ Overly Complex Landing Page: A confusing or difficult-to-navigate landing page can lead to customers leaving the site. Professional Selling and Retailing Strategies (Module + Chapter 13) Salespeople create value for their firms' customers, manage relationships, relay customer and market information back to their organizations, and act on behalf of their customers. Sales strategies: ○ Script-based or "canned" selling: Salespeople memorize and deliver sales pitches verbatim.  ○ Needs-satisfaction selling: Asking questions to identify a buyer's problems and needs, and then tailoring a sales pitch to satisfy those needs. ○ Consultative selling: The seller uses special expertise to solve a complex problem to create a somewhat customized solution. ○ Strategic-partner selling: Both parties invest resources and share their expertise to create solutions that jointly grow one another's businesses. ○ Metrics Used by Salespeople: Pipeline: The number of prospects and suspects a salesperson has. Conversion ratios: A measure of how good a salesperson is at moving customers from one stage in the sales cycle to the next. Activity goals: The number of sales calls of each type a representative has to make in a certain period. Win-loss analysis: An "after the battle" review of how well a salesperson performed given the opportunities they faced. Retailing consists of all activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family, or household use. Consumer utilities offered by retailing: ○ Time: Access at the time necessary ○ Possession: Facilitating the purchase ○ Place: Convenient, accessible location(s) ○ Form: Benefits through the production or alteration of the product Classifying Retail Outlets ○ Level of Service: What degree of service is provided to consumers? Self-, limited-, or full-service ○ Merchandise Line: How many different types of products does a store carry & in what assortment? ○ Form of Ownership: Who owns it? Independent retailers, corporate chains, or contractual systems Non-store retailing: ○ Direct mail & catalogs ○ TV home shopping ○ Telemarketing ○ Direct selling ○ Automatic vending machines (v-commerce) ○ Online retailing  The activities related to managing the store and the merchandise in the Retailing Mix: store, which includes retail pricing, store location, retail communication, and merchandise. Customer Loyalty (Module + Chapter 14) Word of mouth: The passing of information and opinions verbally, which has a powerful influence on purchasing decisions. Buzz: The amount of word of mouth going on in a market. Social media: A catch-all phrase for the online channels of communication that build communities. This includes social networking sites, blogs, podcasts, wikis, vlogs, and other internet-based applications that enable users to contribute content. Viral marketing: The spread of a company's message (like a computer virus) through the community. Customer loyalty management focuses on understanding and enhancing customer loyalty, which has two dimensions: ○ Behavioral loyalty: The customer buys the product regularly and does not respond to competitor's offerings. ○ Attitudinal loyalty: The degree to which the customer prefers or likes the brand. Loyalty programs are marketing efforts that reward a person or organization for frequent purchases and consumption of offerings. Data collected from loyalty programs can be very useful for designing and improving a company's offerings. Customer satisfaction can be improved by establishing appropriate expectations in the minds of customers and delivering on those expectations.