WHAT IS MANAGEMENT



LECTURE OUTLINE AND LECTURE NOTES

CHAPTER OPENING PROFILE

THE SUNNY WINDOW (TEXT PAGES 316-318)

Nancy Engel took the last $30 of her welfare check and purchased assorted spices. She then mixed the spices together and called it her “Italian spice mix.” The next day she took her mixes to a flea market and sold out. Her $30 investment earned her $200. By reinvesting her profits and carefully expanding, her business, The Sunny Window, became a $250,000 venture. Engel’s story is an excellent example of how, with nothing but an idea and $30, a successful business can be created.

|Lecture outline lecture notes |

| I. Introduction to Place and Promotion | |

|Learning objective 1 |PowerPoint 10-1 |

|Explain place and how it pertains to marketing. (Text pages 318-323) |Chapter Title |

|A. The final two “P”s of the marketing mix are place and promotion. |(Refers to text page 316) |

|B. PLACE is the process of getting products to the places where they will be sold, or distribution, | |

|and how to determine the actual locations where the products are sold. |PowerPoint 10-2 |

|C. Promotion consists of five areas: |Learning Objectives |

|1. advertising; |(Refers to text page 317) |

|2. sales promotion; | |

|3. direct marketing; | |

|4. public relations; | |

|5. personal selling. | |

| II. The 4Ps of Marketing: Place | |

|A. There are hundreds of thousands of marketing intermediaries whose job it is to help move goods |PowerPoint 10-3 |

|through the distribution network from producer to customers. |The 4Ps of Marketing: Place (Refers to|

|B. MARKETING INTERMEDIARIES are organizations that assist in moving goods and services from producer |text pages 318-319) |

|to business and consumer users (often called middlemen). | |

|1. These are organizations in the middle of a series of organizations that distribute goods from | |

|producer to consumer. | |

|2. A CHANNEL OF DISTRIBUTION is the whole series of marketing intermediaries, such as agents, | |

|brokers, wholesalers, and retailers, which join together to transport and store goods in their path |TEXT REFERENCE |

|(or channel) from producers to consumers. |Real World Business Apps |

|3. AGENTS/BROKERS are marketing intermediaries who bring buyers and sellers together and assist in |(Box in text on page 319) |

|negotiating an exchange, but do not take title to the goods (don’t own the goods at any point in the |Wei Zhang is the owner of a small |

|process). |retail store that sells ethnic foods, |

|4. A WHOLESALER is a marketing intermediary that sells to other organizations. |such as spices and packaged foods. Wei|

|5. A RETAILER is an organization that sells to ultimate consumers. |wants to expand his business and bring|

|6. Channels of distribution keep communication, the exchange of currency, and the title of the goods |more paying customers into the store. |

|flowing openly among the parties. | |

|C. MERCHANT WHOLESALERS are independently-owned firms that take title to the goods that they handle. | |

|1. Full-service wholesalers perform all of the distribution functions. | |

|2. Limited-function wholesalers perform only selected functions, but try to do them especially well. |TEXT FIGURE 10.1 |

|3. RACK JOBBERS furnish racks or shelves full of merchandise to retailers, display products, and sell|Examples of Distribution Channels for |

|on consignment. |Consumer and Industrial Goods (Box in |

|4. CASH-AND-CARRY WHOLESALERS serve mostly smaller retailers with a limited assortment of products |text on page 320) |

|(example: Office Depot). | |

|5. DROP SHIPPERS solicit orders from retailers and other wholesalers and have the merchandise shipped| |

|directly from a producer to a buyer. | |

|D. Agents and Brokers |critical thinking |

|1. Agents and brokers bring buyers and sellers together and help negotiate an exchange, but they |exercise 10-1 |

|never own the products. |Distribution Channels |

|a. They earn commissions or fees based on a percentage of the sales revenues. |This exercise asks students to |

|b. Agents maintain long-term relationships with the people they represent. |identify the channels of distribution |

|c. Brokers are usually hired on a temporary basis. |of manufacturers in their areas. (See |

|2. Agents who represent producers are known as manufacturer’s agents or sales agents. |complete exercise on page 10.50 of |

|a. Manufacturers’ agents may represent several manufacturers in a specific territory. |this manual.) |

|b. Sales agents represent a single producer in a larger territory. | |

|3. Brokers have no continuous relationship with the buyer or seller. | |

|E. Retail Intermediaries | |

|1. For customers, the most useful intermediary is the retailer. | |

|2. These are the firms who bring goods and services to neighborhoods and make them available to |TEXT FIGURE 10.2 |

|consumers. |Intermediaries Create Exchange |

|SELF Check Questions (Text page 323) |Efficiency (Box in text on page 321) |

|What are marketing intermediaries? Why are they useful? | |

|What is the difference between a merchant wholesaler and an agent/broker? | |

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| |PowerPoint 10-4 |

| |Merchant Wholesalers |

| |(Refers to text pages 319-323) |

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| |Lecture link 10-1 |

| |What Intermediaries to Use When Going |

| |International |

| |What intermediaries are needed to |

| |reach the international customer? (See|

| |complete lecture link on page 10.31 of|

| |this manual.) |

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| | |

| |TEXT REFERENCE |

| |Study Skills: Importance of Study |

| |Partners |

| |(Box in text on page 322) |

| |An additional exercise and discussion |

| |is available on page 10.30 of this |

| |manual. |

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| |lecture link 10-2 |

| |Utilities Created by |

| |Marketing |

| |Six types of utilities are created |

| |when products are made available to |

| |consumers—form, time, place, |

| |possession, information, and service. |

| |PPT 10-5 below can be used with this |

| |lecture link. (See complete lecture |

| |link on page 10.31 of this manual.) |

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| | |

| |PowerPoint 10-5 |

| |Utilities Created by |

| |Intermediaries (Refers to LL 10-2 |

| |above and text pages 323-325) |

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| |bonus internet |

| |exercise 10-1 |

| |Careers in Distribution |

| |This Internet exercise asks students |

| |to research a career in distribution. |

| |(See complete exercise on page 10.43 |

| |of this manual.) |

| | |

| |Bonus Case 10-1 |

| |Multilevel Marketing |

| |Multilevel marketing often gets a bad |

| |rap. But when multilevel marketing |

| |companies succeed, their growth can be|

| |astonishing. (See complete case, |

| |discussion questions, and suggested |

| |answers on page 10.57 of this manual.)|

| III. Logistics and Transportation |PowerPoint 10-6 |

|Learning objective 2 |Logistics and Transportation (Refers |

|DESCRIBE LOGISTICS AND DIFFERENT TRANSPORTATION MODES. (TEXT PAGES 323-325) |to text pages 323-325) |

|A. A key issue in marketing is determining the most effective and efficient methods of delivering | |

|goods. |lecture link 10-3 |

|B. SUPPLY CHAIN MANAGEMENT is the process of moving goods and materials from one place to another. |When the Supply Chain Breaks |

|1. The supply chain (or value chain) is the sequence of linked activities that must be performed by |The unexpected closure of a key player|

|various organizations to move goods from the sources or raw materials to ultimate consumers. |in the supply chain can create chaos |

|2. The supply chain is longer than the channel of distribution. |in the market. (See complete lecture |

|C. LOGISTICS is planning, implementing, and controlling the physical flow of materials, goods, and |link on page 10.33 of this manual.) |

|related information from points of origin to points of consumption. | |

|1. The amount of time a product spends in transit and the associated costs are factors to consider | |

|when choosing transportation. | |

|a. Bringing goods by water is inexpensive, but very slow. | |

|b. Trucks are good for small shipments and can be used to reach remote locations. |TEXT FIGURE 10.3 |

|c. Trains are good for large shipments, but not practical for remote locations. |The Supply Chain and Channels of |

|d. Air transportation is speedy, but very expensive. |Distribution (Box in text on page 324)|

|2. Most logistics managers use intermodal shipping, using multiple forms of transportation to | |

|complete a single shipment. | |

|SELF Check Questions (Text page 325) | |

|Define logistics and supply chain management. What is the difference? | |

|What are the advantages of train transportation vs. truck transportation? | |

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| |TEXT FIGURE 10.4 |

| |Comparison of Transportation Modes |

| |(Box in text on page 324) |

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| |lecture link 10-4 |

| |Evaluating Modes of Transportation |

| |All transportation modes can be |

| |evaluated on basic service criteria: |

| |cost, speed, dependability, |

| |flexibility, frequency, and reach. |

| |(See complete lecture link on page |

| |10.34 of this manual.) |

| | |

| |Bonus Case 10-2 |

| |Greater Chicago Food Depository: |

| |Feeding the Poor of Chicago (Video |

| |Case) |

| |This bonus case ties in with the video|

| |available for use with this chapter. |

| |Every business, both for-profit and |

| |not-for-profit, needs to understand |

| |the basic principles of marketing. |

| |This case focuses on one such |

| |nonprofit—the Greater Chicago Food |

| |Depository. (See complete case, |

| |discussion questions, and suggested |

| |answers on page 10.59 of this manual.)|

| IV. Retailing | |

|Learning objective 3 | |

|DESCRIBE THE TYPES OF RETAIL COMPETITION AND DISTRIBUTION. (TEXT PAGES 325-333) | |

|A. A retailer is a middleman that sells to consumers. | |

|1. The U.S. has about 2.3 million retail stores, not including websites. | |

|2. These firms generate $3.8 trillion sales annually. | |

|3. About 15.3 million people work for retail organizations. | |

|B. Method of Competition in Retailing | |

|1. There are five major ways in which retailers compete for customers. | |

|2. Price competition |PowerPoint 10-7 |

|a. Discount stores such as Wal-Mart, Target, and Kmart succeed by offering low prices. |Retailing (Refers to text pages |

|b. Service organizations, such as Southwest Airlines and H&R Block, also compete on price. |325-329) |

|c. Price competition is getting fiercer as Internet firms help consumers find the best prices. | |

|3. Service competition | |

|a. Service in retailing involves putting the customer first and providing follow-up service. | |

|b. Consumers are frequently willing to pay a little more if the retailer offers outstanding service. | |

|c. The benchmark companies include Home Depot, The Men’s Warehouse, Southwest Airlines, and |bonus internet |

|Nordstrom. |exercise 10-2 |

|4. Location competition |Top 100 Retailers |

|a. Many services compete effectively by having good locations (Burger King and Pizza Hut have on |This Internet exercise asks student to|

|campus locations). |use the Internet to research the top |

|b. Nothing is more convenient than shopping online. |ten U.S. retailers. (See complete |

|c. Competition between brick-and-mortar retailers and online retailers is intensifying. |exercise on page 10.44 of this |

|5. Selection competition |manual.) |

|a. Selection is the offering of a wide variety of items in the same product category. | |

|b. CATEGORY KILLER STORES offer wide selection of goods in a specific category (such as Toys “R” Us),| |

|at competitive prices. | |

|c. Small, independent toys stores were driven out of business by Toys “R” Us. | |

|d. In turn, many category killer stores are being “killed” by discount stores like Wal-Mart. | |

|i. Customers find it convenient to shop for multiple products at one store. |lecture link 10-5 |

|ii. Location may be more important than selection for consumer items. |Wal-Mart to the Rescue |

|e. Internet stores can offer products from dozens of suppliers and almost unlimited selection. |After Hurricane Katrina devastated |

|f. Customers favor stores such as Costco for the convenience of one-stop shopping. |Waveland, Mississippi, Wal-Mart store |

|6. Entertainment competition |manager Ron Cox contacted the retailer|

|a. Retailers try to add value through innovative items and designs. Examples: |and arranged for a temporary |

|i. Jordan’s Furniture recreates French Quarter facades. |replacement. (See complete lecture |

|ii. Bass Pro Shops feature aquariums. |link on page 10.35 of this manual.) |

|b. If the experience is “fun,” it can build loyalty and repeat visits. | |

|c. Many retailers compete in multiple areas (example: REI Stores use selection, location, service, | |

|and entertainment competition). | |

|SELF Check Questions (Text page 330) | |

|Differentiate between price and service competition. What customers would be attracted to each | |

|category? Why? | |

|Explain the concepts of selection and entertainment competition. Can retailers compete in more than | |

|one area? Explain. | |

|C. Retail Distribution | |

|1. Different products call for different retail distribution strategies. | |

|2. INTENSIVE DISTRIBUTION puts products into as many retail outlets as possible, including vending | |

|machines (used for convenience goods.) | |

|a. Convenience goods such as candy, gum, and popular magazines, need intensive distribution. | |

|b. Such products should be in as many retailer outlets as possible. | |

|3. SELECTIVE DISTRIBUTION sends products to only a preferred group of retailers in an area (used for | |

|shopping goods). | |

|a. Selective distribution helps assure producers of quality sales and service. | |

|b. Examples: Godiva Chocolatier, H and M Polo, and Polo clothing. | |

|c. Such distribution is less widespread than intensive distribution. | |

|4. EXCLUSIVE DISTRIBUTION sends products to only one retail outlet in a given geographic area (used | |

|for specialty goods). | |

|a. The retailer has exclusive rights to sell the product. | |

|b. Examples: luxury auto manufacturers and Tiffany’s. | |

|D. Other Types of Retailing | |

|1. Electronic retailing means selling goods and services to ultimate consumers (e.g., you and me) | |

|over the Internet. | |

|a. Attracting customers is only half the battle; the other half is delivering the goods, providing | |

|service, and keeping your customers. | |

|b. Internet retailers have had difficulties with service after the sale, such as handling complaints | |

|and returns. | |

|c. Most Internet retailers provide e-mail confirmation. | |

|d. Some websites have live chat functions. | |

|2. TELEMARKETING is the sale of goods and services by telephone. | |

|a. Many companies use telemarketing to supplement in-store selling. | |

|b. There are two types of telemarketing: | |

|i. At outbound call centers an employee calls people to try to sell a product | |

|ii. An inbound call centers handles calls from customers on a toll-free number. | |

|c. Companies that use outbound telemarketing face several challenges: | |

|i. the National Do No Call Registry; | |

|ii. caller identification services; | |

|iii. other methods customers use to screen out potential telemarketing calls. | |

|d. Many online sellers use spam, e-mails that encourage potential customers to buy a product. |TEXT FIGURE 10.5 |

|i. The goal is to send out as many e-mails as possible in the hope a few customers will respond. |Types of Retail Stores (Box in text on|

|ii. Many customers consider outbound telemarketing and spam as nuisances. |page 326) |

|3. Vending | |

|a. Vending machines dispense convenience goods when customers deposit enough money into the machine. | |

|b. The benefit of vending machines is their convenient location. | |

|4. DIRECT SELLING is selling to consumers in their homes or where they work. | |

|a. Some goods are sold at “house parties” sponsored by sellers. | |

|b. Many companies are sponsoring parties at workplaces and on weekends and evenings to accommodate | |

|working women. | |

|SELF Check Questions (Text page 333) | |

|What are the three types of retail distribution? What type of distribution would convenience products| |

|use? Specialty products? | |

|Name three forms of retailing that take place outside of bricks and mortar stores. | |

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| |PowerPoint 10-8 |

| |Retail Distribution |

| |(Refers to text pages 330-333) |

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| |critical thinking |

| |exercise 10-2 |

| |Retail Distribution Strategy |

| |This exercise asks students to give |

| |examples for each category of |

| |distribution strategy. (See complete |

| |exercise on page 10.51 of this |

| |manual.) |

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| |Bonus Case 10-3 |

| |Starting an Online Business |

| |Joseph Cohen started an online |

| |business at age 14. (See complete |

| |case, discussion questions, and |

| |suggested answers on page 10.61 of |

| |this manual.) |

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| |critical thinking |

| |exercise 10-3 |

| |Designing a Website |

| |A well-designed website is a powerful |

| |promotional tool. This exercise asks |

| |students to design a basic |

| |website—developing an overall message,|

| |developing interesting visual |

| |features, and building a basic page |

| |hierarchy. PPT 10-9, “Designing a |

| |Website,” below can be used with this |

| |exercise. (See complete exercise on |

| |page 10.52 of this manual.) |

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| |PowerPoint 10-9 |

| |Designing a Website (Refers to CTE |

| |10-3 above and text pages 334-337) |

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| |bonus internet |

| |exercise 10-3 |

| |Internet Auctions: |

| |Bypassing the Retailer |

| |This Internet exercise directs |

| |students to the Internet auction site |

| |eBay to explore how such sites are |

| |changing the channel of distribution |

| |for consumer goods. (See complete |

| |exercise on page 10.46 of this |

| |manual.) |

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| |lecture link 10-6 |

| |The Cost of Violating the “Do Not |

| |Call” Registration Law |

| |Ignoring the Federal Do Not Call |

| |registry can be expensive. One company|

| |was fined nearly $4.5 million. (See |

| |complete lecture link on page 10.36 of|

| |this manual.) |

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| |TEXT REFERENCE |

| |Ethical Challenge: Salespeople’s Time |

| |and Trouble |

| |Is Advertising Unethical? (Box in text|

| |on page 331) |

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| |lecture link 10-7 |

| |Party On |

| |The days of the old-fashioned |

| |Tupperware party are over, but some |

| |companies are using the direct-to-home|

| |distribution method for more unusual |

| |products. (See complete lecture link |

| |on page 10.37 of this manual.) |

| | |

| V. The 4Ps of Marketing: Promotion | |

|Learning objective 4 | |

|UNDERSTAND THE FIVE TYPES OF PROMOTION. (TEXT PAGES 334-349) | |

|A. The final “P” is promotion. | |

|1. Promotion is an effort by marketers to inform and remind people in the target market and about |PowerPoint 10-10 |

|products and to persuade them to participate in the exchange. |The 4Ps of Marketing: Promotion |

|a. The marketer must: |(Refers to text pages 334-337) |

|i. define the target audience; | |

|ii. select methods to reach the audience; | |

|iii. design the right message for the audience; | |

|iv. make sure the audience gets the message. | |

|b. Many companies chose to hire advertising agencies to: |TEXT FIGURE 10.6 |

|i. develop the target market; |The Promotion Mix (Box in text on page|

|ii. create advertisements and promotional plans; |335) |

|iii. implement these plans. | |

|c. The combination of promotional tools, or its PROMOTIONAL MIX, includes advertising, personal | |

|selling, public relations, and sales promotion. | |

|2. INTEGRATED MARKETING COMMUNICATION (IMC) combines all the promotional tools into one comprehensive| |

|and unified promotional strategy. | |

|a. Companies use all the promotional tools and resources to create a positive brand image and meet | |

|strategic marketing goals. | |

|b. The concept involves unifying all aspects of the product and its marketing. | |

|c. Good IMC should provide the customer with a consistent message about a product. |TEXT FIGURE 10.7 |

|B. Advertising |Steps in a Promotion Campaign (Box in |

|1. ADVERTISING is paid, nonpersonal communication through various media by organizations and |text on page 335) |

|individuals who are in some way identified in the advertising message. | |

|a. Total ad volume exceeds $281 billion yearly. | |

|b. Television is the number one advertising medium in terms of total dollars spent. | |

|c. The public benefits from advertising: | |

|i. Advertising is informative–it provides information about products, prices, features, and so on. | |

|ii. Advertising provides us with free TV and radio programs, because advertisers cover most of the | |

|production costs. | |

|iii. Advertising costs cover the major costs of producing newspapers and magazines. | |

|d. Newspapers, radio, and the yellow pages are especially attractive to local advertisers. | |

|e. TV has many advantages to national advertisers, but it is expensive. | |

|i. However, few other media can reach as many people with such impact. | |

|ii. Forty-three percent of U.S. households are reached by the Super Bowl. | |

|2. PRODUCT PLACEMENT is paying to put products into TV shows and movies where they will be seen. | |

|3. Marketers must choose which media and which programs will best reach the audience they desire. | |

|C. PERSONAL SELLING is face-to-face presentation and promotion of products and services. | |

|1. Personal selling occurs at both a B2B level and at a consumer level. | |

|a. Effective selling today is more than persuading others to buy; it is helping consumers satisfy | |

|their wants and needs. | |

|b. Salespeople now use technology, such as the Internet, portable computers, and fax machines, to | |

|help customers and to complete the sale. | |

|c. The benefit of personal selling is having a person help compete the transaction. | |

|d. Because personal attention for customers is expensive, some companies are replacing salespeople | |

|with Internet services. | |

|2. Step 1: Prospect and Qualify | |

|a. PROSPECTING involves researching potential buyers and choosing those most likely to buy. | |

|b. This is also called qualifying, making sure that people have the need for a product, the authority|TEXT FIGURE 10.8 |

|to buy, and the willingness to listen to a sales message. |Advantages and Disadvantages of |

|c. A person who meets these criteria is the prospect. |Various Forms of Media (Box in text on|

|d. The best prospects are people recommended by existing customers. |page 336) |

|3. Step 2: Preapproach | |

|a. Before making a sales call, sales representatives must learn as much as possible about customers | |

|and their wants and needs. |bonus internet |

|b. In B2B situations, salespeople often e-mail potential clients with proposals before making a |exercise 10-4 |

|formal visit. |Advertising on Google |

|4. Step 3: Approach |A popular method of Internet |

|a. You don’t have a second chance to make a first impression. |advertising is buying an ad on a web |

|b. The approach should give an impression of friendly professionalism to create rapport, to build |search engine such as Google. This |

|credibility, and to start a relationship. |Internet exercise lets students |

|5. Step 4: Make presentation |explore exactly what this involves. |

|a. The presentation should match the benefits of your value package to the client’s needs. |(See complete exercise on page 10.47 |

|b. Using research, salespeople can tailor their presentation to fit clients. |of this manual.) |

|c. This is a good time to use testimonials. | |

|6. Step 5: Answer objections | |

|a. A salesperson should anticipate potential objections and prepare proper responses. |bonus internet |

|b. Questions should be viewed as opportunities to create better relationships. |exercise 10-5 |

|7. Step 6: Close sale |Ethics in Advertising |

|a. The trial close consists of a question or statement that moves the selling process toward the |The American Association of |

|actual close. |Advertising Agencies is the |

|b. The final step is to ask for the order. |professional organization representing|

|8. Step 7: Follow Up |the major advertising agencies. Its |

|a. The selling process isn’t over until the order is approved and the customer is happy. |website provides guidelines for |

|b. Selling includes establishing relationships, not just selling goods and services. |ethical behavior in advertising. (See |

|c. Follow-up includes handling customer complaints, making sure that the customer’s questions are |complete exercise on page 10.48 of |

|answered, and supplying what the customer wants. |this manual.) |

|d. Customer service is often as important to the sale as the product itself. | |

|9. The selling process varies somewhat among different goods and services, but the general idea is | |

|the same. |critical thinking |

|D. Public Relations |exercise 10-4 |

|1. PUBLIC RELATIONS (PR) is the management function that evaluates public attitudes, changes policies|Advertising Appeals |

|and procedures accordingly, and executes a program of action and information to earn public |This exercise explores the different |

|understanding and acceptance. |advertising appeals that marketers use|

|a. A good public relations program has three steps: |in television advertising. (See |

|i. listen to the public: start with good marketing research; |complete exercise on page 10.54 of |

|ii. change policies and procedures in response to what customers want; |this manual.) |

|iii. inform people that you’re being responsive to their needs. | |

|b. Customers often complain that it is nearly impossible to reach a human being with a complaint. | |

|i. Today PR is taking a more active role in listening to consumer with problems. | |

|ii. PR must maintain good relationships with production and service people so they can answer | |

|questions quickly. |TEXT FIGURE 10.9 |

|c. Public relations is one of the fastest-growing industries. |Expenditures in 2006 for Various Types|

|d. The public relations department is responsible for maintaining close relationships with the media,|of Media (Box in text on page 337) |

|community leaders, government officials, and other stakeholders. | |

|2. Publicity | |

|a. PUBLICITY is any information about an individual, product, or an organization that is distributed | |

|to the public through the media and that’s not paid for or controlled by the sponsor. | |

|i. Press releases must be carefully written so the media will publish them. | |

|ii. Publicity works only if the media finds the material interesting or newsworthy. | |

|b. Advantages of publicity: | |

|i. Publicity is free. | |

|ii. Publicity may reach people who wouldn’t read an ad. | |

|iii. The greatest advantage of publicity may be its believability. | |

|c. Disadvantages of publicity include: | |

|i. Marketers have no control over how, when, or if the media will use the story. | |

|ii. The media does not have to publish it. | |

|iii. The story can be altered so it’s not positive. | |

|iv. There is good publicity and there is bad publicity. | |

|v. Stories are not likely to be repeated; advertising can be repeated as often as needed. |critical thinking |

|d. To see that publicity is handled well by the media, the marketer should establish a friendly |exercise 10-5 |

|relationship with the media and cooperate with them. |Identifying Product |

|E. SALES PROMOTION is the promotional tool that stimulates consumer purchasing and dealer interest by|Placement |

|means of short-term activities. |This exercise asks students to watch |

|1. Examples of consumer sales promotions include free samples, cents-off coupons, and prizes. |prime time television to identify |

|a. Sales promotion programs are designed to supplement personal selling, advertising, and public |product placements in television |

|relations by creating enthusiasm for the overall promotional program. |shows. (See complete exercise on page |

|b. Internal sales promotions (within company) generate employee enthusiasm about a product, |10.56 of this manual.) |

|including: | |

|i. sales training; | |

|ii. development of sales aids such as flip charts, portable audiovisual displays, and videotapes; | |

|iii. participation in trade shows. | |

|c. External sales promotion (outside company, including distributors and dealers) | |

|i. It is important to get distributors and dealers involved so they, too, are enthusiastic. | |

|ii. Trade shows are important because buyers are able to see products from many different sellers. | |

|d. Virtual trade shows—trade shows on the Internet—let buyers to see many products without leaving | |

|the office. | |

|2. Next promote to final consumers. |PowerPoint 10-11 |

|a. Techniques include samples, coupons, cents-off deals, displays, contests, rebates, and so on. |Personal Selling |

|b. Sales promotion is an ongoing effort to maintain enthusiasm. |(Refers to text pages 337-341) |

|3. SAMPLING is letting consumers have a small sample of a product for no charge. | |

|a. Using sampling in grocery stores is a quick, effective way of demonstrating a product’s | |

|superiority at the time consumers are making a purchase decision. | |

|b. Sampling is a quick, effective way of showing a product’s benefits. | |

|4. Companies use sampling in conjunction with other techniques such as event marketing. | |

|a. EVENT MARKETING is sponsoring events such as rock concerts or being at various events to promote | |

|your products. | |

|b. Companies can also support charitable organizations in order to give back to their communities. | |

|F. Other Types of Promotion | |

|1. To create a “buzz” companies can try viral marketing and word-of-mouth. | |

|2. VIRAL MARKETING is the term now used to describe everything from paying people to say positive | |

|things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for| |

|directing friends to specific websites. | |

|a. Viral marketing can include: | |

|i. paying people to say positive things on the Internet; | |

|ii. setting up multilevel selling schemes. | |

|b. Example: Barnes & Noble sends an e-mail to customers’ friends telling them if you enjoy reading a | |

|book. | |

|3. Word-of-mouth is one of the most effective promotional tools. | |

|a. WORD-OF-MOUTH PROMOTION is a promotional tool that involves people telling other people about | |

|products they have purchased. | |

|b. Anything that encourages people to talk favorably about an organization is effective | |

|word-of-mouth. | |

|c. Clever commercials and samples can generate word-of-mouth. | |

|d. An effective strategy for spreading word-of-mouth is to send testimonials to current customers. | |

|e. Testimonials are effective in confirming customers’ belief that they chose the right company and | |

|are effective in promotion to new customers. | |

|SELF Check Questions (Text page 349) | |

|List each type of promotion we discussed. | |

|Which method of promotion do you think is most effective in selling to you? Which is the least | |

|effective? | |

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| |PowerPoint 10-12 |

| |Public Relations |

| |(Refers to text pages 341-344) |

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| |bonus internet |

| |exercise 10-6 |

| |Protecting Competition and Consumers |

| |The Federal Trade Commission is the |

| |enforcement arm for consumer |

| |protection laws and laws ensuring fair|

| |competition. This Internet exercise |

| |asks students to explore the specific |

| |laws that affect advertising and |

| |competition. (See complete exercise on|

| |page 10.49 of this manual.) |

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| |TEXT FIGURE 10.10 |

| |A Press Release Announced Apple’s |

| |Introduction of the iPhone (Box in |

| |text on page 343) |

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| |TEXT FIGURE 10.11 |

| |Examples of Business-to-Business Sales|

| |Promotion: Techniques and Consumer |

| |Sales Promotion Techniques (Box in |

| |text on page 344) |

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| |PowerPoint 10-13 |

| |Sales Promotion |

| |(Refers to text pages 344-349) |

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| |TEXT REFERENCE |

| |Career Development: Make an Impression|

| |That Counts! |

| |(Box in text on page 347) |

| |An additional exercise and discussion |

| |is available on page 10.29 of this |

| |manual. |

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| |TEXT REFERENCE |

| |Thinking Critically: Small-Screen |

| |Dream: Launch a Cable Ad Campaign |

| |(Box in text on page 348) |

| |Cable networks have lured audiences |

| |away from broadcast TV networks. Now |

| |local commercials are the mainstay of |

| |cable systems and allow marketers to |

| |reach a wide yet qualified audience. |

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| |TEXT REFERENCE |

| |Real World Business Apps |

| |(Box in text on page 351) |

| |Wei Zhang has learned that he needs to|

| |develop a promotional plan to expand |

| |his customer base. He has developed an|

| |advertisement for the yellow pages and|

| |plans to use public relations as part |

| |of his marketing plan. |

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| |lecture link 10-8 |

| |Measuring Web Traffic |

| |Is the “most popular” website the one |

| |with the most unique visitors or the |

| |most individual hits? It makes a big |

| |difference. (See complete lecture link|

| |on page 10.37 of this manual.) |

| | |

| |lecture link 10-9 |

| |Desktop Distribution |

| |Internet providers and software |

| |companies use a form of sampling, |

| |trial software preloaded on new PCs. |

| |(See complete lecture link on page |

| |10.38 of this manual.) |

| | |

| |lecture link 10-10 |

| |Promotional Bits |

| |Celebrity voice-overs, phone booth |

| |ads, advertising and TiVo, and an |

| |online chicken—a collection of |

| |interesting bits about promotion. (See|

| |complete lecture link on page 10.39 of|

| |this manual.) |

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| |Bonus Case 10-4 |

| |Wieden & Kennedy: |

| |Experimental Promotions |

| |Wieden and Kennedy (W&K), is known as |

| |one of the most creative advertising |

| |agencies in the United States. One of |

| |its ads even used a streaker. (See |

| |complete case, discussion questions, |

| |and suggested answers on page 10.63 of|

| |this manual.) |

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| |Bonus Case 10-5 |

| |Night Agency (Video Case) |

| |This bonus case ties in with the video|

| |available for use with this chapter |

| |The challenge for marketers today is |

| |to create promotions for the new |

| |realities of the marketplace. That |

| |means, for one thing, creating |

| |advertising and other promotions on |

| |the Internet. (See complete case, |

| |discussion questions, and suggested |

| |answers on page 10.65 of this manual.)|

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| |Bonus Case 10-6 |

| |Guerrilla Marketing |

| |Dietrich Mateschitz is the man who |

| |introduced Red Bull to the U.S. |

| |market. The secret to Red Bull’s |

| |success is something called guerrilla |

| |marketing. (See complete case, |

| |discussion questions, and suggested |

| |answers on page 10.67 of this manual.)|

| VI. IMC: Putting Promotions Together |PowerPoint 10-13 |

|Learning objective 5 |IMC: Putting Promotions Together |

|DEFINE INTEGRATED MARKETING COMMUNICATION AND ITS ROLE IN PROMOTION. (TEXT PAGES 349-352) |(Refers to text pages 349-351) |

|A. Each target group calls for a separate promotion mix. | |

|1. All the promotions are part of one concerted effort. | |

|2. An integrated marketing communications (IMC) promotional approach is a method of uniting all | |

|promotional efforts and making them more consistent. | |

|3. IMC includes public relations and promotional efforts such as jingles, packaging, Internet | |

|communications, and interactive tools. | |

|B. There is often little coordination across promotional efforts. | |

|1. Customers can receive conflicting messages. | |

|2. Small businesses can use IMC by ensuring that any signage, letterheads, and ads carry the same | |

|message. |TEXT FIGURE 10.12 |

|SELF Check Questions (Text page 352) |Integrated Marketing Communication |

|Explain why IMC is beneficial to businesses. |(Box in text on page 349) |

|What are two items that are important to remember when developing a program of IMC? | |

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| |TEXT REFERENCE |

| |Career Spotlight: So, You Want to Be …|

| |in Logistics |

| |(Box in text on page 350) |

| | |

| VII. SUMMARY | |

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