Myers' Psychology for the AP Course
3rd EditionC. Nathan DeWall, David G Myers
955 solutions
Social Psychology
10th EditionElliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson
525 solutions
Consumer Behavior: Buying, Having, Being
13th EditionMichael R Solomon
449 solutions
Social Psychology
10th EditionElliot Aronson, Robin M. Akert, Timothy D. Wilson
525 solutions
Terms in this set (52)
Pricing objectives specify the role of price in a firm's marketing strategy and may include profit, sales revenue, market share, unit volume, survival, or some socially responsible price level. Pricing constraints that restrict a firm's pricing flexibility in- clude demand, product newness, other products sold by the firm, production and marketing costs, cost of price changes, type of competitive market, and the prices of competitive substitutes.
Demand, cost, profit, and competition influence the initial con- sideration of the approximate price level for a product or ser- vice. Demand-oriented pricing approaches stress consumer demand and revenue implications of pricing and include eight types: skimming, penetration, prestige, price lining, odd-even, target, bundle, and yield management. Cost-oriented pricing approaches emphasize the cost aspects of pricing and include three types: standard markup, cost-plus, and experience curve pricing. Profit-oriented pricing approaches focus on a bal- ance between revenues and costs to set a price and include three types: target profit, target return-on-sales, and target return-on-investment pricing. And finally, competition-oriented pricing approaches stress what competitors or the marketplace are doing and include three types: customary; above-, at-, or below-market; and loss-leader pricing. Although these approaches are described separately, some of them overlap, and an effective marketing manager will consider several in searching for an approximate price level.
The promotional mix depends on the target audience. Pro- grams for consumers, business buyers, and intermediaries might emphasize advertising, personal selling, and sales pro- motion, respectively. The promotional mix also changes over the product life-cycle stages.
During the introduction stage, all promotional mix elements are used. During the growth stage advertising is emphasized, while the maturity stage uti-
FOCUSING ON KEY TERMS
lizes sales promotion and direct marketing. Little promotion is used during the decline stage. Product characteristics also help determine the promotion mix. The level of complexity, risk, and ancillary services required will determine which element is needed. Knowing the customer's stage in the buying process can help
marketers select appropriate promotions. Advertising and public relations can create awareness in the prepurchase stage, personal selling and sales promotion can facilitate the purchase, and advertising can help reduce anxiety in the post- purchase stage. Finally, the promotional mix can depend on the channel strategy. Push strategies require personal selling and sales promotions directed at channel members, while pull strat- egies depend on advertising and sales promotion directed at
consumers.
Television advertising reaches large audiences and uses picture, print, sound, and motion; its disadvantages, however, are that it is expensive and perishable. Radio advertising is inexpensive and can be placed quickly, but it has no visual element and is perishable. Magazine advertising can target specific audiences and can convey complex information, but it takes a long time to place the ad and is relatively expensive. Newspapers provide ex-
cellent coverage of local markets and can be changed quickly, but they have a short life span and poor color. Yellow pages
FOCUSING ON KEY TERMS
advertising has a long use period and is available 24 hours per day; its disadvantages, however, are that there is a proliferation of directories and they cannot be updated frequently. Internet advertising can be interactive, but its effectiveness is difficult to measure. Outdoor advertising provides repeat exposures, but its message must be very
short and simple. Direct mail can be tar- geted at very selective audiences, but its cost per contact is high.
Social media are online media where users submit comments, photos, and videos, often accompanied by a feedback process to identify "popular" topics. Social media can be classified based on two factors: (1) media richness, which involves the degree of acoustic, visual, and personal contact between the social network and the user, and (2) self-disclosure, which is the degree to which individuals can control the impressions they want to make on others. Social media differ from tradi- tional advertising media (newspapers, magazines, radio, and television) in that user-generated content (1) is relatively inex- pensive to create, publish, and access, (2) requires little train- ing to develop, (3) can deliver virtually instantaneous responses, (4) can quickly alter and repost, and (5) may not be as private or anonymous as users expect.
The four major social networks are Facebook, Twitter, LinkedIn, and YouTube. Facebook is a social network where users create a personal profile, add other users as "friends," and exchange comments, photos, videos, and "likes" with them. To increase traffic to a Facebook Page, brand managers can use paid ads and sponsored stories. Twitter enables users to send and receive "tweets," messages up to 140 characters long. For Twitter, brand managers can use
monitoring programs to track what people are saying about their organization's brand. LinkedIn lets users post their personal profiles to a network of business- people. LinkedIn can be used to create a company profile to share brand information and career opportunities with LinkedIn users and to demonstrate the company's expertise and profes- sionalism. YouTube is a video-sharing website where users can
upload, view, and comment on videos. YouTube also allows marketers to create a brand
channel to promote a product, show ads for it, and have viewers comment on it. A company can use YouTube to inform consumers about itself and direct traffic by featuring a link back to its website.
With promotional messages received through traditional media, recipients are generally "passive receivers" and the communi- cation ends with them. In contrast, recipients of social media messages are "active receivers," and the company sending them messages hopes they will become "evangelists" and send posi- tive messages back to the company and to online friends. The factors a marketer uses to select a specific social network in- volve assessing (1) the number of registered users and unique visitors to the company's website, (2) the characteristics (or profile) of those visitors, and (3) the focus of the social net- work. Of the four major social networks, Facebook has the larg- est number of daily visitors, followed by YouTube, Twitter, and LinkedIn. Each of these has a unique user profile that allows marketers to develop marketing programs to reach specific tar- get segments. Also, because each social network has a unique focus (videos, short text messaging, and so on), marketers can modify their marketing programs to take advantage of these differences.
The convergence of the real and digital worlds in social net- working is the result of the proliferation of interlinked smart- phones, tablet devices, sensors, RFIDs, databases, algorithms, apps, and other elements. Apps are small, downloadable soft- ware programs that run on smartphones and tablet devices to add functionality to these devices. In the future, there will be: (1) new ways to personalize social media connections; (2) an increased focus on socially networked "communities;" (3) an increased emphasis on measuring the marketing return on in- vestment for social media initiatives; and (4) the use of devices equipped with near field communications technology that allows consumers and marketers to exchange personal and product- related information with each other. The convergence of social media, smartphones, tablet devices, and new apps will lead to companies having a more dynamic interaction with their cus- tomers. For consumers, however, this could lead to a loss of privacy and possible exploitation by unscrupulous marketers.
Interactive marketing involves two-way buyer-seller
electronic communication in a computer-mediated environment in which the buyer controls the kind and amount of information received
from the seller. It creates customer value by providing time, place, form, and possession utility for consumers. Customer re- lationships are created and sustained through two unique capa- bilities of Internet technology: interactivity and individuality. From an interactive marketing perspective, customer experi- ence represents the sum total of the interactions
that a customer
has with a company's website, from the initial look at a home page through the entire purchase decision process. Companies produce a customer experience through seven website design elements. These elements are context, content, community, cus- tomization, communication, connection, and commerce.
Porter identifies four generic business strategies that firms can adopt: (1) a cost leadership strategy, which focuses on reducing expenses to
lower product prices while targeting many market segments; (2) a differentiation strategy, which requires products to have significant points of difference to charge a premium price while targeting many market segments; (3) a cost focus strategy, which involves controlling costs to lower prices of products targeting only a few market segments; and (4) a dif- ferentiation focus strategy, which requires products to have sig- nificant points of difference to reach one or only a few market
segments.
The synergy analysis framework focuses on two kinds of synergies: marketing synergies (efficiencies), which run hori- zontally across the row of the various products offered by the firm to a single market segment; and R&D-manufacturing synergies (efficiencies), which run vertically down a column of the various market segments targeted for a given product or product class. This results in five alternative combinations: market-product concentration, market specialization, product
specialization, selective specialization, and full coverage.
First, marketing departments must distinguish between line po- sitions, those individuals who have the authority and responsi- bility to issue orders to people who report to them, and staff positions, those individuals who have the authority and respon- sibility to advise but cannot directly order people in line posi- tions to do something.
Second, marketing organizations use one of four
divisional groupings to implement marketing plans: product line group- ings, which are responsible for specific product offerings; func- tional groupings, which represent the different departments and business activities within a firm; geographical groupings, in which sales territories are subdivided on a geographical basis; and market-based groupings, which utilize specific customer segments.
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Product managers interact with many people and groups both inside and outside the firm to
coordinate the planning, implementation, and evaluation of the marketing plan and its budget on an annual and long-term basis for the products for which they are responsible.
Retail outlets can be classified by their form of ownership, level of service, and type of merchandise line. The forms of owner- ship include independent retailers, corporate chains, and con- tractual systems that include retailer-sponsored cooperatives, wholesaler-sponsored voluntary chains, and franchises. The levels of service include self-service, limited-service, and full- service outlets. Stores classified by their merchandise line in- clude stores with depth, such as sporting goods specialty stores, and stores with breadth, such as large department stores.
The wheel of retailing concept explains how retail outlets typi- cally enter the market as low-status, low-margin stores. Over time, stores gradually add new products and services, increas- ing their prices, status, and margins, and leaving an opening for new low-status, low-margin stores. The retail life cycle de- scribes the process of growth and decline for retail outlets through four stages: early growth, accelerated development, maturity, and decline.
There are three types of firms that perform wholesaling func- tions. First, merchant wholesalers are independently owned and take title to merchandise. They include general merchandise wholesalers, specialty merchandise wholesalers, rack jobbers, cash and carry wholesalers, drop shippers, and truck jobbers. Merchant wholesalers can perform a variety of channel func- tions. Second, agents and brokers do not take title to merchan- dise and primarily perform marketing functions. Finally, manufacturer's branches, which may carry inventory, and sales offices, which perform sales functions, are wholly owned by the producer.
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