Deck 17: Pricing Objectives and Policies

Question 1

A vital component of a successful marketing strategy is the company's plan for communication to its stakeholders. One segment of the communication plan is included in the marketing mix as the promotional element. A clear understanding of the role that promotion plays, as well as the various methods of promotion, is important in developing the promotional plan. The following questions should assist you in relating the information in this chapter to several decisions in your marketing plan.
Which of the four elements of the promotional mix are most appropriate for accomplishing your objectives? Discuss the advantages and disadvantages of each.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Answer 1

The four promotional methods that can be used by one in the promotion mix are as follows:
1) Advertising : It a paid non-personal communication about a business and its products through various medias for increasing the customer base. It will help in increasing the number of people who have knowledge about the product through electronic medium.
2) Sales promotion : It is the activity of oaring added incentive or value for the merchandise to the consumers, salespeople, or resellers. It helps in creating one to one customer interaction.
3) Public relations : It is used for creating and maintaining favourable relationship among the stakeholders of a firm. It builds a good image about the product and the firm in the minds of people.
4) Personal selling : It refers to the paid personal communication for informing and persuading a customer for purchasing merchandise in an exchange circumstance. It helps in attaining fast feedback and building loyalty.

Question 2

Should organizations be allowed to promote offensive, violent, sexual, or unhealthy products that can be legally sold and purchased? Support your answer.

Answer 2

Yes , organizations should be allowed to promote any product which is legal for selling because these products are harmful only in wrong hands. The government should make sure that the organization should make sure about the warning labels to be put on it, like in case of cigarette packets, or mention the age limit after which they can be used. The organizations should be given the authority to operate freely as per market demand and legal considerations.

Question 3

Identify several causes of noise. How can a source reduce noise?

Answer 3

Noise refers to everything that reduces the accuracy and clarity of the communication. It can occur due to laryngitis, slow or poor Internet connection, and radio static.
The source can reduce the noise by having a clear voice and adapting voice pitch as required. The noise can also be reduced by decreasing the use of symbols and signs in a message.

Question 4

Myspace
Myspace is not just for friends. It is also a unique promotional platform for musical artists, especially unsigned and independent artists. By creating a Myspace page, musicians can share their songs, post important dates, or even blog. Myspace music pages are different from record company websites because they feel more personal. Artists also take advantage of Myspace's viral nature by allowing other Myspace members to post their pictures, songs, and music videos on their own Myspace profi le pages. Visit the website at http:// music.myspace.com , and look for your favorite artist or discover a new one.
What are the promotional objectives of this website?

Question 5

Marketers must consider whether to use a push or a pull policy when deciding on a promotion mix (see Figure 17. 4). Identify a product for which marketers should use each policy and a third product that might best be promoted using a mix of the two policies. Explain your answers.

Question 6

A vital component of a successful marketing strategy is the company's plan for communication to its stakeholders. One segment of the communication plan is included in the marketing mix as the promotional element. A clear understanding of the role that promotion plays, as well as the various methods of promotion, is important in developing the promotional plan. The following questions should assist you in relating the information in this chapter to several decisions in your marketing plan.
What role should word-of-mouth communications, buzz marketing, or product placement play in your promotional plan?
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 7

The overall objective of promotion is to stimulate demand for a product. Through television advertising, the American Dairy Association promotes the benefits of drinking milk, a campaign that aims to stimulate primary demand. Advertisements for a specific brand of milk focus on stimulating selective demand. Identify two television commercials, one aimed at stimulating primary demand and one aimed at stimulating selective demand. Describe each commercial and discuss how each attempts to achieve its objective.

Question 8

What is the major task of promotion? Do firms ever use promotion to accomplish this task and fail? If so, give several examples.

Question 9

Since their dismal beginnings in 1896 when they played near a swamp (earning' the name Mud Hens in honor of the coots inhabiting the marshy land), the Triple-A Toledo Mud Hens have become one of the most successful minor league baseball teams in the country, and their games some of the best attended. How did they leverage their climb from such a murky start? In a word: marketing. With their two slogans, "Toledo's Family Fun Park" and "Experience the Joy of Mu dville," the Mud Hens harness the twin themes of family and history. These days, the Mud Hens are the Triple-A affiliate of the major league team the Detroit Tigers. Because the Tigers do all of the hiring and firing of players, trainers, and medical staff, the Mud Hens' home office can focus all of its energy on improving the image and profitability of the Mud Hens enterprise.
The Mud Hens do not have the star power of the major league teams (aside from their popular bird mascots, Muddy and Muddonna), so marketers must seek another way to pro-mote the games. They advertise the games as wholesome, affordable family fun-an alternative to bowling or going to the movies. People of all ages can come to the games and socialize, while watching potential up-and-coming baseball stars develop into mature athletes. Because there is no star paraphernalia to sell, most of the marketing attention is paid to pronioting Mud Hens merchandise, like T-shirts and hats, and food and beverage sales. In fact, the team has been the league leader in ballpark merchandise sales since 2000. The on-premise Swampshop offers dozens of styles of T-shirts and baseball caps in all sizes. Truly avid fans can shop online from anywhere in the world. As fans wear the merchandise, it creates good word-of-mouth advertising and buzz about the team.
The league's continued sales and revenue growth stand in contrast to an overall downturn in attendance and purchases at minor league baseball games. This statistic attests to the strength of the Mud Hens' marketing strategy. They market directly to advance ticket buyers in order to target those people who are apt to buy tickets early, buy in quantity, and spend cash at the games. Other marketing channels include radio, television, print media, and even Facebook. The Mud Hens enjoy an especially close relationship with local newspapers, where a prominent story about the team is almost guaranteed whenever the Mud Hens have a home game.
Even in the midst of a recession, the Toldco Mud Hens managed to boost revenues by incorporating a new network to integrate its e-mail platform with other applications. This ability allows the Mud Hens to target segments of its customer base with tailored messages. For example, in 2009, three of the Mud Hen suite rentals were available, without any obvious takers. By using the new system to identify customers who had clicked on the online suite rental links in the past six months, the Mud Hens sent e-mails to 50 to 60 specific people to inform them about the rentals' vacancies. All three suites were rented that same day. By integrating this new system into its marketing communications strategy, the Mud Hens are able to coordinate promotional and marketing efforts to have maximum impact on customers.
In addition to its successful marketing strategies, the Mud Hens have become an integral part of the com-munity-through direct marketing and regular media coverage, but also through charitable endeavors. Because the marketing focus is so much on family fun, community, and socializing, the organization does its best to give back to the community that so avidly sup-ports them. The organization engages in educational and com-munity outreach through various programs such as Muddy's Knothole Club, which provides tickets to underprivileged kids; regular fundraisers and auctions; and donations to local charities. Even pro-bono activities such as these can be part of a well-managed, integrated marketing communications strategy because they increase goodwill toward the organization and encourage people to attend games.

1How do the Toledo Mud Hens use integrated marketing communications to promote their enterprise?
2. How do the Mud Hens identify and market to their target audience?
3. Suggest how the Mud Hens can gain publicity in order to maintain and increase attendance.

Question 10

Myspace
Myspace is not just for friends. It is also a unique promotional platform for musical artists, especially unsigned and independent artists. By creating a Myspace page, musicians can share their songs, post important dates, or even blog. Myspace music pages are different from record company websites because they feel more personal. Artists also take advantage of Myspace's viral nature by allowing other Myspace members to post their pictures, songs, and music videos on their own Myspace profi le pages. Visit the website at http:// music.myspace.com , and look for your favorite artist or discover a new one.
Is word-of-mouth communication occurring at this website? Explain.

Question 11

A vital component of a successful marketing strategy is the company's plan for communication to its stakeholders. One segment of the communication plan is included in the marketing mix as the promotional element. A clear understanding of the role that promotion plays, as well as the various methods of promotion, is important in developing the promotional plan. The following questions should assist you in relating the information in this chapter to several decisions in your marketing plan.
Review the communication process in Figure 17.1. Identify the various players in the communication process for promotion of your product.

The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 12

Describe the possible objectives of promotion and discuss the circumstances under which each objective might be used.

Question 13

What does the term integrated marketing communications mean?

Question 14

Identify and briefly describe the four promotional methods an organization can use in its promotion mix.

Question 15

Myspace
Myspace is not just for friends. It is also a unique promotional platform for musical artists, especially unsigned and independent artists. By creating a Myspace page, musicians can share their songs, post important dates, or even blog. Myspace music pages are different from record company websites because they feel more personal. Artists also take advantage of Myspace's viral nature by allowing other Myspace members to post their pictures, songs, and music videos on their own Myspace profi le pages. Visit the website at http:// music.myspace.com , and look for your favorite artist or discover a new one.
Who is the target market for members?

Question 16

What forms of interpersonal communication besides language can be used in personal selling?

Question 17

Developing a promotion mix is contingent on many factors, including the type of product and the product's attributes. Which of the four promotional methods-advertising, personal selling, public relations, or sales promotion- would you emphasize if you were developing the promotion mix for the following products? Explain your answers.
a. Washing machine
b. Cereal
c. Halloween candy
d. Compact disc

Question 18

How do target market characteristics determine which promotional methods to include in a promotion mix? Assume a company is planning to promote a cereal to both adults and children. Along what major dimensions would these two promotional efforts have to differ from each other?

Question 19

These fun campaigns arc creative, but do they work? More importantly, are the revenues that Southwest forgoes from its two-bags-fly-free policy justified by an increased market share? Southwest seems to think so. In 2009, the air-line recorded a record full-load factor of 76 percent and an increase of S1 billion in market share. These positive results are thought to have come at least in part from the "Grab Your Bag. It's On!" campaign. Through effective integrated market-ing, Southwest has been able to launch successful campaigns, gain market share, and thrive even during the most recent recession."
1. Describe the various promotion elements that Southwest Airlines uses in its integrated marketing communications.
2. How does the engaging and entertaining performance of Southwest flight crews contribute to promotion activities?
3. How has Southwest Airlines positioned its advertising by focusing on simple concepts such as "We Love Your Bags" and "Grab Your Bag. It's On!"?

Question 20

How can a product's characteristics affect the composition of its promotion mix?

Question 21

A vital component of a successful marketing strategy is the company's plan for communication to its stakeholders. One segment of the communication plan is included in the marketing mix as the promotional element. A clear understanding of the role that promotion plays, as well as the various methods of promotion, is important in developing the promotional plan. The following questions should assist you in relating the information in this chapter to several decisions in your marketing plan.
What are your objectives for promotion? Use Table 17.2 as a guide in answering this question.

The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 22

Evaluate the following statement: "Appropriate advertising media are always available if a company can afford them."

Question 23

Define communication and describe the communication process. Is it possible to communicate without using all the elements in the communication process? If so, which elements can be omitted?

Question 24

Explain the difference between a pull policy and a push policy. Under what conditions should each policy be used?

Question 25

Myspace
Myspace is not just for friends. It is also a unique promotional platform for musical artists, especially unsigned and independent artists. By creating a Myspace page, musicians can share their songs, post important dates, or even blog. Myspace music pages are different from record company websites because they feel more personal. Artists also take advantage of Myspace's viral nature by allowing other Myspace members to post their pictures, songs, and music videos on their own Myspace profi le pages. Visit the website at http:// music.myspace.com , and look for your favorite artist or discover a new one.
What is being promoted to these individuals?

Question 26

In which ways can word-of-mouth communication influence the effectiveness of a promotion mix for a product?

Question 27

Suppose marketers at Falcon International Corporation have come to you for recommendations on how to promote their products. They want to develop a comprehensive promotional campaign and have a generous budget with which to implement their plans. What questions would you ask them, and what would you suggest they consider before developing a promotional program?

Question 28

Which criticisms of promotion do you believe are the most valid? Why?